-----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, D4q+X2SYUAcf09qCTJNlDAB2kFQ+U2wK8z5lLCGfFwvj3LemsFGHpQpDxi57TDPw lgzVbYHhmYskuG0FJ6wLEA== 0000950152-01-000375.txt : 20010124 0000950152-01-000375.hdr.sgml : 20010124 ACCESSION NUMBER: 0000950152-01-000375 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000914 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CABLE LINK INC CENTRAL INDEX KEY: 0000893139 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 311239657 STATE OF INCORPORATION: OH FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-23111 FILM NUMBER: 1513727 BUSINESS ADDRESS: STREET 1: 280 COZZINS ST CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142213131 8-K/A 1 l86056ae8-ka.txt CABLE LINK, INC. 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------- FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported) SEPTEMBER 14, 2000. CABLE LINK, INC. (DBA A NOVO BROADBAND, INC.) (Name of Small Business Registrant in Its Charter) OHIO 0-23111 31-1239657 (State or Other Jurisdiction of COMMISSION FILE NUMBER (I.R.S. Employer Incorporation or Organization) Identification No.) 3015 GREENE STREET, HOLLYWOOD, FLORIDA 33020 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number including area code: (954)-922-8776 1 2 ITEM 2. ACQUISITION OF ASSETS On September 12, 2000, A Novo Canada Enterprises Inc. ("A Novo Canada"), a Canadian corporation that is a newly-formed, indirect, wholly-owned subsidiary of Cable Link, Inc., dba A Novo Broadband, Inc. ("A Novo"), entered into an Asset Purchase Agreement, dated as of September 12, 2000, with Les Telecommunications Valsysteme Inc. ("Valsysteme"), 9038-2847 Quebec Inc. Valsysteme's sole stockholder) and Jacques Franco (the sole stockholder of Valsysteme), pursuant to which A Novo Canada agreed to purchase substantially all of the assets of Valsysteme (the "Assets"). The purchase of the Assets under the Asset Purchase Agreement was consummated on September 14, 2000. Valsysteme was engaged in the business of the maintenance and repair of cable television equipment, microwave equipment, television and radio broadcast equipment and optical and cable broadcasting equipment. The Assets consisted of substantially all of Valsysteme's assets, including all of its inventory, equipment, contracts and goodwill. A Novo Canada intends to use the Assets to conduct the business previously conducted by Valsysteme. The total consideration paid to complete the transaction was $2,756,484, consisting of $2,611,665 paid in cash at closing to Valsysteme, assumption of $75,545 of Valsysteme's liabilities, and $69,274 paid in fees and expenses. The transaction was accounted for under the purchase method of accounting, and as a result, A Novo recognized $2,714,294 in goodwill in conjunction with this transaction in its September 30, 2000, financial statements. The historical audited statements for Valsysteme included in this Report are presented in the local currency of the Canadian dollar. The following tables provide a reconciliation of the net income and stockholders' equity of Valsysteme from the Canadian dollar to the United States dollar. The translation rates used represent the average currency exchange rate for each twelve month period.
