-----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, SycGQT5igTWTYmBfXVEPcWJBGRBEsOL/IANaMULdC09/QH9HpvoC2SnNLxvwWXm/ jw7Dt5z/Ko9aHQmPFFEF7A== 0000893877-96-000026.txt : 19960222 0000893877-96-000026.hdr.sgml : 19960222 ACCESSION NUMBER: 0000893877-96-000026 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951130 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960221 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PCT HOLDINGS INC /NV/ CENTRAL INDEX KEY: 0000790023 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 870431483 STATE OF INCORPORATION: NV FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-26088 FILM NUMBER: 96523551 BUSINESS ADDRESS: STREET 1: 434 OLDS STATION ROAD CITY: WENATCHEE STATE: WA ZIP: 98801 BUSINESS PHONE: 5096648000 MAIL ADDRESS: STREET 2: 434 OLDS STATION ROAD CITY: WENATCHEE STATE: WA ZIP: 98801 FORMER COMPANY: FORMER CONFORMED NAME: VERAZZANA VENTURES LTD DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VERAZZANA VENTURES SYSTEMS LTD DATE OF NAME CHANGE: 19890618 8-K/A 1 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 Date of Report (Date of earliest event reported): November 30, 1995 PCT HOLDINGS, INC. (Exact name of registrant as specified in its charter) Nevada 0-26088 87-0431483 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation or organization) 434 Olds Station Road, Wenatchee, WA 98801 (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code: (509) 664-8000 None (Former name or former address, if changed since last report) 2 Item 2. Acquisition of Assets - ----------------------------- On December 1, 1995 (the "Effective Date"), PCT Holdings, Inc., a Nevada corporation (the "Company"), effected a merger (the "Merger") between a subsidiary of the Company that was formed for such purpose and Morel Industries, Inc., a Washington corporation ("Morel"). The Merger was effected pursuant to the terms of an Agreement and Plan of Merger (the "Merger Agreement") between and among the Company, Morel, Stephen L. Morel and Mark Morel (together, the "Shareholders"), and Morel Acquisition Corporation, a Washington corporation and wholly-owned subsidiary of the Company. As a result of the Merger, the Company acquired a significant amount of assets otherwise than in the ordinary course of business. As consideration for the Company's acquisition by merger of Morel, the Company tendered to the Shareholders 900,000 shares of the Company's authorized but previously unissued common stock (the "Shares") upon surrender and cancellation of all of the issued and outstanding stock of Morel. As a result of the Merger, the Shareholders own an aggregate of 12.5% of the shares of the Company's common stock outstanding as of the Effective Date, and the Company owns all of the outstanding capital stock of Morel. The parties to the Merger Agreement valued the Shares at $4.75 per share, the closing bid price for the common stock of the Company as quoted on the NASDAQ SmallCap Market on the Effective Date. The purchase price was determined pursuant to arms-length negotiations between the Company and the Shareholders. In connection with the Merger, the Company entered into a registration rights agreement with the Shareholders, pursuant to which the Company granted to the Shareholders the right to have up to 50% of the Shares registered, at the Company's expense, on an equal basis with other shareholders of the Company, if the Company proposes, within two years after the date of closing, to register any of its common stock under the Securities Act of 1933, as amended (except for registrations (i) under compensation plans on Form S-8 or any successor form or (ii) in connection with the acquisition by merger, tender offer or otherwise of another public company). Prior to the Merger, no material relationship existed between Morel and the Company or any of its affiliates, directors, officers, or their associates, except that Morel and certain subsidiaries of the Company transacted business from time to time in the ordinary course of business. Morel's purchase of its Entiat, Washington, facility was financed by the Chelan County Development Corporation (the "Lender"). The Company has guaranteed repayment of that financing in exchange for the Lender's consent to the Merger. Prior to the Merger, Morel owned or leased the equipment used in its business. After the Merger, Morel intends to continue to use the same equipment (whether owned or leased) for the same business purposes for which they were employed by Morel prior to the Merger. 3 Morel was incorporated in 1946, and its primary business has been the operation of a foundry that designs and manufactures precision cast metal parts for the aerospace and automotive industries. After the Merger, Morel has continued, and presently intends to continue, the business operations described above. Morel owns and occupies its facility located at 14351 Shamel Street, Entiat, WA 98822. The principal executive office of Morel will be at the Company's headquarters in Wenatchee, Washington. As of January 26, 1996, the Company entered into an agreement (the "Agreement") with the Shareholders, pursuant to which the Shareholders returned to the Company an aggregate of 250,000 of the 900,000 shares of the Company's common stock that were acquired by the Shareholders as a result of the Merger. As a result, the Shareholders' aggregate ownership of the Company's common stock was reduced to 650,000 shares, or approximately 9.3% of the common stock of the Company outstanding as of the date of the Agreement (after giving effect to the return of shares). The number of shares of the Company's common stock returned by the Shareholders was negotiated at arms' length between the Company and the Shareholders based on Morel's audited financial statements for its fiscal year ended June 30, 1995. These financial statements became available to the parties after the closing of the Merger. Item 7. Financial Statements and Exhibits - ----------------------------------------- A. Financial Statements -------------------- Presented on the following pages 4 through 33 are (i) a Table of Contents for the supplementary financial information presented herein; (ii) management's introduction and notes to the supplemental financial information; (iii) the Report of Independent Accountants and the accompanying audited balance sheet of Morel Industries, Inc., as of June 30, 1995, and the related statements of operations, changes in stockholders' equity, and cash flows for the fiscal year then ended; and (iv) proforma supplemental financial statements combining the Company's historical financial statements with those of the acquired entity. 