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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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July 6, 2000
------------
Date of Report (Date of earliest event reported)
METRISA INC.
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(Exact name of registrant as specified in charter)
Delaware 0-16152 04-2891557
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
25 Wiggins Avenue
Bedford, Massachusetts 01730-2323
---------------------------------
(Address of principal executive offices and zip code)
(781) 275-3300
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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<PAGE>
ITEM 7.
FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financing Statements of business acquired:
2
<PAGE>
MONITEK TECHNOLOGIES, INC. AND SUBSIDIARY
CONTENTS
--------------------------------------------------------------------------------
Page
AUDITORS' REPORT ON THE FINANCIAL STATEMENTS 4
FINANCIAL STATEMENTS
Consolidated balance sheets 5
Consolidated statements of operations 6
Consolidated statements of Sentex Sensing Technology, Inc. investment 7
Consolidated statements of cash flows 8
Notes to consolidated financial statements 9-17
3
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder
Monitek Technologies, Inc.
Cleveland, Ohio
We have audited the accompanying consolidated balance sheets of Monitek
Technologies, Inc. and subsidiary as of November 30, 1999 and 1998, and the
related consolidated statements of operations, Sentex Sensing Technology, Inc.
investment, and cash flows for each of the two years in the period ended
November 30, 1999. 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 consolidated financial position of Monitek
Technologies, Inc. and subsidiary as of November 30, 1999 and 1998, and the
consolidated results of their operations and their cash flows for each of the
two years in the period ended November 30, 1999, in conformity with generally
accepted accounting principles.
/s/ Hausser & Taylor LLP
------------------------------
Cleveland, Ohio
September 5, 2000
4
<PAGE>
MONITEK TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
November 30, 1999 and 1998
<TABLE><CAPTION>
-------------------------------------------------------------------------------------------------------
1999 1998
---------- ----------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 6,845 $ 115,795
Accounts receivable, less allowance for doubtful
accounts of $10,000 for 1999 and $28,988 for 1998 649,034 699,409
Inventories 962,390 1,118,990
Other current assets 89,488 62,279
---------- ----------
Total current assets 1,707,757 1,996,473
PROPERTY AND EQUIPMENT, less accumulated depreciation
and amortization of $209,003 for 1999 and $163,089 for 1998 123,793 175,500
OTHER ASSETS
Goodwill, net of accumulated amortization of $37,710 for 1999
and $25,140 for 1998 213,692 226,262
Other assets 14,395 19,135
---------- ----------
$2,059,637 $2,417,370
========== ==========
LIABILITIES AND INVESTMENTS
CURRENT LIABILITIES
Trade accounts payable $ 248,970 $ 410,772
Accrued liabilities 397,826 413,489
---------- ----------
Total current liabilities 646,796 824,261
INVESTMENTS
Sentex Sensing Technology, Inc. investment 1,412,841 1,593,109
---------- ----------
$2,059,637 $2,417,370
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MONITEK TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended November 30, 1999 and 1998
--------------------------------------------------------------------------------
1999 1998
----------- -----------
REVENUES
Net sales $ 4,114,559 $ 5,245,469
Interest and other income 18,464 73,765
----------- -----------
Total revenues 4,133,023 5,319,234
COST AND EXPENSES
Cost of sales 2,241,163 2,568,254
Selling, general and administrative 3,070,799 3,545,503
Research and development 177,542 117,988
----------- -----------
Total costs and expenses 5,489,504 6,231,745
----------- -----------
LOSS BEFORE PROVISION FOR INCOME TAX
EXPENSE (1,356,481) (912,511)
PROVISION FOR INCOME TAX EXPENSE -- --
----------- -----------
NET LOSS $(1,356,481) $ (912,511)
=========== ===========
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
MONITEK TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF SENTEX SENSING TECHNOLOGY, INC. INVESTMENT
Years Ended November 30, 1999 and 1998
--------------------------------------------------------------------------------
Total
Equity
-----------
BALANCE - November 30, 1997 $ 1,555,519
Net change in Sentex Sensing Technology, Inc. advances 964,827
Net change in accumulated translation adjustments (14,726)
Net loss (912,511)
-----------
BALANCE - November 30, 1998 1,593,109
Net change in Sentex Sensing Technology, Inc. advances 1,171,487
Net change in accumulated translation adjustments 4,726
Net loss (1,356,481)
-----------
BALANCE - November 30, 1999 $ 1,412,841
===========
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
MONITEK TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended November 30, 1999 and 1998
<TABLE><CAPTION>
------------------------------------------------------------------------------------------
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,356,481) $ (912,511)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 71,477 86,776