NET INCOME AUGUST 31, 2000 AUGUST 31, 1999 -------------------- --------------------- Net income in Canadian dollars $Can 146,806 $Can 242,945 Foreign currency translation rate .6785 .6637 -------------------- -------------------- Net income in US dollars $ 99,608 $ 161,243 ==================== ====================
STOCKHOLDERS' EQUITY CANADIAN DOLLARS US DOLLARS ----------------------------------------------- ---------------------------------------- Common Stock Retained Common Retained Earnings Total Stock Earnings Total Balance 8/31/98 $Can 1,000 $Can 224,874 $Can 225,874 $651 $146,460 $ 147,111 Net income 242,945 242,945 161,243 161,243 Dividends (200,000) (200,000) (132,740) (132,740) ------------- --------------- ----------------- ------------ ------------ -------------- Balance 8/31/99 1,000 267,819 268,819 651 174,963 175,614 Net income 146,806 146,806 99,608 99,608 Dividends (200,000) (200,000) (135,700) (135,700) ------------- --------------- ----------------- ------------ ------------ -------------- Balance 8/31/00 $Can 1,000 $Can 214,625 $Can 215,625 $651 $ 138,871 $ 139,522 ============= =============== ================= ============ ============ ============== 8/31/98 8/31/99 8/31/00 ------- ------- ------- Foreign currency translation rate used .6513 .6637 .6785
2 3 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial statements of business acquired See Appendix A attached hereto. (b) Pro forma financial information. See Appendix B attached hereto. (c) Exhibits 2.1 Asset Purchase Agreement dated as of September 12, 2000, between A Novo Canada Enterprises Inc., Les Telecommunications Valsysteme Inc., 9038-2847 Quebec Inc. And Jacques Franco (translated from French and duly certified in accordance with Rule 306(a) of Regulations S-T) incorporated by reference to the registrant's Form 8-K filed on September 25, 2000. 23.1 Consent of accountants SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: January 23, 2001 CABLE LINK, INC. By: /s/ Louis Brunel ----------------------------------------- Louis Brunel, Chief Executive Officer and President 3 4 APPENDIX A LES TELECOMMUNICATIONS VALSYSTEME INC. ANNUAL FINANCIAL REPORT YEAR ENDED AUGUST 31, 2000 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- TABLE OF CONTENTS YEAR ENDED AUGUST 31, 2000 - -------------------------------------------------------------------------------- AUDITOR'S REPORT A - 1 FINANCIAL STATEMENTS: Statement of income A - 2 Statement of retained earnings A - 3 Balance sheet A - 4 Cash flow statement A - 5 Notes to the financial statements A-6- A-9 5 AUDITOR'S REPORT To the Directors of LES TELECOMMUNICATIONS VALSYSTEME INC. I have audited the balance sheet of LES TELECOMMUNICATIONS VALSYSTEME INC. as at August 31, 2000 and August 31, 1999 and the statements of income, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the company's management. My responsibility is to express an opinion on these financial statements based on my audit. Except as explained in the following paragraph, I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance 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. Because I was appointed auditor of the company after the current year end, I was not able to observe the counting of physical inventories at the beginning and end of each year nor satisfy myself concerning those inventory quantities by alternative means. Since opening and ending inventories enter into the determination of the results of operations and cash flows, I was unable to determine whether adjustments to cost of sales, income taxes, net income for the year, opening retained earnings and cash provided from operations might be necessary. In my opinion, except for the effect of adjustments, if any, which I might have determined to be necessary had I been able to examine opening and ending inventory quantities, as described in the preceding paragraph, the statements of income, retained earnings and cash flows present fairly, in all material respects, the results of operations and cash flows of the company for the years ended August 31, 2000 and August 31, 1999 in accordance with generally accepted accounting principles. Further, in my opinion, the balance sheet presents fairly, in all material respects, the financial position of the company as at August 31, 2000 and August 31, 1999 in accordance with generally accepted accounting principles. Chartered Accountant Longueuil, January 