UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) December 31, 1998
BIOSENSOR CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-11408 41-1427114
(State or other jurisdiction (Commission File No.)
(IRS Employer of incorporation)
Identification no.)
6 Woodcross DriveColumbia, SC 29212
(Address of principal executive offices) (Zip Code)
(803) 407-3044
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 31, 1998, Biosensor Corporation (the "Company")
purchased from Innovative Physician Services, Inc. (d/b/a/
Diagnostic Monitoring) ("IPS"), a wholly-owned subsidiary of
Cardiac Science Inc., a product line sold under the name Diagnostic
Monitoring. Biosensor obtained certain assets (consisting of
inventory valued at approximately $96,000, accounts receivable valued at
approximately $119,000, and capital equipment valued at approximately
$10,000), and product rights, intellectual property, and distribution, and
assumed certain liabilities (consisting of trade accounts payable and
accrued liabilities valued at approximately $109,000). The Company
issued 1,440,000 shares of Biosensor Corporation common stock,
subject to a post-closing adjustment based on Net Book Value of the
Assets (as defined in the Purchase Agreement) in exchange for the
purchased product line.
The Diagnostic Monitoring product line consists principally
of PC-based Ambulatory ECG ("Holter") systems and Holter recorders.
The majority of the hardware sold as part of these systems is
manufactured for Cardiac Science under subcontract by Braemar Inc.,
a wholly owned subsidiary of the Company. Diagnostic Monitoring
products are sold through international distributors pursuant to
strategic distribution agreements on a country by country basis.
Distribution is currently in place with market coverage in over 40
countries worldwide, with more than 90% of revenue currently being
realized in international markets. In the United States, products
are sold directly to hospitals, physicians, and medical centers.
Reference is made to the Purchase Agreement, a copy of which
is attached hereto as Exhibit I for a more complete description of
the transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The transaction will be accounted for by the Company using
the purchase accounting method. The net book value of the assets
purchased was approximately $115,000, which is substantially less
than 10 percent of the registrant's total assets consolidated as of
the end of the fiscal year ended June 30, 1998. Audited financial
statements for the acquired product line on a stand-alone basis are
not available for either the twelve months ended June 30, 1998 or
the interim quarterly period ended September 30, 1998 because the
product line was operated as an integral part of Cardiac Science
during those periods and financial results of the Diagnostic
Monitoring product line were consolidated with those of Cardiac
Science. Since none of the conditions in the definitions of
significant subsidiary contained in Regulation S-B exceed 20%, the
automatic waiver of the requirement for financial statements
applies, and none are included herein.
Exhibits:
Exhibit I Agreement for Purchase and Sale of Assets
Exhibit I
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN
INNOVATIVE PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING),
CARDIAC SCIENCE, INC.
AND
BIOSENSOR CORPORATION
DATED DECEMBER 31, 1998
Schedule 1.1.6 Records Transferred
Schedule 2.1 Assumed Liabilities
Schedule 4.3(i) Real Property
Schedule 4.3(ii) Executory Contracts
Schedule 4.3(iii) Intangible Property Rights
Schedule 4.3(iv) Permits
Schedule 4.3(v) Contracts, Agreements, Leases Requiring Consent
Schedule 4.3(vi) Personal Property
Schedule 4.3(vii) Inventory
Schedule 4.3(viii) Accounts Receivable
Schedule 4.3(ix) Accounts Payable and Accrued Expenses
Schedule 4.3(x) Equipment
Schedule 4.5 Lawsuits
Schedule 4.13 Environmental Matters
Schedule 5.5 Capitalization
LIST OF EXHIBITS
Exhibit A Condensed Balance Sheet
AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets is made
December 31, 1998 by and between Innovative Physician Services,
Inc. (DBA Diagnostic Monitoring), a California corporation
("Seller"), Cardiac Science, Inc., a California corporation
("CSI"), and Biosensor Corporation, a Minnesota corporation ("Purchaser").
RECITALS:
A. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, on the terms and subject to the conditions
set forth in this Agreement, a product line (collectively, the
"Product Line") consisting of certain assets and operations
conducted on the date hereof by Seller under the name "Diagnostic
Monitoring"(including, without limitation, the distribution of
certain medical monitoring devices).
NOW, THEREFORE, in consideration of the premises, the respective
covenants and commitments of Seller and Purchaser set forth in this
Agreement, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:
1.0. Purchase and Sale of Assets
1.1 Assets: In reliance on the representations, warranties and
covenants contained in this Agreement, on the Closing Date, but with
effect as and from 11:59:00 p.m. local time in Columbia, S.C. on
December 31, 1998, Seller shall sell, assign, deliver and transfer
to Purchaser, and Purchaser agrees to purchase and acquire from
Seller, free and clear of all Encumbrances and on the terms and
subject to the conditions set forth in this Agreement, those certain
assets set forth below in this Section 1.1, and including those
assets identified on Schedules prepared in accordance with Section
4.3 owned or used or held for use by Seller in the manufacture and
distribution of the Product Line distributed by Seller under the
name Diagnostic Monitoring (the "Assets"). The parties acknowledge
that the Assets totaled approximately $251,000 on November 30,1998.
1.1.1. Inventories, Purchase Contracts; All inventories of
supplies, raw materials, parts, finished goods, work-in-process,
product labels and packaging materials, all third party
manufacturers' warranties applicable to the inventories, all orders
or contracts for the purchase of inventories, raw materials, parts,
or supplies ordered by Seller in the ordinary course of business
under the name Diagnostic Monitoring prior to the Closing Date;
1.1.2. Machinery, Tooling; All machinery, equipment, fixtures and
other fixed assets used by Seller in manufacturing, procuring,
testing or distributing the Product Line.