4 PCT HOLDINGS, INC. TABLE OF CONTENTS FOR SUPPLEMENTARY FINANCIAL INFORMATION FORM 8-K FINANCIAL DISCLOSURE - POOLING OF INTEREST TRANSACTION WITH MOREL INDUSTRIES, INC. SUPPLEMENTARY FINANCIAL INFORMATION PAGE - ----------------------------------- ---- 1. Management's introduction and notes to the supplemental financial information, including incorporation by reference of the audited financial statements of the Company at and for the annual periods ended May 31, 1995 and 1994 previously filed with the Commission in conjunction with the Company's annual report on Form 10-KSB; and the unaudited quarterly financial statements at and for the quarterly periods ended August 31, 1995 and 1994 previously filed with the Commission in conjunction with the Company's quarterly report on Form 10-QSB. 5 2. Audited Financial Statements of Morel Industries, Inc. at and for the annual periods ended June 30, 1995 and 1994. 6 3. Proforma supplemental financial statements combining the Company's historical financial statements with those of the acquired entity, Morel Industries, Inc., including the balance sheets, income statements and statements of cash flow, as follows: 19 a. At and for the quarterly periods ended August 31 and September 30, 1995; 21 b. At and for the annual periods ended May 31 and June 30, 1995; 23 c. At and for the annual periods ended May 31 and June 30, 1994; and 28 d. Quarterly periods ended August 31 and September 30, 1994 (Income Statements and Cash Flow only). 32 5 PCT HOLDINGS, INC. SUPPLEMENTARY FINANCIAL INFORMATION FOR FORM 8-K MANAGEMENT'S INTRODUCTION AND NOTES THERETO The financial statements included and incorporated herein include the financial statements of the registrant, PCT Holdings, Inc., and the financial statements of Morel Industries, Inc., the acquired entity. Proforma supplementary financial information combining the two entities has been prepared in form and content in reference to these financial statements and the associated notes. Management has not chosen to eliminate or adjust the historical financial information since it considers that any material changes to the operations of the two entities will or may not occur until a time significantly after the business combination, and are therefore not estimable at this time. Captions have been modified slightly to allow consistency in reporting the proforma combined results of the two entities accounted for as a pooling of interest. Earnings per share on the related income statements reflects the shares issued by the registrant in the business combination as if issued at the beginning of the periods. 6 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Board of Directors Morel Industries, Inc. Entiat, Washington We have audited the accompanying balance sheets of Morel Industries, Inc. as of June 30, 1995 and 1994, and the related statements of income, stockholders' equity, 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 generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from 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 Morel Industries, Inc. at June 30, 1995 and 1994, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. /s/ BDO SEIDMAN, LLP November 8, 1995, except as to Notes 4 and 9 which date is December 1, 1995 Seattle, Washington 7 MOREL INDUSTRIES, INC. BALANCE SHEETS
June 30, 1995 1994 - --------------------------------------------------------------------------- ASSETS (Note 4) CURRENT ASSETS Cash $ 151,825 $ 636,114 Accounts receivable (Note 3) 1,395,527 1,415,762 Project receivable (Note 8) 126,000 897,656 Inventories (Notes 1 and 3) 936,311 821,021 Prepaid expenses and other 112,728 28,970 ---------- ---------- Total Current Assets 2,722,391 3,799,523 PROPERTY AND EQUIPMENT, less accumulated depreciation (Notes 2 and 3) 6,667,079 2,625,767 RECEIVABLE FROM STOCKHOLDERS --- 111,403 DEFERRED BOND COSTS 24,745 --- ---------- ---------- $9,414,215 $6,536,693 ========== ==========
8 MOREL INDUSTRIES, INC. BALANCE SHEETS
June 30, 1995 1994 - ------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Line-of-credit (Note 3) $ 968,539 $ 889,554 Accounts payable 1,106,331 937,286 Accrued expenses 540,622 454,141 Current maturities of long-term debt (Note 4) 1,001,781 103,149 Pre-billed moving expenditures (Note 8) -- 768,500 ---------- ---------- Total Current Liabilities 3,617,273 3,152,630 ---------- ---------- DEFERRED SALES TAX 144,891 -- LONG-TERM DEBT, net of current maturities (Note 4) 2,147,672 -- DEFERRED INCOME TAXES (Note 6) 727,848 681,645 ---------- ---------- Total Liabilities 6,637,684 3,834,275 ---------- ---------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (Note 9) Common stock, $100 par value; 2,500 shares authorized; 416 shares issued and outstanding 41,600 41,600 Common stock, non-voting, $2,000 par value; 2,500 shares authorized; 87.5 shares issued and outstanding 175,000 175,000 Additional paid-in capital 825,938 825,938 Retained earnings 1,733,993 1,659,880 ---------- ---------- Total Stockholders' Equity 2,776,531 2,702,418 ---------- ---------- $9,414,215 $6,536,693 ========== ==========