2, 2001 A-1 6 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- STATEMENT OF INCOME YEAR ENDED AUGUST 31, 2000 1999 - -------------------------------------------------------------------------------- REVENUES $ 1,471,272 $ 1,307,095 COST OF SERVICES RENDERED 707,744 601,524 ------------------ ------------------ GROSS PROFIT 763,528 705,571 ------------------ ------------------ OPERATING EXPENSES Selling and administrative expenses 577,393 384,958 Depreciation of capital assets 6,158 7,513 Interest and bank charges 261 1,814 ------------------ ------------------ 583,812 394,285 ------------------ ------------------ INCOME FROM OPERATIONS 179,716 311,286 INTEREST REVENUE 6,327 6,745 ------------------ ------------------ INCOME BEFORE INCOME TAXES 186,043 318,031 CURRENT INCOME TAXES 39,237 75,086 ------------------ ------------------ NET INCOME $ 146,806 $ 242,945 ================== ================== A-2 7 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- STATEMENT OF RETAINED EARNINGS YEAR ENDED AUGUST 31, 2000 1999 - -------------------------------------------------------------------------------- BALANCE, BEGINNING OF YEAR $ 267,819 $ 224,874 Net income 146,806 242,945 ------------------- ------------------ 414,625 467,819 Dividends - class A shares ( 200,000 ) ( 200,000 ) ------------------- ------------------ BALANCE, END OF YEAR $ 214,625 $ 267,819 =================== ================== A-3 8 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- BALANCE SHEET AUGUST 31, 2000 1999 - -------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 110,914 $ 315,138 Accounts receivable 159,707 79,874 Grants receivable 2,887 - Income taxes receivable 47,547 - Inventories 20,645 17,541 Prepaid expenses 13,457 8,154 ------------------- ----------------- 355,157 420,707 CAPITAL ASSETS (Note 3) 25,371 28,078 ------------------- ----------------- $ 380,528 $ 448,785 =================== ================= LIABILITIES CURRENT LIABILITIES Accounts payable (Note 5) $ 164,903 $ 137,142 Income taxes - 42,824 ------------------- ----------------- 164,903 179,966 ------------------- ----------------- SHAREHOLDER'S EQUITY Share capital (Note 6) 1,000 1,000 Retained earnings 214,625 267,819 ------------------- ------------------ 215,625 268,819 ------------------- ------------------ $ 380,528 $ 448,785 =================== ================= A-4 9 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- CASH FLOW STATEMENT YEAR ENDED AUGUST 31, 2000 1999 - -------------------------------------------------------------------------------- OPERATING ACTIVITIES Net income $ 146,806 $ 242,945 Adjustments for: Depreciation of capital assets 6,158 7,513 Loss on disposal of capital assets 2,439 - ------------------ ------------------ 155,403 250,458 Net changes in non-cash working capital items ( 153,737 ) 135,377 ------------------ ------------------ 1,666 385,835 ------------------ ------------------ FINANCING ACTIVITIES Dividends ( 200,000 ) ( 200,000 ) ------------------ ------------------ ( 200,000 ) ( 200,000 ) ------------------ ------------------ INVESTING ACTIVITIES Acquisition of capital assets ( 5,890 ) ( 1,480 ) ------------------ ------------------ CASH INCREASE (DECREASE) ( 204,224 ) 184,355 CASH, BEGINNING OF YEAR 315,138 130,783 ------------------ ------------------ CASH, END OF YEAR $ 110,914 $ 315,138 ================== ================== A-5 10 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2000 - -------------------------------------------------------------------------------- 1. STATUTES OF INCORPORATION AND NATURE OF ACTIVITIES The company is incorporated under Part 1A of the Quebec Companies Act and operates mainly in the sector of calibrating and repairing of communication and telecommunication equipment. 2. SIGNIFICANT ACCOUNTING POLICIES INVENTORIES Inventories are evaluated at lower of cost and replacement cost, the cost being determined using the first in, first out method. CAPITAL ASSETS AND DEPRECIATION Capital assets are recorded at cost and are amortized following the declining balance method over their estimated useful lives at the following rates: Equipment and tools 20% Office furniture 20% Computers 30% INCOME TAX CREDITS AND GOVERNMENT ASSISTANCE The income tax credits and government grants are accounted for in reduction of the asset cost or operating expenses they relate to. 3. CAPITAL ASSETS
