-----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, FvSkOWF0tFW3f3GlTAan4OcXXOho86E4i+YX5pbmwmbKoL2vmqL6RiLBOwvXMDQH x2lCL9DKqhHwSqLgNJKJoA== 0001157523-02-000996.txt : 20020905 0001157523-02-000996.hdr.sgml : 20020905 20020905111144 ACCESSION NUMBER: 0001157523-02-000996 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020628 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METWOOD INC CENTRAL INDEX KEY: 0000032567 STANDARD INDUSTRIAL CLASSIFICATION: OIL ROYALTY TRADERS [6792] IRS NUMBER: 830210365 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-05391 FILM NUMBER: 02757123 BUSINESS ADDRESS: STREET 1: 819 NAFF RD CITY: BOONES MILL STATE: VA ZIP: 24065 BUSINESS PHONE: 8012741011 MAIL ADDRESS: STREET 1: 819 NAFF ROAD CITY: BOONES MILL STATE: VA ZIP: 24065 FORMER COMPANY: FORMER CONFORMED NAME: EMC ENERGIES INC DATE OF NAME CHANGE: 19920703 8-K/A 1 a4241783.txt METWOOD 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A Amendment No. 2 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 June 28, 2002 (Date of Report) METWOOD, INC. (Exact name of registrant as specified in its charter) NEVADA 0-5391 83-0210365 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 819 Naff Road Boones Mill, VA 24065 (Address of principal executive offices) (540) 334-4294 (Registrant's telephone number, including area code) 1 The Registrant hereby amends Item 7 of its Report on Form 8-K filed with the Securities and Exchange Commission on June 28, 2002. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of Providence Engineering, P.C., the business acquired: (i) Independent Auditors' Report (ii) Balance Sheets as of December 31, 2001 and 2000 (iii) Statements of Income and Retained Earnings for the Years Ended December 31, 2001 and 2000 (iv) Statements of Cash Flows for the Years Ended December 31, 2001 and 2000 (v) Notes to Financial Statements (b) Pro forma financial statements: (i) Consolidated (Unaudited) Condensed Pro Forma Balance Sheet as of December 31, 2001 (ii) Consolidated (Unaudited) Condensed Pro Forma Statement of Income for the Year Ended June 30, 2001 (iii) Consolidated (Unaudited) Condensed Pro Forma Statement of Income for the Six Months Ended December 31, 2001 (iv) Notes to Pro Forma Consolidated (Unaudited) Condensed Financial Statements 2 INDEPENDENT AUDITORS' REPORT The Board of Directors and Stockholders Providence Engineering, P.C. Roanoke, Virginia We have audited the accompanying balance sheets of Providence Engineering, P.C. as of December 31, 2001 and 2000, and the related statements of income and retained earnings, and cash flows for the years 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 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 Providence Engineering, P.C. at December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. McLeod & Company Roanoke, Virginia August 20, 2002 3
PROVIDENCE ENGINEERING, P.C. BALANCE SHEETS December 31, ------------------------------------------- 2001 2000 ----------------- ----------------- ASSETS Current Assets Cash $ 1,244 $17,167 Accounts receivable, less allowance for doubtful accounts of $2,500 in 2001 and $1,000 in 2000 73,655 32,028 ----------------- ----------------- Total Current Assets 74,899 49,195 Property and Equipment Automobiles 24,663 24,663 Computer hardware & software 12,325 6,338 Furniture and fixtures 16,827 16,827 ----------------- ----------------- 53,815 47,828 Less accumulated depreciation (27,502) (19,084) ----------------- ----------------- Net Property and Equipment 26,313 28,743 ----------------- ----------------- TOTAL ASSETS $101,212 $77,938 ================= =================
See accompanying notes to financial statements. 4
