-----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, Itq9FCwO5tFnB4Xh1XXjr2k7pzvHsegxJHYuercHLmpPY99mvq/o6Jh3yj/bqRxT 24X2crL+Dw3I2cGE4fgzrg== 0001093801-03-000834.txt : 20030715 0001093801-03-000834.hdr.sgml : 20030715 20030715172921 ACCESSION NUMBER: 0001093801-03-000834 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030714 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DEVELOPED TECHNOLOGY RESOURCE INC CENTRAL INDEX KEY: 0000890725 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 411713474 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21394 FILM NUMBER: 03787986 BUSINESS ADDRESS: STREET 1: 7300 METRO BLVD SUITE 550 STREET 2: SUITE 550 CITY: EDNA STATE: MN ZIP: 55439 BUSINESS PHONE: 9528200022 MAIL ADDRESS: STREET 1: 7300 METRO BLVD STREET 2: SUITE 550 CITY: EDNA STATE: MN ZIP: 55439 8-K/A 1 x8kaa-703.txt DEVELOPED TECHNOLOGY RESOURCE, INC. UNITED STATES 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: July 14, 2003 DEVELOPED TECHNOLOGY RESOURCE, INC. (Exact name of registrant as specified in its charter) MINNESOTA 0-21394 41-1713474 (State of other jurisdiction (Commission File No.) (IRS Employer of incorporation) Identification Number) SOUTHPOINT OFFICE CENTER, 1650 WEST 82ND STREET, SUITE 1040, BLOOMINGTON, MN 55431 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (952) 881-4105 5223 INDUSTRIAL BOULEVARD, EDINA, MN 55439 (Former name, former address and former fiscal year, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS This second amendment amends Form 8-K dated April 30, 2003, filed May 9, 2003 and July 14, 2003. The 8-K reported the acquisition of GelStat Corp. ("GelStat") by the registrant, Developed Technology Resource, Inc. ("DTR"), and a resulting change of control of the registrant. This amendment completes the required financial statement (historical and pro forma) disclosure. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. The following historical financial statements of GelStat and pro forma combined financial statements of DTR and GelStat are hereby filed by this second amendment to Form 8-K. 23.1 Consent of Gary Lundeen Company, PA. 99.1 Audited Financial Statements of GelStat Corp. for the period from June 25, 2002 (inception) to December 31, 2002. 99.2 Unaudited Interim Financial Statements of GelStat Corp. for the Three Months ended March 31, 2003. 99.3 Unaudited Pro forma financial information. 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. Dated: July 14, 2003 DEVELOPED TECHNOLOGY RESOURCE, INC. By /s/ Stephen C. Roberts ------------------------------- Stephen C. Roberts Chief Executive Officer EX-23.1 3 ex231-703.txt ACCOUNTANT'S CONSENT CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS GelStat Corp. Minneapolis, Minnesota We hereby consent to the use in the Company's Form 8-K/A of our report dated March 28, 2003, relating to the financial statements of GelStat Corp., which is contained in that Form 8-K/A. /s/ Gary Lundeen Company, P.A. Hopkins, Minnesota July 14, 2003 EX-99.1 4 ex991-703.txt FINANCIALS EXHIBIT 99.1 GELSTAT CORP. (A Development Stage Company) MINNEAPOLIS, MINNESOTA FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT PERIOD FROM JUNE 25, 2002 (INCEPTION) TO DECEMBER 31, 2002 GELSTAT CORP. (A Development Stage Company) TABLE OF CONTENTS ----------------- Page ---- Independent Auditor's Report 1 Balance Sheet 2 Statement of Operations 3 Statement of Cash Flows 4 Notes to Financial Statements 5 - 7 INDEPENDENT AUDITOR'S REPORT The Board of Directors GelStat Corp. Minneapolis, Minnesota We have audited the accompanying balance sheet of GelStat Corp. (a development stage company) as of December 31, 2002 and the related statements of operations and accumulated deficit and cash flows for the period from June 25, 2002 (inception) to December 31, 2002. 