2000 1999 ----------------------------------------------------------------- -------------------- CUMULATED NET Net COST DEPRECIATION VALUE Value --------------------- ------------------- ------------------- -------------------- Equipment and tools $ 106,224 $ 92,051 $ 14,173 $ 17,716 Office furniture 18,905 14,723 4,182 5,228 Computers 10,286 3,270 7,016 5,134 --------------------- ------------------ ------------------ -------------------- $ 135,415 $ 110,044 $ 25,371 $ 28,078 ===================== ================== ================== ====================
A-6 11 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2000 - -------------------------------------------------------------------------------- 4. BANK OVERDRAFT The company has an authorized line of credit of $100,000, at a rate of prime plus 1%, secured by the accounts receivable and renewable on December 31, 2000. 5. ACCOUNTS PAYABLE 2000 1999 ------------------ ------------------- Trade and accrued charges $ 62,915 $ 15,399 Salaries and vacations 71,501 83,058 Withholding taxes 6,013 11,151 Sales taxes 24,474 27,534 ------------------ ------------------- $ 164,903 $ 137,142 ================== =================== 6. SHARE CAPITAL AUTHORIZED Unlimited number of Class A shares, voting and participating, each Class A share is exchangeable for one Class D share, without par value; Unlimited number of Class B shares, voting and participating, without par value; Unlimited number of Class C shares, voting and non-participating, redeemable at the company's option at a price equal to the paid-up amount, without par value; Unlimited number of Class D shares, non-voting, non-cumulative monthly dividend of 1% calculated on the redemption price, redeemable at the holder's option at a price equal to the fair value of the consideration received at their issuance, without par value; A-7 12 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2000 - -------------------------------------------------------------------------------- 6. SHARE CAPITAL (CONT'D) AUTHORIZED Unlimited number of Class E shares, non-voting, non-cumulative monthly dividend of 1% calculated on the redemption price, redeemable at the holder's option at a price equal to the fair value of the consideration received at their issuance, without par value; Unlimited number of Class F shares, non-voting, non-cumulative dividend of 1$ per share, redeemable at the holder's option at a price equal to the paid-up amount, without par value; Unlimited number of Class G shares, non-voting, non-cumulative dividend of 1$ per share, redeemable at the company's option at a price equal to the paid-up amount, without par value; 2000 1999 ------------------ ----------------- ISSUED 100 Class A shares $ 1,000 $ 1,000 ================== ================= 7. COMMITMENTS The company leases business premises under a lease expiring October 31, 2000. The future minimum lease payments amount to $ 6,392. 8. RELATED PARTY TRANSACTIONS During the year, the company paid to its shareholder management fees amounting to $ 329,000 ($120,000 in 1999). A-8 13 LES TELECOMMUNICATIONS VALSYSTEME INC. - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS AUGUST 31, 2000 - -------------------------------------------------------------------------------- 9. FINANCIAL INSTRUMENTS CREDIT RISK The company provides credit to its clients in the normal course of its operations. It carries out, on a continuing basis, credit checks on its clients and maintains provisions for contingent credit losses which, once they materialize, are consistent with management's forecasts. The company does not normally require a guarantor. For the other debts, the company determines, on a continuing basis, the probable losses and sets up a provision for losses based on the estimated realizable value. FAIR VALUE The fair values of cash, accounts receivable, accounts payable, client deposits and dividends payable correspond approximately to their carrying amount because of their short-term maturity dates. 