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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
AMENDED
FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):JULY 08, 1996
(FEBRUARY 27, 1996)
THERAPY LASERS, INC.
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(Exact Name of Registrant as Specified in its Charter)
NEVADA
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(State or other Jurisdiction of Incorporation)
0-18515 93-0960302
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(Commission File Number) (IRS Employer Identification Number)
10850 RICHMOND AVE., STE.#216
HOUSTON, TEXAS 77042
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(Address Of Principal Executive Offices) (Zip Code)
(713) 783-0443
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(Registrant's Telephone Number, Including Area Code)
1
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
AS A RESULT OF THE SHARES OF THERAPY LASERS, INC. COMMON STOCK RECEIVED IN
THE AGREEMENT AND PLAN OF REORGANIZATION BETWEEN THERAPY LASERS, INC. AND
LASERCARE, INC., (DISCUSSED IN ITEM 2), MR. CHARLES E. SHEFFIELD NOW CONTROLS
APPROXIMATELY 42.8% OF THE OUTSTANDING STOCK OF THERAPY LASERS, INC. PRIOR TO
THIS TRANSACTION NO ONE PERSON BENEFICIALLY OWNED DIRECTLY OR INDIRECTLY MORE
THAN 12% OF THE OUTSTANDING STOCK OF THERAPY LASERS, INC.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
ON MARCH 11, 1996, THERAPY LASERS, INC. ENTERED INTO AN AGREEMENT AND PLAN
OF REORGANIZATION WITH LASERCARE, INC. THERAPY LASERS, INC. ISSUED TO
LASERCARE, INC. 5,750,776 SHARES OF COMMON STOCK IN EXCHANGE FOR 1000 SHARES OF
LASERCARE, INC.'S COMMON STOCK. THE 5,750,776 SHARES OF THERAPY LASERS, INC.
STOCK REPRESENT APPROXIMATELY 60% OF THE CURRENT STOCK OUTSTANDING OF THERAPY
LASERS, INC. THE 1000 SHARES OF LASERCARE, INC. STOCK REPRESENT 100% OF THEIR
OUTSTANDING. THE BASIS FOR DETERMINING THE TRANSACTION WAS BASED ON THE TOTAL
ASSETS LESS LIABILITIES OF BOTH COMPANIES COMBINED AND THE PERCENTAGES OWNED BY
EACH COMPANY.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
N/A
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
EFFECTIVE FEBRUARY 27, 1996, THE CLIENT -AUDITOR RELATIONSHIP BETWEEN
THERAPY LASERS, INC. AND THE AUDITING FIRM OF PHILIP H. SALCHLI, CERTIFIED
PUBLIC ACCOUNTANT, CEASED. THERE WERE NO DISAGREEMENTS ON ANY MATTER OF
ACCOUNTING PRINCIPLES OR PRACTICES, FINANCIAL STATEMENT PRESENTATION OR
DISCLOSURE, OR AUDITING SCOPE OR PROCEDURES DURING THE YEAR ENDED FEBRUARY 28,
1995.
(A)(1)(I) THE FORMER ACCOUNTANT PHILIP H. SALCHLI DECLINED TO STAND FOR
REELECTION.
(II) THE ACCOUNTANTS REPORT ON THE FINANCIAL STATEMENT FOR THE PAST YEAR
DID NOT CONTAIN AN ADVERSE OPINION OR DISCLAIMER OF OPINION. THERE WERE NO
DISAGREEMENTS IN REGARDS TO ACCOUNTING PRINCIPLES.
2
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(III) THE DECISION TO CHANGE ACCOUNTANTS WAS RECOMMENDED AND APPROVED BY
THE BOARD OF DIRECTORS.
(IV) THERE WERE NO DISAGREEMENTS WITH THE FORMER ACCOUNTANTS ON ANY MATTER
OF ACCOUNTING PRINCIPLES OR PRACTICES, FINANCIAL STATEMENT DISCLOSURE, OR
AUDITING SCOPE OF PROCEDURE.
(V)(A) THE ACCOUNTANT HAS ADVISED US THAT THE INTERNAL CONTROLS NECESSARY
TO DEVELOP RELIABLE FINANCIAL STATEMENTS DO EXIST.