See accompanying summary of accounting policies and notes to financial statements. 9 MOREL INDUSTRIES, INC. STATEMENTS OF INCOME
Years Ended June 30, 1995 1994 - ----------------------------------------------------------------------------- SALES $ 10,707,838 $ 9,895,578 COST OF SALES 9,622,768 8,327,254 Gross Profit 1,085,070 1,568,324 OPERATING EXPENSES 1,189,553 1,240,742 ------------ ------------ Income (Loss) from Operations (104,483) 327,582 ------------ ------------ OTHER INCOME (EXPENSE) Interest income 30,844 18,326 Interest expense (267,477) (130,500) Realized recovery (loss) on investment 28,881 (77,471) Other expense (13,886) (40,235) ------------ ------------ Total Other Income (Expense) (221,638) (229,880) ------------ ------------ Income (Loss) Before Extraordinary Item (326,121) 97,702 EXTRAORDINARY ITEM, gain on sale of foundry less applicable income taxes of $151,789 and $988,134 (Note 8) 294,648 1,918,142 ------------ ------------ Income (Loss) Before Income Taxes (31,473) 2,015,844 Deferred Income Tax (Provision) Benefit (Note 6) 105,586 (38,708) ------------ ------------ Net Income $ 74,113 $ 1,977,136 ============ ============
See accompanying summary of accounting policies and notes to financial statements. 10 MOREL INDUSTRIES, INC. STATEMENTS OF STOCKHOLDERS' EQUITY
Non-voting Additional Retained Common Common Paid-in Earnings Stock Stock Capital (Deficit) Total ------------ ----------- ----------- ------------ ----------- BALANCE, July 1, 1993 $ 41,600 $ 175,000 $ 825,938 $ (317,256) $ 725,282 Net income -- -- -- 1,977,136 1,977,136 ----------- ----------- ----------- ----------- ----------- BALANCE, June 30, 1994 41,600 175,000 825,938 1,659,880 2,702,418 Net income -- -- -- 74,113 74,113 ----------- ----------- ----------- ----------- ----------- BALANCE, June 30, 1995 $ 41,600 $ 175,000 $ 825,938 $ 1,733,993 $ 2,776,531 =========== =========== =========== =========== ===========
See accompanying summary of accounting policies and notes to financial statements. 11 MOREL INDUSTRIES, INC. STATEMENTS OF CASH FLOW
Years Ended June 30 1995 1994 - ---------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 74,113 $ 1,977,136 ----------- ----------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Gain on sale of foundry (294,648) (1,918,142) Depreciation and amortization 356,600 112,241 Deferred income taxes (105,586) 38,708 Settlement of stockholder 111,403 -- receivable as a bonus Changes in operating assets and liabilities: Decrease (increase) in assets: Accounts receivable 20,235 (194,725) Inventories (115,290) (118,583) Prepaid expenses and other (83,758) (17,096) Increase (decrease) in liabilities Accounts payable 169,045 (262,525) Accrued expenses 86,481 247,960 ----------- ----------- Net Cash Provided by (Used in) Operating Activities 218,595 (135,026) ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale and relocation 2,508,860 3,336,528 of foundry Acquisition of property and (4,492,197) (1,937,427) equipment Payment of relocation costs (1,963,807) (512,761) Increase in deferred sales tax 144,891 -- Increase in receivable from stockholder -- (111,403) ----------- ----------- Net Cash Provided by (Used in) (3,802,253) 774,937 ----------- ----------- Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in line-of- 78,985 89,555 credit Proceeds from long-term borrowings 3,438,868 -- Principal payments on long-term (392,564) (435,660) debt Increase in deferred bond costs (25,920) -- ----------- ----------- Net Cash Provided by (Used in) Financing Activities 3,099,369 (346,105) ----------- ----------- Net Increase (Decrease) in Cash (484,289) 293,806 CASH, beginning of period $ 636,114 $ 342,308 ----------- ----------- CASH, end of period $ 151,825 $ 636,114 =========== =========== SUPPLEMENTAL CASH FLOWS DISCLOSURE: Cash paid for interest $ 260,733 $ 130,500 =========== ===========
See accompanying summary of accounting policies and notes to financial statements. 12 MOREL INDUSTRIES, INC. SUMMARY OF ACCOUNTING POLICIES NATURE OF BUSINESS Morel Industries, Inc. ("Morel") is AND SIGNIFICANT a manufacturer of aluminum castings located in Entiat, CUSTOMER Washington. During 1994, Morel changed its name from Morel Foundry Corporation to emphasize Morel's expanding capabilities in machining and powder coat painting. In 1995 and 1994 sales to a major customer in the Class 8 truck industry were 75% and 78% of total sales. INVENTORIES Inventories are valued at the lower of cost (first-in, first-out) or market. Work-in-process is valued at the lower of estimated cost or market. Estimated cost is derived through an analysis of historical gross profit margins. PROPERTY AND Property and equipment is recorded at cost and is EQUIPMENT depreciated using the straight-line method over estimated useful lives as follows: Years ---------------------------------------------------------- Office equipment 3-7 Foundry equipment 7-10 Building 15-40 ---------------------------------------------------------- Expenditures for repairs and maintenance which do not extend the useful life of the related asset are expensed as incurred. INCOME TAXES Deferred taxes are provided for temporary differences in the basis of assets and liabilities for book and income tax reporting purposes. If it is more likely than not that some of a deferred tax asset will not be realized, a valuation allowance is recognized. 