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Previous: VIANET TECHNOLOGIES INC, 8-K/A, 2000-03-14 |
Next: QUANTITATIVE METHODS CORP, 10QSB, 2000-03-14 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20546
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): March 13, 2000
UNIDYN, CORP.
(Exact name of registrant as specified in its charter)
Nevada 33-55254-31 87-0438639
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
1216 South 1580 West, #A
Orem, Utah 84058-4927
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 434-7250
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements or other portions of its CURRENT REPORT on FORM 8-K dated December
31, 1999 as set forth in the pages attached hereto:
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNIDYN, CORP.
March 13, 20000 By:
Ira Gentry, President & Director
<PAGE>
Smith
&
Company
A Professional Corporation of Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Avalon Technology, Inc.
We have audited the accompanying balance sheet of Avalon Technology, Inc. as of
February 28, 1999, and the related statements of operations, changes in
stockholders' equity, and cash flows for the year then ended. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Avalon Technology, Inc. as of
February 28, 1999, and the results of its operations, changes in stockholders'
equity, and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
March 4, 2000
10 West 100 South, Suite 700o Salt Lake City, Utah 84101-1554
Telephone: (801) 575-8297o Facsimile: (801) 575-8306
E-mail: [email protected]
Members: American Institute of Certified Public Accountantso
Utah Association of Certified Public Accountants
F-1
<PAGE>
Avalon Technology, Inc.
BALANCE SHEET
<TABLE>
<CAPTION>
February 28,
1999
-----------------
ASSETS
CURRENT ASSETS
<S> <C>
Cash in bank $ 1,798
Accounts receivable (net of allowance for doubtful accounts of $18,370) 103,800
Deferred tax benefit (Note 6) 16,498
Inventory (Note 1) 232,650
-----------------
TOTAL CURRENT ASSETS 354,746
PROPERTY, PLANT & EQUIPMENT (Note 3) 86,774
OTHER ASSETS
Deposits and other 9,004
-----------------
9,004
-----------------
$ 450,524
=================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 71,228
Payable - related party (Note 4) 191,303
Accrued expenses 25,973
Loans payable (Note 5) 70,197
Deposits 24,500
Deferred income taxes (Note 6) 3,562
Income taxes payable 391
-----------------
TOTAL CURRENT LIABILITIES 387,154
STOCKHOLDERS' EQUITY
Common Stock $1.00 par value:
Authorized - 1,000 shares
Issued and outstanding 300 shares 300
Additional paid-in capital 27,357
Retained earnings 35,713
-----------------
TOTAL STOCKHOLDERS' EQUITY 63,370
-----------------
$ 450,524
=================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Avalon Technology, Inc.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year ended
February 28,
1999
-----------------
<S> <C>
Net sales $ 1,611,338
Cost of sales 579,943
-----------------
GROSS PROFIT 1,031,395
Other Income
Gain on disposal of assets 1,647
-----------------
1,647
General & administrative expenses:
Amortization and depreciation 32,276
Bad debts 13,458
Bank charges 520
Commissions/consulting 56,360
Insurance 9,529
Interest expense 27,334
Payroll taxes and benefits 79,242
Professional services 25,745
Property taxes 1,338
Rent 62,532
Repairs and maintenance 13,848
Salaries 569,455
Sales and marketing 80,543
Supplies 25,941
Telephone 13,401
Utilities 10,835
Miscellaneous 11,490
-----------------
1,033,847
NET LOSS BEFORE INCOME TAXES (805)
Income tax expense (benefit) (618)
-----------------
NET LOSS $ (187)
=================
Net (loss) per weighted average share $ (.62)
=================
Weighted average number of common shares used to compute
net (loss) per weighted average share 300
=================
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
Avalon Technology, Inc.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional
Par Value $1.00 Paid-in Retained
Shares Amount Capital Earnings
-------------- ------------- -------------- -----------------
<S> <C> <C> <C> <C>
Balances at 2/28/98 300 $ 300 $ 27,357 $ 35,900
Net loss for year (187)
-------------- ------------- -------------- -----------------
Balances at 2/28/99 300 $ 300 $ 27,357 $ 35,713
============== ============== ============== =================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
Avalon Technology, Inc.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended
February 28,
1999