Translation and other adjustments 4,726 (14,726)
Changes in assets and liabilities:
Accounts receivable 50,375 (70,889)
Inventories 156,600 84,460
Other current assets (27,209) 102,641
Other assets (2,460) 1,684
Accounts payable (161,802) 42,705
Accrued liabilities (15,663) (199,392)
----------- -----------
Total adjustments 76,044 33,259
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Net cash used by operating activities (1,280,437) (879,252)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment -- (26,408)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in Sentex Sensing Technology, Inc. investment 1,171,487 964,827
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (108,950) 59,167
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 115,795 56,628
----------- -----------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 6,845 $ 115,795
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ -- $ 6,020
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
NOTE 1. ORGANIZATION, BACKGROUND AND INDUSTRY SEGMENT
On July 6, 2000, Sentex Sensing Technology, Inc. ("Sentex") (the parent
company to Monitek Technologies, Inc.) sold substantially all of the net assets
and operations of Monitek Technologies, Inc. to Metrisa, Inc. ("Metrisa"), a
manufacturer of similar products, with an effective date of July 1, 2000. The
sale also included the assets and operations of Monitek GmbH, a wholly-owned
subsidiary located in Germany (see Note 11).
The accompanying historical financial statements are presented on a
carve-out basis prepared from the Company's (as defined below) historical
accounting records. The results of operations are not necessarily indicative of
the results that would have occurred had Metrisa owned the Company's operations
for the periods presented in the historical financial statements. The financial
statements include allocations of direct and indirect corporate administrative
costs attributable to the Company. The methods by which such amounts are
attributed and allocated are deemed reasonable by management. All intercompany
transactions between the Company and its parent, including allocated expenses,
are deemed to be paid in the period recorded and are shown as a net change in
Sentex investment on the balance sheet.
The consolidated financial statements include the accounts of Monitek
Technologies, Inc. and its wholly-owned subsidiary, Monitek GmbH (collectively
the "Company"). All material intercompany accounts and transactions have been
eliminated in consolidation.
Prior to the sale to Metrisa, the Company's business was confined to a
single industry segment, manufacturing analysis equipment. The Company designed,
developed, assembled and marketed instruments for the measurement of clarity
(turbidity), suspended solid content, color, purity, flow, level and volume of
liquids in industrial waste water environments. Monitek GmbH, a wholly-owned
subsidiary of Monitek, was formed in Germany to sell and service Monitek's
products throughout Continental Europe. At November 30, 1999, Monitek GmbH's
assets, located in Continental Europe, represent approximately 50% of the
Company's total consolidated assets.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Cash and Cash Equivalents - Cash equivalents are comprised of certain
highly liquid investments with a maturity of three months or less when
purchased.
B. Goodwill - In November 1996, Monitek Technologies, Inc. was acquired by
Sentex. The excess of the aggregate purchase price over the estimated fair
market value of the net assets acquired was $251,402, which is being
amortized on a straight-line basis over 20 years.
C. Inventories - Inventories are stated at the lower of cost (determined by
the first-in, first-out method) or market.
D. Property and Equipment - Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization
are computed using straight-line and accelerated methods over the estimated
useful lives of the respective assets.
When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation or amortization are removed from the accounts and
any resulting gain or loss is recognized in income or loss for the period.
The cost of maintenance and repairs is included in the statements of
operations as incurred; significant renewals and betterments are
capitalized.
9
<PAGE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Revenue Recognition - The Company records revenue as products are shipped
to customers.
F. Research and Development Costs - Research and development costs are
expensed as incurred.
G. Concentration of Credit and Risk Factors - Financial instruments which
potentially subject the Company to concentrations of credit risk are cash
and equivalents, investments in certificates of deposit and accounts
receivable arising from its normal business activities. Concentrations of
credit risk with respect to trade receivables are limited, due to the
number of customers comprising the Company's customer base and their
disposition across different industries and geographic areas. Bad debt
expenses have not been material. The Company places its cash and cash
equivalents with high credit quality financial institutions. The amount on
deposit in any one institution that exceeds federally insured limits is
subject to credit risk.
