-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UltyMi9BfUS8cq1zUBuXS7uw4nhKC2jgUivi7AF82YzvEA0mMrqRrZpjS/N45cZj +qfEaoq910+6hmqqLNn9Jw== 0001072613-02-001446.txt : 20020910 0001072613-02-001446.hdr.sgml : 20020910 20020910135832 ACCESSION NUMBER: 0001072613-02-001446 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20020701 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020910 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ZAP CENTRAL INDEX KEY: 0001024628 STANDARD INDUSTRIAL CLASSIFICATION: MOTORCYCLES, BICYCLES & PARTS [3751] IRS NUMBER: 943210624 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-30300 FILM NUMBER: 02760471 BUSINESS ADDRESS: STREET 1: 117 MORRIS ST CITY: SEBASTOBOL STATE: CA ZIP: 95472 BUSINESS PHONE: 7078244150 MAIL ADDRESS: STREET 1: 117 MORRIS ST CITY: STBASTOPOL STATE: CA ZIP: 95472 FORMER COMPANY: FORMER CONFORMED NAME: ZAP POWER SYSTEMS INC DATE OF NAME CHANGE: 19970319 FORMER COMPANY: FORMER CONFORMED NAME: ZAPWORLD COM DATE OF NAME CHANGE: 19990715 8-K/A 1 form8-k_11492.txt ZAP FORM 8-K DATED JULY 1, 2002 ================================================================================ 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) JULY 1, 2002 ZAP --- (Exact name of Registrant as specified in its charter) CALIFORNIA 0-303000 94-3210624 ---------- -------- ---------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 117 MORRIS STREET SEBASTOPOL, CA, 95472 --------------------- (Address of principal executive offices) (707) 824-4150 -------------- Registrant's telephone number, including area code This current report on Form 8-K/A amends the current report on Form 8-K filed on July 17, 2002. ================================================================================ ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS - -------------------------------------------- On July 1, 2002, ZAP completed its acquisition of Voltage Vehicles ("VV") and RAP Group, Inc. ("RAP") pursuant to ZAP's Second Amended Plan of Reorganization that was approved by the United States Bankruptcy Court (the "Court"), Northern District of California (Santa Rosa Division) on June 20, 2002. In exchange for all of the outstanding shares of the businesses, ZAP will issue the lesser of 49% of the issued shares to any new equity shareholders or 4,500,000 (post split) 500,000 to VV and 4,000,000 to RAP. The equity shareholders of VV and RAP will also receive one Warrant in Series B,C,D and K to purchase common stock in ZAP for each share issued to Voltage Vehicles and RAP Group, Inc. Voltage Vehicles is a Sonoma County-based Nevada Corporation with the exclusive distribution contracts for advanced transportation in the independent auto dealer network, including rights to one of the only full-performance electric cars certified under federal safety standards. The RAP Group owns an auto dealership focused on the independent automotive and advanced technology vehicle markets. A Voltage Vehicle authorized dealer, RAP showcases an array of advanced transportation at its dealership in Fulton, California. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. - --------------------------------------------------------------------------- (a) Financial Statements of Businesses Acquired The following appear as Exhibit 99.2 to this Current Report on Form 8-K/A and are incorporated into this document by reference : (i) The audited Financial Statements of the RAP Group, Inc dba The Repo Outlet for the years ended December 31, 2001 and 2000. The following appear as Exhibit 99.3 to this Current Report on Form 8-K/A and are incorporated into this document by reference: (ii) The audited Financial Statements of Voltage Vehicles , period from inception February 26, 2001 through December 31, 2001. (b) Pro Forma Condensed Combined Financial Information On July 1, 2002, ZAP acquired all of the outstanding stock of the RAP Group, Inc (`RAP")and Voltage Vehicles ("VV")in exchange for ZAP stock valued at a total of $2.9 million. This transaction was in accordance ZAP's Second Plan of Reorganization date June 17, 2002. ZAP acquired all of the outstanding stock of RAP Group, Inc., for 4 million shares of ZAP common stock valued at $2,640,000,based upon the closing market value on the date. All of the outstanding stock of Voltage Vehicles was acquired for $330,000 on July 1, 2002. The acquisition has been accounted for using the purchase method of accounting. ZAP has allocated a portion of the purchase price to the fair market value of the acquired assets and assumed liabilities of RAP and VV. The excess of the purchase price over the fair market value of the acquired assets and assumed liabilities of RAP and VV has been allocated to goodwill. The following appear as Exhibit 99.4 to this Current Report on Form 8-K/A and are incorporated into this document by reference. (i) Unaudited pro forma condensed combined Balance Sheet as of June 30, 2002. (ii) Unaudited pro forma condensed combined Statements of Operations for the six months ended June 30, 2002. (iii) Unaudited pro forma condensed combined Statements of Operations for the Year ended December 31, 2001. (c) Exhibits. Exhibit No. Description ----------- ----------- 2 * Order Confirming Debtor's Chapter 11 Plan of Reorganization (June 20, 2002) Case No. 02-10482-AJ, U.S. Bankruptcy Court, Northern District of California (Santa Rosa Division). Debtor's Second Amended Plan of Reorganization (June 17, 2002). 