10. SUBSEQUENT EVENT On September 14, 2000, the company sold all its inventories, capital assets and intangible assets, including mainly goodwill, permits and contracts, for a cash consideration of $4,000,000. A-9 14 APPENDIX B CABLE LINK, INC. DBA A NOVO BROADBAND, INC. PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION CONTENTS Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2000 (Unaudited).............................................................. B-2 Pro Forma Condensed Consolidated Statement of Income for the year ended December 31, 1999 (Unaudited)...................................... B-3 Pro Forma Condensed Consolidated Statement of Income for the six months ended June 30, 2000 (Unaudited).......................................... B-4 Notes to Pro Forma Condensed Consolidated Financial Information (Unaudited).............................................................. B-5 PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) On September 14, 2000, Cable Link Inc., dba A Novo Broadband, Inc, ("A Novo") acquired 100 percent of the assets of Les Telecommunications Valsysteme, Inc. ("Valsysteme"). The purchase was conducted through A Novo Canada Enterprises, Inc., a wholly owned subsidiary of A Novo. The purchase price of the assets was $2,756,484, all of which was paid in cash. The acquisition will be accounted for using the purchase method, and accordingly, goodwill of $2,714,294 was recorded as part of the transaction in A Novo's September 30, 2000, financial statements. The unaudited pro forma condensed consolidated balance sheet of A Novo and Valsysteme as of June 30, 2000, reflects adjustments as if the acquisition had occurred on that date. The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 1999, and for the six months ending June 30, 2000, reflect adjustments as if the acquisition had occurred on January 1, 1999, and January 1, 2000, respectively. The unaudited pro forma condensed consolidated balance sheet and statement of income should be read in conjunction with the separate historical audited financial statements of A Novo and Valsysteme and the related notes appearing elsewhere in this report. The pro forma financial information is not necessarily indicative of the results that would have been reported had such events actually occurred on the dates specified, nor is it necessarily indicative of the future results of the combined company. B-1 15 CABLE LINK, INC. DBA A NOVO BROADBAND, INC. AND LES TELECOMMUNICATIONS VALSYSTEME, INC. PRO FORMA COMBINED BALANCE SHEETS (UNAUDITED) JUNE 30, 2000 ASSETS
A NOVO PRO FORMA PRO FORMA BROADBAND VALSYSTEME ADJUSTMENTS COMBINED --------- ---------- ----------- -------- CURRENT ASSETS Cash and cash equivalents..................... $ 42,647 $ 82,008 (a) $ 7,808,255 $7,932,910 Accounts receivable, net...................... 1,415,879 83,819 -- 1,499,698 Inventories................................... 1,313,417 23,746 -- 1,337,163 Income tax receivable......................... 70,000 48,316 -- 118,316 Prepaid and other assets...................... 92,962 40,728 -- 133,690 Deferred income taxes......................... 517,000 -- -- 517,000 Deposits...................................... 11,850 -- -- 11,850 --------------- -------------- -------------- ---------------- Total current assets........................ 3,463,755 278,617 7,808,255 11,550,627 --------------- -------------- -------------- ---------------- PROPERTY AND EQUIPMENT, at cost 641,305 17,279 658,584 --------------- -------------- -------------- ---------------- OTHER ASSETS Goodwill...................................... (a) 2,590,472 2,590,472 Deferred income taxes......................... 94,000 -- -- 94,000 Other assets.................................. 26,739 -- -- 26,739 --------------- -------------- -------------- ---------------- Total other assets ......................... 120,739 2,590,472 2,711,211 --------------- -------------- -------------- ---------------- TOTAL ASSETS $4,225,799 $ 295,896 $10,398,727 $ 14,920,422 =============== ============== ============== ================ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term obligations $ 4 ,980 -- (a) (4,980) $ -- Notes payable - bank 1,382,431 -- (a) (1,382,431) -- Accounts payable.............................. 1,579,052 129,884 1,708,936 Accrued expenses.............................. 148,750 -- 148,750 --------------- -------------- -------------- ---------------- Total current liabilities................... 3,115,213 129,884 (1,387,411) 1,857,686 --------------- -------------- -------------- ---------------- STOCKHOLDERS' EQUITY Common stock, no par value 1,496,864 668 (a) 11,951,482 13,449,014 Additional paid-in-capital.................... 159,136 -- 159,136 Retained (deficit) earnings................... (545,414) 165,344 (a) (165,344) (545,414) --------------- -------------- -------------- ---------------- Total stockholders' equity 1,110,586 166,012 11,786,738 13,062,736 --------------- -------------- -------------- ---------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....... $ 4,225,799 $ 295,897 $10,398,727 $ 14,920,422 =============== ============== ============== ================
