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): April 28, 2000
4networld.com, Inc.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 33-13110 11-2831380
------------------ --------------------- ------------------
(State or other (Commission File No.) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation)
900 Third Avenue, Suite 201, New York, New York 10022
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(Address of Principal Executive Offices)
(212) 610-2778
---------------------------------------------
(Registrant's Telephone Number, including area code)
MEDTECH DIAGNOSTICS, INC.
-------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
4networld.com, Inc. (the "Registrant") hereby amends the following
items, financial statements, exhibits, or other portions of its Current Report
on Form 8-K, originally filed with the Securities and Exchange Commission on
April 6, 2000(the "Form 8-K"), as set forth in the pages attached hereto.
Item 7. Financial Statement and Exhibits
(a) Financial Statements of the Business Acquired
(b) Pro Forma Financial Information
<PAGE>
On April 28, 2000, the Registrant acquired all of the issued and
outstanding capital stock of DelOtto Systems, Inc., a Pennsylvania corporation
("DelOtto Systems"), pursuant to the terms and conditions of a Stock Purchase
Agreement dated April 24, 2000 (the "Stock Purchase Agreement") by and between
Michael Park, Andrew Patros and Robert Park (collectively the "Sellers") and
MedTech Diagnostics, Inc. (the "Acquisition"). The Stock Purchase Agreement is
attached as an exhibit to the Current Report on Form 8-K filed by the Registrant
on May 3, 2000, and is incorporated herein by reference. DelOtto Systems is a
full service provider of content management and content syndication services to
business-to-business Internet companies. DelOtto Systems is based in Elmira, New
York.
Pursuant to the terms and conditions of the Stock Purchase Agreement,
the Registrant acquired all of the issued and outstanding capital stock of
DelOtto Systems in exchange for fifteen million (15,000,000) shares of the
Registrant's authorized but unissued shares of common stock (the "MedTech
Shares"). The MedTech Shares have not been registered under the Securities Act
of 1933, as amended, and are subject to a lock-up agreement for a period of two
(2) years, the terms of which may be waived by the Board of Directors of the
Registrant. Furthermore, the Registrant caused DelOtto Systems to enter into two
(2) year employment agreements with each of the Sellers and to appoint Robert
Park to the Registrants Board of Directors, effective 91 days after the Special
Meeting of Stockholders of the Registrant, currently scheduled for May 11, 2000.
The terms and conditions of the Stock Purchase Agreement were determined through
the arms-length negotiations between the parties.
The foregoing description of the Stock Purchase Agreement and the
transactions contemplated thereby is not intended to be complete and is
qualified in its entirety by the complete text of the Stock Purchase Agreement.
Certain of the matters discussed herein include forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act of 1934. Statements that are predictive in nature, that
depend upon or refer to future events or conditions, or that include words such
as "expects", "anticipates", "intends", "plans", "believes", "estimates" and
similar expressions are forward-looking statements. The actions of current and
potential new competitors, changes in technology, seasonality, business cycles,
new regulatory requirements and other factors may impact greatly upon strategies
and expectations and are outside our direct control.
The purpose of this amended Form 8-K is to file required financial
statements relating to the Acquisition, including required pro-forma financial
information. The following financial statements relating to the Acquisition are
attached hereto:
FINANCIAL STATEMENT INDEX
Item 7.Financial Statement and Exhibits
(a) Financial Statements of the Business Acquired
Independent Auditors' Report ................... F-1
Financial Statements
Balance Sheet ........................... F-2
Statement of Operations ................. F-3
Statement of Changes
in Deficiency in Assets .............. F-4
Statement of Cash Flows ................. F-5
Notes to Financial Statements ........... F-6 - F-9
2
<PAGE>
(b) Pro Forma Financial Information
Index to Unaudited Pro Forma Consolidated Financial
Statements 4networld.com, Inc. and Delotto Systems, Inc.
Introduction to Unaudited Pro Forma
Consolidated Financial Statements ..... F-10
Unaudited Pro Forma Consolidated
Statement of Operations for the
six months ended March 31, 2000 ....... F-11
Notes to Unaudited Pro Forma
Consolidated Statement of Operations .. F-12
Unaudited Pro Forma Consolidated
Balance Sheet as of March 31, 2000 .... F-13
Notes to Unaudited Pro Forma
Consolidated Balance Sheet ............ F-14
(c) Exhibits.