23.1 Consent of Independent Accountants. 99.1* ZAP's Press Release, dated June 21, 2002. In Re: ZAP Plan of Reorganization Confirmed Emerges from Chapter 11. 99.2 The audited Financial Statements of the RAP Group, Inc dba The Repo Outlet for the years ended December 31, 2001 and 2000. 99.3 The audited Financial Statements of Voltage Vehicles , period from inception February 26, 2001 through December 31, 2001. 99.4 Unaudited pro forma condensed combined Statements of Operations for the year ended December 31, 2001 and the six months ended June 30, 2002 and the unaudited pro forma condensed combined Balance Sheet as of June 30, 2002. - ------------------------ * Previously filed SIGNATURE 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, thereunto duly authorized. September 10, 2002 ZAP BY: - ------------------------ Gary Starr, Director/ Chief Executive Officer Index to Exhibits Exhibit No. Description ----------- ----------- 23.1 Consent of Independent Accountants. 99.2 The audited Financial Statements of the RAP Group, Inc dba The Repo Outlet for the years ended December 31, 2001 and 2000. 99.3 The audited Financial Statements of Voltage Vehicles , period from inception February 26, 2001 through December 31, 2001. 99.4 Unaudited pro forma condensed combined Statements of Operations for the year ended December 31, 2001 and the six months ended June 30, 2002 and the unaudited pro forma condensed combined Balance Sheet as of June 30, 2002. EX-23.1 3 exhibit23-1_11492.txt CONSENT OF INDEPENDENT ACCOUNTANTS EXHIBIT 23.1 ------------ Consent of Independent Accountants We hereby consent to the incorporation by reference in Form 8 K/A of our report dated July 3, 2002 accompanying the December 31, 2001 and 2000 financial statements of RAP Group, Inc. and our report dated July 3, 2002, except for Note 7, as to which the date is August 7, 2002 accompanying the financial statements for the period from inception (February 26, 2001) through December31, 2001 of Voltage Vehicles. /s/ Spicer, Jeffries & Co. Denver, Colorado September 10, 2002 EX-99.2 4 exhibit99-2_11492.txt RAP GROUP FINANCIAL STATEMENTS EXHIBIT 99.2 ------------ INDEPENDENT AUDITORS' REPORT To the Board of Directors Rap Group, Inc. dba The Repo Outlet We have audited the accompanying balance sheet of Rap Group, Inc. dba The Repo Outlet as of December 31, 2001, and the related statements of operations, changes in shareholders' equity, and cash flows for the years ended December 31, 2001 and 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 Rap Group, Inc. dba The Repo Outlet as of December 31, 2001, and the results of its operations and its cash flows for the years ended December 31, 2001 and 2000, in conformity with accounting principles generally accepted in the United States of America. /s/ SPICER, JEFFRIES & CO. Denver, Colorado July 3, 2002 2 RAP GROUP, INC. DBA THE REPO OUTLET BALANCE SHEET DECEMBER 31, 2001 ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $ 148,047 Contracts receivable, net of allowance for doubtful accounts of $543,324 (Note 2) 358,801 Inventory 499,101 Due from related party (Note 3) 166,942 Deferred tax asset (Note 4) 87,190 Advances receivable 1,500 ----------- TOTAL CURRENT ASSETS 1,261,581 PROPERTY AND EQUIPMENT, net of accumulated depreciation of $15,059 45,985 ----------- $ 1,307,566 =========== LIABILITIES AND SHAREHOLDER'S EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts payable and accrued expenses $ 115,230 Due to credit unions 203,653 Income taxes payable 240,011 Due to related party (Note 3) 155,136 ----------- TOTAL CURRENT LIABILITIES 714,030 ----------- COMMITMENTS AND CONTINGENCIES (Notes 5 and 6) SHAREHOLDER'S EQUITY: Common stock, no par value; 25,000 shares authorized; 10,000 shares issued and outstanding 27,911 Retained earnings 565,625 ----------- TOTAL SHAREHOLDER'S EQUITY 593,536 ----------- $ 1,307,566 =========== The accompanying notes are an integral part of these statements. 