1.1.3. Engineering and Production Data. All blueprints, drawings,
forms, raw material specifications, manufacturing specifications,
quality assurance specifications, engineering data, production data,
development data, design data, formulae, plans, and other data owned
by Seller and used in connection with the Product Line, whether such
properties are located on the site at which business is being
conducted or on the business premises of Seller's suppliers;
1.1.4 Executory Contracts. To the extent assignable, all
executory licenses, contracts, agreements, sales orders, purchase
orders and commitments relating to the Product Line including,
without limitation, those listed on Schedule 4.3(ii) and (v) to this
Agreement, with such additions and deletions as may hereafter arise
in the ordinary course of business, excluding, however, all facility leases;
1.1.5. Intangible Property Rights. All intangible property rights
used in connection with the Product Line, including patents, patent
applications, copyrights, copyright applications, trade names
(including the name "Diagnostic Monitoring" and any and all other
names similar to the foregoing), trade dress, goodwill, trademarks
or service marks, registered or unregistered and applications
therefor, logos, processes, computer programs and software,
inventions, trade secrets, discoveries, improvements, drawings,
designs, patterns, know-how, manufacturing standards and procedures,
computer software, data bases, product names, Web page, internet
domain names and other intellectual property rights listed on
Schedule 4.3 (iii) to this Agreement, with such additions and
deletions as may hereafter arise in the ordinary course of business
(collectively, the "Intangible Property Rights");
1.1.6. Books and Records. Originals (or, where appropriate,
copies) of all books, accounting records, records and other
documents and information relating to the Assets and the Product
Line as specified on Schedule 1.1.6, including, without limitation,
all customer, prospect, dealer and distributor lists, sales
literature, inventory records, purchase orders and invoices, sales
orders and sales order log books, customer information, commission
records, correspondence, outstanding proposals, product data, price
lists, product demonstrations, quotes and bids, catalogues and
brochures of every kind and nature;
1.1.7. Accounts Receivable. All accounts receivable owing to
Seller on the Closing Date, as a result of sales of the Product Line prior
to the Closing Date, listed on Schedule 4.3 (viii) to this Agreement, with
such additions and deletions as may hereafter arise in the ordinary course of
business (collectively, the "Accounts Receivables");
1.1.8. Telephone Listings. Seller's current telephone listings
for Diagnostic Monitoring and the right to use the telephone numbers
currently being used at the principal offices and at any sales,
warehouse, or distribution facilities of the Product Line;
1.1.9. Permits. To the extent assignable, all permits, licenses
and other approvals (including Food and Drug Administration
approvals) relating to the Product Line as listed on Schedule
4.3(iv) to this Agreement, with such additions and deletions as may
hereafter arise in the ordinary course of business;
1.1.10. Prepaid Expenses and Deposits. All prepaid expenses and
deposits required for the operation of the Product Line or relating
to the Assets;
1.1.11. Goodwill. All goodwill associated with or attributable to
the Product Line;
1.1.12. Claims. All of the Seller's right, title and interest to
claims and causes of action relating to the Assets or the Product Line;
1.1.13. Rights. Seller's rights under all supply agreements,
customer agreements, licenses, and other contracts relating to
Diagnostic Monitoring to which it is a party; but not including any
facility leases;
1.1.14 Other All other assets that are related to or used in
connection with Seller's business and that are owned by Seller, or
by any affiliate of Seller.
1.2 Excluded Assets: Assets do not include any books and records of
account of Seller other than those identified on Schedule 1.1.6,
cash, and personal property or equipment not related to, or not
used in connection with, the Product Line.
2.0 Assumption of Liabilities.
2.1 Obligations to be Assumed by Purchaser. Purchaser agrees to
assume and to pay, perform and discharge in accordance with their
respective terms, from and after the Closing Date, each of the
following obligations or commitments of Seller (the "Assumed
Liabilities"):(A) trade accounts payable and accrued expenses incurred
in the normal course of business and directly associated with the
Product Line sold under the name Diagnostic Monitoring (excluding
employment and travel expenses incurred by Victor Bravo through the
Closing Date), to be agreed upon by Purchaser and Seller prior to
Closing and a complete schedule of which is attached as Schedule 2.1,
and (B) warranty obligations accrued in the ordinary course of business
for Seller, but solely with respect to 1/0 board patient recorders
which have been sold or delivered prior to the Closing Date, but only
if and to the extent the same have not been paid or discharged prior to
the Closing Date. The parties acknowledge that the foregoing
liabilities and obligations, excluding warranty obligations, if any,
referred to in (B) above totaled approximately $110,000 as of November
30, 1998. Assets less Assumed Liabilities ("Net Book Value") shall not
be less than $100,000. Any special obligations or liabilities, if any,
to employees, or ex-employees of Seller are not assumed by Purchaser.
The assumption by Purchaser of the Assumed Liabilities shall not enlarge
any rights of any person under contracts or arrangements with Seller.
Nothing contained herein shall prevent Purchaser from contesting in
good faith any of the Assumed Liabilities with any third party obligee.
3.0 Purchase Price
The purchase price for the Assets shall equal the aggregate of (i) the
Assumed Liabilities, and (ii) 1,440,000 shares of common stock of
Purchaser (this amount represents the "Initial Purchase Price"),
subject to the post closing adjustments provided in Section 3.1. On
the Closing Date, Purchaser shall (I) assume the Assumed Liabilities,
and (II) issue to Seller 1,440,000 shares of its common stock.
Seller acknowledges that Purchaser has proposed a one share for six
reverse stock split that is pending shareholder approval, and upon
approval of same the consideration hereunder shall represent 240,000
shares, all as described in Purchaser's Preliminary Proxy Statement
filed with the Securities and Exchange Commission on December 4, 1998.
Following the reverse stock split (A) there will be a total of
approximately 3,125,000 shares of Purchaser's common stock outstanding,
(B) no preferred stock issued and outstanding, and (C) options,
warrants, convertible securities and other commitments for an
additional 13,750 shares of its common stock outstanding. Seller
acknowledges that the most recent price paid by new investors of
Purchaser's common stock was in May of 1998, and was the equivalent of
$2.08 per share (on a post-reverse stock split basis).