The Company operates in an environment with many financial risks,
including, but not limited to, its lack of history of profitable
operations, the inherent risks associated with new product research and
development, the highly competitive nature of the industry in which it
operates and worldwide economic conditions. The Company's ability to
capitalize on its current and emerging technology and diversity of its
operations and products is also dependent upon the Company's ability to
obtain the necessary capital through operating cash flow, additional
borrowings or additional equity funds.
H. Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
I. Income Taxes - The Company, which files a consolidated return with its
parent, utilizes Statement of Financial Accounting Standards No. 109 ("SFAS
109"), Accounting for Income Taxes, which requires an asset and liability
approach to financial accounting and reporting for income taxes. The
difference between the financial statement and tax basis of assets and
liabilities is determined annually. Deferred income tax assets and
liabilities are computed for those temporary differences that have future
tax consequences using the current enacted tax laws and rates that apply to
the periods in which they are expected to affect taxable income. Valuation
allowances are established, if necessary, to reduce the deferred tax asset
to the amount that will, more likely than not, be realized. Income tax
expense is the current tax payable or refundable for the period plus or
minus the net change in the deferred tax assets and liabilities.
There are no current plans to repatriate undistributed earnings of
Monitek's foreign subsidiary. Therefore, no tax has been provided to cover
the repatriation of such undistributed earnings. The cumulative amount of
undistributed earnings for which the Company has not provided United States
income taxes is not material.
The Company has terminated its IC-DISC and, therefore, has begun
repatriation of the undistributed earnings of the IC-DISC. The
undistributed earnings of approximately $780,000 are recognized as income
by the Company over a 10-year period ending March 31, 2001.
10
<PAGE>
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
J. Fair Value of Financial Instruments - The fair values of cash, accounts
receivable, accounts payable and other short-term obligations approximate
their carrying values because of the short maturity of these financial
instruments.
K. Foreign Currency Translation - The Company accounts for foreign currency
translation in accordance with Statement of Financial Accounting Standards
No. 52, Foreign Currency Translation. The functional currency of the
Company's German subsidiary is the deutsche mark. All transactions of that
subsidiary denominated in currency other than the functional currency are
remeasured into the functional currency with the resulting gain or loss
included as foreign currency transaction gains or losses in the
accompanying consolidated statements of operations. Assets and liabilities
denominated in currencies other than U.S. dollars are translated at year
end exchange rates and all statement of operations items are translated at
the weighted average exchange rate for the year. The changes in the
accumulated translation adjustments have been included in Sentex Sensing
Technology, Inc. investment.
L. New Authoritative Pronouncements - In June 1997, SFAS No. 131, Disclosures
About Segments of an Enterprise and Related Information, was issued. SFAS
No. 131 changes the standards for reporting financial results by operating
segments, related products and services, geographic areas and major
customers. The Company adopted the new standard, which did not materially
affect the Company's financial statements.
In June 1998, SFAS 133, Accounting for Derivative Instruments and Hedging
Activities, was issued. SFAS 133 establishes accounting and reporting
standards for derivative instruments and hedging activities. SFAS 133, as
amended by SFAS 137, is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. Management believes this pronouncement
will have no effect on the financial statements.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial
Statements." SAB 101 summarizes the staff's views and provides guidance on
applying generally accepted accounting principles to revenue recognition.
SAB 101, as amended by SAB 101A and SAB 101B, must be adopted no later than
the fourth fiscal quarter of fiscal years beginning after December 15,
1999. The Company has not determined the effects, if any, the SAB may have
on its financial statements.