3 RAP GROUP, INC. DBA THE REPO OUTLET STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2001 AND 2000 2001 2000 ------------ ----------- SALES $ 6,365,498 $ 7,146,267 COST OF SALES 4,936,678 5,460,716 ------------ ----------- GROSS PROFIT ON SALES 1,428,820 1,685,551 ------------ ----------- OPERATING EXPENSES: Advertising and promotion 90,860 61,142 Bad debts 322,318 95,772 General and administrative 120,214 90,876 Insurance 51,554 24,472 Professional fees 74,767 78,628 Rents and occupancy 82,269 82,372 Salaries, benefits and related expenses 555,854 487,293 ------------ ----------- TOTAL OPERATING EXPENSES 1,297,836 920,555 ------------ ----------- OPERATING INCOME 130,984 764,996 ------------ ----------- OTHER INCOME (EXPENSE): Other income 16,606 10,208 Interest expense (36,240) (9,000) ------------ ----------- NET OTHER INCOME (EXPENSE) (19,634) 1,208 ------------ ----------- NET INCOME BEFORE INCOME TAXES 111,350 766,204 Provision for income taxes (Note 4) (60,215) (301,762) ------------ ----------- NET INCOME $ 51,135 $ 464,442 ============ =========== The accompanying notes are an integral part of these statements. 4 RAP GROUP, INC. DBA THE REPO OUTLET STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY YEARS ENDED DECEMBER 31, 2001 AND 2000
Common Stock Total No Par Value Retained Shareholder's Shares Amount Earnings Equity ------------ ------------ ----------- ------------ BALANCES, DECEMBER 31, 1999 10,000 $ 27,911 $ 50,048 $ 77,959 Net income -- -- 464,442 464,442 ------------ ------------ ----------- ------------ BALANCES, DECEMBER 31, 2000 10,000 27,911 514,490 542,401 Net income -- -- 51,135 51,135 ------------ ------------ ----------- ------------ BALANCES, DECEMBER 31, 2001 10,000 $ 27,911 $ 565,625 $ 593,536 ============ ============ =========== ============
The accompanying notes are an integral part of these statements. 5 RAP GROUP, INC. DBA THE REPO OUTLET STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2001 AND 2000 INCREASE (DECREASE) IN CASH 2001 2000 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 51,135 $ 464,442 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Bad debts 322,318 95,772 Depreciation 6,219 4,500 Increase in contracts receivable (17,923) (666,589) (Increase) decrease in inventory (346,249) 14,425 Increase in deferred tax asset (87,190) -- Increase (decrease) in due to credit unions (55,777) 161,276 Increase in income taxes payable 42,729 176,000 Increase in accounts payable 25,532 58,819 ------------ ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES (59,206) 308,645 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of office equipment (26,872) (24,098) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in due from affiliate (166,942) -- (Increase) decrease in advances receivable 25,000 (26,500) Payments, net, on related party payable (52,508) (48,125) ------------ ----------- NET CASH USED IN FINANCING ACTIVITIES (194,450) (74,625) ------------ ----------- NET INCREASE (DECREASE) IN CASH (280,528) 209,922 CASH, BEGINNING OF YEAR 428,575 218,653 ------------ ----------- CASH, END OF YEAR $ 148,047 $ 428,575 ============ =========== SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS: Income taxes paid $ 104,676 $ 125,762 ============ =========== Interest paid $ 45,740 $ 9,000 ============ =========== The accompanying notes are an integral part of these statements. 6 RAP GROUP, INC. DBA THE REPO OUTLET NOTES TO FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION AND OPERATIONS Rap Group, Inc. ("the Company") was incorporated in California on May 16, 1996. The Company's primary business is the sale of used automobiles. Sales consist of vehicles that are owned by the company and repossessed vehicles that are not owned by the Company. Sales are made primarily in Northern California. STATEMENT OF CASH FLOWS For purposes of the statements of cash flows, cash includes deposits in commercial bank accounts. ACCOUNTS RECEIVABLE The Company uses the allowance method for accounting for bad debts. At December 31, 2001, the Company's management believes the allowance is adequate to provide for future losses. INVENTORY Inventory is valued at the lower of cost or market. Inventory is costed on a specific identification method. As of December 31, 2001, inventory is entirely comprised of used automobiles. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the useful lives of the assets ranging from 5 to 7 years. The cost of maintenance and repairs is charged to expense as incurred. Significant renewals and improvements are capitalized. DUE TO CREDIT UNIONS The Company has an arrangement with various credit unions to sell repossessed automobiles on their behalf. The credit union receives its proportionate share of the sale proceeds after a sale is completed. INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. 