PROVIDENCE ENGINEERING, P.C. BALANCE SHEETS December 31, ------------------------------------------ 2001 2000 ---------------- ---------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses $ 8,636 $ 5,756 Payroll liabilities 5,027 5,499 Notes payable - current 8,249 7,283 ----------------- ---------------- Total Current Liabilities 21,912 18,537 Notes payable - long-term 2,421 10,669 ----------------- ---------------- Total Liabilities 24,333 29,207 ----------------- ---------------- Stockholders' Equity Common stock, $1.00 par; 5,000 shares authorized; 1,000 shares issued and outstanding 1,000 1,000 Retained earnings 75,879 47,731 ----------------- ----------------- Total Stockholders' Equity 76,879 48,731 ----------------- ----------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $101,212 $77,938 ================= =================
See accompanying notes to financial statements. 5
PROVIDENCE ENGINEERING, P.C. STATEMENTS OF INCOME AND RETAINED EARNINGS Year Ended December 31, --------------------------------------------- 2001 2000 ------------------- ------------------- Sales $ 288,895 $ 239,343 Cost of sales 145,579 133,983 ------------------- ------------------- Gross Profit 143,316 105,360 Selling, general and administrative expenses 112,678 91,119 ------------------- ------------------- Income from operations 30,638 14,241 Other income (expense): Interest expense (2,490) (1,816) ------------------- ------------------- Net income 28,148 12,425 Retained earnings, beginning of year 47,731 35,306 ------------------- ------------------- Retained earnings, end of year $ 75,879 $ 47,731 =================== ===================
See accompanying notes to financial statements. 6
PROVIDENCE ENGINEERING, P.C. STATEMENTS OF CASH FLOWS Year Ended December 31, --------------------------------------------- 2001 2000 ------------------- ------------------- CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers $ 245,767 $ 226,533 Cash paid to suppliers and employees (245,883) (208,945) Interest paid (2,539) (1,815) ------------------- ------------------- Net cash provided (used) by operating activities (2,655) 15,773 ------------------- ------------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (5,986) (11,658) ------------------- ------------------- Net cash used by investing activities (5,986) (11,658) ------------------- ------------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of long-term debt - 9,300 Principal payments on long-term debt (7,282) (4,848) ------------------- ------------------- Net cash used by financing activities (7,282) 4,452 ------------------- ------------------- Net increase (decrease) in cash (15,923) 8,567 Cash, beginning of year 17,167 8,600 ------------------- ------------------- Cash, end of year $ 1,244 $ 17,167 =================== ===================
(continued) 7
PROVIDENCE ENGINEERING, P.C. STATEMENTS OF CASH FLOWS (continued) Year Ended December 31, ------------------------------------------ 2001 2000 ---------------- --------------- Reconciliation of Net Income to Net Cash Provided (Used) by Operating Activities: Net income $ 28,148 $12,425 Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities: Depreciation 8,418 6,247 Provision for doubtful accounts 1,500 1,000 Increase in accounts receivable (43,129) (12,809) Increase in accounts payable and accrued expenses 2,880 5,756 Increase (decrease) in payroll liabilities (472) 3,154 ---------------- --------------- Total adjustments (30,803) 3,348 ---------------- --------------- Net Cash Provided (Used) by Operating Activities $(2,655) $15,773 ================ ===============
See accompanying notes to financial statements. 8 PROVIDENCE ENGINEERING, P.C. NOTES TO FINANCIAL STATEMENTS Years Ended December 31, 2001 and 2000 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of the Company The Company, located in Roanoke, Virginia, is in the business of providing consulting and engineering services to customers primarily in southwestern Virginia. Cash Equivalents For purposes of reporting cash flows, the Company considers all short-term investments with a maturity of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2001 or 2000. Accounts Receivable Customer accounts are charged off when determined uncollectible. Management's allowance for doubtful accounts is based on past experience and management's estimate of customer's ability to pay. It is at least reasonably possible that management's estimate will change in the near future. Property and Equipment Property and equipment are stated at cost. Maintenance and repairs which do not increase the life of the related asset are charged to current operations when incurred. Depreciation is computed on the straight-line method based on their estimated useful lives. 