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 GelStat Corp., as of December 31, 2002 and the results of its operations and its cash flows for the period from June 25, 2002 (inception) to December 31, 2002, in conformity with accounting principles generally accepted in the United States of America. /s/ Gary Lundeen Company, P.A. Gary Lundeen Company, P.A. March 28, 2003 1 GELSTAT CORP. (A Development Stage Company) BALANCE SHEET DECEMBER 31, 2002 ASSETS Current Assets Cash in bank $ 133,014 Unexpired insurance 5,001 ---------- Total Current Assets 138,015 ---------- Property and Equipment Office equipment 1,115 Machinery and equipment 191 ---------- 1,306 Less accumulated depreciation 30 ---------- 1,276 ---------- Other Assets Lease deposit 500 Patent, net of amortization of $49 11,654 ---------- Total Other Assets 12,154 ---------- Total Assets $ 151,445 ========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Note payable $ 300,000 Accounts payable 3,692 Accrued salaries 960 Accrued interest 3,364 ---------- Total Current Liabilities 308,016 ---------- Stockholders' Deficit Common stock, $.001 par value, 75,000,000 shares authorized 3,375,000 shares issued and outstanding 3,375 Undesignated stock, no par value, 25,000,000 shares authorized no shares issued -- Due from shareholders (3,375) Accumulated deficit (accumulated during the development stage) (156,571) ---------- Total Stockholders' Deficit (156,571) ---------- Total Liabilities and Stockholders' Deficit $ 151,445 ========== See accompanying Notes to Financial Statements. 2 GELSTAT CORP. (A Development Stage Company) STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT PERIOD FROM JUNE 25, 2002 (INCEPTION) TO DECEMBER 31, 2002 Revenues $ -- ------------ Operating Expenses Consulting fees 97,000 Salaries 960 Health care benefits 6,051 Research and development 21,090 Organization expense 13,024 Office supplies and expense 7,873 Advertising and marketing 1,275 Rent 1,795 Liability insurance 714 Travel and entertainment 2,768 Telephone 556 Depreciation 30 Amortization 49 Bank charges 22 ------------ 153,207 ------------ Loss from Operations (153,207) Other Expense Interest expense 3,364 ------------ Net Loss (156,571) Accumulated Deficit - Beginning of Period -- ------------ Accumulated Deficit - End of Period $ (156,571) ============ See accompanying Notes to Financial Statements. 3 GELSTAT CORP. (A Development Stage Company) STATEMENT OF CASH FLOWS PERIOD FROM JUNE 25, 2002 (INCEPTION) TO DECEMBER 31, 2002 Cash Flow from Operating Activities Net Loss $ (156,571) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 79 Increase in unexpired insurance (5,001) Increase in accounts payable 3,692 Increase in accrued expenses 4,324 ------------ Net Cash Used by Operating Activities (153,477) ------------ Cash Flow from Investing Activities Purchase of property and equipment (1,306) Patent acquisition costs (11,703) Lease deposit (500) ------------ Net Cash Used by Investing Activities (13,509) ------------ Cash Flow from Financing Activities Loan proceeds 300,000 ------------ Net Cash Provided by Financing Activities 300,000 ------------ Increase in Cash 133,014 Cash at Beginning of Period -- ------------ Cash at End of Period $ 133,014 ============ Supplemental Disclosure Financing Activities Not Affecting Cash Issuance of common stock accompanied by shareholder promise to remit consideration at par value $ 3,375 ============ See accompanying Notes to Financial Statements. 4 GELSTAT CORP. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations - -------------------- GelStat Corp. is a development stage company involved in the development and marketing of various non-prescription consumer health products. Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents - ------------------------- The Company considers all short-term debt securities purchased with a maturity of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and does not consider its bank account balances to be exposed to any significant credit risk. Property and Equipment - ---------------------- Property and equipment are stated at cost. Depreciation is provided using the straight-line method over estimated useful lives of the assets. Income Taxes - ------------ Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due and deferred taxes arising from timing differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred taxes arising from timing differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the timing differences are expected to reverse. These deferred taxes relate primarily to differences in start-up costs, organizational expenses, and research and development costs recognized for financial reporting, but not for tax purposes. Advertising Costs - ----------------- Advertising costs are expensed as incurred. NOTE 2 - DEVELOPMENT STAGE OPERATIONS The Company was formed on June 25, 2002 to produce and market non-prescription (over-the-counter) health products, developed by its founders. The Company has been conducting clinical trials on products for the treatment of migraine headaches and insomnia and continues to devote substantially all of its efforts to the development of these products. 