7 RAP GROUP, INC. DBA THE REPO OUTLET NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount 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, and such differences may be material to the financial statements. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments, including cash, receivables, other assets and payables approximate fair value due to the short-term nature of those instruments. LICENSE AND DOCUMENT FEES The Company charges a standard fee per retail vehicle for license and documentation fees. The Company includes license and document fees as a part of operating income. NOTE 2 - CONTRACTS RECEIVABLE The Company's receivables consist of the following at December 31, 2001: Unfunded receivables $ 312,135 Finance company receivables 286,884 Other receivables 303,106 ------------ 902,125 Less reserve (543,324) ------------ $ 358,801 ============ Unfunded receivables consist of amounts due from customers on completed sales prior to funding by finance companies. Amounts due from finance companies represent a 30% retainage on the gross amount financed. These amounts are retained to offset future losses, if any, incurred by the finance company. These receivables have been fully reserved in the accompanying financial statements. 8 RAP GROUP, INC. DBA THE REPO OUTLET NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 3 - RELATED PARTY TRANSACTIONS The Company provides office space and facilities to a related entity, Voltage Vehicles, Inc. ("VVI"). The Company has advanced VVI $166,942 in operating capital as of December 31, 2001. The advances are non-interest bearing and are due on demand. In addition, the Company was advanced $155,136 from the sole shareholder of VVI. The advance bears interest and 6% and is due on demand. NOTE 4 - INCOME TAXES The provision for income taxes includes current income taxes of $147,405 and $301,762 for the years ended December 31, 2001 and 2000 and deferred income tax benefit of $87,190 and $0 for the years ended December 31, 2001 and 2000. Deferred income taxes, arising from financial statement and tax return temporary differences, principally relate to the reporting of the allowance for doubtful accounts and depreciation. The provision for income taxes is less than if computed at the maximum statutory federal income tax rate of 34% due to the following: 2001 2000 ---------- ---------- Computed "expected" tax expense $ 37,859 $ 260,509 Difference due to progressive statutory rates (7,665) (20,206) State taxes 30,021 61,459 ---------- ---------- Income tax expense $ 60,215 $ 301,762 ========== ========== Amounts for deferred tax assets and liabilities are as follows: 2001 ---------- Deferred tax liabilities $ -- ========== Deferred tax assets: Temporary difference due to allowance for Doubtful accounts and depreciation $ 87,190 Less valuation allowance -- ---------- Deferred tax asset $ 87,190 ========== 9 RAP GROUP, INC. DBA THE REPO OUTLET NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 5 - COMMITMENTS The Company leases its office space and facilities from a related party under an operating lease. The lease calls for monthly payments of $2,500. The lease will terminate on February 6, 2006. The Company paid rent expense of $30,000 under this lease for the years ended December 31, 2001 and 2000. The future minimum lease payments under this lease are as follows: 2002 $ 30,000 2003 30,000 2004 30,000 2005 30,000 2006 5,000 ---------- $ 125,000 ========== NOTE 6 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONTINGENCIES Substantially all of the Company's facilities are subject to federal, state and local provisions regulating the discharge of materials into the environment. Compliance with these provisions has not had, nor does the Company expect such compliance to have, any material effect upon the capital expenditures, net income, financial condition, or competitive position of the Company. Management believes that its current practices and procedures for the control and disposition of such wastes comply with applicable federal and state requirements. NOTE 7 - SUBSEQUENT EVENT Effective July 1, 2002, the Company was acquired by ZAP, a publicly traded company, as a wholly owned subsidiary. ZAP, formerly ZAPWORLD.Com, was incorporated on September 23, 1999 and provides alternate modes of transportation as a means of providing relief from the emissions associated with gas powered vehicles by developing low-cost electric vehicles. ZAP markets electric bicycles, scooters and other light electric vehicles. On March 1, 2002, ZAP filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the Northern District of California, Santa Rosa Division. Rap Group, Inc. was included in their plan of reorganization. ZAP's plan of reorganization was approved by the United States Bankruptcy Court on June 20, 2002 which allowed ZAP to emerge from bankruptcy. 