NOTE 3. INVENTORIES
Inventories consist of the following at November 30:
1999 1998
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Raw materials $ 431,474 $ 371,243
Work-in-process 254,430 186,099
Finished Goods 276,163 561,648
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$ 962,390 $1,118,990
========== ==========
11
<PAGE>
NOTE 4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at November 30:
1999 1998
-------- --------
Machinery and equipment $284,183 $284,183
Leasehold improvements -- 5,793
Furniture and fixtures 48,613 48,613
-------- --------
332,796 338,589
Less accumulated depreciation
and amortization 209,003 163,089
-------- --------
$123,793 $175,500
======== ========
NOTE 5. ACCRUED LIABILITIES
Accrued liabilities consist of the following at November 30:
1999 1998
-------- --------
Accrued bonuses and other compensation $ 16,138 $ 63,798
Accrued commissions 13,936 67,239
Accrued pension 328,764 265,013
Accrued payroll and related taxes 24,198 17,439
Other accrued liabilities 14,790 --
-------- --------
$397,826 $413,489
======== ========
NOTE 6. COMMITMENTS AND CONTINGENCIES
The Company leases certain equipment and occupies premises under
various operating leases. Rental expense amounted to approximately $295,000 and
$272,000 for the years ended November 30, 1999 and 1998, respectively. Future
minimum payments under leases that have initial or remaining terms in excess of
one year are as follows at November 30, 1999:
2000 $135,442
2001 73,333
--------
$208,775
========
NOTE 7. PROFIT-SHARING PLAN
The Company has a profit-sharing plan and a 401(k) retirement plan for
the benefit of eligible employees. Contributions under the plans are determined
at the discretion of the Board of Directors and are credited to employees based
upon a percentage of eligible salaries. The Company elected to suspend all
contributions for the years ended November 30, 1999 and 1998.
12
<PAGE>
NOTE 8. INCOME TAXES
As referred to in Note 1, the Company utilizes SFAS 109, Accounting for
Income Taxes, and files a consolidated return with its parent company. The
following presents certain income tax information as if the Company prepared its
tax return on a stand-alone basis. A reconciliation between the Company's
effective income tax rate and the statutory federal income tax rate is as
follows for the years ended November 30:
1999 1998
------- --------
Expected federal income tax benefit at
the statutory rate (34.0)% (34.0)%
Increase in taxes resulting from:
Effect of operating loss for which no tax
carrybacks are available 34.0 34.0
------- --------
- % - %
======= ========
The tax effects of significant temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax liabilities are
presented below for the years ended November 30:
1999 1998
--------- ---------
Deferred tax assets:
Allowance for doubtful accounts and
miscellaneous other $ (4,000) $ (7,000)
Net operating loss carryforward 742,000 455,000
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Total gross deferred tax assets 738,000 448,000
Less valuation allowance 738,000 448,000
--------- ---------
Net deferred tax assets $ -- $ --
========= =========
The deferred tax assets do not include deferred tax assets related to
purchased net operating loss carryforwards that are subject to usage limitations
(see below).
The Company established a valuation allowance against tax benefits that
are potentially available to the Company but have not yet been recognized. This
valuation allowance relates to the amount of net operating loss carryforwards in
excess of existing net taxable temporary differences and to certain deductible
temporary differences that may not reverse during periods in which the Company
may generate net taxable income. During the years ended November 30, 1999 and
1998, the Company recorded increases of $280,000 and $284,000, respectively, in
the valuation allowance primarily as a result of the net operating loss
generated during the year.
At November 30, 1999, the Company had approximately $8,449,000 of net
operating loss carryforwards available to offset future federal taxable income.
The federal net operating loss carryforwards expire at various dates through
2019. Federal tax law imposes restrictions on the utilization of net operating
loss carryforwards in the event of a change in ownership. The Company's net
operating loss includes approximately $6,265,000 of loss carryforwards that are
subject to limitations as a result of these provisions.
13
<PAGE>
NOTE 9. RELATED PARTY TRANSACTIONS
Interest expense of $221,963 for 1999 and $69,941 for 1998 is accrued
and included in the inter-company accounts to the parent company. The net
liability to Sentex Sensing Technology, Inc. is included in the investment
account.
Effective March 1, 1996 and amended in June 1996, the parent company
entered into a management agreement with an affiliate and significant
shareholder, CPS Capital, Ltd., to perform management and executive services.
Management fee expense charged to Monitek was $200,000 for 1999 and $125,000 for
1998 and the liability has been reflected in the investment account of Sentex
Sensing Technology, Inc.