5 GELSTAT CORP. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 NOTE 3 - INTANGIBLE ASSETS The cost of acquired patents is amortized on the straight-line method over their 20-year lives. NOTE 4 - DUE FROM STOCKHOLDERS The amount due from stockholders represents consideration due from the founding shareholders in exchange for the shares of stock issued to them at par value. NOTE 5 - LOAN PAYABLE The Company obtained unsecured financing from Developed Technology Resource, Inc. in the amount of $300,000 for the purpose of providing working capital during product research and development. The loan accompanied a Plan of Merger (see Note 6), bears interest at a rate of 8% and is due December 31, 2003. NOTE 6 - PLAN OF MERGER On November 26, 2002, the Company entered into a Plan of Merger with Developed Technology Resource, Inc. and its 100% owner subsidiary, NP Acquisition Corporation, which provides for the merger of NP Acquisition Corporation into GelStat Corp. Developed Technology Resource, Inc. and NP Acquisition Corporation have the option to execute and deliver the Merger Agreement during the option period defined in the Plan of Merger. In further consideration of the loan (see Note 5) and the exercise of the Option Agreement, GelStat Corp. issued a warrant to Developed Technology Resource, Inc. to purchase 400,000 shares of its common stock at a price of $.75 per share over a period of three years following the: 1) termination of the option period if the option is not exercised; or 2) termination of the Merger Agreement. NOTE 7 - LEASING ARRANGEMENTS The Company leases its office facilities in Schofield, Wisconsin on a monthly basis. The Company also leases office facilities in Bloomington, Minnesota under an operating lease expiring on November 30, 2003. Future minimum rentals under the operating lease for the year 2003 are $11,000. 6 GELSTAT CORP. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 NOTE 8 - INCOME TAXES Income taxes are provided for tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes, if applicable. Expenses for start-up costs, organizational costs and research and development costs are deductible in the year incurred for financial statement purposes, however, for tax purposes they must be amortized over a number of years. The income tax benefit of those expenses are classified as a deferred income tax benefit. The reporting of these expenses and the related tax benefit reflect timing differences between financial statements and corporate income taxes. Following is a reconciliation of book income to taxable income: Loss per books $(156,571) Start-up expenses, organizational costs and research and development costs capitalized for tax purposes 156,571 --------- Taxable income per tax returns $ -- ========= Deferred tax assets at December 31, 2002 consisted of the following: Deferred income tax benefit $ 54,899 Valuation allowance (54,899) --------- Net deferred tax benefit $ -- ========= A valuation allowance for the entire deferred income tax benefit has been estimated because of the Company's development stage status and the uncertainty of realizing an income tax benefit from the recognition of costs that have been capitalized. 7 EX-99.2 5 ex992-703.txt FINANCIALS EXHIBIT 99.2 GELSTAT CORP. (A Development Stage Company) Minneapolis, Minnesota UNAUDITED FINANCIAL STATEMENTS QUARTER ENDED MARCH 31, 2003 1 GELSTAT CORP. (A Development Stage Company) BALANCE SHEET MARCH 31, 2003 (Unaudited) ASSETS Current Assets Cash in bank $ 112,313 Inventory 2,991 Unexpired insurance 3,572 --------- Total Current Assets 118,876 --------- Property and Equipment Office equipment 1,115 Machinery and equipment 191 1,306 --------- Less accumulated depreciation 75 --------- 1,231 --------- Other Assets Lease deposit 500 Patent, net of amortization of $99 12,075 --------- Total Other Assets 12,575 --------- Total Assets $ 132,682 ========= LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Note payable $ 450,000 Accounts payable 7,797 Accrued salaries 960 Accrued interest 9,556 --------- Total Current Liabilities 468,313 --------- Stockholders' Deficit Common stock, $.001 par value, 75,000,000 shares