10 EX-99.3 5 exhibit99-3_11492.txt VOLTAGE VEHICLE FINANCIAL STATEMENTS EXHIBIT 99.3 ------------ INDEPENDENT AUDITORS' REPORT To the Board of Directors Voltage Vehicles, Inc. We have audited the accompanying balance sheet of Voltage Vehicles, Inc. (A Company in the Development Stage) as of December 31, 2001, and the related statements of operations, changes in shareholder's deficit, and cash flows for the period from inception (February 26, 2001) through December 31, 2001. 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 auditing standards generally accepted in the United States of America. 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 Voltage Vehicles, Inc. as of December 31, 2001, and the results of its operations and its cash flows for the period from inception (February 26, 2001) through December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. /s/ SPICER, JEFFRIES & CO. Denver, Colorado July 3, 2002, except for Note 7, as to which the date is August 7, 2002 2 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) BALANCE SHEET DECEMBER 31, 2001 ASSETS ------ CURRENT ASSETS: Cash and cash equivalents $ 4,381 Accounts receivable, net of allowance for doubtful accounts of $3,189 4,754 Inventory 129,408 ----------- TOTAL CURRENT ASSETS 138,543 OFFICE EQUIPMENT, net of accumulated depreciation of $890 6,317 ----------- $ 144,860 =========== LIABILITIES AND SHAREHOLDER'S DEFICIT ------------------------------------- CURRENT LIABILITIES: Accounts payable and accrued expenses $ 5,302 Due to related parties (Note 2) 177,942 Advances payable (Note 3) 61,665 ----------- TOTAL LIABILITIES 244,909 ----------- SHAREHOLDER'S DEFICIT: Common stock, no par value; 25,000 shares authorized; 16,000 shares issued and outstanding 2,500 Deficit accumulated during the development stage (102,549) ----------- TOTAL SHAREHOLDER'S DEFICIT (100,049) ----------- $ 144,860 =========== The accompanying notes are an integral part of these statements. 3 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF OPERATIONS PERIOD FROM INCEPTION (FEBRUARY 26, 2001) THROUGH DECEMBER 31, 2001 SALES $ 59,878 COST OF SALES 49,216 ----------- GROSS PROFIT ON SALES 10,662 ----------- OPERATING EXPENSES: Advertising and promotion 8,448 Bad debts 3,189 General and administrative 22,454 Interest expense 1,860 Salaries and related expenses 27,295 ----------- TOTAL OPERATING EXPENSES 63,246 ----------- OPERATING LOSS (52,584) ----------- OTHER INCOME (LOSS): Other income 35 Inventory casualty loss (Note 5) (50,000) ----------- NET OTHER LOSS (49,965) ----------- NET LOSS BEFORE INCOME TAXES (102,549) Provision for income taxes (Note 4) -- ----------- NET LOSS $ (102,549) =========== The accompanying notes are an integral part of these statements. 4 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF CHANGES IN SHAREHOLDER'S DEFICIT PERIOD FROM INCEPTION (FEBRUARY 26, 2001) THROUGH DECEMBER 31, 2001
Deficit Common Stock Accumulated No Par Value During the Total Development Shareholder's Shares Amount Stage Deficit ---------- ---------- ---------- ---------- BALANCES, INCEPTION, FEBRUARY 26, 2001 -- $ -- $ -- $ -- Issuance of common stock 16,000 2,500 -- 2,500 Net loss -- -- (102,549) (102,549) ---------- ---------- ---------- ---------- BALANCES, DECEMBER 31, 2001 16,000 $ 2,500 $ (102,549) $ (100,049) ========== ========== ========== ==========
The accompanying notes are an integral part of these statements. 5 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) STATEMENT OF CASH FLOWS PERIOD FROM INCEPTION (FEBRUARY 26, 2001) THROUGH DECEMBER 31, 2001 INCREASE (DECREASE) IN CASH CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (102,549) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 890 Bad debts 3,189 Increase in accounts receivable (7,943) Increase in inventory (67,743) Increase in accounts payable 5,302 ----------- NET CASH USED IN OPERATING ACTIVITIES (168,854) ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of office equipment (7,207) ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in due to affiliate 177,942 Issuance of common stock 2,500 ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 180,442 NET INCREASE IN CASH 4,381 CASH, BEGINNING OF PERIOD -- CASH, END OF PERIOD $ 4,381 =========== SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS: Inventory purchased through advances payable $ 61,665 =========== The accompanying notes are an integral part of these statements. 