(B) THE ACCOUNTANT HAS NOT ADVISED US THAT INFORMATION HAS COME TO HIS
ATTENTION THAT HAS LED HIM TO NO LONGER BE ABLE TO RELY ON MANAGEMENT'S
REPRESENTATIONS.
(C)(1) THE ACCOUNTANT HAS NOT ADVISED US OF THE NEED TO EXPAND THE SCOPE OF
OUR AUDIT, OR THAT INFORMATION HAS COME TO HIS ATTENTION THAT WOULD MATERIALLY
IMPACT THE FAIRNESS OR RELIABILITY OF A PREVIOUSLY ISSUED AUDIT OR FINANCIAL
STATEMENTS, OR FINANCIAL STATEMENTS ISSUED OR TO BE ISSUED COVERING THE FISCAL
PERIOD SUBSEQUENT TO THE DATE OF THE MOST RECENT FINANCIAL STATEMENTS COVERED BY
AN AUDIT REPORT. THERE HAS BEEN NO CAUSE FOR THE ACCOUNTANT TO BE UNWILLING TO
RELY ON MANAGEMENT'S REPRESENTATIONS OR TO BE ASSOCIATED WITH OUR FINANCIAL
STATEMENTS.
(2) THERE WAS NO REASON FOR THE ACCOUNTANT TO EXPAND THE SCOPE OF OUR
AUDIT.
(D)(1) THE ACCOUNTANT HAS NOT ADVISED US THAT ANY INFORMATION HAS COME TO
HIS ATTENTION THAT WOULD MATERIALLY IMPACT THE FAIRNESS OR RELIABILITY OF EITHER
A PREVIOUSLY ISSUED AUDIT REPORT OR THE UNDERLYING FINANCIAL STATEMENTS, OR THE
FINANCIAL STATEMENTS ISSUED OR TO BE ISSUED COVERING THE FISCAL PERIOD
SUBSEQUENT TO THE DATE OF THE MOST RECENT FINANCIAL STATEMENTS COVERED BY AN
AUDIT REPORT.
(2) THERE WERE NO ISSUES UNRESOLVED PRIOR TO THE ACCOUNTANTS DECISION NOT
TO STAND FOR REELECTION.
EFFECTIVE MARCH 18, 1996, THE COMPANY ENTERED INTO AN AGREEMENT WITH
BATEMAN, BLOMSTROM & CO., CERTIFIED PUBLIC ACCOUNTANTS, TO ACT AS THE COMPANIES
NEW PRINCIPAL ACCOUNTANT.
ITEM 5. OTHER EVENTS
N/A
ITEM 6. RESIGNATION OF REGISTRANTS DIRECTORS
N/A
3
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A)(4) FINANCIAL STATEMENTS FOR LASERCARE, INC.
(C) EXHIBITS
(1) LETTER FROM PHILIP H. SALCHLI, CERTIFIED PUBLIC ACCOUNTANT, TO THERAPY
LASERS, INC., STATING THEIR DECISION NOT TO STAND FOR REELECTION, PREVIOUSLY
FILED WITH ORIGINAL FORM 8K, DATED MARCH 14, 1996.
(2) LETTER FROM PHILIP H. SALCHLI, CERTIFIED PUBLIC ACCOUNTANT, TO THE
COMMISSION DATED APRIL 29, 1996, STATING THEIR DECISION NOT TO STAND FOR
REELECTION AND AFFIRMING THAT THERE WERE NO DISAGREEMENTS ON ANY MATTER OF
ACCOUNTING PRINCIPLES OR PRACTICES, FINANCIAL STATEMENT DISCLOSURE OR AUDITING
SCOPE OR PROCEDURE, PREVIOUSLY FILED WITH AMENDED FORM 8K, DATED APRIL 30, 1996.
(3) CONTRACT BETWEEN THERAPY LASERS, INC. AND BATEMAN, BLOMSTROM & CO.,
CERTIFIED PUBLIC ACCOUNTANTS, PREVIOUSLY FILED WITH ORIGINAL FORM 8K , DATED
MARCH 14, 1996.
(4) AGREEMENT AND PLAN OF REORGANIZATION BETWEEN THERAPY LASERS, INC.
