-----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, R4UmRfgnZetwgWYcjnXm5OhV/Mn59zVBpZ5UyUbdE5wLo8SkzkiBk9gtGzn6qorB 90KM7SY859XCEU+g7elmOw== 0001169232-04-005305.txt : 20041025 0001169232-04-005305.hdr.sgml : 20041025 20041025150807 ACCESSION NUMBER: 0001169232-04-005305 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040730 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041025 DATE AS OF CHANGE: 20041025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WIRELESS AGE COMMUNICATIONS INC CENTRAL INDEX KEY: 0001130131 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RADIO TV & CONSUMER ELECTRONICS STORES [5731] IRS NUMBER: 980336674 STATE OF INCORPORATION: NV FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-31338 FILM NUMBER: 041093863 BUSINESS ADDRESS: STREET 1: 1150 ROSE STREET STREET 2: REGINA CITY: REGINA STATE: A9 ZIP: S49 1Z6 BUSINESS PHONE: (306) 539-1666 MAIL ADDRESS: STREET 1: 1150 ROSE STREET STREET 2: REGINA CITY: REGINA STATE: A9 ZIP: S49 1Z6 FORMER COMPANY: FORMER CONFORMED NAME: LENNOC VENTURES INC DATE OF NAME CHANGE: 20001215 8-K/A 1 d60999_8-ka.txt FORM 8-K/A 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 (Date of earliest event reported) July 30, 2004 WIRELESS AGE COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) Nevada 001-313338 98-0336674 State or other jurisdiction of (Commission (IRS Employer Incorporation or organization File No.) Identification No.) 13980 Jane Street, King City, Ontario, Canada, L7B 1A3 (Address of principal executive offices) (Zip Code) (905) 833-0808 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instruction A.2. below): |_| Written communication pursuant to Rule 425 under the Securities Ac (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c)) TABLE OF CONTENTS Item 2.01 Completion of Acquisition or Disposition of Assets. Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits SIGNATURE Item 2.01 Completion of Acquisition or Disposition of Assets. On August 16, 2004, the Registrant filed Form 8-K describing its acquisition of Marlon Distributors Ltd. and its wholly owned subsidiary Marlon Recreational Products Ltd. The Registrant is voluntarily furnishing the consolidated audited financial statements of Marlon Distributors for general public informational purposes. The Registrant is not required to provide pro-forma financial information with respect to the acquisition of Marlon Distributors Ltd. A copy of the Marlon Distributors Ltd. audited consolidated financial statements is set forth as Exhibit 99.1. to this Current Report on Form 8-K. Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits (a) Financial Statements of Businesses Acquired. The financial statements for Marlon Distributors Ltd. are attached as Exhibit 99.1 [Signature Page Follows] SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 25, 2004 WIRELESS AGE COMMUNICATIONS, INC. By /s/ Gary Hokkanen --------------------------------- Gary N. Hokkanen Chief Financial Officer EX-99.1 2 d60999_ex99-1.txt CONSOLIDATED FINANCIAL STATEMENTS Exhibit 99.1 MARLON DISTRIBUTORS LTD. CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2003 STATED IN CANADIAN DOLLARS DONALD BEATSON CHARTERED ACCOUNTANT 6176 Alma Street Vancouver, B. C. V6N 1Y6 Telephone 604-263-4814 AUDITOR'S REPORT To the Shareholders I have audited the consolidated balance sheet of Marlon Distributors Ltd. as at December 31, 2003 and the consolidated statements of income and retained earnings and cash flows for the year 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. I conducted my audit in accordance with Canadian 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. In my opinion, these financial statements present fairly, in all material respects, the consolidated financial position of the Company and the consolidated results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. DONALD BEATSON Chartered Accountant Vancouver, Canada February 24, 2004 MARLON DISTRIBUTORS LTD. CONSOLIDATED BALANCE SHEET DECEMBER 31, 2003