The following Exhibits are hereby filed as part of this Current Report
on Form 8-K:
Exhibit Description
-------------------
2.1 Stock Purchase Agreement dated April 24, 2000 by and among Michael
Park, Robert Park and Andrew Patros and MedTech Diagnostics, Inc. with
respect to the purchase of all of the issued and outstanding capital
stock of DelOtto Systems, Inc.*
--------------
* The Stock Purchase Agreement is attached as an exhibit to the Current Report
on Form 8-K filed by the Registrant on May 3, 2000, and is incorporated herein
by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
MedTech Diagnostics, Inc. has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
4networld.com, Inc.
(Registrant)
By: /s/ Steven N. Bronson
----------------------
Steven N. Bronson, Sole Officer
Dated: July 11, 2000
3
<PAGE>
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DELOTTO SYSTEMS, INC.
FINANCIAL STATEMENTS
FOR THE PERIOD FROM INCEPTION
(JULY 8, 1999) TO MARCH 31, 2000
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<PAGE>
CONTENTS
Page
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INDEPENDENT AUDITORS' REPORT F - 1
FINANCIAL STATEMENTS
Balance Sheet F - 2
Statement of Operations F - 3
Statement of Changes in Deficiency in Assets F - 4
Statement of Cash Flows F - 5
Notes to Financial Statements F - 6 to F - 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
-----------------------------------------------------------------------------
To the Boards of Directors and Stockholders
Delotto Systems, Inc. and 4worldnet.com, Inc.
New York, New York
We have audited the accompanying balance sheet of Delotto Systems, Inc., as of
March 31, 2000 and the related statements of operations, changes in deficiency
in assets, and cash flows for the period from inception (July 8, 1999) to March
31, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with 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 audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Delotto Systems, Inc. as of
March 31, 2000, and the results of its operations and cash flows for the period
from inception (July 8, 1999) to March 31, 2000 in conformity with generally
accepted accounting principles.
Miami, Florida
June 30, 2000
F-1
<PAGE>
DELOTTO SYSTEMS, INC.
BALANCE SHEET
MARCH 31, 2000
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ASSETS
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CURRENT ASSETS
Cash $ 25,397
Accounts receivable, net of allowance for doubtful
accounts of $3,590 24,239
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Total current assets 49,636
PROPERTY AND EQUIPMENT (NOTE 2) 48,400
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$ 98,036
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LIABILITIES AND DEFICIENCY IN ASSETS
-----------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 18,739
Current portion of long-term debt (Note 3) 21,805
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Total current liabilities 40,544
LONG-TERM DEBT (NOTE 3) 97,022
COMMITMENTS (NOTE 4)
DEFICIENCY IN ASSETS (39,530)
-----------------------------------------------------------------------------
$ 98,036
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See accompanying notes.
F-2
<PAGE>
DELOTTO SYSTEMS, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (JULY 8, 1999) TO MARCH 31, 2000
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
REVENUE $ 71,711
OPERATING EXPENSES 126,453
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NET LOSS ($ 54,742)
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NET LOSS PER COMMON SHARE - BASIC ($ 36.49)
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 1,500
-----------------------------------------------------------------------------
See accompanying notes.
F-3
<PAGE>
DELOTTO SYSTEMS, INC.