authorized 3,375,000 shares issued and outstanding 3,375 Due from shaeholders (3,375) Accumulated deficit (accumulated during the development stage) (335,631) --------- Total Stockholders' Deficit (335,631) --------- Total Liabilities and Stockholders' Deficit $ 132,682 ========= 2 GELSTAT CORP. (A Development Stage Company) STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT THREE MONTHS ENDED MARCH 31, 2003 (Unaudited) Revenues $ -- ---------- Operating Expenses Consulting fees 71,000 Salaries 6,935 Health care benefits 7,502 Research and development 26,610 Organization expense 1,538 Office supplies and expense 1,607 Advertising and marketing 35,543 Rent 4,575 Liability insurance 1,429 Travel and entertainment 12,908 Telephone 3,114 Depreciation 45 Amortization 50 Bank charges 12 ---------- 172,868 ---------- Loss from Operations (172,868) Other Expense Interest expense 6,192 ---------- Net Loss (179,060) Accumulated Deficit - Beginning of Period (156,571) ---------- Accumulated Deficit - End of Period $ (335,631) ========== 3 GELSTAT CORP. (A Development Stage Company) STATEMENT OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2003 (Unaudited) Cash Flow from Operating Activities Net Loss $ (179,060) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 95 Increase in inventory (2,991) Decrease in unexpired insurance 1,429 Increase in accounts payable 4,105 Increase in accrued expenses 6,192 ---------- Net Cash Used by Operating Activities (170,230) ---------- Cash Flow from Investing Activities Patent acquisition costs (471) ---------- Net Cash Used by Investing Activities (471) ---------- Cash Flow from Financing Activities Loan proceeds 150,000 ---------- Net Cash Provided by Financing Activities 150,000 ---------- Decrease in Cash (20,701) Cash at Beginning of Period 133,014 ---------- Cash at End of Period $ 112,313 ========== 4 EX-99.3 6 ex993-703.txt FINANCIALS EXHIBIT 99.3 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2002 (Unaudited)
DEVELOPED TECHNOLOGY GELSTAT ADJUSTING RESOURCE CORP. ENTRIES PRO FORMA ------------ ------------ ------------ ------------ Cost and Expenses: General and administrative 144,427 153,207 -- 297,634 Non-cash stock compensation expense 12,282 -- -- 12,282 ------------ ------------ ------------ ------------ 156,709 153,207 -- 309,916 ------------ ------------ ------------ ------------ Other Income (Expense): Interest income 75,917 -- -- 75,917 Interest expense (14,374) (3,364) 3,364 (14,374) Gain on sale of FMI 1,500,000 -- -- 1,500,000 Gain on sale of equipment to FMI 11,890 -- -- 11,890 Gain on sale of Phygen Stock 75,000 -- -- 75,000 Loss on sale of Savory Snacks (17,039) -- -- (17,039) Equity in loss of Savory Snacks (12,180) -- -- (12,180) ------------ ------------ ------------ ------------ 1,619,214 (3,364) 3,364 1,619,214 ------------ ------------ ------------ ------------ Net Income (Loss) $ 1,462,505 $ (156,571) $ 3,364 $ 1,309,298 ============ ============ ============ ============ Net Income (Loss) per Common Share: Basic $ 1.20 $ 0.49 ============ ============ Diluted $ 1.19 $ 0.49 ============ ============ Shares Used In Computation of Net Income (Loss) per Common Share: Basic 1,221,890 (1,471,530) 2,693,420 ============ ============ ============ Diluted 1,225,183 (1,471,530) 2,696,713 ============ ============ ============
See accompanying notes to the pro forma condensed consolidated financial statements. 1 PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2003 (Unaudited)
DEVELOPED TECHNOLOGY GELSTAT ADJUSTING RESOURCE CORP. ENTRIES PRO FORMA ------------ ------------ ------------ ------------ ASSETS Current Assets: Cash $ 436,527 $ 112,313 $ -- $ 548,840 Other receivables 27,666 -- -- 27,666 Notes receivable 917,219 -- (450,000) 467,219 Inventory -- 2,991 -- 2,991 Prepaid and other current assets 13,462 3,572 -- 17,034 ------------ ------------ ------------ ------------ Total current assets 1,394,874 118,876 (450,000) 1,063,750 Furniture and Equipment, net 244 1,231 808 2,283 Long-lived Assets Held for Disposal 808 -- (808) -- Deposits -- 500 -- 500 Patent, net -- 12,075 -- 12,075 Note Receivable from Sale of Investment 25,000 -- -- 25,000 ------------ ------------ ------------ ------------ $ 1,420,926 $ 132,682 $ (450,000) $ 1,103,608 ============ ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes payable $ -- $ 450,000 $ (450,000) $ -- Accounts payable 