-----------------
OPERATING ACTIVITIES
<S> <C>
Net (loss) $ (187)
Adjustments to reconcile net (loss) to cash provided by
operating activities:
Gain on asset disposal 1,647
Amortization and depreciation 32,276
Bad debts 229
Deferred taxes (1,009)
Changes in assets and liabilities:
Inventory 7,620
Accounts receivable (1,099)
Deposits and other (1,941)
Accrued expenses (35,395)
Deposits (2,273)
Income taxes payable 341
Accounts payable 14,402
-----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 14,611
INVESTING ACTIVITIES
Purchase of equipment (44,680)
-----------------
NET CASH USED BY INVESTING ACTIVITIES (44,680)
FINANCING ACTIVITIES
Line of credit repayments (53,491)
Repayments - related parties (7,940)
Loan repayments (22,496)
Borrowings 91,500
-----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 7,573
-----------------
DECREASE IN CASH AND CASH EQUIVALENTS (22,496)
Cash and cash equivalents at beginning of year 24,294
-----------------
CASH & CASH EQUIVALENTS AT END OF YEAR $ 1,798
=================
Cash paid for:
Interest $ 27,334
=================
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
AVALON TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS
February 28, 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Accounting Methods
The Company recognizes income and expenses based on the accrual method
of accounting.
Dividend Policy
The Company has not yet adopted any policy regarding payment of
dividends.
Inventory
Inventory consists of items for resale and is valued at the lower of
cost (first-in, first-out basis) or market. At February 28, 1999
finished goods are $61,256, raw materials are $164,849, and work in
process is $6,545.
Revenue Recognition
Revenue is recognized upon shipment of products.
Allowance for Uncollectible Accounts
The Company provides an allowance for uncollectible accounts based upon
prior experience and management's assessment of the collectability of
existing accounts.
Cash and Cash Equivalents
For financial statement purposes, the Company considers all highly
liquid investments with an original maturity of three months or less
when purchased to be cash equivalents.
Earnings (loss) per share
Earnings or loss per common and common equivalent share is computed by
dividing net earnings (loss) by the weighted average common shares
outstanding during each year.
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,
liabilities, revenues, and expenses during the reporting period.
Estimates also affect the disclosure of contingent assets and
liabilities at the date of the financial statements. Actual results
could differ from these estimates. Such estimates of significant
accounting sensitivity are allowance for doubtful accounts.
Income Taxes
The Company records the income tax effect of transactions in the same
year that the transactions enter into the determination of income,
regardless of when the transactions are recognized for tax purposes.
Tax credits are recorded in the year realized.
In February, 1992, the Financial Accounting Standards Board adopted
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, which supersedes substantially all existing authoritative
literature for accounting for income taxes and requires deferred tax
balances to be adjusted to reflect the tax rates in effect when those
amounts are expected to become payable or refundable.
NOTE 2: ORGANIZATION AND HISTORY
The Company was incorporated under the laws of the State of Arizona on
February 23, 1996. The Company manufactures and sells equipment related
to the hot air solder leveler industry.
NOTE 3: PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment as of February 28, 1999 are summarized
as follows:
<TABLE>
<CAPTION>
Accumulated Net Book
Cost Depreciation Value
------------- ------------------ -------------
<S> <C> <C> <C>
Vehicles $ 19,928 $ 19,928 $ 0
Computers & Software 65,628 24,709 40,919
Machinery & Equipment 61,998 41,838 20,160
Furniture & Fixtures 43,056 25,144 17,912
Leasehold Improvements 30,391 22,608 7,783
------------- ------------------ -------------
$ 221,001 $ 134,227 $ 86,774
============= ================== =============
</TABLE>
F-6
<PAGE>
AVALON TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
February 28, 1999
NOTE 3: PROPERTY, PLANT, AND EQUIPMENT (continued)
Depreciation expense is calculated under straight-line methods based on
the estimated service lives of depreciable assets. Depreciation expense
for the year ended February 28, 1999 amounted to $31,782.