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. 9 PROVIDENCE ENGINEERING, P.C. NOTES TO FINANCIAL STATEMENTS Years Ended December 31, 2001 and 2000 Income Taxes The Company, with the consent of its stockholders, has elected under the Internal Revenue Code to be an S Corporation. In lieu of corporate income taxes, the stockholders of an S Corporation are taxed on their proportionate share of the Company's taxable income. Therefore, no provision for income taxes has been included in the Company's financial statements. 2. LONG-TERM DEBT Long-term debt is comprised of the following:
December 31, ----------------------------------- 2001 2000 -------------- --------------- Note payable to a bank maturing August 2003. Monthly payments of $318.96 at an interest rate of 14.245%. Note is collateralized by a vehicle. $ 5,648 $ 8,451 Note payable to a bank maturing December 2002. Monthly payments of $444.75 at an interest rate of 11.434%. Note is collateralized by a vehicle. 5,022 9,501 -------------- --------------- 10,670 17,952 Less current maturities (8,249) (7,283) -------------- --------------- $ 2,421 $ 10,669 ============== =============== Aggregate principal payments required under the remaining long-term debt obligations as of December 31, 2002 are as follows: 2002 $ 8,249 2003 2,421 --------------- $ 10,670 ===============
10 PROVIDENCE ENGINEERING, P.C. NOTES TO FINANCIAL STATEMENTS Years Ended December 31, 2001 and 2000 3. SUBSEQUENT EVENT On June 10, 2002 the Company sold substantially all its assets to Metwood, Inc. pursuant to an Asset Purchase Agreement dated January 1, 2002. The assets were sold for $350,000, consisting of cash and Metwood, Inc. common stock. 4. CONCENTRATIONS At December 31, 2002, accounts receivable from two customers totaled approximately $19,700. At December 31, 2000, accounts receivable from two customers totaled approximately $15,000. 5. RELATED-PARTY TRANSACTIONS Sales to Metwood, Inc. (see note 3) approximated $24,500 and $10,500 for the years ended December 31, 2001 and 2000, respectively. Accounts receivable from Metwood, Inc. totaled $6,724 and $0 at December 31, 2001 and 2000, respectively. 6. LEASES The Company leases its office space under a month-to-month lease. Rent expense totaled $8,640 for both 2001 and 2000. 11 PRO FORMA FINANCIAL STATEMENTS The following consolidated (unaudited) condensed pro forma balance sheet reflects the financial position of the Company as of December 31, 2001 as if the acquisition of Providence Engineering, P.C. had been completed as of that date, and the consolidated (unaudited) condensed pro forma statements of income for the Company for the year ended June 30, 2001 and the six months ended December 31, 2001 as if the transaction had been completed as of July 1, 2000. Although the acquisition was not completed until June 10, 2002, the effective date of the purchase was January 1, 2002. Therefore, the Company's annual Form 10KSB for the year ended June 30, 2002 will include income earned from Providence Engineering, P.C. from January 1, 2002 through June 30, 2002. These financial statements are presented for informational purposes only and do not purport to be indicative of the financial position that would have resulted if the acquisition had been consummated at each company's year end. The pro forma financial statements should be read in conjunction with the notes thereto and Metwood's financial statements and related notes thereto contained in the Company's SEC quarterly and annual filings and Providence's financial statements and related notes thereto contained elsewhere in this Form 8K. A final determination of required purchase accounting adjustments, including the allocation of the purchase price to the assets acquired based on their respective fair values, has not yet been been made. Accordingly, the purchase accounting adjustments made in connection with the development of the pro forma financial statements are preliminary and have been made solely for purposes of developing the pro forma combined financial information. 12