2003 2002 ASSETS CURRENT ASSETS Cash $ 75,386 $ 146,666 Guaranteed investment certificate 322,908 315,824 Accounts receivable - net of allowance 449,209 477,885 Inventory 1,209,150 1,062,501 Prepaid expenses 40,751 43,859 ----------- ----------- 2,097,404 2,046,735 CAPITAL ASSETS (Note 3) 146,070 325,756 GOODWILL Purchased by subsidiary, less amortization thereon 73,228 83,288 Arising upon consolidation (Note 1(e)) 184,196 184,196 ----------- ----------- Total Assets $ 2,500,898 $ 2,639,975 =========== =========== LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities $ 508,456 $ 390,496 Corporation income taxes payable 9,735 12,603 Current portion of long-term debt 95,000 324,565 ----------- ----------- 613,191 727,664 LONG-TERM DEBT (Note 4) 377,643 466,541 FUTURE TAXES 3,325 1,875 ----------- ----------- Total Liabilities 994,159 1,196,080 ----------- ----------- SHAREHOLDERS' EQUITY SHARE CAPITAL (Note 5) 459,162 459,162 RETAINED EARNINGS 1,297,577 1,234,733 PREMIUM ON REDEMPTION OF SHARES (Note 5) (250,000) (250,000) ----------- ----------- Total Equity 1,506,739 1,443,895 ----------- ----------- Total Liabilities and Equity $ 2,500,898 $ 2,639,975 =========== ===========
MARLON DISTRIBUTORS LTD. STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS YEAR ENDED DECEMBER 31, 2003 2003 2002 SALES $3,188,521 $ 2,902,582 COST OF SALES 2,198,845 2,121,138 ---------- ----------- Gross Margin 989,676 781,444 OTHER OPERATING INCOME Commissions 84,644 85,606 Rent 955 6,000 Interest and other 11,059 12,357 ---------- ----------- 1,086,334 885,407 SELLING AND ADMINISTRATIVE EXPENSES 1,061,698 920,976 ---------- ----------- OPERATING INCOME (LOSS) 24,636 (35,569) OTHER INCOME Gain on disposal of assets (Note 3(b)) 55,533 79,089 ---------- ----------- INCOME BEFORE TAXES 80,169 43,520 ---------- ----------- INCOME TAXES Current 15,875 11,722 Future (recovery) 1,450 (1,500) ---------- ----------- 17,325 10,222 ---------- ----------- NET INCOME 62,844 33,298 Retained earnings, beginning of year 1,234,733 1,201,435 ---------- ----------- RETAINED EARNINGS, END OF YEAR $1,297,577 $ 1,234,733 ========== =========== MARLON DISTRIBUTORS LTD. STATEMENT OF CONSOLIDATED CASH FLOWS YEAR ENDED DECEMBER 31, 2003
2003 2002 CASH PROVIDED (UTILIZED) BY OPERATING ACTIVITIES Net income $ 62,844 $ 33,298 Add (deduct) items not requiring cash: Amortization 54,561 66,202 Gain on disposal of assets (55,533) (79,089) Deferred income taxes (recovery) 1,450 (1,500) --------- --------- 63,322 18,911 CHANGES IN NON-CASH WORKING CAPITAL ITEMS: Accounts receivable 28,676 (108,089) Goods and services tax recoverable -- 7,458 Inventory (146,649) 23,509 Prepaid expenses 3,108 68,307 Accounts payable and accrued liabilities 117,960 3,930 Corporation income taxes payable (2,868) 10,726 --------- --------- 63,549 24,752 --------- --------- CASH PROVIDED (UTILIZED) BY FINANCING ACTIVITIES Net reduction of long-term debt contracts (318,463) (377,559) --------- --------- CASH PROVIDED (UTILIZED) BY INVESTING ACTIVITIES Purchase of guaranteed investment certificates (7,084) (145,764) Disposal of capital assets 190,718 257,433 Reduction in employee automobile loan -- 1,528 --------- --------- 183,634 113,197 --------- --------- DECREASE IN CASH POSITION (71,280) (239,610) Cash, beginning of year 146,666 386,276 --------- --------- CASH, END OF YEAR $ 75,386 $ 146,666 ========= =========
MARLON DISTRIBUTORS LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2003 1. ACCOUNTING POLICIES (a) Inventory Inventory is priced at the lower of cost and net realized value with cost being determined as the average cost based on the most recent invoice prices. (b) Amortization Amortization of capital assets is provided on the declining-balance method at the following rates over the estimated useful lives of the assets: Building - 5% Equipment and office furniture - 20% Computer and automotive equipment - 30% In the year of acquisition, amortization is provided at only one-half of the normal rates. Leasehold improvements are amortized on a straight-line basis over the five year term of the lease. Purchased goodwill of the wholly-owned subsidiary is amortized on a straight-line basis