AND LASERCARE, INC, PREVIOUSLY FILED WITH ORIGINAL FORM 8K, DATED MARCH 14,
1996.
ITEM 8. CHANGE IN REGISTRANT'S FISCAL YEAR
N/A
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934, AS
AMENDED, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
DATE: JULY 8, 1996 THERAPY LASERS, INC.
/s/ [SIGNATURE APPEARS HERE]
------------------------------------------
LEON D. HOGG
PRESIDENT
4
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
INDEX TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
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DESCRIPTION PAGE
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Report of Independent Certified Public Accountants F-2
Balance sheet F-3
Statement of loss for the period from inception,
March 28, 1995, through February 29, 1996 F-4
Statement of stockholder's equity for the period
from inception, March 28, 1995, through
February 29, 1996 F-5
Statement of cash flows for the period from
inception, March 28, 1995, through
February 29, 1996 F-6
Notes to financial statements F-7
F-1
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[LETTERHEAD OF BATEMAN, BLOMSTROM & CO.]
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To The Board of Directors and Stockholders
LaserCare, Inc.
Houston, Texas
We were engaged to audit the accompanying balance sheet of LaserCare, Inc. (a
development stage enterprise) as of February 29, 1996, and the related
statements of loss, stockholders' equity, and cash flows for the period from
inception, March 28, 1995, through February 29, 1996. These financial
statements are the responsibility of the Company's management.
As indicated in Note 2 to the financial statements, a substantial part of the
Company's assets had been advanced to Therapy Lasers, Inc., at February 29,
1996, and substantially all of the remainder of the Company's cash was advanced
to Therapy Lasers, Inc. between February 29 and May 31, 1996. Because Therapy
Lasers, Inc. is a development stage enterprise without significant assets,
income, or cash flows, and because there is substantial doubt about its ability
to continue as a going concern, it is not possible to apply suffficient auditing
procedures to determine the collectibility of the advances.
Also, the accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the following conditions
raise substantial doubt about its ability to continue as a going concern. As
discussed in Note 6 to the financial statements, the Company has no operating
revenues and had an accumulated deficit of $3,483. In addition, as indicated
above, substantially all of its cash was loaned to Therapy Lasers, Inc.
subsequent to February 29, 1996. Realization of the assets included in the
balance sheet referred to above is dependent not only on the Company's
successful future operations, but also Therapy Laser, Inc.'s successful future
operations.
Since we were unable to satisfy ourselves regarding the collectibility of the
advances to Therapy Lasers, Inc. described above, the scope of our work was not
sufficient to enable us to express an opinion, and because of the significance
of the uncertainties described in the preceding paragraphs, we are unable to
express, and we do not express, an opinion on the financial statements referred
to in the first paragraph.
[Signature of Bateman, Blomstrom & Co.
appears here]
BATEMAN, BLOMSTROM & CO.
Houston, Texas
July 6, 1996
Member
INTERNATIONAL ASSOCIATION OF PRACTISING ACCOUNTANTS
Offices in Principal Cities Around The World
F-2
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
FEBRUARY 29, 1996
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FEBRUARY 29,
1996
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ASSETS
Current assets:
Cash $12,807
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Total current assets 12,807
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Other assets:
Advances receivable, Therapy Lasers, Inc. 6,000
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Total assets $18,807
=======
LIABILITIES
Current liabilities:
Account payable, affiliated company $ 290
Note payable, related party --
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Total current liabilities 290
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Commitments and contingencies --
STOCKHOLDERS' EQUITY
Common stock, par value $1 per share, 1,000 shares
authorized, issued and outstanding 1,000
Capital in excess of par value 21,000
Deficit accumulated during the development stage (3,483)
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Total stockholders' equity 18,517
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Total liabilities and stockholders' equity $18,807
=======
The accompanying notes are an integral part of these statements.
F-3
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF LOSS FOR THE PERIOD FROM INCEPTION,
MARCH 28, 1995, THROUGH FEBRUARY 29, 1996
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INCEPTION
MARCH 28, 1995,
THROUGH
FEBRUARY 29,
1996
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Development stage expenses:
Office and research supplies $ 1,721
Telephone 922
Legal and professional fees 267
Rent --
Other general and administrative 573
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Net (loss) $(3,483)
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Net loss per common share $ (4.05)
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Weighted average number of shares outstanding 861
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The accompanying notes are an integral part of these statements.