6 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION Voltage Vehicles, Inc. ("the Company") was incorporated in Nevada on February 26, 2001. The Company is a full-service alternative fuel vehicle distributor specializing in electric and alternative fuel vehicles. The Company has been in the development stage since its inception. STATEMENT OF CASH FLOWS For purposes of the statement of cash flows, cash includes deposits in commercial bank accounts. ACCOUNTS RECEIVABLE The Company uses the allowance method for accounting for bad debts. At December 31, 2001, the Company has reserved $3,189 for doubtful receivables. INVENTORY Inventory is valued at the lower of cost or market. Inventory is costed on a specific identification method. As of December 31, 2001, inventory is entirely comprised of finished goods. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the useful lives of the assets ranging from 5 to 7 years. The cost of maintenance and repairs is charged to expense as incurred. Significant renewals and improvements are capitalized. INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under the asset and liability method of Statement 109, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. 7 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount 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, and such differences may be material to the financial statements. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company's financial instruments, including cash, other assets and payables approximate fair value due to the short-term nature of those instruments. NOTE 2 - RELATED PARTY TRANSACTIONS The Company receives office space and facilities from a related entity, The Rap Group, Inc. ("RAP"). RAP has also advanced $166,942 in operating capital as of December 31, 2001. The advances are non-interest bearing and are due on demand. In addition, the Company purchased an electric car from ZAP (See Note 6), and has an $11,000 liability due them. NOTE 3 - ADVANCES PAYABLE The Company has been advanced $61,665 from an unrelated individual for the purchase of inventory. The advances bear interest at 6% per annum and are due on demand. NOTE 4 - INCOME TAXES As of December 31, 2001, the Company has a net operating loss carryforward for income tax and financial reporting purposes of approximately $100,000, expiring in the year 2021. The deferred tax asset that results from such operating loss carryforward of approximately $34,000 at December 31, 2001, has been fully reserved for in the accompanying financial statements. During the period ended December 31, 2001, the valuation allowance established against the net operating loss carryforwards increased by $34,000. 8 VOLTAGE VEHICLES, INC. (A COMPANY IN THE DEVELOPMENT STAGE) NOTES TO FINANCIAL STATEMENTS (Continued) NOTE 5 - INVENTORY CASUALTY LOSS During December 2001, the Company purchased $100,000 of inventory. During transit, a portion of the inventory was destroyed in a fire. The Company has made an allowance and has written off $50,000 of the purchased inventory. NOTE 6 - SUBSEQUENT EVENT Effective July 1, 2002, the Company was acquired by ZAP, a publicly traded company as a wholly owned subsidiary. ZAP, formerly ZAPWORLD.Com, was incorporated on September 23, 1999 and provides alternate modes of transportation as a means of providing relief from the emissions associated with gas powered vehicles by developing low-cost electric vehicles. ZAP markets electric bicycles, scooters and other light electric vehicles. On March 1, 2002, ZAP filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the Northern District of California, Santa Rosa Division. Voltage Vehicles, Inc. was included in their plan of reorganization. ZAP's plan of reorganization was approved by the United States Bankruptcy Court June 20, 2002 which allowed ZAP to emerge from bankruptcy. NOTE 7 - EVENT SUBEQUENT TO THE DATE OF THE AUDITOR'S REPORT On August 7, 2002, the Company's current shareholder, ZAP (see Note 6), infused $100,000 as additional paid-in capital to fund the Company's operations. 9 EX-99.4 6 exhibit99-4_11492.txt ZAP FINANCIAL STATEMENTS EXHIBIT 99.4 ------------ Unaudited Pro Forma Condensed Combined Financial Statements The accompanying Unaudited Pro Forma Condensed Combined Statements of Operations (the " Pro Forma Statements of Operations ") for the year ended December 31, 2001 gives effect to the RAP acquisition as if it occurred on January 1, 2001 and the VV acquisition for the period from February 26, 2001 (VV was incorporated on February 26, 2001). The historical amounts for ZAP are based upon the amounts as reported in ZAP's Form 10-KSB for the year ended December 31, 2001. The Pro Forma Statements of Operations for the six months ended June 30, 2002 were based upon the unaudited financial information for RAP and VV and for ZAP the amounts were based