13 MOREL INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS NOTE 1: Inventories consisted of the following: Inventories June 30, 1995 1994 ---------------------------------------------------------- Work-in-process $695,411 $593,064 Raw materials 112,538 100,812 Foundry supplies 128,362 127,145 ---------------------------------------------------------- Total inventories $936,311 $821,021 ========================================================== NOTE 2: Property and equipment consisted of the following: Property and Equipment June 30, 1995 1994 ---------------------------------------------------------- Machinery, equipment and furniture $3,768,755 $2,874,282 Land and building 3,684,314 823,844 Accumulated depreciation (785,990) (1,072,359) ---------------------------------------------------------- Net property and equipment $6,667,079 $2,625,767 ========================================================== NOTE 3: Morel has a line-of-credit with a bank with interest at Line-of-Credit bank's prime rate (9% at June 30, 1995) plus 2%. The agreement allows Morel to borrow up to the lesser of $1,000,000 or 80% of eligible accounts receivable as defined by the bank. At June 30, 1995, $968,539 was outstanding and $31,461 was available for borrowing. The line-of-credit is secured by accounts receivable, inventories and equipment and is personally guaranteed by the stockholders, see Notes 4 and 9. 14 June 30, 1995 1994 -------------------------------------------------------- Industrial revenue bond payable to a bank with monthly payments of $19,252, including interest at 8.12% through November 2009, secured by land, building and equipment, and personally guaranteed by the stockholders $1,953,154 -- Note payable to a supplier with quarterly interest payments of 12% on the outstanding balance; principal due February 1996 and 1997, secured by property and equipment 277,291 -- Note payable to an organization with monthly payments of $1,718, including interest at 10.5% through September 2000, secured by personal residences and guarantee of the stockholders 100,000 -- Note payable to an individual, interest only at 14% through September 30, 1995, when interest increases to 15%. Due in full in March 1996. Secured by substantially all assets of Morel and subordinated to the industrial revenue bond 500,000 -- Notes payable to suppliers with monthly payments of $757 to $44,543 including interest at 10%. Unsecured with maturities through February 1996 318,320 -- Note payable to a supplier in quarterly installments of $25,000, plus interest at 12% through May 1995, unsecured 100,000 -- Other 688 3,149 -------------------------------------------------------- $3,149,453 $103,149 Less current maturities 1,001,781 103,149 -------------------------------------------------------- 15 Total Long-Term Debt $2,147,672 -- ======================================================== Scheduled maturities of long-term debt as of June 30, 1995, are as follows: ---------------------------------------------------------- 1996 $1,001,781 1997 270,316 1998 100,415 1999 109,207 2000 118,774 Thereafter 1,548,960 ---------------------------------------------------------- Total $3,149,453 ========================================================== Morel's line-of-credit and industrial revenue bond agreements require, among other matters, that Morel maintain minimum working capital, tangible net worth and debt to tangible net worth ratios. Morel was not in compliance with the covenants at June 30, 1995. In conjunction with the merger of Morel on December 1, 1995, the bank provided a waiver of the covenants through November 30, 1995, and restructured the covenants through the expiration of the agreements, see Note 9. Management believes Morel will be in compliance with the covenants through June 30, 1996. 16 NOTE 5: Morel leases equipment and vehicles under noncancelable Commitments and operating leases. Future minimum lease payments are as Contingencies follows: ---------------------------------------------------------- 1996 $32,336 1997 22,142 1998 5,092 1999 1,796 2000 974 ---------------------------------------------------------- $62,340 ========================================================== Rent expense for the years ended June 30, 1995 and 1994, was $57,386 and $66,669. During the normal course of business, matters arise which may ultimately subject Morel to claims and litigation. Management believes that the resolution of these matters will not have a material adverse effect on Morel's financial condition. NOTE 6: Deferred tax liabilities are comprised of the following: Income Taxes ---------------------------------------------------------- June 30, 1995 1994 ---------------------------------------------------------- Property and equipment $(1,227,233) $(1,065,361) Officers' bonus 93,424 47,964 Other 58,502 39,782 Net operating loss carryforward 347,459 295,970 ---------------------------------------------------------- $(727,848) $(681,645) ========================================================== Morel has net operating loss carryforwards of approximately $1,022,000 with expiration dates through fiscal year 2010. The difference between Morel's effective income tax rate and the statutory rate of 34% consists of the following: June 30, 1995 1994 ----------------------------------------------------------- Income tax (provision) benefit at the statutory rate $110,881 $(33,219) Amortization of goodwill -- (2,487) Meals and entertainment (3,426) (1,388) Officer's life insurance (1,869) (1,614) ----------------------------------------------------------- $105,586 $(38,708) =========================================================== 17 NOTE 7: Morel participates in a multi-employer pension plan Employee Benefit pursuant to an agreement between Morel and its employee Plans bargaining unit. Although the plan is a defined benefit plan, the specific benefit levels are not negotiated with or known by Morel. Contributions expense related to the plan was $36,014 and $29,411 for the years ended June 30, 1995 and 1994. Subsequent to year end, Morel's collective bargaining agreement expired and was not renewed. Accordingly, Morel no longer participates in the multi-employer plan. Morel has a 401(k) employee benefit plan for those employees who meet the eligibility requirements set forth in the plan. Eligible employees may contribute up to 15% of their compensation. Morel's annual contribution to the plan