3.1 Post Closing Adjustment. The Initial Purchase Price is based on
the assumption that the Net Book Value of the Business will be at least
$100,000 as of the Closing Date. Within twenty (20) days after the
Closing Date, Seller shall cause to be prepared and delivered to
Purchaser an unaudited list of Assets and Assumed Liabilities for the
Product Line as of the close of business on the Closing Date (the
"Closing Balance Sheet") and a computation of the Net Book Value of the
Product Line as of the Closing Date. The Closing Balance Sheet shall
be prepared in conformity with generally accepted accounting principles
("GAAP"), applied on a basis consistent with Seller's Financial
Statements and shall present fairly the Assets and Assumed Liabilities
of Seller as of that date; provided that there shall not be included in
the Closing Balance Sheet any asset which is an Excluded Asset.
Within ten (10) days after the delivery of the Closing Balance Sheet,
Purchaser may notify Seller in writing of any objections or changes to
the Closing Balance Sheet or computation of Net Book Value, specifying
in reasonable detail any such objections or changes, and the parties
shall attempt in good faith to resolve any such dispute. If the
parties cannot resolve such dispute within a period of twenty (20) days
commencing from Seller's receipt of the Purchaser's notification, the
parties shall submit the matter to McGladrey & Pullen, LLP (the
"Accountant") whose decision with respect to the disputed matter shall
be binding on the parties. The prevailing party shall be entitled to
receive from the other party its costs and expenses, including
reasonable attorneys fees in connection with its objection or defense
to the calculation of Net Book Value. The fees and expenses of the
Accountant shall be paid by the party against whom a decision is
rendered. The prevailing party shall be the party whose proposed Net
Book Value is closest to the Net Book Value finally determined by the
Accountant.
If the Net Book Value as of the Closing Date, as finally determined as
provided in this Section 3.1, is less than $100,000, the Seller shall
pay to Purchaser the amount of the deficit in cash; and if the Net Book
Value is greater than $100,000, Purchaser shall pay to Seller the
amount of the excess in additional shares of common stock based on a
pre-reverse split value of $0.3472 per share, not to exceed 210,000
additional shares (or 35,000 shares post reverse stock split).
3.2 Unregistered Shares All shares of common stock of the Purchaser
issued to the Seller will not have been registered under the Securities
Act of 1933, as amended (the "Act"), on the basis that (i) this
transaction is exempt under the Act and such shares shall have the
status of securities acquired under Section 4(2) of the Act, as not
involving any public offering, and (ii) in the view of the Securities
and Exchange Commission (the "SEC"), the statutory basis for the exemption
would not be present , if, notwithstanding the forgoing, the Seller has a
present intention to dispose of such shares or any portion thereof.
3.3 Piggyback Registration Rights All of the shares of common stock
of the Purchaser issued to the Seller shall have "piggy back"
registration rights to be included in the next registration statement
filed by the Purchaser with the Securities and Exchange Commission.
Purchaser has a current intention to file an S-4 Registration Statement
during the first calendar quarter of 1999, but no assurance can be
given that any Registration Statement will be filed, or if filed,
whether it will become effective. If registered under the Act,
Seller's shares of Purchaser's stock shall also be registered under
such state securities laws as Seller may reasonably request.
3.4 Seller's Reliance on Purchaser's Financial and Other Information
Publicly on File. In determining the value of the securities to be
issued in exchange for the Assets purchased, Seller acknowledges that
it is relying solely on the financial and other information regarding
the Purchaser's financial condition, operating results and business and
other matters that is on file with the Securities and Exchange
Commission (Forms 10-KSB, 10-QSB, 8-K and Preliminary Proxy
Statements). Such financial information has been prepared in
accordance with GAAP, is audited where appropriate, and to the best of
the Purchaser's belief is current as regards SEC filing requirements.
Seller further acknowledges that Purchaser has not made and is not
making any representations or warranties with respect to itself other
than as expressly set forth in this Agreement and for the information
contained in its materials filed with the Securities and Exchange Commission.
4.0 Representations and Warranties of Seller and CSI
As a material inducement to Purchaser to enter into this Agreement and
with the understanding that Purchaser will be relying thereon in
consummating the transactions contemplated by this Agreement, Seller
and CSI, jointly and severally, represent and warrant to Purchaser as follows:
4.1 Corporate Authorization. Seller and CSI have full corporate
power and authority to enter into this Agreement and to sell the Assets
and the Product Line in accordance with the terms of this Agreement.
The execution, delivery and performance of this Agreement by Seller and
CSI, and all other agreements or instruments to be executed by Seller
or CSI pursuant to this Agreement, have been duly and effectively
authorized by their boards of directors and, in the case of Seller, its
sole shareholder, and no other corporate proceedings on their part are
necessary to authorize this Agreement or the transactions contemplated
by this Agreement. This Agreement constitutes, and such other
agreements or instruments will constitute, the legal, valid and binding
obligations of Seller and CSI, enforceable in accordance with their
respective terms, except as enforcement may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforcement of creditors'
rights in general, moratorium laws or by general principles of equity.
4.2 No Liens or Encumbrances. Seller has, and on the Closing Date
will transfer and convey to Purchaser, good, marketable and insurable
title to the Assets, and, except as set forth in this Agreement and
the Schedules hereto, the Assets shall be free and clear of all
mortgages, liens, claims, charges, encumbrances, leases, security
interests, pledges, and title retention agreements of any kind or
nature (collectively, "Encumbrances")
4.3 Schedules. Each of the following schedules, which have been
furnished to Purchaser by Seller and which are incorporated into this
Agreement by reference, is complete and the information contained in
the schedules is correct in all material respects as of the date of
this Agreement:
Schedule 4.3(i) This Schedule contains a description of each lease
of real property of Seller with respect to the Product Line.
Schedule 4.3(ii) This Schedule lists the following executory
agreements, whether oral or written, to which Seller is a party,
that relate to the Product Line:
(1) Each contract with any dealer, distributor, broker, agent
or sales representative;
(2) Each contract, agreement, or commitment for delivery by
Seller of its products or services for more than $___________ or
over a period of more than thirty (30) days from the date of
this Agreement.
Schedule 4.3(iii): This Schedule lists all Intangible Property
Rights owned by Seller and used or useful in the manufacture and
distribution of the Product Line.
Schedule 4.3(iv): This Schedule lists all permits, licenses and
other approvals (including Food and Drug Administration approvals)
and authorizations including, without limitation, those required
under the Environmental Laws, issued to the Seller related to the
Product Line, and sets forth the title, issuing agency and
expiration date thereof.