See accompanying notes to the unaudited pro forma consolidated financial information. B-2 16 CABLE LINK, INC. DBA A NOVO BROADBAND, INC. AND LES TELECOMMUNICATIONS VALSYSTEME, INC. PRO FORMA COMBINED STATEMENTS OF OPERATIONS (UNAUDITED) For the Year Ended December 31, 1999
A NOVO PRO FORMA PRO FORMA BROADBAND VALSYSTEME ADJUSTMENTS COMBINED --------- ---------- ----------- -------- Revenues...................................... $ 10,606,235 $ 1,031,702 $ 11,637,937 Cost of sales................................. 6,485,381 454,782 6,940,163 ------------------ ---------------- -------------- ----------------- Gross profit............................... 4,120,854 576,920 4,697,774 (a) 129,524 Selling, general and administrative expenses.. 2,995,283 238,357 (c) (47,142) 3,316,022 ------------------ ---------------- -------------- ----------------- Income from operations..................... 1,125,571 338,563 (82,382) 1,381,752 Interest income............................... -- 1,151 (b) 510,860 512,011 Interest expense.............................. 74,947 -- (b) (74,947) -- ------------------ ---------------- -------------- ----------------- Income before income taxes.................... 1,050,624 339,714 503,425 1,893,763 Provision for income taxes.................... 251,105 88,647 (d) 215,203 554,955 ------------------ ---------------- -------------- ----------------- Income from continuing operations............. $ 799,519 $ 251,067 $288,223 $ 1,338,809 ================== ================ ============== ================= Basic Earnings Per Share Income from continuing operations $ 0.47 $ 0.28 ================== ================= Weighted average shares outstanding 1,694,880 3,040,666 4,735,546 ================== ============== ================= Diluted Earnings Per Share Income from continuing operations $ 0.46 $ 0.28 ================== ================= Weighted average shares outstanding 1,725,360 3,040,666 4,766,026 ================== ============== =================
See accompanying notes to unaudited pro forma consolidated financial information. B-3 17 CABLE LINK, INC. DBA A NOVO BROADBAND, INC. AND LES TELECOMMUNICATIONS VALSYSTEME, INC. PRO FORMA COMBINED STATEMENTS OF OPERATIONS (UNAUDITED) For the Six Months Ended June 30, 2000
A NOVO PRO FORMA PRO FORMA BROADBAND VALSYSTEME ADJUSTMENTS COMBINED --------- ---------- ----------- -------- Revenues...................................... $ 4,612,124 $ 429,815 $5,041,939 Cost of sales................................. 2,933,437 237,802 3,171,239 ------------------ --------------- --------------- ----------------- Gross profit............................... 1,678,687 192,013 1,870,700 (a) 64,762 Selling, general and administrative expenses.. 1,659,792 275,736 (c) (158,800) 1,841,490 ------------------ --------------- --------------- ----------------- Income (loss) from operations.............. 18,895 (83,723) 94,038 29,210 Interest Income -- 7,906 (b) 267,646 275,552 Interest expense.............................. 30,153 -- (b) (30,153) -- ------------------ --------------- --------------- ----------------- Income (loss) before income taxes............. (11,258) (75,817) 391,837 304,762 Total benefit (provision) for income taxes.... (3,060) 16,680 (d) (155,244) (141,624) ------------------ --------------- --------------- ----------------- Income (loss) from continuing operations...... $ (14,318) $ (59,137) 236,593 $ 163,138 ================== =============== =============== ================= Basic Earnings Per Share Income (loss) from continuing operations $ (0.01) $ 0.03 ================== ================= Weighted average shares outstanding 1,702,963 3,040,666 4,743,629 ================== =============== ================= Diluted Earnings Per Share Income (loss) from continuing operations $ (0.01) $ 0.03 ================== ================= Weighted average shares outstanding 1,925,972 3,040,666 4,966,638 ================== =============== =================