is determined by the board of directors. Morel made no contributions during the years ended June 30, 1995 and 1994. NOTE 8: In 1994, Morel was required to sell its facility in Sale of Foundry Seattle, Washington, to the Port of Seattle (the Port). Property Under terms of the sale Morel received $2,533,000 for the facility and $3,626,000 for relocation costs. In March 1994, Morel purchased a facility in Entiat, Washington, and began operations in Entiat during August 1994. For financial statement purposes, Morel recognized an extraordinary gain of $294,648 and $1,918,142 for the years ended June 30, 1995 and 1994. For tax reporting purposes, Morel retained its original basis in the assets sold and, accordingly, did not recognize a taxable gain. At June 30, 1995 and 1994, Morel was due $126,000 and $897,656 from the Port for relocation costs. During the year ended June 30, 1994, Morel billed the Port $768,500 for relocation costs which had not yet been incurred, and which are recorded in the accompanying balance sheet as a liability. NOTE 9: On December 1, 1995, Morel entered into an agreement to Subsequent Events merge with PCT Holdings, Inc. (PCTH), in a transaction expected to be accounted for as a pooling of interests. PCTH serves as a holding company for subsidiaries providing sealed connectors and components, ceramic capacitors and filters and machined aluminum parts for the medical, energy, aerospace, communications and electronics industries. Morel has reported a loss before extraordinary item of $362,121 in 1995 and as of June 30, 1995, has a working capital deficit of $894,822. Additionally, at June 30, 1995, Morel was in violation of certain debt covenants on the line-of-credit and industrial revenue bond agreements. Subsequent to the merger, PCTH provided Morel with $1 million of working capital. The proceeds of the loan were used primarily to repay $500,000 of the industrial revenue bond. The balance was used to fund $260,000 of accounts payable, prepayment penalties of $140,000 and provide working capital for Morel. 18 In conjunction with the repayment of the industrial revenue bond, the bank provided Morel with a waiver of its debt covenants through November 30, 1995, and restructured the covenants through the expiration of the agreements. Morel's 1996 operating plan has been developed to improve operating efficiency and continue to broaden Morel's revenue base. Additionally, PCTH has committed to provide Morel with sufficient working capital until profitable operations are restored. Although Morel believes that its operating plan and working capital available from PCTH will be adequate to meet its 1996 working capital needs and maintain compliance with the restructured debt covenants, there can be no assurance that Morel may not experience liquidity problems because of adverse market conditions or other unfavorable events. 19 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED BALANCE SHEET - SUPPLEMENTAL DISCLOSURE FORM 8-K AUGUST 31, 1995, and SEPTEMBER 30, 1995, RESPECTIVELY
PCT HOLDINGS, INC. MOREL IND., INC. Unaudited Unaudited August 31, 1995 September 30, 1995 COMBINED ------------------ ------------------ -------- Assets: Current Assets Cash $ 476,051 $ 89,513 $ 565,564 Receivables 1,621,033 1,555,739 3,176,772 Inventory 4,942,063 839,068 5,781,131 Prepaid Expense 68,936 45,972 114,908 Other 281,181 0 281,181 ------------ ------------ ------------ Total Current Assets $ 7,389,264 $ 2,530,292 $ 9,919,556 Net Property, Plant & Equipment 3,209,609 6,593,842 9,803,451 Real Estate Held for Resale 676,253 0 676,253 Cost in Excess of NBV 462,687 0 462,687 Patents, net 454,635 0 454,635 Non-compete Agreement 100,000 0 100,000 Other 115,908 24,241 140,149 ------------ ------------ ------------ Total Assets $ 12,408,356 $ 9,148,375 $ 21,556,731 ============ ============ ============ Liabilities and Shareholders' Equity Current Liabilities Bank Line of Credit 0 $ 964,140 $ 964,140 Accounts Payable $ 2,122,108 1,373,033 3,495,141 Accrued Liabilities 366,622 501,448 868,070 Current Portion - LTD 2,677,401 799,071 3,476,472 Current Portion - C/L 48,585 0 48,585 Current Portion - N/P 600,000 0 600,000 Current Portion - Non-compete 35,000 0 35,000 ------------ ------------ ------------ Total Current Liabilities 5,849,716 3,637,692 9,487,408 ------------ ------------ ------------ Long Term Debt, net 540,739 2,128,992 2,669,731 Capital Leases, net 51,063 0 51,063 Deferred Sales Tax 0 144,891 144,891 Non-compete Agreement, net 65,000 0 65,000 Deferred Rent/Taxes 146,710 637,554 784,264 ------------ ------------ ------------ Total Liabilities 6,653,228 6,549,129 13,202,357 ------------ ------------ ------------ Shareholders' Equity Common Stock 11,511,777 41,600 11,553,377 Common Stock, Non-Voting 0 175,000 175,000 Additional Paid in Capital 0 825,938 825,938 Accumulated Deficit (5,756,649) 1,556,708 (4,199,941) ------------ ------------ ------------ Total Shareholders' Equity 5,755,128 2,599,246 8,354,374 ------------ ------------ ------------ 20 Total Liabilities & Equity $ 12,408,356 $ 9,148,375 $ 21,556,731 ============ ============ ============
The accompanying notes are an integral part of the combined financial statements 21 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF INCOME QUARTER ENDED AUGUST 31, 1995, AND SEPTEMBER 30, 1995, RESPECTIVELY PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND, INC. QUARTERS ENDED ----------------------------------- August 31, 1995 September 30, 1995 Unaudited Unaudited CONSOLIDATED --------------- ------------------ ------------ NET SALES $ 3,456,473 $ 2,785,422 $ 6,241,895 COST OF SALES 2,795,475 2,669,528 5,465,003 ----------- -------- ----------- GROSS PROFIT 660,998 115,894 776,892 OPERATING EXPENSES 808,687 245,554 1,054,241 ----------- -------- ----------- INCOME (LOSS) FROM OPERATIONS (147,689) (129,660) (277,349) ----------- -------- ----------- OTHER INCOME AND EXPENSE Interest Income 0 1,075 1,075 Interest Expense (44,776) (103,461) (148,237) Other 52 (35,533) (35,481) ----------- -------- ----------- (44,724) (137,919) (182,643) ----------- -------- ----------- NET INCOME(LOSS) BEFORE FEDERAL INCOME TAX (192,413) (267,579) (459,992) FEDERAL INCOME TAX - deferred 0 90,294 90,294 ----------- -------- ----------- NET INCOME (LOSS) FOR THE YEAR ($ 192,413) (177,285) ($ 369,698) =========== ======== =========== NET INCOME (LOSS) PER SHARE ($ 0.02) ($ 0.27) ($ 0.06) =========== ======== ===========