STATEMENT OF CHANGES IN DEFICIENCY IN ASSETS
FOR THE PERIOD FROM INCEPTION (JULY 8, 1999) TO MARCH 31, 2000
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<TABLE>
<CAPTION>
Common Stock; $1 Stated Value;
3,000 Shares Authorized
---------------------------------
Number of Additional Total
Shares Issued Paid-in Accumulated Deficiency in
and Outstanding Amount Capital Deficit Assets
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of stock for 1,500 $ 1,500 $ 13,712 $ - $ 15,212
Net loss - - - (54,742) (54,742)
-----------------------------------------------------------------------------------------------------------
Balances - March 31, 2000 1,500 $ 1,500 $ 13,712 ($ 54,742) ($ 39,530)
-----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
F-4
<PAGE>
DELOTTO SYSTEMS, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (JULY 8, 1999) TO MARCH 31, 2000
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<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($ 54,742)
----------------------------------------------------------------------------------------------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 4,332
Provision for bad debt 3,590
Common stock issued for services 14,192
Changes in operating assets and liabilities:
Accounts receivable ( 27,829)
Accounts payable and accrued expenses 18,739
----------------------------------------------------------------------------------------------
Total adjustments 13,024
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Net cash used in operating activities ( 41,178)
----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ( 52,732)
----------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on long-term debt 125,000
Principal payments of long-term debt ( 6,173)
Net proceeds from issuance of common stock 1,020
----------------------------------------------------------------------------------------------
Net cash provided by financing activities 119,847
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NET INCREASE IN CASH REPRESENTING CASH BALANCE AT MARCH 31, 2000 $ 25,397
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Supplemental Disclosures:
----------------------------------------------------------------------------------------------
Interest paid $ 3,973
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Income taxes paid $ -
----------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
F-5
<PAGE>
DELOTTO SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Business Activity
Delotto Systems, Inc. (the Company) was incorporated in the State
of Pennsylvania on July 8, 1999 and commenced operations in
November 1999. The Company is engaged in the business of
providing internet consulting and web design and maintenance
services for the business-to-business market and is a provider of
content management and content syndication software. The
Company's customers are located primarily in the United States.
Property and Equipment
Property and equipment is recorded at cost. Expenditures for
major betterments and additions are charged to the asset accounts
while replacements, maintenance and repairs, which do not improve
or extend the lives of the respective assets, are charged to
expense currently.
Depreciation and Amortization
Depreciation is computed principally by using the straight-line
method based on the estimated useful lives of the assets.
Amortization of leasehold improvements is recognized over the
term of the lease or the life of the asset, whichever is shorter.
The range of estimated useful lives is presented as follows:
Furniture and fixtures 7 years
Office and computer equipment 5 years
Leasehold improvements 3 years or life of lease
Use of Estimates in the Preparation of Financial Statements
The accounting and reporting policies of the Company are in
conformity with generally accepted accounting principles. 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 as of the balance sheet date and the reported amounts
of revenues and expenses for the period presented. Actual results
could differ from those estimates.
Income Taxes
Statement of Financial Accounting Standards No. 109 ("SFAS No.
109"), "Accounting for Income Taxes, " requires the use of an
asset and liability approach in accounting for income taxes.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes.
See accompanying notes.
F-6
<PAGE>
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
-----------------------------------------------------------------------------
At March 31, 2000, the Company had net operating loss
carryforwards of approximately $55,000, which expire in varying
amounts through December 31, 2019. Federal tax rules impose
limitations on the use of net operating losses following certain
changes in ownership. Such a change of control occurred in April
2000. As a result, the Company's ability to utilize the net
operating loss carryforwards existing prior to the ownership
change is subject to annual limitations.
As a result of these net operating losses, the Company has
recorded a deferred tax asset of approximately $21,000, which is
offset by a valuation allowance in the same amount as the Company
believes it is more likely than not that future tax benefits will
not be realized. Realization of the deferred tax asset is
dependent on generating sufficient taxable income in the future.
The amount of the deferred tax asset considered realizable could
change in the near term if estimates of future taxable income are
increased.
Net Loss Per Common Share
The Company applies Statement of Financial Accounting Standards
No. 128, "Earnings Per Share" (FAS 128). Net loss per share
excludes dilution and is computed by dividing net loss by the
weighted average number of common shares outstanding during the
reported period. There is no difference between basic and diluted
net loss per share.
Fair Value of Financial Instruments
The carrying values of cash and accrued expenses approximate
their fair values due to the short maturity of these instruments.
The carrying value of long-term debt approximates fair value as
the interest rates are not significantly different from market
rates available to the Company.
Major Customers
At March 31, 2000, three customers accounted for approximately
38% of accounts receivable.