Schedule 4.3(v): This Schedule lists all contracts, agreements,
leases, documents, permits, and licenses relating to the Product
Line required to be listed on any of the Schedules described in
this Section 4.3 (including governmental and regulatory bodies and
agencies) requiring the consent or approval of a third party to
Seller's sale or assignment and Purchaser's assumption of such
contracts, agreements, leases, documents, permits and licenses on
the Closing Date.
Schedule 4.3(vi): This Schedule lists all personal property owned
by any third party (whether a customer, supplier or other person)
relating to the operation of the business of the Product Line for
which the Seller is responsible.
Schedule 4.3(vii): This Schedule lists all inventory relating to
the Product Line which will include cost, location and item.
Schedule 4.3(viii):This Schedule lists all trade accounts
receivable relating to the Product Line which will include customer
name, invoice number, and amount due.
Schedule 4.3(ix): This Schedule will list all accounts payable and
accrued expenses relating to the Product Line which will include
vendor name, invoice number and amount due.
Schedule 4.3(x): This Schedule will list all equipment relating to
the Product Line which will include a brief description, cost and
location.
4.4 Seller as an Investor in the Purchaser's Securities Seller
acknowledges that in accepting Purchaser's common stock as payment for
the Assets, Seller becomes an investor in the common stock of the
Purchaser, and in that capacity Seller represents and warrants to and
with Purchaser as follows:
4.4.1 High Degree of Risk Seller acknowledges that investment
in Purchaser's stock is speculative and involves a high degree of
risk and the possible loss of its entire investment.
4.4.2 Review of Available Financial Information Seller is
familiar with the operations of the Purchaser, has evaluated the
merits and risks of this transaction, has made its independent
judgment as to the value of the securities to be issued in exchange
for the Assets purchased by reviewing the financial and other
information regarding the Purchaser that is publicly available and
on file with the Securities and Exchange Commission (Forms 10-KSB,
10-QSB, 8-K and Preliminary Proxy Statements). Seller has had the
opportunity to request additional information and to ask questions
and receive answers concerning the business operations of Purchaser, and
is satisfied with the results of it investigation of the Purchaser.
4.4.3 Acquired Shares for Investment Seller is acquiring the
Purchaser's shares in good faith for the purpose of investment in
the Purchaser and not for the purpose of distributing or publicly
selling the shares to others, reselling, assigning, pledging or
hypothecating the shares, or dividing its participation in
ownership of the shares with others, except that Seller may
transfer the shares to its parent company, Cardiac Science, Inc.
4.4.4. Unregistered Shares. Seller understands and acknowledges
that it has been advised by the Purchaser that shares of the common
stock of Purchaser will not have been registered under the Act, on
the basis that (i) this transaction is exempt under the Act and the
shares shall have the status of securities acquired under Section
4(2) of the Act, as not involving any public offering, and (ii) in
the view of the Securities and Exchange Commission (the "SEC"), the
statutory basis for the exemption would not be present , if,
notwithstanding the forgoing, the Seller has a present intention to
dispose of such shares or any portion thereof. Seller acknowledges
that the Purchaser is relying on the statutory exemption from the
registration requirements under the Minnesota Securities Act,
basing its reliance in part on the Seller's representations set
forth in this agreement.
4.4.5. [Intentionally Omitted]
4.4.6. No Assurance of Liquidity Seller recognizes that the
Purchaser may not comply in the future with the requirements which
would permit it to sell the shares of Purchaser pursuant to Rule
144. As such, Seller agrees that such shares may have to be held
for an indeterminate period of time. Seller understands that the
certificates representing the shares shall be stamped with a legend
in substantially the following form:
"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933 or
under applicable state securities laws and may not be sold,
transferred, or pledged in the absence of such registration,
unless pursuant to an exemption from the registration
requirements of the Securities Act of 1933 and applicable
state securities laws. The Company reserves the right to
require on opinion of counsel satisfactory to it before
effecting any transfer of the shares."
Purchaser's shares cannot be expected to be readily liquidated, if
at all. Seller is aware that there is currently a very limited
public market for the shares of Purchaser and that there is no
assurance that a more liquid market will develop.
4.4.7 Forward Looking Statements Not Indicative Seller
acknowledges that the available financial statements and forecasts
cannot be relied upon as an indication of future results. Future
operations of Purchaser will be dependent, in part, on the market
acceptance of its products, "Health Care Reform" legislation,
health insurance reimbursement policies, the status of the economy
and its effect on the market for diagnostic health care products,
competition, changes in demographic characteristics of the market
or shifts in emphasis regarding health care, and on management's
ability to control operating expenses. Many of these factors
cannot be controlled by Purchaser. No representation had been made
that actual results of operations will conform to historical
results or forecasted results.
4.5 Lawsuits; Proceedings; Etc. Seller is not engaged in any legal
action or other proceedings before any court or administrative agency.
Seller is not a party to any action or proceeding, nor has Seller been
threatened with any such action or proceeding, nor, to the Knowledge
of Seller, does there exist any basis therefor, which will or could
have a material adverse effect on the condition, financial or
otherwise, of the Assets or the Product Line. No order, writ,
injunction or decree has been issued by, or requested of, any court or
governmental agency which does or may result in any material adverse
change in the Assets or in the selling or servicing of the Product Line.
4.6 Assets. All of the tangible Assets, whether or not reflected
on the Balance Sheet, are being acquired by Purchaser on an "as-is,
where is" basis. Except as otherwise set forth in this Agreement,
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
SUCH ASSETS ACQUIRED BY PURCHASER HEREUNDER, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. The Assets constitute all of the operating assets and
properties that have been used by Seller in the manufacturing and
distribution of the Product Line and comprise all those properties,
assets and rights of Seller necessary to operate the Product Line
under the name Diagnostic Monitoring in the ordinary course of business.