The accompanying notes are an integral part of the proforma combined financial statements 22 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF CASH FLOW PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. FIRST QUARTER ENDED AUGUST 31 AND SEPTEMBER 30, 1995, RESPECTIVELY SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND., INC. CONSOLIDATED Quarters Ending ------------------------------------- August 31, 1995 September 30, 1995 Unaudited Unaudited Unaudited --------------- ------------------ ------------ CASH FLOW FROM OPERATING ACTIVITIES Net Cash Provided by (Used in) Operating Activities ($ 741,800) $ 54,017 ($ 687,783) ----------- ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES Purchase of Property and Equipment (293,661) (16,540) (310,201) Proceeds from Sale and Relocation of Foundry 126,000 126,000 Other Changes, net (74,299) 0 (74,299) ----------- ----------- ----------- Net Cash Provided by (Used in) Investing Activities (367,960) 109,460 (258,500) ----------- ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES Payments of Debt and Capital Leases (72,447) (221,390) (293,837) Proceeds from Financing Debt 86,250 0 86,250 Sale of Common Stock 493,371 0 493,371 Other Changes, net 0 (4,399) (4,399) ----------- ----------- ----------- Net Cash Provided by (Used in) Financing Activities 507,174 (225,789) 281,385 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH (602,586) (62,312) (664,898) CASH, beginning of period 1,078,637 151,825 1,230,462 ----------- ----------- ----------- CASH, end of period $ 476,051 $ 89,513 $ 565,564 =========== =========== ===========
The accompanying notes are an integral part of the proforma combined financial statements 23 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED BALANCE SHEET - SUPPLEMENTAL DISCLOSURE FORM 8-K MAY 31, 1995, and JUNE 30, 1995, RESPECTIVELY
PCT HOLDINGS, INC. MOREL IND., INC. Audited Audited May 31, 1995 June 30, 1995 COMBINED ------------------ ---------------- -------- Assets: Current Assets Cash $ 1,078,637 $ 151,825 $ 1,230,462 Receivables 1,075,999 1,521,527 2,597,526 Inventory 4,375,162 936,311 5,311,473 Prepaid Expense 39,721 112,728 152,449 Other 278,795 473,045 751,840 ------------ ------------ ------------ Total Current Assets $ 6,848,314 $ 3,195,436 $ 10,043,750 Net Property, Plant & Equipment 3,008,122 6,667,079 9,675,201 Real Estate Held for Resale 676,253 0 676,253 Patents, net 478,092 0 478,092 Costs in Excess of NBV 462,687 0 462,687 Non-compete Agreement 100,000 0 100,000 Other 56,444 24,745 81,189 ------------ ------------ ------------ Total Assets $ 11,629,912 $ 9,887,260 $ 21,517,172 ============ ============ ============ Liabilities and Shareholders' Equity Current Liabilities Bank Line of Credit 0 $ 968,539 $ 968,539 Accounts Payable $ 1,527,467 1,106,331 2,633,798 Accrued Liabilities 518,065 540,622 1,058,687 Current Portion - LTD 2,448,000 1,001,781 3,449,781 Current Portion - C/L 51,000 0 51,000 Current Portion - N/P 510,000 0 510,000 Current Portion - Non-Compete 35,000 0 35,000 ------------ ------------ ------------ Total Current Liabilities 5,089,532 3,617,273 8,706,805 Long Term Debt, net 319,574 2,147,672 2,467,246 Capital Leases, net 115,281 0 115,281 Notes Payable, net 457,644 0 457,644 Non-compete Agreement, net 65,000 0 65,000 Deferred Rent/Taxes 128,711 1,345,784 1,474,495 ------------ ------------ ------------ Total Liabilities 6,175,742 7,110,729 13,286,471 ------------ ------------ ------------ Shareholders' Equity Common Stock 11,018,406 41,600 13,794,937 Common Stock, Non-Voting 0 175,000 Additional Paid in Capital 0 825,938 Accumulated Deficit (5,564,236) 1,733,993 (5,564,236) ------------ ------------ ------------ Total Shareholders' Equity 5,454,170 2,776,531 8,230,701 ------------ ------------ ------------ 24 Total Liabilities & Equity $ 11,629,912 $ 9,887,260 $ 21,517,172 ============ ============ ============
The accompanying notes are an integral part of the combined financial statements 25 PCT HOLDINGS, INC AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF INCOME FISCAL YEAR ENDED MAY 31, 1995, AND JUNE 30, 1995, RESPECTIVELY PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND., INC. YEARS ENDED ----------------------------------- May 31, 1995 June 30, 1995 Audited Audited CONSOLIDATED ------------ ------------- ------------ NET SALES $ 11,035,595 $ 10,707,838 $ 21,743,433 COST OF SALES 9,092,157 9,622,768 18,714,925 ------------ ------------ ------------ GROSS PROFIT 1,943,438 1,085,070 3,028,508 OPERATING EXPENSES 2,788,940 1,189,553 3,978,493 ------------ ------------ ------------ INCOME (LOSS) FROM OPERATIONS (845,502) (104,483) (949,985) ------------ ------------ ------------ OTHER INCOME AND EXPENSE Interest Income 74,352 30,844 105,196 Interest Expense (356,360) (267,477) (623,837) Gain on sale of foundry, net of income taxes of $151,789 0 323,529 323,529 Other 13,835 (13,886) (51) ------------ ------------ ------------ (268,173) 73,010 (195,163) NET LOSS BEFORE MERGER AND EQUITY CAPITAL COSTS (1,113,675) (31,473) (1,145,148) MERGER AND EQUITY CAPITAL COSTS (538,040) 0 (538,040) ------------ ------------ ------------ INCOME(LOSS) BEFORE FEDERAL TAX (1,651,715) (31,473) (1,683,188) FEDERAL INCOME TAX(DEFERRED) 241,000 105,586 346,586 ------------ ------------ ------------ NET INCOME (LOSS) FOR THE YEAR ($ 1,410,715) $ 74,113 ($ 1,336,602) ============ ============ ============ INCOME(LOSS) PER SHARE OF COMMON STOCK ($ 0.41) $ 0.12 ($ 0.33) ============ ============ ============