NOTE 10. SEGMENT AND GEOGRAPHIC INFORMATION
The Company operates in one industry segment as described in Note 1 and
two geographical reporting segments. Sales and operating losses for the years
ended November 30, 1999 and 1998, and identifiable assets classified by the
major geographic areas in which the Company operates, are as follows:
Year Ended November 30,
----------------------------
1999 1998
----------- -----------
Sales to unaffiliated customers:
United States
Domestic $ 1,315,848 $ 1,765,320
Export sales 412,921 423,040
Continental Europe 2,385,790 3,057,109
Inter-company transfers 642,346 396,846
Eliminations (642,346) (396,846)
Net Sales 4,114,559 5,245,469
Operating Loss:
United States (804,843) (846,199)
Continental Europe (348,139) (70,136)
Interest Expense (221,963) (69,941)
Other income, net 18,464 73,765
Loss before income tax expense $(1,356,481) $ (912,511)
=========== ===========
Identifiable assets:
United States $ 1,026,837 $ 1,176,570
Continental Europe 1,032,800 1,240,800
Total Assets $ 2,059,637 $ 2,417,370
=========== ===========
14
<PAGE>
NOTE 11. SUBSEQUENT EVENT
On July 6, 2000, Sentex Sensing Technology, Inc. (Monitek's parent
company) sold substantially all of the Company's assets to Metrisa for cash,
notes, the assumption of selected liabilities and Metrisa common stock.
At the closing, Metrisa issued 160,000 shares of Metrisa common stock
to Sentex and paid Sentex $1,265,000 for substantially all the assets of Monitek
and Monitek GmbH, which was based on the estimated net book value of certain
assets of those companies at July 1, 2000. The payment of the non-stock
consideration was made by the assumption of various liabilities of Monitek and
Monitek GmbH in the approximate amount of $272,000, payment in cash of
approximately $500,000, reduced by $50,000 reflecting the amount of cash Metrisa
advanced to Sentex prior to closing, and delivery of a promissory note in the
amount of approximately $493,000. A final adjustment to the purchase price will
be made 45 days after closing. Any adjustments will be made to the amount of the
promissory note.
15
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(CONTINUED)
(b) Pro Forma Financial Information:
UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following Unaudited Pro Forma Combined Statements of Operations for
the fiscal year ended September 30, 1999 and for the nine months ended June 30,
2000 present the results of the operations of Metrisa, Inc. as if the
acquisition had occurred at the beginning of the periods presented. The
Unaudited Pro Forma Combined Financial Data for the fiscal year ended September
30, 1999 and for the nine months ended June 30, 2000 have been prepared by
Metrisa's management and are not necessarily indicative of Metrisa's results of
operations had the acquisition actually occurred on the assumed dates, nor are
they necessarily indicative of Metrisa's results of operations for any future
period. As permitted in combining entities with different fiscal years, no
adjustments were made to Monitek results from operations for the periods
presented as Monitek's year end is within 93 days of Metrisa's year end. In the
opinion of management, all necessary adjustments have been made to fairly
present this pro forma information. The Unaudited Pro Forma Combined Financial
Data are based on the historical financial statements of Metrisa, Inc. and
Monitek Technologies, Inc. and subsidiary and give effect to the assumptions and
adjustments set forth in the accompanying notes. References to the Company's pro
forma fiscal year ended September 30, 1999, combined, on a pro forma basis, the
results of Metrisa, Inc. for the fiscal year ended September 30, 1999 and
Monitek Technologies, Inc. and subsidiary for the last twelve months ended
November 30, 1999. References to the Company's pro forma nine months ended June
30, 2000, combine, on a pro forma basis, the results of Metrisa, Inc. for the
nine months ended June 30, 2000 and Monitek Technologies, Inc. and subsidiary
for the seven months ended June 30, 2000. The following Unaudited Pro Forma
Combining Balances Sheet was prepared as if the Metrisa/Monitek merger occurred
on 6/30/2000.
The acquisition of the assets of Monitek Technologies, Inc. and
subsidiary has been accounted for using the purchase method of accounting, and
accordingly, the purchase price has been allocated to the assets purchased and
the liabilities assumed based on fair values at the date of acquisition. The
allocation of the aggregate purchase price for the acquisition, together with
the liabilities assumed pursuant thereto, to the net assets acquired has been
based on management's preliminary estimate. Adjustments to asset values and
liabilities in the final allocation may differ from these estimates, which could
impact future earnings.