F-4
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM INCEPTION,
MARCH 28, 1995, THROUGH FEBRUARY 29, 1996
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DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
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Stock issued for cash:
March 29, 1995 834 $ 834 $ 1,166 $ 2,000
January 4, 1996 166 166 19,834 20,000
Net loss $(3,483) (3,483)
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Balances, February 29, 1996 1,000 $1,000 $21,000 $(3,483) $18,517
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The accompanying notes are an integral part of these statements.
F-5
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCEPTION,
MARCH 28, 1995, THROUGH FEBRUARY 29, 1996
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INCEPTION
MARCH 28, 1995
THROUGH
FEBRUARY 29, 1996
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Cash flows from operating activities:
Net (loss) $(3,483)
Adjustments to reconcile net loss to net cash used
in operating activities:
Increase in account payable, affiliated company 290
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Net cash used in operating activities (3,193)
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Cash flows from investing activities:
Increase in advances to Therapy Lasers, Inc. (6,000)
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Net cash used in investing activities (6,000)
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Cash flows from financing activities:
Proceeds from sale of common stock 22,000
Increase in note payable, related party --
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Net cash provided (used) by financing activities 22,000
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Net increase (decrease) in cash and equivalents 12,807
Cash and equivalents, beginning of period --
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Cash and equivalents, end of period $12,807
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Supplemental cash flow disclosures:
Cash paid for:
Interest $ --
Income taxes --
The accompanying notes are an integral part of these statements.
F-6
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
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NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Following is a summary of the Company's organization and significant accounting
policies:
ORGANIZATION AND NATURE OF BUSINESS - LaserCare, Inc. ("the Company" or
"LaserCare") is a Delaware corporation engaged principally in
organizational activities, raising capital, and research and development
efforts related to laser technology in the healthcare field, and is seeking
to manufacture and market a medical laser device. The Company's offices
are in Houston, Texas. Since the device is not approved for sale in the
United States by the applicable regulatory agencies, the Company is
attempting to establish markets in foreign countries, principally Mexico.
The Company has been in the development stage since commencement of
business, March 28, 1995. In the development stage, management anticipates
incurring substantial additional losses as it pursues its research and
development efforts until its laser products can be marketed.
BASIS OF PRESENTATION - The accounting and reporting policies of the
Company conform to generally accepted accounting principles of development
stage enterprises and to general practices within its industry.
USES 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 amount of revenues and
expenses during the reporting period. Actual results could differ from
those estimates. The Company's periodic filings with the Securities and
Exchange Commission include, where applicable, disclosures of estimates,
assumptions, uncertainties and concentrations in products and markets which
could affect the financial statements and future operations of the Company.
CASH AND CASH EQUIVALENTS - For purposes of the statement of cash flows,
the Company considers all cash in banks, money market funds, and
certificates of deposit with a maturity of less than one year to be cash
equivalents.
INCOME TAXES - Deferred income taxes are reported for timing differences
between items of income or expense reported in the financial statements and
those reported for income tax purposes in accordance with Statement of
Financial Accounting Standards number 109 Accounting for Income Taxes,
which requires the use of the asset/liability method of accounting for
income taxes. Deferred income taxes and tax benefits are recognized for
the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, and for tax loss and credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The Company provides
deferred taxes for the estimated future tax effects attributable to
temporary differences and carryforwards when realization is more likely
than not.
The Company has had no significant differences between book and tax income.
F-7
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
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FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS -
The Company has adopted Statement of Financial Accounting Standards number
119, Disclosure About Derivative Financial Instruments and Fair Value of
Financial Instruments. The Company has determined that it is not
practicable to estimate the fair values of its financial instruments
because the cost of such a determination would exceed the benefit derived.
At February 29, 1996, the Company had no derivative financial instruments.
NET INCOME PER SHARE OF COMMON STOCK - Net income per share of common stock
is computed by dividing net income by the weighed average number of shares
of common stock outstanding during the period, after giving retroactive
effect to stock splits, if any.