4.7 Inventory: All inventories reflected on Schedule 4.3 (vii) are
stated at the lower of cost or market value determined using the
first-in, first-out ("FIFO") method of accounting. All inventories
reflected on such Schedule shall be stated at the lower of cost or
market determined using the FIFO method of accounting. All
inventories reflected on such Schedule are used in the manufacture and
distribution of the Product Line, regularly offered from current price
lists. All inventories are being acquired by Purchaser on an "as-is,
where is" basis. Except as otherwise set forth in this Agreement,
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
INVENTORIES, WORK IN PROGRESS OR RAW MATERIALS ACQUIRED BY PURCHASER
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4.8 Compliance with Laws; Permits. Seller has complied in all
material respects with all applicable statutes, regulations, orders,
ordinances and other laws of the United States of America, all state,
local and foreign governments and other governmental bodies and
authorities, and agencies of any of the foregoing to which they are
subject in connection with the operation of the Product Line under the
name Diagnostic Monitoring. Seller has not received any notice to the
effect that, or otherwise been advised that, Seller is not in
compliance with any of such statutes, regulations and orders,
ordinances, other laws or undertakings as they might relate to any
manner whatsoever to the Product Line.
4.9 Intangible Properties. The Intangible Property Rights listed
on Schedule 4.3 (iii) to this Agreement are all those used by or
useful to the Product Line and are valid and in full force and effect.
All patents, copyrights and trademarks have been duly registered or
filed in the United States Patent and Trademark Office, and such
registrations have been properly maintained and renewed in accordance
with all applicable laws, rules and regulations.
Seller has good and marketable title to and owns or exclusively holds
all rights to use, free and clear of all liens, claims, restrictions,
and infringements, the Intangible Property Rights. The Intangible
Property Rights are valid, subsisting, enforceable and in full force
and effect. There is no infringement or other adverse claim pending
against any of the Intangible Property Rights. In connection with the
operation of the Business, Seller is not obligated or under any
liability whatsoever to make any payments by way of royalties, fees or
otherwise with respect to third-party patents, trademarks, copyrights
or other intellectual property in connection with the conduct of the Business.
4.10 Changes in Customers or Suppliers. Seller has not received
any notice that any major customer or supplier of the Product Line
intends to terminate, limit or reduce its business relations with
Seller either currently or following the consummation of the
transactions contemplated by this Agreement. No customer or supplier
which was material to the Product Line in the past twelve month period
has terminated, materially reduced or, to the knowledge of Seller,
threatened to terminate or materially reduce its purchases from or
provision of products or services to the Product Line.
4.11 Brokers or Finders. No person, firm or corporation has or will
have, as a result of any act or omission of the Seller, any right,
interest or valid claim against Purchaser for any commission, fee or
other compensation as a finder or broker in connection with the
transactions contemplated by this Agreement.
4.12 Accounts and Notes Receivable. The accounts receivable of
Seller that are part of the Assets being transferred hereby (i) have
and shall have arisen only from bona fide transactions in the ordinary
course of business, and (ii) represent and will represent valid and
binding obligations of the account debtors, not subject to defense or
offset to which such receivables relate.
4.13 Environmental Matters. Schedule 4.13 to this Agreement
contains a complete list of all permits, consents, licenses and
authorizations related to the Product Line obtained by Seller under
the Environmental Laws. The Seller is in compliance with all terms
and conditions of the permits, consents, licenses, approvals, and
authorizations listed on Schedule 4.13 to this Agreement.
There is no civil, criminal, or administrative action, suit, demand,
claim, hearing, notice or demand letter, notice of violation,
investigation, or proceeding pending or, to the Knowledge of Seller,
threatened against Seller, the Assets, or the operations and
properties currently or previously owned, leased, or used with respect
to the Product Line relating in any way to the Environmental Laws.
With respect to the Product Line, and any currently or previously
owned, leased, or used properties or operations, there are no past or
present events, conditions, circumstances, activities, practices,
incidents, actions, or plans that interfere with or prevent compliance
or continued compliance with the Environmental Laws or which may give
rise to any liability (whether statutory or common law) or otherwise
form the basis of any claim, action, demand, suit, proceeding,
hearing, notice of violation, study, or investigation arising under
any Environmental Law or otherwise based on or related to the
generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling, or the release into the
workplace, the community, or the environment of any contaminant.
No environmental lien has attached to any Asset.
4.14 No Other Agreements to Sell the Assets or the Product Line.
Seller has no legal obligation, absolute or contingent, to any other
person or firm to sell the Assets or the Product Line (other than
sales of inventory in the ordinary course of business).
4.15 Disclosure. Seller has not withheld from Purchaser any
material facts relating to the Assets, or the operations of the
Product Line. No representation or warranty of Seller in this
Agreement contains any untrue statement of material fact required to
be stated herein to make the statement not misleading.
4.16 No Breaches; etc. Neither Seller nor CSI is in violation of,
and the execution, delivery and performance of this Agreement or the
other agreements contemplated by this Agreement and the consummation
of the transactions contemplated by this Agreement does not and will
not result in any breach or acceleration of, any of the terms or
conditions of their articles of incorporation or by-laws, or of any
mortgage, bond, indenture, contract, agreement, license or other
instrument or obligation to which Seller or CSI is a party or by which
the Assets are bound. The execution, delivery and performance of this
Agreement or the other agreements contemplated by this Agreement will
not result in the violation of any statute, regulation, judgment,
writ, injunction or decree of any court, nor require the consent,
approval, permission or other authorization of any court, arbitrator
or governmental, administrative or self-regulatory authority or any
other third party.
4.17 Representations and Warranties. The representations and
warranties of Seller have been made with the Knowledge and expectation
that Purchaser is relying on them, and such representations and
warranties shall survive the Closing Date in accordance with Section 9.1.
5.0 Representations and Warranties of Purchaser
As a material inducement to Seller to enter into this Agreement and
with the understanding that Seller will be relying thereon in
consummating the transactions contemplated by this Agreement,
Purchaser represents and warrants to Seller as follows:
5.1 Organization and Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Minnesota, and has all requisite corporate power and capital
assets to carry on its business as it is now being conducted.