Year 2000 Uncertainties
Although the Company has not identified any computer system or
program problems, there is still a possibility that at some time
during the Year 2000 their computer systems and programs, as well
as equipment that uses embedded computer chips, may be unable to
distinguish between the years 1900 and 2000. This may create
system errors and failures resulting in the disruption of normal
business operations. Although it is unlikely, there may be some
third parties, such as governmental agencies, utilities,
telecommunication companies, vendors and customers that at times
may not be able to continue business with the Company due to
their own Year 2000 problems.
See accompanying notes.
F-7
<PAGE>
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NOTE 2. PROPERTY AND EQUIPMENT
-----------------------------------------------------------------------------
At March 31, 2000 property and equipment consisted of the
following:
Furniture and fixtures $ 16,939
Office and computer equipment 32,782
Leasehold improvements 3,011
--------------------------------------------------------------
52,732
Less accumulated depreciation and amortization 4,332
--------------------------------------------------------------
$ 48,400
--------------------------------------------------------------
Depreciation and amortization expense was $4,332 for the period
from inception (July 8, 1999) to March 31, 2000.
-----------------------------------------------------------------------------
NOTE 3. LONG-TERM DEBT
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Long-term debt consisted of the following at March 31, 2000:
6.25% promissory note to bank due December 2004;
collateralized by equipment, equipment and accounts
receivable; guaranteed by the shareholders $ 47,853
8.75% promissory note to bank due December 2004;
collateralized by equipment; guaranteed by the shareholders 70,974
-------------------------------------------------------------------------
118,827
Less: current maturities 21,805
-------------------------------------------------------------------------
Long-term debt $ 97,022
-------------------------------------------------------------------------
Aggregate maturities of long-term debt for the years subsequent
to March 31, 2000 are as follows:
March 31, 2001 $ 21,805
March 31, 2002 23,552
March 31, 2003 25,444
March 31, 2004 27,490
March 31, 2005 20,536
-------------------------------------------------------------------------
$ 118,827
-------------------------------------------------------------------------
</TABLE>
For the period from inception (July 8, 1999) to March 31, 2000
interest expense on total indebtedness amounted to $3,973.
See accompanying notes.
F-8
<PAGE>
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NOTE 4. COMMITMENTS
-----------------------------------------------------------------------------
Related Party - Office Rent
The Company sub-leases office space on a month-to-month basis
from shareholders of the Company who in turn lease the space from
an unrelated third party. Total rent expense related to this
lease amounted to approximately $3,000 for the period from
inception (July 8, 1999) to March 31, 2000.
Employment Contracts
In April 2000, the Company entered into employment contracts with
three executives which are cancelable under certain conditions,
as stated. Future annual minimum payments under these employment
agreements are as follows:
March 31, 2001 $ 156,000
March 31, 2002 $ 170,000
March 31, 2003 14,000
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$ 340,000
---------------------------------------------------------------
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NOTE 5. SUBSEQUENT EVENT
-----------------------------------------------------------------------------
On April 28, 2000, 4networld.com, Inc. (formerly known as
MedTech Diagnostics, Inc.) acquired all of the issued and
outstanding common stock of the Company.
See accompanying notes.
F-9
<PAGE>
INDEX TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Page
-----------------------------------------------------------------------------
4networld.com, Inc. and Delotto Systems, Inc.
Introduction to Unaudited Pro Forma Consolidated Financial Statements F - 10
Unaudited Pro Forma Consolidated Statement of Operations for the
six months ended March 31, 2000 F - 11
Notes to Unaudited Pro Forma Consolidated Statement of Operations F - 12
Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2000 F - 13
Notes to Unaudited Pro Forma Consolidated Balance Sheet F - 14
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------------------------------------
4networld.com, Inc. (the Company) acquired 100% of the common stock of Delotto
Systems, Inc. (the Target) on April 28, 2000.
The following pro forma financial information presents a) the Company's and
Target's pro forma unaudited consolidating statement of operations for the six
months ended March 31, 2000, as if the acquisition of the Target occurred on
October 1, 1999 and b) the Company's and Target's pro forma unaudited
consolidating balance sheet as of March 31, 2000, as if the acquisition of the
Target occurred on March 31, 2000.