26 The accompanying notes are an integral part of the combined financial statements 27 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF CASH FLOW PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. YEARS ENDED MAY 31 AND JUNE 30, 1995, RESPECTIVELY SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND., INC. CONSOLIDATED Years Ending ------------------------------------- May 31, 1995 June 30, 1995 Audited Audited ------------ ------------- ------------- CASH FLOW FROM OPERATING ACTIVITIES Net Cash Provided by (Used in) Operating Activities ($ 416,646) $ 218,595 ($ 198,051) ----------- ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES Purchase of Property and Equipment (604,904) (4,492,197) (5,097,101) Proceeds from Sale and Relocation of Foundry 0 2,508,860 2,508,860 Proceeds from Sale of Property and Equipment 0 0 0 Payment of Relocation Costs 0 (1,963,807) (1,963,807) Purchase of Patents (461,000) 0 (461,000) Payments Received on Notes Receivable 20,159 0 20,159 Other Changes, net 0 144,891 144,891 ----------- ----------- ----------- Net Cash Provided by (Used in) Investing Activities (1,045,745) (3,802,253) (4,847,998) ----------- ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES Payments of Debt and Capital Leases (1,299,601) (392,564) (1,692,165) Proceeds from Financing Debt 2,229,336 3,438,868 5,668,204 Proceeds from Notes Payable to Stockholders 50,000 0 50,000 Net change in Note Payable (1,388,779) 0 (1,388,779) Payments on Notes Payable to Stockholders (1,659,994) 0 (1,659,994) Sale of Common Stock 4,582,858 0 4,582,858 Other Changes, net 0 53,065 53,065 ----------- ----------- ----------- Net Cash Provided by (Used in) Financing Activities 2,513,820 3,099,369 5,613,189 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH 1,051,429 (484,289) 567,140 CASH, beginning of period 27,208 636,114 663,322 ----------- ----------- ----------- CASH, end of period $ 1,078,637 $ 151,825 $ 1,230,462 =========== =========== ===========
The accompanying notes are an integral part of the proforma combined financial statements 28 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED BALANCE SHEET - SUPPLEMENTAL DISCLOSURE FORM 8-K MAY 31, 1994, and JUNE 30, 1994, RESPECTIVELY
PCT HOLDINGS, INC. MOREL IND., INC. Audited Audited May 31, 1994 June 30, 1994 COMBINED ------------------ ---------------- -------- Assets: Current Assets Cash $ 27,208 $ 636,114 $ 663,322 Receivables 923,894 2,313,418 3,237,312 Inventory 3,459,969 821,021 4,280,990 Prepaid Expense 62,242 28,970 91,212 Other 23,000 0 23,000 ------------ ------------ ------------ Total Current Assets $ 4,496,313 $ 3,799,523 $ 8,295,836 Net Property, Plant & Equip 2,307,564 2,625,767 4,933,331 Note Receivable from Stkhldr 952,207 111,403 1,063,610 Patents, net 46,781 0 46,781 Other 90,666 0 90,666 ------------ ------------ ------------ Total Assets $ 7,893,531 $ 6,536,693 $ 14,430,224 ============ ============ ============ Liabilities and Shareholders' Equity Current Liabilities Bank Line of Credit $ 1,388,779 $ 889,554 $ 2,278,333 Accounts Payable 958,850 937,286 1,896,136 Accrued Liabilities 371,417 454,141 825,558 Current Portion - LTD 1,008,000 103,149 1,111,149 Current Portion - C/L 1,917,838 0 1,917,838 Current Portion - N/P 88,000 0 88,000 Pre-billed Moving Exp 0 768,500 768,500 ------------ ------------ ------------ Total Current Liabilities 5,732,884 3,152,630 8,885,514 ------------ ------------ ------------ Long Term Debt, net 415,329 0 415,329 Capital Leases, net 73,407 0 73,407 Notes Payable, Stockholder 160,000 0 160,000 Deferred Rent/Taxes 286,000 681,645 967,645 ------------ ------------ ------------ Total Liabilities 6,667,620 3,834,275 10,501,895 ------------ ------------ ------------ Shareholders' Equity Common Stock 5,379,432 41,600 5,421,032 Common Stock, Non-Voting 0 175,000 175,000 Additional Paid in Capital 0 825,938 825,938 Accumulated Deficit (4,153,521) 1,659,880 (2,493,641) ------------ ------------ ------------ Total Shareholders' Equity 1,225,911 2,702,418 3,928,329 ------------ ------------ ------------ Total Liabilities & Equity $ 7,893,531 $ 6,536,693 $ 14,430,224 ============ ============ ============
The accompanying notes are an integral part of the combined financial statements 29 PCT HOLDINGS, INC AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF INCOME FISCAL YEAR ENDED MAY 31, 1994, AND JUNE 30, 1994, RESPECTIVELY PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND., INC. YEARS ENDED ----------------------------------- May 31, 1994 June 30, 1994 Audited Audited COMBINED ------------ ------------- -------- NET SALES $ 2,940,019 $ 9,895,578 $12,835,597 COST OF SALES 2,859,791 8,327,254 11,187,045 ----------- ----------- ----------- GROSS PROFIT 80,228 1,568,324 1,648,552 OPERATING EXPENSES 963,811 1,240,742 2,204,553 ----------- ----------- ----------- INCOME (LOSS) FROM OPERATIONS (883,583) 327,582 (556,001) ----------- ----------- ----------- OTHER INCOME AND EXPENSE Interest Income 4,008 18,326 22,334 Interest Expense (207,205) (130,500) (337,705) Realized recovery (loss) on investment 0 (77,471) (77,471) Other (11,227) (40,235) (51,462) (214,424) (229,880) (444,304) ----------- ----------- ----------- INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (1,098,007) 97,702 (1,000,305) EXTRAORDINARY ITEM, gain on sale of assets, net of applicable income taxes of $988,134 0 1,918,142 1,918,142 ----------- ----------- ----------- NET INCOME (LOSS) BEFORE FEDERAL INCOME TAX (1,098,007) 2,015,844 917,837 FEDERAL INCOME TAX 0 (38,708) (38,708) ----------- ----------- ----------- NET INCOME (LOSS) FOR THE YEAR ($1,098,007) $ 1,977,136 $ 879,129 =========== =========== =========== INCOME (LOSS) PER SHARE ($ 0.60) $ 3.04 $ 0.35 =========== =========== ===========