16
<PAGE>
METRISA, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
<TABLE><CAPTION>
HISTORICAL PRO FORMA
---------- ---------
METRISA(A) MONITEK(B) ADJUSTMENTS COMBINED
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 7,640,595 4,114,559 (304,477)(m) 11,450,677
Cost of sales 3,747,893 2,241,163 171,657(c) 6,160,713
--------------------------------------------------- ------------
Gross profit 3,892,702 1,873,396 (476,134) 5,289,964
Operating expenses:
Selling, general and administrative 3,847,182 3,070,799 3,330(d) 6,642,366
-- 25,532(e)
-- (304,477)(m)
Research and development 621,661 177,542 -- 799,203
Restructuring charge 149,288 -- -- 149,288
--------------------------------------------------- ------------
Total Operating Expenses 4,618,131 3,248,341 (275,615) 7,590,857
Profit/Loss from operations (725,429) (1,374,945) (200,519) (2,300,893)
Other income (expense):
Other income 3,671 -- -- 3,671
Interest income 86,014 18,464 -- 104,478
Interest expense (448,294) -- (38,346)(f) (486,640)
--------------------------------------------------- ------------
(358,609) 18,464 (38,346) (378,491)
------------------------------------------------------------------------
Income (loss) before income taxes (1,084,038) (1,356,481) (238,865) (2,679,384)
Income taxes 6,000 -- -- 6,000
--------------------------------------------------- ------------
Net (loss) income $ (1,090,038) $ (1,356,481) $ (238,865) $ (2,685,384)
=================================================== ============
Net profit/loss per common share - basic $ (1.07) -- -- $ (2.27)
- diluted $ (1.07) -- -- $ (2.27)
Shares outstanding - basic 1,021,320 -- 160,000 1,181,320
- diluted 1,021,320 -- 160,000 1,181,320
</TABLE>
See accompanying notes to Unaudited Combined Pro Forma Statements of Operations
17
<PAGE>
METRISA, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR TO DATE JUNE 30, 2000
<TABLE><CAPTION>
HISTORICAL PRO FORMA
---------- ---------
METRISA (A) MONITEK (B) ADJUSTMENTS COMBINED
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 5,476,208 1,803,120 -- 7,279,328
Cost of sales 2,458,387 961,903 171,657(c) 3,591,947
------------------------------------------------ -----------
Gross profit 3,017,821 841,217 (171,657) 3,687,381
Operating expenses:
Selling, general and administrative 2,478,889 1,246,453 (636)(d) 3,743,855
-- -- 19,149(e) --
Research and development 482,717 71,290 -- 554,007
------------------------------------------------ -----------
Total Operating Expenses 2,961,606 1,317,743 18,513 4,297,862
Profit/Loss from operations 56,215 (476,526) (190,170) (610,481)
Other income (expense):
Other income -- 4,502 -- 4,502
Interest income 18,287 19,467 -- 37,754
Interest expense (308,013) (177,478) (28,760)(f) (514,251)
------------------------------------------------ -----------
(289,726) (153,509) (28,760) (471,995)
Income (loss) before income taxes (233,511) (630,035) (218,930) (1,082,476)
Income taxes 19,514 -- -- 19,514
Net (loss) income $ (253,025) $ (630,035) $ (218,930) $(1,101,990)
================================================ ===========
Net profit/loss per common share - basic $ (0.22) -- -- $ (0.83)
- diluted $ (0.22) -- -- $ (0.83)
Shares outstanding - basic 1,171,436 -- 160,000 1,331,436
- diluted 1,171,436 -- 160,000 1,331,436
</TABLE>
See accompanying notes to Unaudited Combined Pro Forma Statements of Operations
18
<PAGE>
METRISA, INC.