15,243 7,797 -- 23,040 Accrued compensation 2,400 960 -- 3,360 Accrued lease commitments 24,671 -- -- 24,671 Accrued interest -- 9,556 (9,556) -- Accrued liabilities 7,848 -- -- 7,848 ------------ ------------ ------------ ------------ Total current liabilities 50,162 468,313 (459,556) 58,919 Non-Current Deferred Gain 25,000 -- -- 25,000 ------------ ------------ ------------ ------------ Total liabilities 75,162 468,313 (459,556) 83,919 ------------ ------------ ------------ ------------ Shareholders' Equity: Common stock 12,219 3,375 11,340 26,934 Additional paid-in capital 6,818,001 -- (14,715) 6,803,286 Notes receivable (310,750) (3,375) 3,375 (310,750) Accumulated deficit (5,173,706) (335,631) 9,556 (5,499,781) ------------ ------------ ------------ ------------ Total shareholders' equity 1,345,764 (335,631) 9,556 1,019,689 ------------ ------------ ------------ ------------ $ 1,420,926 $ 132,682 $ (450,000) $ 1,103,608 ============ ============ ============ ============
See accompanying notes to the pro forma condensed consolidated financial statements. 2 PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2003 (Unaudited)
DEVELOPED TECHNOLOGY GELSTAT ADJUSTING RESOURCE CORP. ENTRIES PRO FORMA ------------ ------------ ------------ ------------ Cost and Expenses: General and administrative 25,749 172,868 -- 198,617 Non-cash stock compensation expense 27,225 -- -- 27,225 ------------ ------------ ------------ ------------ 52,974 172,868 -- 225,842 ------------ ------------ ------------ ------------ Other Income (Expense): Interest income 26,310 -- -- 26,310 Interest expense (9) (6,192) 6,192 (9) ------------ ------------ ------------ ------------ 26,301 (6,192) 6,192 26,301 ------------ ------------ ------------ ------------ Net Income (Loss) $ (26,673) $ (179,060) $ 6,192 $ (199,541) ============ ============ ============ ============ Net Income (Loss) per Common Share: Basic $ (0.02) $ 0.00 $ (0.07) ============ ============ ============ Diluted $ (0.02) $ 0.00 $ (0.07) ============ ============ ============ Shares Used In Computation of Net Income (Loss) per Common Share: Basic 1,221,890 (1,471,530) 2,693,420 ============ ============ ============ Diluted 1,221,890 (1,471,530) 2,693,420 ============ ============ ============
See accompanying notes to the pro forma condensed consolidated financial statements. 3 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The unaudited pro forma statements of operation combine the historical statements of operations of Developed Technology Resource, Inc. for the year ended December 31, 2002 and the three months ended March 31, 2003 with the historical statements of operations of GelStat Corp. for the period from inception (June 25, 2002) through December 31, 2002 and the three months ended March 31, 2003. The unaudited pro forma balance sheet combines the financial position of the two companies as of March 31, 2003. The pro forma condensed consolidated financial statements do not purport to be indicative of the results of operations or financial position which would have been actually reported had the transaction been consummated on the dates indicated, or which may be reported in the future. NOTE 2 - MERGER AND PRO FORMA ADJUSTMENT On April 30, 2003, Developed Technology Resource, Inc.'s ("DTR") wholly-owned subsidiary, NP Acquisition Corp., merged with GelStat Corp. ("GelStat"), with GelStat as the survivor. Pursuant to the merger agreement, DTR issued 1,471,530 shares of common stock to the owners of GelStat in exchange for all of the outstanding shares of common stock of GelStat, consisting of 3,375,000 shares. No cash consideration was exchanged. The officers, directors, and former owners of GelStat now comprise a majority of DTR's Board of Directors. The merger transaction was accounted for as a purchase of DTR by GelStat Corp. (a reverse acquisition in which GelStat is considered the acquirer for accounting purposes), since the shareholders of GelStat obtained a majority of the voting rights of DTR as a result of the transaction. The pro forma financial statements include an adjustment to eliminate the notes payable of $450,000 at March 31, 2003 between GelStat and DTR and the interest expense thereon recorded by GelStat. Interest income related to the notes was not previously recorded by DTR and therefore does not need to be eliminated. 4 -----END PRIVACY-ENHANCED MESSAGE-----