METWOOD, INC. AND SUBSIDIARY CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA BALANCE SHEET DECEMBER 31, 2001 (Unaudited) Pro Forma Metwood Providence Adjustments Pro Forma ------------------ ------------------- -------------------- ----------------------- ASSETS Current Assets Cash $ 33,602 $ 1,244 (1,244)(A) $ 33,602 Accounts receivable, net 179,919 73,655 (6,724)(L) 246,850 Inventory 191,405 191,405 ------------------ ------------------- -------------------- ----------------------- Total Current Assets 404,926 74,899 (7,968) 471,857 - Property and Equipment - Buildings and improvements 634,798 634,798 Furniture and equipment 230,491 29,152 70,848 330,491 Vehicles 94,918 24,663 337 119,918 Land 177,000 177,000 ------------------ ------------------- -------------------- ----------------------- 1,137,207 53,815 71,185 1,262,207 Accumulated depreciation (155,032) (27,502) 27,502 (155,032) ------------------ ------------------- -------------------- ----------------------- Net Property and Equipment 982,175 26,313 98,687 (B) 1,107,175 Intangible assets 151,345 (C) 151,345 ------------------ ------------------- -------------------- ----------------------- TOTAL ASSETS $ 1,387,101 $101,212 242,064 $ 1,730,377 ================== =================== ==================== =======================
See accompanying notes to (unaudited) pro forma financial statements. 13
METWOOD, INC. AND SUBSIDIARY CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA BALANCE SHEET DECEMBER 31, 2001 (Unaudited) Pro Forma Consolidated Metwood Providence Adjustments Pro Forma ------------------ ------------------ -------------------- --------------------- LIABILITIES AND EQUITY Current Liabilities Accounts payable and accrued expenses $ 110,396 $ 13,663 $ (20,386) (D) $ 101,673 Notes payable - current 150,000 8,249 51,751 (E) 210,000 ------------------ ------------------ -------------------- --------------------- Total Current Liabilities 260,396 21,912 31,365 313,673 Long-Term Liabilities Note payable - long term 2,421 (2,421) (F) - Deferred income tax liability 6,080 6,080 ------------------ ------------------ -------------------- --------------------- Total Long-Term Liabilities 6,080 2,421 (2,421) 6,080 Stockholders' Equity Common stock, $.001 par value, 100,000,000 shares authorized; 11,842,549 shares issued and outstanding 11,843 290 (G) 12,133 Common stock, $1.00 par, 5,000 shares authorized; 1,000 shares issued and outstanding 1,000 (1,000) Additional paid-in capital 1,058,711 289,710 (H) 1,348,421 Retained earnings 50,071 75,879 (75,879) 50,071 ------------------ ------------------ -------------------- --------------------- Total Stockholders' Equity 1,120,625 76,879 213,121 1,410,625 ------------------ ------------------ -------------------- --------------------- Total Liabilities and Stockholders' Equity $1,387,101 $101,212 $ 242,065 $ 1,730,378 ================== ================== ==================== =====================
See accompanying notes to (unaudited) pro forma financial statements. 14