upon the results as reported in the Form10QSB for the period. The Unaudited Pro Forma Condensed Combined Balance Sheet (the "Pro Forma Balance Sheet") gives effect to the acquisition of RAP and VV as if it had occurred on June 30, 2002. The Pro Forma Statements of Operations and Pro Forma Balance Sheet and the accompanying notes (the " Pro Forma Financial Information") should be read in conjunction with, and are qualified by, the historical financial statements of ZAP contained in the Form 10-KSB as of December 31, 2001 and the Form 10-QSB for the six months ended June 30, 2002. The Pro Forma Financial Information is intended for informational purposes only and does not purport to represent (i) the future results of operations of ZAP or (ii) the actual results of operations of ZAP had the acquisition occurred on the dates assumed. In addition, the pro forma results are not intended to be a projection of future results. 1 ZAP Unaudited Pro Forma Condensed Combined Balance Sheet June 30, 2002 (in $000's)
Zap Rap Group Voltage Pro Forma Pro Forma as Vehicles Adjustments Adjusted Assets Current Assets Cash $ 348 $ 220 $ 4 $ -- $ 572 Accounts receivable, net of allowance for doubtful accounts of $1,125 216 1,103 5 -- 1,324 Inventories 1,269 442 129 -- 1,840 Prepaid expenses and other assets 88 -- -- -- 88 -------- -------- -------- -------- -------- Total current assets 1,921 1,765 139 -- 3,825 -------- -------- -------- -------- -------- Property and Equipment, net of accumulated depreciation of $768 342 47 6 -- 395 -------- -------- -------- -------- -------- Other Assets Patents & Trademarks 274 -- -- -- 274 Goodwill 100 -- -- 2,571 2,671 Deposits and other 89 -- -- -- 89 -------- -------- -------- -------- -------- Total other assets 463 -- -- 2,571 3,034 -------- -------- -------- -------- -------- Total assets $ 2,726 $ 1,812 $ 145 $ 2,571 $ 7,254 ======== ======== ======== ======== ======== Liabilities and Stockholders' Equity (Deficit) Current Liabilities Accounts payable 50 1,313 245 -- 1,608 Accrued liabilities and other expenses 177 -- -- -- 177 Current maturities of long-term debt 119 -- -- -- 119 Current maturities of obligations under capital leases 10 -- -- -- 10 -------- -------- -------- -------- -------- Total current liabilities 356 1,313 245 -- 1,914 -------- -------- -------- -------- -------- Other Liabilities Long-Term Debt, less current maturities 235 -- -- -- 235 Obligations under capital leases, less current maturities 25 -- -- -- 25 -------- -------- -------- -------- -------- Total other liabilities 260 -- -- -- 260 -------- -------- -------- -------- -------- Stockholders' Equity (Deficit) Preferred stock, authorized 50,000 shares of no par -- -- -- -- -- Common stock, authorized 100,000 shares of no par value; issued and outstanding 3,015 shares 18,296 28 3 2,939 21,266 Retained Earnings ( Accumulated deficit) (16,186) 471 (103) (368) (16,186) -------- -------- -------- -------- -------- Total stockholders' equity (deficit) 2,110 499 (100) 2,571 5,080 -------- -------- -------- -------- -------- Total liabilities and stockholders' equity $ 2,726 $ 1,812 $ 145 $ 2,571 $ 7,254 ======== ======== ======== ======== ======== SEE ACCOMPANYING NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
1 ZAP Unaudited Pro Forma Condensed Combined Statement of Operations Six Months Ended June 30, 2002 (in $000's except per share amounts)
Zap Rap Voltage Pro Forma Pro Forma as Group Vehicles Adjustments Adjusted Net Sales $ 780 $ 3,984 $ -- $ -- $ 4,764 Cost of goods sold 540 2,984 -- -- 3,524 ------- ------- ------- ------- ------- Gross profit 240 1,000 -- -- 1,240 ------- ------- ------- ------- ------- Operating expenses Selling 133 48 -- -- 181 General and administrative 1,116 682 -- -- 1,798 Research and development 30 0 -- -- 30 ------- ------- ------- ------- ------- 1,279 730 -- -- 2,009 ------- ------- ------- ------- ------- Profit (Loss) from operations before reorganization items and extraordinary gain (1,039) 270 -- -- (769) ------- ------- ------- ------- ------- Other income (expense) Interest income (expense) (10) 1 -- -- (9) Other income (expense) 27 -- -- -- 27 ------- ------- ------- ------- ------- 17 1 -- -- 18 ------- ------- ------- ------- ------- Profit (Loss) before reorganization terms and extraordinary gain (1,022) 269 -- -- (753) ------- ------- ------- ------- ------- Reorganization items: Professional fees 165 -- -- -- 165 Provision to rejected executory contracts 31 -- -- -- 31 ------- ------- ------- ------- ------- 196 -- -- -- 196 ------- ------- ------- ------- ------- Net profit (loss) before preferred dividend and extraordinary gain (1,218) 269 -- -- (949) Preferred dividend -- -- -- -- ------- ------- ------- ------- ------- Profit (loss) before extraordinary gain (1,218) 269 -- -- (949) Extraordinary gain on forgiveness of debt (Note 2) 4,058 -- -- -- 4,058 ------- ------- ------- ------- ------- Net income $ 2,840 $ 269 $ -- $ -- $ 3,109 ======= ======= ======= ======= ======= Net loss per common share basic and diluted restated for reverse stock split (Note B) Loss per share before extraordinary gain $(1.24) $(0.18)(B) Extraordinary gain 4.14 .75 (B) ------ ------ Net gain per share-basic and diluted $ 2.90 $ .57 (B) ====== ====== Weighted average of common shares outstanding basic and diluted 980 -- -- 4,500 (B) 5,480 (B) ------- ------- ------- ------- ------- SEE ACCOMPANYING NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
2 ZAP Unaudited Pro Forma Condensed Combined Statement of Operations Year Ended December 31, 2001 (in $000's, except per share amounts)
Zap Rap Voltage Pro Forma Pro Forma Group Vehicles Adjustments as Adjusted Net Sales $ 4,998 $ 6,365 $ 60 $ -- $ 11,423 Cost of goods sold 5,850 4,937 49 -- 10,836 -------- -------- -------- -------- -------- Gross profit (loss) (852) 1,429 11 -- 588 Operating expenses Selling 1,098 647 8 -- 1,753 General and administrative 4,083 651 53 -- 4,787 Research and development 500 -- -- -- 500 Impairment of intangibles 2,610 -- -- -- 2,610 -------- -------- -------- -------- -------- 8,291 1,298 61 -- 9,650 -------- -------- -------- -------- -------- Profit (Loss) from operations (9,143) 131 (50) -- (9,062) Other income (expense) Interest expense (11) (36) (2) -- (49) Other income (expense) (44) 17 (50) -- (77) -------- -------- -------- -------- -------- (55) (19) (52) -- (126) -------- -------- -------- -------- -------- Profit (Loss) before income taxes (9,198) 112 (102) -- (9,188) Provision for income taxes 1 60 -- -- (59) -------- -------- -------- -------- -------- NET PROFIT (LOSS) $ (9,199) $ 52 $ (102) $ -- $ (9,247) -------- -------- -------- -------- -------- Net loss attributable to common shares Net loss $ (9,199) $ 52 $ (102) $ -- $ (9,247) Preferred dividend (138) -- -- -- (138) -------- -------- -------- -------- -------- $ (9,337) $ 52 $ (102) $ -- $ (9,385) ======== ======== ======== ======== ======== Net loss per common share Basic and diluted restated for the Reverse stock split (Note B) $ (8.65) $ (1.68) (B) ======== ======== Weighted average common shares outstanding 1,079 4,500(B) 5,579(B) -------- -------- SEE ACCOMPANYING NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
3 Notes to the Unaudited Pro Forma Condensed Combined Financial Information (1) Pro Forma Adjustments and Assumptions (A) The consideration paid by ZAP in connection with the acquisition of RAP Group, Inc and of Voltage Vehicles consists of the following : - Zap acquired all of the outstanding stock of RAP on July 1, 2002 for 4,000,000 shares of its common stock valued at $2,640,000. - ZAP also acquired all of the outstanding stock of Voltage Vehicles for 500,000 shares of its common stock which was valued at $330,000. - Both of these transactions were approved by ZAP's Second Amended Plan of Reorganization of June 17, 2002. The following represents the allocation of the purchase price over the historical net book values of the acquired assets and assumed liabilities of RAP at June 30, 2002. (in thousands) Assets acquired: Cash......................................... $ 220 Accounts receivable ........................ 1,103 Inventory .................................. 442 Property and equipment ..................... 47 Goodwill ................................... 2,141 ------- 3,953 Liabilities assumed ........................ (1,313) ------- Purchase price ............................. $ 2,640 ======= 4 The following represents the allocation of the purchase price over the historical net book values of the acquired assets and assumed liabilities of Voltage Vehicles at June 30, 2002. (in thousands) Assets acquired: Cash........................................... $ 4 Accounts receivable .......................... 5 Inventory .................................... 129 Property and equipment ....................... 6 Goodwill ..................................... 431 ----- 575 Liabilities assumed .......................... (245) Purchase price ............................... $ 330 ===== (B) The pro forma basic and diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding. The calculation of the weighted average number of shares outstanding assumes that 4,500,000 shares of ZAP common stock issued in connection with the acquisitions of RAP and VV were outstanding as of January 1, 2001. The shares outstanding were also restated to account for ZAP's reverse stock split which occurred July 1, 2002. 5 -----END PRIVACY-ENHANCED MESSAGE-----