NOTE 4: PAYABLE - RELATED PARTY
At February 28, 1999, the Company owes $152,970 to its President for
cash advanced to the Company and $38,333 in accrued salary.
NOTE 5: LOANS PAYABLE
Loans payable at February 28, 1999 are as follows:
Interest Long-
Rate Current term
------------- ------------- --------
Equipment lease 13.32% $ 6,672 $ 0
Equipment lease 13.32% 5,516 0
Line of credit variable 17,767 0
Line of credit variable 17,323 0
Line of credit variable 22,919 0
------------- --------
$ 70,197 $ 0
============= ========
NOTE 6: INCOME TAXES
Components of income tax are as follows:
1999
-------------
Current
Federal $ 0
State 391
-------------
391
Deferred (1,009)
-------------
$ (618)
=============
A reconciliation of the provision for income tax expense with the
expected income tax computed by applying the federal statutory income
tax rate to loss before provision for income taxes is as follows:
1999
-------------
Income tax computed at Federal statutory
tax rate $ (121)
Deferred taxes (888)
State taxes (net of federal benefit) 391
------------
$ (618)
=============
The significant component of the Company's deferred tax asset and
liability for income taxes consists of the following:
Current deferred tax asset
Allowance for doubtful accounts $ 4,409
Salary accrual 9,200
Vacation accrual 2,889
-------------
$ 16,498
=============
Current deferred tax liability
Depreciation differences $ 3,562
=============
NOTE 7: COMMITMENTS AND CONTINGENCIES
The Company has a lease on the building in Arizona where it operates.
The approximate monthly amount is $5,685. The lease expires in August,
2000. Future expected lease payments on the building are as follows:
Year ending February 29, 2000 $ 68,220
Year ending February 28, 2001 34,110
-------------
$ 102,330
=============
Rent expense for the building in 1999 was $62,532.
F-7
<PAGE>
AVALON TECHNOLOGY, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
February 28, 1999
NOTE 8: MAJOR CUSTOMERS
Sales to one customer represented 5.1% during the year ended February
28, 1999. As of February 28, 1999, accounts receivable from this
customer represented 17.0%.
During the year ended February 28, 1999, the Company had sales of
$341,948 to foreign customers.
NOTE 9: SUBSEQUENT EVENTS
Effective December 1, 1999, most assets and liabilities of the Company
were acquired by Kenney Ventures and NCS Investments, who placed the
assets and liabilities in Avalon Manufacturing Co. ("AMC"). Effective
December 31, 1999, UniDyn, Corp. acquired all of the outstanding stock
of AMC in a purchase transaction.
NOTE 10: PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
See the following pages for unaudited condensed consolidated financial
statements which assume the entities were together as of the beginning
of the period presented.
The balance sheet adjustments assume 700,000 shares of UniDyn stock
issued at $.85 per share on January 1, 1998 and the issuance of a
$312,000 promissory note to complete the transaction. The balance sheet
and statement of operations also assume goodwill is being amortized
over fifteen years.