UNAUDITED PRO FORMA COMBINING BALANCE SHEET
<TABLE><CAPTION>
METRISA(A) MONITEK(B)
JUNE 30, ACQUISITION ADJUSTMENTS COMBINED
2000 JULY 1, 2000
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents 934,925 -- (450,000)(g) 484,925
Accounts receivable, net of allowance for
doubtful accounts 2,002,764 436,538 -- 2,439,302
Inventories: 1,213,439 709,269 171,656(h) 2,094,364
Prepaid expenses 166,315 45,502 (116,694)(i) 95,123
Other Current Assets -- 7,316 -- 7,316
Notes receivable 50,000 -- (50,000)(g) --
-----------------------------------------------------------
Total current assets 4,367,443 1,198,625 (445,038) 5,121,030
Equipment and fixtures, net 342,776 49,232 (3,541)(j) 388,467
Other assets, net of accumulated amortization 1,573,884 -- 382,974(k) 1,956,858
-----------------------------------------------------------
Total assets 6,284,103 1,247,857 (65,605) 7,466,355
--------- --------- --------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to bank 649,938 -- -- 649,938
Note Payable -- -- -- --
Accounts payable 1,213,406 158,344 -- 1,371,750
Accrued expenses and other 451,570 163,858 55,198(i) 670,626
Current portion of long-term debt 225,050 -- -- 225,050
Intecompany receivable -- -- -- --
-----------------------------------------------------------
Total current liabilities 2,539,964 322,202 55,198 2,917,364
Long-term debt, less current portion 1,762,109 -- 425,652(g) 2,187,761
Stockholders' equity:
Common stock 632,657 -- 80,000(g) 712,657
Additional paid-in capital 2,450,160 -- 299,200(g) 2,749,360
Accumulated deficit (1,100,787) -- -- (1,100,787)
Sentex Sensing Technologies,Inc. Investment -- 925,655 (925,655)(l) --
-----------------------------------------------------------
Total stockholders' equity 1,982,030 925,655 (546,455) 2,361,230
Total liabilities and stockholders' equity 6,284,103 1,247,857 (65,605) 7,466,355
===========================================================
</TABLE>
See Accompanying notes to Unaudited Pro Forma Combining Balance Sheets.
19
<PAGE>
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR FISCAL YEAR ENDED SEPTEMBER 30, 1999
AND THE NINE MONTHS ENDED JUNE 30, 2000 AND
UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF JUNE 30, 2000
(a) For the purpose of the Unaudited Pro Forma Combined Financial
Statements the name "Metrisa" refers to Metrisa, Inc.
(b) For the purpose of the Unaudited Pro Forma Combined Financial Statement
the name "Monitek" refers to Monitek Technologies, Inc. and Subsidiary
(c) Reflects the $171,657 write up in Finished Goods and Work in process
inventory value at the time of acquisition and assumes all items have
been shipped and costs transferred into Cost of Sales
(d) Reflects the $3330 for 1999 and ($636) for 2000 write-offs and/or
reduction of useful lives of certain acquired Fixed Assets.
(e) Reflects the Goodwill Amortization expense of $25,532 and $9,149 for
the 1999 year and nine months of year 2000.
(f) The Interest expenses of $38,346 and $28,760 for 1999 and 2000
respectively, represents the interest on the Note Payable set up as
part of the acquisition payment calculated at 9%.
(g) Reflects the purchase price; the payment of $50,000 prepaid at the
signing of the Purchase and Sales Agreement in March and additional
$450,000 on July 6, 2000 for a total of $500,000 in cash. Issuance of
160,000 shares of Common Stock at a value of $2.37/share, recorded as
$80,000 in common stock and $299,200 in additional paid in capital. The
$2.37/share value is the most recent arms length similar volume
transaction. The balance of the purchase price is the $425,652 Note
Payable in Long-term debt.
(h) Reflects the $171,656 reflects the write up of Finished Goods and Work
in Process inventory to their estimated selling price less normal
Distributor discounts.
(i) Reflects Prepaid and Accrued deal costs including Attorney Fees,
Accounting Fees and other related costs.
(j) Reflects the $3,541 adjustments to Furniture and Fixtures and Computers
as a result of a change in the depreciated useful life.
(k) Reflects the $382,974 addition to Other Assets consisting of the excess
of cost over net assets acquired (Goodwill). Goodwill will be amortized
over a fifteen year life. No other intangible assets were in the
allocation of the purchase price.
(l) The removal of the $925,655 of Sentex Sensing Technologies, Inc.
Investment from the Balance Sheet.
(m) Certain reclassifications have been made to Monitek Historical
Financial results to conform to Metrisa Presentation (treatment of
Distributor Discounts).
20
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(CONTINUED)
(c) Exhibits.
Exhibit No. Description
----------- -----------
10.20 Asset Purchase Agreement by and among
Metrisa, Inc., Metrisa GmbH, Sentex Sensing
Technology, Inc., Monitek Technologies,
Inc., Monitek GmbH and CPS Capital, Ltd.
dated as of March 14, 2000 (filed with
Metrisa's Form 10 Q SB for the fiscal
quarter ended March 31, 2000, incorporated
herein by reference).
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METRISA, INC.
Date: September 15, 2000 By: /s/ John E. Wolfe
--------------------
John E. Wolfe, President, Chief
Executive Officer and Treasurer
22