METWOOD, INC. AND SUBSIDIARY CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA STATEMENT OF INCOME FOR THE YEAR ENDED JUNE 30, 2001 Pro Forma Consolidated Metwood Providence Adjustments Pro Forma -------------------- ----------------- ---------------- ------------------ REVENUES AND COST OF SALES Sales $ 1,558,807 $ 270,697 (I) $ (1,867)(K) $1,827,637 Cost of sales (877,368) (142,637) 1,867 (K) (1,018,138) -------------------- ----------------- -------------------- Gross profit 681,439 128,060 809,499 OPERATING EXPENSES Salaries and wages 276,032 16,720 292,752 Professional fees 85,368 4,939 90,307 Insurance 42,648 18,823 61,471 Telephone 12,011 2,169 14,180 Utilities 23,555 724 24,279 Repairs and maintenance 46,668 24,992 71,660 Depreciation 42,000 7,584 49,584 Supplies 84,447 4,704 89,151 Advertising 50,045 225 50,270 Taxes and licenses 40,775 4,545 45,320 Other 15,188 17,649 32,837 -------------------- ----------------- -------------------- 718,737 103,074 (J) 821,811 INCOME (LOSS) FROM CONTINUING OPERATIONS (37,298) 24,986 (12,312) OTHER INCOME AND EXPENSE Lawsuit settlement income $ 50,000 50,000 Rental income 13,100 13,100 Interest income (expense), net 1,911 (3,027) (1,116) -------------------- ----------------- -------------------- 65,011 (3,027) 61,984 NET INCOME BEFORE TAX PROVISION 27,713 21,959 49,672 INCOME TAX PROVISION (5,300) (5,300) -------------------- ----------------- -------------------- NET INCOME $ 22,413 $ 21,959 $ 44,372 ==================== ================= ====================
See accompanying notes to (unaudited) pro forma financial statements. 15
METWOOD, INC. AND SUBSIDIARY CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA STATEMENT OF INCOME FOR THE SIX MONTHS ENDED DECEMBER 31, 2001 Pro Forma Consolidated Metwood Providence Adjustments Pro Forma ----------------- ------------------ ------------------ ------------------- REVENUES AND COST OF SALES Sales $ 834,239 $ 143,548 $ (6,784)(L) $971,003 Cost of sales (398,136) (73,511) 6,784 (L) (464,863) ----------------- ------------------ ------------------- Gross profit 436,103 70,037 506,140 OPERATING EXPENSES Salaries and wages 161,310 9,000 170,310 Professional fees 17,077 680 17,757 Insurance 18,258 10,226 28,484 Telephone 8,913 1,405 10,318 Utilities 4,210 448 4,658 Repairs and maintenance 24,631 12,900 37,531 Depreciation 30,000 4,751 34,751 Supplies 27,503 2,513 30,016 Advertising 31,685 452 32,137 Taxes and licenses 24,766 1,630 26,396 Other 16,271 12,491 28,762 ----------------- ------------------ ------------------- 364,624 56,496 421,120 INCOME (LOSS) FROM CONTINUING OPERATIONS 71,479 13,541 85,020 OTHER INCOME AND EXPENSE Rental income 1,675 1,675 Interest income (expense), net 1,294 (552) 742 Other expenses, net (63) (63) ----------------- ------------------ ------------------- 2,906 (552) 2,354 NET INCOME BEFORE TAX PROVISION 74,385 12,989 87,374 INCOME TAX PROVISION (16,743) (16,743) ----------------- ------------------ ------------------- NET INCOME $ 57,642 $ 12,989 $ 70,631 ================= ================== =================== See accompanying notes to (unaudited) pro forma financial statements.
16 METWOOD, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED (UNAUDITED) CONDENSED PRO FORMA FINANCIAL STATEMENTS DECEMBER 31, 2001 (A) Purchased assets did not include cash (B) Property and equipment were adjusted to a total fair market value of $100,000. Included is a significant investment in software developed by Providence that is critical to the design and specifications of products manufactured by Metwood, Inc. (C) Excess of the purchase price over the fair value of assets acquired (D) Elimination of Providence accounts payable - no liabilities were assumed by Metwood; elimination of Metwood account payable to Providence of $6,724 (E) Elimination of Providence current note payable of $8,249 plus addition of Metwood note to Providence shareholders, Ronald Shiflett and Sean Goldsmith, for $60,000, payable at closing date June 10, 2002 (F) Elimination of Providence long-term note payable - no liabilities were assumed by Metwood (G) Par value of 290,000 shares of Metwood stock issued and held in escrow for Providence shareholders (H) Excess of 290,000 shares issued (see (G) above) over par value (I) Includes estimated accounts receivable of $47,000 (J) Includes estimated accounts payable of $4,000 (K) Amount due to Providence from Metwood for engineering services (L) Elimination of Providence's account receivable from Metwood 17 -----END PRIVACY-ENHANCED MESSAGE-----