5.2 Corporate Authorization. Purchaser has the full corporate power
and authority to enter into this Agreement and purchase the Assets and
Product Line in accordance with the terms of this Agreement. The
execution, delivery and performance of this Agreement by Purchaser
pursuant to this Agreement have been duly and effectively authorized
by the board of directors of Purchaser and no other corporate
proceedings on the part of Purchaser are necessary to authorize this
Agreement or the transactions contemplated by this Agreement. This
Agreement constitutes, and such other agreements and instruments will
constitute, the legal, valid and binding obligations of Purchaser
which are, or will be, enforceable against Purchaser in accordance
with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors rights in general, moratorium laws or by
general principles of equity.
5.3 Fully Paid and Validly Issued Shares. Purchaser's shares,
when issued and delivered to Seller, shall be deemed to be, and shall
be, fully paid and validly issued shares of stock of Purchaser and
Seller shall not be liable to any further call or assessment thereon,
and any holder of said shares of stock shall not be liable for any
further payment in respect thereto.
5.4 Reliable Financial Information. The audited fiscal year
financial statements and the unaudited quarterly and pro forma
combined financial statements filed by the Purchaser with the SEC in
Forms 8-K, 10-KSB, 10-QSB and the Preliminary Proxy Statement, were
prepared in accordance with GAAP and fairly present Purchaser's
financial position and results of operations for the covered periods.
5.5 Capitalization. The current capitalization of Purchaser, and the
pro forma capitalization of Purchaser giving effect to the
contemplated reverse stock-split, is set forth in Schedule 5.5 hereto.
Such capitalization shall include the authorized and issued and
outstanding shares of common and preferred stock of Purchaser, the
terms of the preferred stock and the options, warrants, and
convertible securities (and the like) of Purchaser, including the
terms thereof.
5.6 No Breaches; etc. Purchaser is not in violation of, and the
execution, delivery, and performance of this Agreement or the other
agreements contemplated by this Agreement and the consummation of the
transactions contemplated by this Agreement do not and will not result
in any breach or acceleration of, any of the terms or conditions of
its articles of incorporation or by-laws, or of any mortgage, bond,
indenture, contract, agreement, license or other instrument or
obligation to which Purchaser is a party. The execution, delivery and
performance of this Agreement or the other agreements contemplated by
this Agreement will not result in the material violation of any
statute, regulation, judgment, writ, injunction or decree of any
court, threatened or entered in a proceeding or action in which
Purchaser is, was or may be bound.
5.7 No Brokers or Finders. No person, firm or corporation has or
will have, as a result of any act or omission of Purchaser, any right,
interest or valid claim against Seller for any commission, fee or
other compensation as a finder or broker in connection with the
transactions contemplated by this Agreement.
5.8 Disclosure. No representation or warranty of Purchaser in this
Agreement contains any untrue statement of material fact required to
be stated herein to make the statement not misleading. The Forms 10-
KSB, 10-QSB and 8-K, and the Preliminary Proxy Statement of Purchaser
do not contain any untrue statement of material fact, or omit to state
any material fact required to be stated therein.
5.9 Representations and Warranties. The representations and
warranties of Purchaser have been made with the Knowledge and
expectation that Seller is relying on them, and such representations
and warranties shall survive the Closing Date in accordance with Section 9.1.
6.0 Post-Closing Agreement.
Seller and CSI hereby covenant and agree with Purchaser as follows:
6.1 Non-Competition. In consideration of the benefits to Seller
and CSI hereunder and in order to induce Purchaser to enter into this
Agreement, Seller and CSI hereby covenant and agree that for a period
of two (2) years after the Closing Date, Seller and CSI shall not, and
Seller and CSI shall cause each corporation or other entity,
controlling, controlled by or under common control with, Seller or CSI
to not, directly or indirectly, anywhere in the world where the
Product Line is currently produced, marketed, sold or used, as a
proprietor, partner, stockholder, director, officer, employee, joint
venturer, investor, lender, guarantor or in any other capacity own,
engage in, conduct, manage, operate or control, or participate in, be
associated with or be connected in any manner whatsoever in the
ownership, management, operation or control of, any business which,
directly or indirectly, is competitive with the Product Line, except
that this non-competition obligation shall not apply as follows:
(i) Ownership by Seller or any of its affiliates, in the
aggregate, of less than five (5%) percent of the outstanding
shares of capital stock of any corporation with one (1) or
more classes of its capital stock listed on a national
securities exchange or publicly traded in the over-the-
counter market shall not constitute a violation of this Section 6.1; and
(i) The provisions of this Section 6.1 shall not preclude
Seller or any of its affiliates from acquiring control of an
entity which has a portion of its business which competes
with the Business (the "Competing Business"), provided the
Competing Business does not represent more than five (5%)
percent of the total business conducted by such entity.
(a) Seller and CSI hereby covenant and agree that for a period of
two (2) years after the Closing Date, Seller and CSI shall not, and
Seller and CSI shall cause each person, corporation or other entity
related to, controlling or controlled by, directly or indirectly,
Seller or CSI to not, without the prior written consent of
Purchaser, (A) solicit or employ any employee of Purchaser (i.e.:
Victor Bravo) at any time on or after the date hereof to become an
officer, director, employee, agent, consultant or otherwise
affiliated with Seller or CSI, or any entity in which Seller or CSI
owns an equity or debt interest or has the power to direct
management or (B) solicit at any time on or after the date hereof
any employee of Purchaser (i.e.: Victor Bravo) to terminate his or
her relationship with the Purchaser.
(a) Seller and CSI will not at any time from and after the Closing
Date divulge, furnish to or make accessible to anyone any knowledge
or information with respect to confidential or secret processes,
inventions, discoveries, improvements, formulae, plans, material,
devices or ideas or know-how, whether patentable or not, with
respect to any confidential or secret aspects of the Product Line
(including, without limitation, customer lists, supplier lists and
pricing arrangements with customers or suppliers) (collectively,
"Confidential Information"). Any portion of such information and
only such portion, which (i) at or prior to the time of disclosure
was generally available to the public through no breach of this
covenant, (ii) was available to the public on a non-confidential
basis prior to its disclosure, or (iii) is required to be disclosed
by law or by order of a court of competent jurisdiction, shall not
be deemed Confidential Information for purposes of this Agreement,
and the undertakings in this covenant with respect to Confidential
Information shall not apply thereto.