This unaudited pro forma financial information does not purport to represent
what the Company's financial position or results of operations would actually
have been if such transactions in fact occurred on those dates, or to project
the Company's financial position or results of operations for any future date or
period. These unaudited pro forma consolidating financial statements should be
read in conjunction with the historical financial statements of 4networld.com,
Inc. and Delotto Systems, Inc.
As the operations of the Target did not commence until November 1999, a proforma
statement of operations for the year ended September 30, 1999 is not presented.
F-10
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 2000
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical
-------------------------------
4networld.com, Delotto Pro Forma Pro Forma
Inc. (1) Systems, Inc.(2) Adjustments(3) Combined
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE, DIVIDEND AND INTEREST INCOME $ 587 $ 71,711 $ - $ 72,298
GENERAL AND ADMINISTRATIVE EXPENSES 30,921 126,453 41,000 198,374
----------------------------------------------------------------------------------------------------------
NET LOSS ($ 30,334) ($ 54,742) ($ 41,000) ($ 126,076)
----------------------------------------------------------------------------------------------------------
NET LOSS PER COMMON SHARE - BASIC AND DILUTED $ Nil
----------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING - BASIC AND DILUTED 296,400,000
----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Statement of
Operations.
F-11
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENT OF OPERATIONS
-----------------------------------------------------------------------------
NOTE 1. The column includes the historical results of operations of
4networld.com, Inc. for the six months ended March 31, 2000.
NOTE 2. The column includes the historical results of operations of
Delotto Systems, Inc. for the six months ended March 31, 2000.
NOTE 3. The adjustment gives effect for an increase in amortization
expense of $41,000 due to the recording of goodwill in connection
with the acquisition. Amortization of goodwill is being computed
over 10 years.
F-12
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Historical
-------------------------------
4networld.com, Delotto Pro Forma Pro Forma
ASSETS Inc. (1) Systems, Inc.(2) Adjustments (3) Combined
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 2,381 $ 25,397 $ - $ 27,778
Accounts receivable, net - 24,239 - 24,239
Loan receivable 1,000 - - 1,000
------------------------------------------------------------------------------------------------------------
Total current assets 3,381 49,636 - 53,017
PROPERTY AND EQUIPMENT, NET - 48,400 - 48,400
GOODWILL, NET - - 820,000 820,000
------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 3,381 $ 98,036 $ 820,000 $ 921,417
------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 12,617 $ 18,739 $ 20,000 $ 51,356
Current portion of long-term debt - 21,805 - 21,805
------------------------------------------------------------------------------------------------------------
Total current liabilities 12,617 40,544 20,000 73,161
------------------------------------------------------------------------------------------------------------
LONG TERM DEBT - 97,022 - 97,022
------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 12,617 137,566 20,000 170,183
------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock 2,814 1,500 (1,350) 2,964
Additional paid-in capital 1,436,745 13,712 746,608 2,197,065
Accumulated Deficit (1,448,795) (54,742) 54,742 (1,448,795)
------------------------------------------------------------------------------------------------------------
Total stockholders' equity (deficiency) (9,236) (39,530) 800,000 751,234
------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 3,381 $ 98,036 $ 820,000 $ 921,417
------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Balance Sheet.
F - 13
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
-----------------------------------------------------------------------------
NOTE 1. The column includes the historical balance sheet of
4networld.com, Inc. as of March 31, 2000.
NOTE 2. The column includes the historical balance sheet of Delotto
Systems, Inc. as of March 31, 2000.
NOTE 3. The pro forma consolidated balance sheet has been adjusted to
record the acquisition as follows:
Value of 4networld.com, Inc. common stock issued $ 760,470
Acquisition costs 20,000
---------
Total consideration 780,470
Fair value of assets acquired (98,036)
Fair value of liabilities assumed 137,566
---------
Excess of cost over fair value of net
assets acquired, Goodwill $ 820,000
=========
The fair value of the assets acquired were in determined
accordance with APB 16 paragraph 87 & 88 as follows:
1. Accounts receivable was valued at the present value of the
amounts expected to be realized.
2. Property and equipment was assigned their fair value based
upon current estimated replacement costs for similar
capacity.
3. Accounts payable and long-term debt were valued at the
present value of the amounts expected to be satisfied.
F-14