NOTE 2 - TRANSACTIONS WITH THERAPY LASERS, INC.:
On March 12, 1996, all of the Company's outstanding stock was acquired by
Therapy Lasers, Inc., ("Therapy") a Nevada corporation that is also a
development stage enterprise engaged in activities similar to those of the
Company. In the transaction, Therapy Lasers, Inc. issued 5,750,776 shares of
its stock in exchange for 100% of the outstanding stock of LaserCare, Inc. As a
result of this transaction, one individual now controls approximately 70% of
Therapy Lasers, Inc.'s outstanding common stock
At February 29, 1996, the Company had advanced $6,000 to Therapy, and advanced
an additional $13,500 from March 1, 1996 through May 31, 1996, for total
advances of $19,500. Of this amount, $1,000 was repaid by Therapy in June,
1996. No promissory notes or other documentation were issued to evidence the
advances, and the advances were not collateralized.
Audited financial statements of Therapy as of February 29, 1996 indicate that
there is substantial doubt about its ability to survive as a going concern. At
that date, it had a deficit in stockholders' equity in excess of $70,000 and had
no operating revenues. Accordingly, it is uncertain whether Therapy has the
financial ability to repay the advances from LaserCare. No provision has been
made in the accompanying financial statements for the possible impairment of
this asset.
NOTE 3 - RESEARCH AND DEVELOPMENT AND NON-MONETARY TRANSACTIONS:
During the period ended February 29, 1996, the Company incurred approximately
$800 in research and development expenditures in connection with the development
of a hand-held laser medical device. In addition to the costs incurred by the
Company, certain additional costs were incurred by related companies owned or
controlled by the Company's majority shareholder. The related companies have
not sought, and have represented that they will not seek, reimbursement for such
costs. Such costs were not determinable by the Company, but are thought to be
less than $2,000. Because the costs were not determinable, they have not been
reflected in the accompanying financial statements.
NOTE 4 - FEDERAL INCOME TAX:
There is no significant difference between the Company's taxable income (loss)
and income (loss) reported in the accompanying financial statements. No
provision for currently refundable Federal income tax has been made in the
accompanying statements of loss as no recoverable taxes were paid previously.
F-8
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LASERCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 29, 1996
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Details of deferred tax assets, using the statutory rate of 34%, are as follows:
Deferred tax assets attributable to:
Net operating loss carryover $ 1,100
Less, Valuation reserve, amount less
likely than not to be realized (1,100)
-------
Net deferred tax assets $ --
=======
The Company has a net operating loss carryover of approximately $3,500 which
will expire in 2011.
NOTE 5 - COMMITMENTS:
The Company occupies approximately 400 square feet of office space in an office
building in Houston, Texas in space that is leased by an entity controlled by
the Company's principal shareholder. The Company is not a party to the lease.
However, in March, 1996, the Company began paying monthly rentals of $319 and
expects to continue such payments, or enter into leases for comparable amounts,
for the foreseeable future.
NOTE 6 - GOING CONCERN ASSUMPTION:
The Company has incurred net operating losses and negative cash flow from
operations since inception. At February 29, 1996, the Company had no operating
revenues and had an accumulated deficit of $3,483; in addition, substantially
all its cash was loaned to Therapy Lasers, Inc. subsequent to February 29, 1996.
Accordingly, there are insufficient resources to finance operations, capital
improvements, and research and development activities, to establish facilities
for production of products, or to establish markets for the products.
Management recognizes that it must generate additional resources to enable it to
continue operations. Management's plans include consideration of the sale of
additional equity securities, alliances with other entities interested in
similar lines of business and with adequate resources to support the Company's
plan, or other business transactions which would assure continuation of the
Company's operations. However, no assurance can be given that the Company will
be successful in raising additional capital or entering into a business
alliance. Further, there can be no assurance, assuming the Company successfully
raises additional funds or enters into a business alliance, that the Company
will achieve profitability or positive cash flow. If Management's plans are
unsuccessful, the Company will be required to curtail or cease operations.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. The financial statements do not include any adjustments that
might be necessary if the Company is unable to do so.
F-9