(a) Seller and CSI hereby covenant and agree that, for a period of
two (2) years after the Closing Date, Seller and CSI shall not, and
Seller and CSI shall cause each person, corporation or other entity
related to, controlling or controlled by, directly or indirectly,
Seller or CSI to not solicit or attempt to solicit any of the
current customers, clients or accounts with respect to the Product
Line and such other customers, clients or accounts to whom Seller,
directly or indirectly, sold goods or services in the Product Line
during the 24 month period immediately preceding the Closing Date,
with the intent or purpose to perform for such customer, client or
account the same or similar services or to sell to such customer,
client or account the same or similar goods or services which was
performed for or sold to such customer, client or account.
(a) In the event a court of competent jurisdiction deems any provision in
this Section 6.1 to be unreasonable, unenforceable or invalid, then such
provision (s) shall be interpreted as broadly as may be considered
reasonable by such court and this Section 6.1 shall be deemed amended to
the maximum scope of business, duration or geographic scope as such court
determines to be reasonable and , as so amended, shall be enforced.
The parties acknowledge and agree that the breach of the provisions of
this Section 6.1 could not be adequately compensated with monetary
damages and would irreparably injure Purchaser, and, accordingly, that
injunctive relief and specific performance shall be appropriate
remedies to enforce the provisions of this Section, and the parties
waive (a) any claim or defense that there is an adequate remedy at law
for such breach, and (b) the necessity of posting a bond or similar
security; provided, however, that nothing contained herein shall
limit the remedies, legal, or equitable, otherwise available to
Purchaser, and all remedies of the parties herein are in addition to
any remedies available to the parties at law or otherwise.
6.2 Access to Books and Records.
(a) Seller shall afford to Purchaser and Purchaser's auditing staff,
accountants and other authorized representatives, upon reasonable
notice, full access to the books and records of the Product Line
not acquired by Purchaser hereunder pertaining to the Product Line
operations prior to the Closing Date for a period of three (3)
years following the Closing Date in connection with tax and
accounting matters and other reasonable business purposes.
Purchaser shall reimburse Seller for all out-of-pocket costs
incurred in complying with this Section 6.2 other than with respect
to the storage of records.
For a period of three (3) years after the Closing Date, Purchaser
shall allow Seller, its affiliates and their auditing staffs,
accountants and other authorized representatives, at Seller's expense,
and during normal business hours upon reasonable notice to Purchaser,
to inspect and copy any records of the Product Line with respect to
periods prior to the Closing Date for the purposes of (a) preparing
and /or defending tax returns for any period prior to the Closing
Date, (b) obtaining information relating to claims arising from the
conduct of the business of the Product Line prior to the Closing Date,
or (c) for such other purposes as Seller may reasonably request.
During such three (3) year period, Purchaser shall make the records
available to Seller and shall not destroy or discard such financial
records without giving Seller thirty (30) days prior written notice of
its intentions and giving Seller the right, at its expense, to remove
from Purchaser's premises any such financial records. Seller shall
reimburse Purchaser for all out-of-pocket costs incurred in complying
with this Section 6.2, other than with respect to the storage of records.
6.3 Collection of Receivables. After the Closing Date, all cash,
checks or other proceeds received by Seller or CSI or their banks that
relate to the accounts receivable of Seller purchased by Purchaser
shall be paid to Purchaser within five (5) days after receipt by
Seller or CSI, which payments shall be accompanied by a statement
identifying the payee, the amount of the payment and the related
invoice number. Seller agrees to endorse and Purchaser shall have the
right to endorse the name of Seller on any such checks or proceeds
(whether received directly by Purchaser or received from Seller or its
banks) and shall deposit such checks and other proceeds in bank
accounts maintained in Purchaser's name. From and after the Closing
Date, Seller shall cooperate with, and provide reasonable assistance
to, Purchaser in collecting such accounts.
7.0 [Intentionally Omitted]
7.1 [Intentionally Omitted]
8.0 Closing
8.1 Time and Place. The Closing shall take place at 5:00 o'clock
p.m. on December 31, 1998 by facsimile transmission (and overnight
mailing) of the signature pages to this Agreement and all ancillary
agreements. As soon as practicable following the Closing, Seller
shall cause to be delivered to Purchaser and its counsel an original
set of the closing documents.
8.2 Deliveries At the Closing:
(a) Seller shall execute and deliver to Purchaser such bills of
sale, assignments and other good and sufficient instruments of
conveyance and transfer, in form and substance reasonably
satisfactory to Purchaser, as are effective to transfer the Assets.
(b) Purchaser shall execute and deliver to Seller such documents
of assumption, in form and substance reasonably satisfactory to
Seller, as are effective to assume the Assumed Liabilities.
(c) Purchaser shall issue to Seller, in accordance with Section
3.0 of this Agreement, shares of fully paid, non assessable Common
Stock of Purchaser.
(d) The parties shall each deliver to the other such other
documentation, such as Board of Director and Shareholder
resolutions, as the other party shall reasonably request.
9.0 Survival of Representations and Warranties; Identification
9.1 Survival of Representations, Warranties, etc. All representations and
warranties of the parties made in this Agreement or as provided in
this Agreement shall survive the Closing Date for a period of two (2)
years thereafter notwithstanding any investigation at any time made by
or on behalf of the other party ("Survival Period"). All
representations and warranties related to any specific claim asserted
in writing prior to the expiration of the Survival Period shall
survive until such claim shall be resolved and payment in respect
thereof, if any is owing, shall be made.