F-8
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
BALANCE SHEET
<TABLE>
<CAPTION>
UniDyn Avalon Pro Forma Consolidated
12/31/98 2/28/99 Adjustments Pro Forma
------------------ ----------------- ----------------- ------------------
ASSETS
CURRENT ASSETS
<S> <C> <C> <C>
Cash in bank $ 138,936 $ 1,798 $ $ 140,734
Accounts receivable 245,312 103,800 349,112
Deferred tax benefit 14,500 16,498 30,998
Prepaid expense 17,564 0 17,564
Inventory 34,173 232,650 266,823
------------------ ----------------- ----------------- ------------------
TOTAL CURRENT ASSETS 450,485 354,746 0 805,231
PROPERTY, PLANT & EQUIPMENT 95,287 86,774 182,061
OTHER ASSETS
Other 0 9,004 9,004
Deferred tax benefit 196,500 0 196,500
Goodwill 0 0 802,000 802,000
Derritron Technology 4,008,400 0 4,008,400
------------------ ----------------- ----------------- ------------------
4,204,900 9,004 802,000 5,015,904
------------------ ----------------- ----------------- ------------------
$ 4,750,672 $ 450,524 $ 802,000 $ 6,003,196
================== ================= ================= ==================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 173,138 $ 71,228 $ $ 244,366
Payable - related party 90,670 191,303 281,973
Accrued expenses 47,285 25,973 73,258
Loans payable 0 70,197 312,000 382,197
Deposits 0 24,500 24,500
Deferred income taxes 0 3,562 3,562
Income taxes payable 50 391 441
------------------ ----------------- ----------------- ------------------
TOTAL CURRENT LIABILITIES 311,143 387,154 312,000 1,010,297
STOCKHOLDERS' EQUITY
Common stock $.001 par value:
Authorized - 100,000,000 shares
Issued and outstanding 32,000,000
shares (32,700,000 after acquisition) 32,000 300 400 32,700
Additional paid-in capital 4,341,832 27,357 546,600 4,915,789
Retained earnings 65,697 35,713 (57,000) 44,410
------------------ ----------------- ----------------- ------------------
TOTAL STOCKHOLDERS' EQUITY 4,439,529 63,370 490,000 4,992,899
------------------ ----------------- ----------------- ------------------
$ 4,750,672 $ 450,524 $ 802,000 $ 6,003,196
================== ================= ================= ==================
</TABLE>
F-9
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
UniDyn Avalon Pro Forma Consolidated
12/31/98 2/28/99 Adjustments Pro Forma
------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C>
Net sales $ 2,016,779 $ 1,611,338 $ $ 3,628,117
Cost of sales 609,694 579,943 1,189,637
------------------ ----------------- ----------------- ------------------
GROSS PROFIT 1,407,085 1,031,395 2,438,480
Other Income
Commissions 212,900 0 212,900
Gain on disposal of assets 11,388 1,647 13,035
------------------ ----------------- ----------------- ------------------
224,288 1,647 225,935
General & administrative expenses:
Accounting / legal 91,705 0 91,705
Advertising / promotion 33,165 0 33,165
Amortization and depreciation 8,970 32,276 57,000 98,246
Bad debts 0 13,458 13,458
Bank charges 6,320 520 6,840
Commissions / consulting 47,888 56,360 104,248
Engineering 2,412 0 2,412
Insurance 0 9,529 9,529
Interest expense 2,544 27,334 29,878
Office expense 14,890 0 14,890
Payroll taxes and benefits 29,300 79,242 108,542
Professional services 16,562 25,745 42,307
Property taxes 0 1,338 1,338
Rent 49,380 62,532 111,912
Repairs and maintenance 26,592 13,848 40,440
Salaries / employee leasing 1,006,552 569,455 1,576,007
Sales and marketing 0 80,543 80,543
Supplies 0 25,941 25,941
Telephone 30,453 13,401 43,854
Travel 93,438 0 93,438
Utilities 7,174 10,835 18,009
Vehicle expense 43,072 0 43,072
Miscellaneous 13,166 11,490 24,656
------------------ ----------------- ----------------- ------------------
1,523,583 1,033,847 57,000 2,614,430
NET INCOME (LOSS)
BEFORE INCOME TAXES 107,790 (805) (57,000) 49,985
Income tax expense (benefit) 36,297 (618) 0 35,679
------------------ ----------------- ----------------- ------------------
NET INCOME (LOSS) $ 71,493 $ (187) $ (57,000) $ 14,306
================== ================= ================= ==================
Net income (loss) per weighted average
share $ .00 $ (.62) $ .00
================== ================= ==================
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 31,280,000 300 31,980,000
================== ================= ==================
</TABLE>
F-10
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