See accompanying notes to the unaudited pro forma consolidated financial information. B-4 18 CABLE LINK, INC. DBA A NOVO BROADBAND, INC. AND LES TELECOMMUNICATIONS VALSYSTEME, INC. NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) Note 1 - Significant Accounting Policies and Basis of Presentation The accompanying historical financial statements of Cable Link, Inc. dba A Novo Broadband, Inc. (" A Novo"), and Les Telecommunications Valsysteme, Inc. ("Valsysteme") have been derived from financial statements prepared in accordance with generally accepted accounting principles. A Novo's historical financial statements as of and for the year ended December 31, 1999, used in the pro forma financial statements are derived from A Novo's audited financial statements for the fiscal year then ended. The Valsysteme historical financial statements as of and for the twelve months ended December 31, 1999, used in the pro forma financial statements are based on the unaudited financial statements of Valsysteme at December 31, 1999, and on the audited financial statements for the years ended August 31, 1998 and August 31, 1999, adjusted using interim financial statements to reflect the twelve months ended December 31, 1999. A Novo's historical financial statements as of and for the six months ended June 30, 2000, used in the pro forma financial statements are derived from A Novo's unaudited financial statements for the six months ended June 30, 2000. The Valsysteme historical financial statements as of June 30, 2000 are based on the unaudited financial statements of Valsysteme at June 30, 2000, and December 31, 1999, adjusted to reflect the six months ended June 30, 2000. Valsysteme's interim financial statements are prepared on the basis of generally accepted accounting principles and include all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of such financial information. The pro forma adjustments are based on A Novo's allocation of the purchase price of Valsysteme to the net assets acquired as if the transaction occurred on June 30, 2000. Note 2 - Foreign Currency Translation Valsysteme conducts its business in Montreal, Canada. All financial statements provided herein have been adjusted from the local currency, the Canadian dollar. For the balance sheet presentation, amounts were translated to the U. S. dollar by using the exchange rate in place as of June 30, 2000. For the income statement presentations, amounts were translated to the U.S. dollar using the average exchange rate for the period presented on the statements of income. Note 3 - Pro Forma Condensed Consolidated Balance Sheet Adjustment This column reflects the following adjustments: (a) To record the consideration paid and the net assets acquired at their fair market value. The consideration paid by A Novo to acquire Valsysteme was $2,756,484 in cash. Of this consideration, the following allocation was made based on the net assets of Valsysteme as of June 30, 2000: Net assets $ 166,012 Goodwill 2,590,472 ------------------ $ 2,756,484 ================== To record the $12 million private placement of common stock with A Novo Americas LLC, which occurred on August 7, 2000. This private placement provided the cash which was used to purchase the assets from Valsysteme. Certain of the proceeds of the private placement were assumed to be used to repay A Novo's bank debt as of June 30, 2000. B-5 19 Note 4 - Pro Forma Consolidated Statement of Income Adjustments This column reflects the following adjustments: (a) To record amortization of amounts allocated to goodwill using an estimated life of 20 years. (b) To record the interest income realized utilizing the excess cash available from the $12 million private placement, net of the cash used to conduct the purchase transaction and repay the bank debt of A Novo. To eliminate interest expense no longer incurred because the long-term debt was prepaid at the beginning of the period. (c) To eliminate management fee charged by previous owners of Valsysteme, which will not be charged by A Novo. (d) To record the income tax effect of the pro forma adjustments after consideration of the nondeductible intangible asset amortization. B-6 EX-23.1 2 l86056aex23-1.txt EXHIBIT 23.1 1 Exhibit 23.1 We hereby consent to the use of our report dated January 2, 2001, relating to the financial statements of Les Telecommunications Valsysteme, Inc., in its Report on Form 8-K for the year ending August 31, 2000. January 2, 2001 /s/ Dino Petrone Dino Petrone Chartered Accountant -----END PRIVACY-ENHANCED MESSAGE-----