9.2 Indemnification.
(a) Seller and CSI, jointly and severally, will fully indemnify and hold
harmless Purchaser, its officers, directors, employees and affiliates
against and in respect of any and all liabilities, losses, damages,
deficiencies, costs, or expenses (including, without limitation, the
reasonable fees and expenses of investigation and counsel)
(collectively, "Losses") resulting from:
(i) any misrepresentation or breach of any representation, warranty,
covenant or agreement by Seller made in this Agreement;
(i) any claims, proceedings, actions or investigations made or brought
by third parties based on or arising from acts, omissions or states
of fact relating to Seller, the Assets or the Product Line and
occurring or in existence prior to the Closing Date, except to the
extent they constitute an Assumed Liability;
(i) the failure of Seller to timely pay any taxes relating to or
resulting from the operation of the Product Line for any and all
periods through and including the Closing Date (except where an
Assumed Liability); or
(i) the noncompliance with any Bulk Sales Law.
(b) Purchaser will fully indemnify and hold harmless the Seller, its
officers, directors, shareholders, employees and affiliates against
and in respect of any and all Losses resulting from:
(i) any misrepresentation or breach of any representation, warranty,
covenant or agreement by Purchaser made in this Agreement
(including, without limitation, the certificates delivered under
this Agreement) or as provided in this Agreement;
(i) the failure by Purchaser to pay, perform or discharge when due any
Assumed Liability; or
(i) any claims, proceedings, actions or investigations made or brought
by third parties based on or arising from acts, omissions or states
of fact relating to Purchaser, the Assets or the Product Line and
occurring after the Closing Date.
(c) Any indemnification claim of a party must be asserted prior to the
expiration of the Survival Period. Following the expiration of the
Survival Period, a party may not assert any claims for
indemnification under this Section 9.2.
(d) Each parties' responsibility shall not apply to the first $1,000 of
Losses, and is subject to a maximum responsibility of $500,000.
9.3 Procedure for Indemnification. Any person entitled to indemnification
under this Agreement shall (i) give prompt notice to the indemnifying
party of any third party claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the
indemnified party; provided, that any person entitled to indemnification
under this Agreement shall have the right to employ separate counsel and
to participate in the defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such person.
10.0 Miscellaneous.
10.1 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable against the parties and their
respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to, or shall confer on,
any person other than any of the parties hereto any rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.
10.2 Governing Law. This Agreement shall in all respects be governed by,
and enforced and interpreted in accordance with the laws of the State
of Minnesota without giving effect to choice of law principles.
10.3 Notices. All notices, consents, requests, demands, instructions or
other communications provided for in this Agreement shall be in
writing and shall be deemed validly given, made and served when
delivered personally, or sent by certified or registered mail,
postage prepaid, overnight courier or by telephone facsimile, pending
the designation of another address, addressed as follows:
If to Seller: Cardiac Science Inc.
1176 Main Street Bldg. "C"
Irvine, Ca 92614
Attn: Mr. Raymond Cohen
Fax No. (949) 951-7315
With a copy to: Breslow & Walker
767 Third Avenue
New York, New York 10017
Attn: Mr. Howard Breslow
Fax No. (212) 888-4955
If to Purchaser:
Biosensor Corporation
6 Woodcross Drive
Columbia, SC 29212
Attn: Ronald G. Moyer
Fax No. (803) 407-1967
With a copy to:
Blanco, Tackabery, Combs & Matamoros
P.O. Drawer 25000
Winston-Salem, NC 27114-5000
Attn: Brian L. Herndon
Fax No. (910) 761-1530
10.4 Entire Agreement and Counterparts. This Agreement and the attached
Exhibits and Schedules evidence the entire agreement among the Seller
and Purchaser relating to the purchase and sale of the Assets and the
Product Line and supersede in all respects any and all prior oral or
written agreements or understandings. This Agreement shall be
amended or modified only by written instrument signed by Seller and
Purchaser. This Agreement may be executed in counterparts.
10.5 Headings. Section and article headings used in this Agreement have
no legal significance and are used solely for convenience of reference.
10.6 Expenses. Each party shall pay for its own legal, accounting and
other similar expenses incurred in connection with the transactions
contemplated by this Agreement, whether or not such transactions are
consummated.
10.7 Bulk Sales Laws. Purchaser and Seller waive compliance with the
provisions of any bulk sales laws, including Article 6 of the Uniform
Commercial Code as it may be in effect in any applicable jurisdiction
("Bulk Sales Laws").
10.8 Taxes. Any sales, use or excise taxes payable in connection with
these transactions shall be shared equally by Seller and Purchaser.
Each party agrees to execute all of the documents and to take such
other action or corporate proceedings as may be necessary or
desirable to structure the transaction which is the subject of this
Agreement as an "exempt occasional sale" under applicable tax law, to
obtain the relevant tax exemption certificates and to provide copies
of such certificates to the other parties hereto.
10.9 Severability. Each and every provision of this Agreement shall be
deemed valid, legal and enforceable in all jurisdictions to the
fullest extent possible. Any provision of this Agreement that is
determined to be invalid, illegal or enforceable in any jurisdiction
shall, as to that jurisdiction, be adjusted and reformed rather than
voided, if possible, in order to achieve the intent of the parties.
Any provision of this Agreement that is determined to be invalid,
illegal or unenforceable in any jurisdiction which cannot be adjusted
and reformed shall for the purposes of that jurisdiction, be voided.
Any adjustment, reformation or voidance of any provision of this
Agreement shall only be effective in the jurisdiction requiring such
adjustment or voidance, without affecting in any way the remaining
provisions of this Agreement in such jurisdiction or adjusting,
reforming, voiding or rendering that provision or any other provision
of this Agreement invalid, illegal or unenforceable in any other jurisdiction.
10.10 Interpretive Provision. Whenever used in this Agreement "to the
Knowledge of" or similar language shall mean the actual knowledge,
after reasonable inquiry, of any person who, on the date hereof is an
officer of Seller.
IN WITNESS WHEREOF, each of the parties hereto have
executed this Agreement as of the date set forth in the first paragraph.
INNOVATIVE PHYSICIAN SERVICES, INC.
d/b/a Diagnostic Monitoring
By:
Name:
Title:
Date:
CARDIAC SCIENCE, INC.
By:
Name:
Title:
Date:
BIOSENSOR CORPORATION
By:
Name:
Title:
Date:
Exhibit A Condensed Balance Sheet
Accounts Receivable $119,043
Inventory $ 95,680
Equipment $ 9,850
Accounts Payable $109,226
Net Book Value $115,347