The accompanying notes are an integral part of the combined financial statements 30 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF CASH FLOW PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. YEARS ENDED MAY 31 AND JUNE 30, 1994, RESPECTIVELY SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND., INC. CONSOLIDATED Years Ending ----------------------------------- May 31, 1994 June 30, 1994 Audited Audited ------------ ------------- ------------ CASH FLOW FROM OPERATING ACTIVITIES Net Cash Provided by (Used in) Operating Activities ($1,274,661) ($ 135,026) ($1,409,687) CASH FLOW FROM INVESTING ACTIVITIES Purchase of Property and Equipment (81,189) (1,937,427) (2,018,616) Proceeds from Sale and Relocation of Foundry 0 3,336,528 3,336,528 Proceeds from Sale of Property and Equipment 100,030 0 100,030 Payment of Relocation Costs 0 (512,761) (512,761) Purchase of Patents 0 0 0 Payments Received on Notes Receivable 0 0 0 Other Changes, net 0 (111,403) (111,403) ----------- ----------- ----------- Net Cash Provided by (Used in) Investing Activities 18,841 774,937 793,778 ----------- ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES Payments of Debt and Capital Leases (322,709) (435,660) (758,369) Proceeds from Financing Debt 88,571 89,555 178,126 Proceeds from Notes Payable to Stockholders 616,838 0 616,838 Payments on Notes Payable to Stockholders (287,344) 0 (287,344) Sale of Common Stock 1,147,206 0 1,147,206 Other Changes, net 0 0 0 ----------- ----------- ----------- Net Cash Provided by (Used in) Financing Activities 1,242,562 (346,105) 896,457 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH (13,258) 293,806 280,548 CASH, beginning of period 40,466 342,308 382,774 ----------- ----------- ----------- CASH, end of period $ 27,208 $ 636,114 $ 663,322 =========== =========== ===========
The accompanying notes are an integral part of the proforma consolidated financial statements 32 PCT HOLDINGS, INC AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF INCOME QUARTER ENDED AUGUST 31, 1994, AND SEPTEMBER 30, 1994, RESPECTIVELY PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND, INC. QUARTERS ENDED ----------------------------------- August 31, 1994 September 30, 1994 Unaudited Unaudited CONSOLIDATED --------------- ------------------ ------------ NET SALES $ 2,824,024 $ 2,454,330 $ 5,278,354 COST OF SALES 2,218,324 2,386,790 4,605,114 ----------- ----------- ----------- GROSS PROFIT 605,700 67,540 673,240 OPERATING EXPENSES 508,948 224,920 733,868 ----------- ----------- ----------- INCOME (LOSS) FROM OPERATIONS 96,752 (157,380) (60,628) ----------- ----------- ----------- OTHER INCOME AND EXPENSE Interest Income 0 28,127 28,127 Interest Expense (93,815) (25,980) (119,795) Gain on the Sale of Property 0 (28,881) (28,881) Other 30,455 (7,368) 23,087 ----------- ----------- ----------- (63,360) (34,102) (97,462) ----------- ----------- ----------- NET INCOME (LOSS) BEFORE FEDERAL INCOME TAX 33,392 (191,482) (158,090) FEDERAL INCOME TAX (9,850) 61,704 51,854 ----------- ----------- ----------- NET INCOME (LOSS) FOR THE YEAR $ 23,542 ($ 129,778) ($ 106,236) =========== =========== =========== INCOME (LOSS) PER SHARE $ 0.01 ($ 0.20) ($ 0.03) =========== =========== ===========
The accompanying notes are an integral part of the proforma combined financial statements 33 PCT HOLDINGS, INC. AND SUBSIDIARIES PROFORMA COMBINED STATEMENTS OF CASH FLOW PCT HOLDINGS, INC., AND MOREL INDUSTRIES, INC. FIRST QUARTER ENDED AUGUST 31 AND SEPTEMBER 30, 1994, RESPECTIVELY SUPPLEMENTAL FINANCIAL INFORMATION FOR FORM 8-K
PCT HOLDINGS, INC. MOREL IND., INC. Quarters Ending -------------------------------------- CONSOLIDATED August 31, 1994 September 30, 1994 Unaudited Unaudited Unaudited --------------- ------------------ ------------ CASH FLOW FROM OPERATING ACTIVITIES Net Cash Provided by (Used in) Operating Activities $ 203,734 $ 316,087 $ 519,821 ----------- ----------- ----------- CASH FLOW FROM INVESTING ACTIVITIES Purchase of Property and Equipment (105,611) (1,634,288) (1,739,899) Proceeds from Sale and Relocation of Foundry 0 89,400 89,400 Purchase of Patents (450,000) 0 (450,000) ----------- ----------- ----------- Net Cash Provided by (Used in) Investing Activities (555,611) (1,544,888) (2,100,499) ----------- ----------- ----------- CASH FLOW FROM FINANCING ACTIVITIES Payments of Debt and Capital Leases (104,404) (26,841) (131,245) Proceeds from Financing Debt 2,025,896 660,852 2,686,748 Payments on Notes Payable to Stockholders (1,492,838) 0 (1,492,838) Sale of Common Stock 410,000 0 410,000 ----------- ----------- ----------- Net Cash Provided by (Used in) Financing Activities 838,654 634,011 1,472,665 ----------- ----------- ----------- NET INCREASE (DECREASE) IN CASH 486,777 (594,790) (108,013) CASH, beginning of period 27,208 636,114 663,322 ----------- ----------- ----------- CASH, end of period $ 513,985 $ 41,324 $ 555,309 =========== =========== ===========
The accompanying notes are an integral part of the proforma combined financial statements 34 B. Exhibits The following are filed as exhibits to this Amendment No. 1: 23.1 Consent of Moss Adams LLP. 35 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PCT HOLDINGS, INC. By: /s/ Donald A. Wright ---------------------------------- Donald A. Wright President and Chief Executive Officer Dated: February 20, 1996 EXHIBIT INDEX Exhibit Sequential Number Description Page 23.1 Consent of Moss Adams LLP. EX-23.1 2 INDEPENDENT AUDITOR'S CONSENT Exhibit 23.1 Moss Adams LLP Certified Public Accountants INDEPENDENT AUDITOR'S CONSENT We consent to the use in this Current Report of PCT Holdings, Inc., on Form 8-K/A of our report dated July 14, 1995, incorporated by reference and included as part of this Current Report. /s/ Moss Adams LLP Everett, Washington February 13, 1996 -----END PRIVACY-ENHANCED MESSAGE-----