over fifteen years. (c) Income Taxes and Future Taxes The Companies follow the deferred tax allocation method of providing income taxes. Under this method, taxes are determined using accounting income which differs in some respects from taxable income. Differences generally arise because items of income and expense such as amortization, are reflected in different time periods for financial accounting purposes than for income tax purposes. Future taxes represent the amount by which income taxes on accounting income exceed income taxes on taxable income. (d) Premium on Redemption of Shares The premium paid on the redemption of shares is shown as a reduction of the overall shareholders' equity rather than as a reduction of the value of share capital. MARLON DISTRIBUTORS LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2003 1. ACCOUNTING POLICIES (Continued) (e) Consolidation The consolidated financial statements include the assets, liabilities, revenues, expenses and cash flows of the parent company, Marlon Distributors Ltd., and of its wholly-owned subsidiary, Marlon Recreational Products Ltd. for the year ended December 31, 2003 after elimination of inter-company investments, shareholdings and all other inter-company transactions. Goodwill of $184,196, representing the excess of the purchase price of the shares of the subsidiary over their net book value at date of acquisition, arises upon consolidation of the accounts of the subsidiary. (f) Financial Instruments Financial instruments of the companies include the guaranteed investment certificate, accounts receivable, accounts payable and long-term debt contracts. Unless otherwise noted, it is management's opinion that there is no significant interest, currency and credit risks arising from these financial instruments. 2. BANK SECURITY The guaranteed investment certificate, accounts receivable and inventory are pledged as security for a bank line of credit that the parent company uses to finance overseas purchases of goods for resale. 3. CAPITAL ASSETS (a) Capital assets are represented by the following:
Accumulated Net Net Cost Amortization 2003 2002 ---- ------------ ---- ---- Land $ -- $ -- $ -- $ 65,876 Building -- -- -- 112,252 Computer equipment 86,382 73,596 12,786 17,972 Office furniture and equipment 38,147 27,880 10,267 11,410 Machinery and other equipment 33,110 14,135 18,975 10,082 Automotive equipment 181,561 107,711 73,850 101,751 Leasehold improvements 13,328 2,137 11,191 6,412 Prairies distribution rights 20,001 1,000 19,001 1 -------- -------- -------- -------- $372,529 $226,459 $146,070 $325,756 ======== ======== ======== ========
MARLON DISTRIBUTORS LTD NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2003 3. CAPITAL ASSETS (Continued) (b) The land and building were sold during the year for a cash consideration of $239,000 and a gain on sale of $52,712. A portion of the proceeds amounting to $137,409 was used to repay shareholders' loans (Note 4). (c) The capital assets of the subsidiary are pledged as security for term business loans outlined in note 4 below. 4. LONG-TERM DEBT a) Long-term debt is represented by the following:
2003 2002 Term loans payable to the HSBC Bank Canada: i) Retired during the year $ -- $ 91,356 ii) Payable in blended monthly instalments of $1,405, interest at prime plus .75%, payable in full by April, 2010, secured as outlined below 135,579 153,495 iii) Payable in blended monthly instalments of $1405, interest at prime plus 1%, secured as outlined below 19,573 34,641 iv) Payable in monthly instalments of interest only at prime plus 1%, secured by a first charge on a 2002 GMC crewcab 3/4 ton truck 21,774 28,487 Promissory note payable to former shareholder of subsidiary, Alexander Cameron, payable in quarterly principal payments of $12,500 plus interest at prime plus 1% 50,000 100,000 Advances from shareholders, non-interest bearing, no fixed terms of repayment 245,717 383,127 -------- -------- 472,643 791,106 Current portion included in current liabilities 95,000 324,565 -------- -------- $377,643 $466,541 ======== ========
MARLON DISTRIBUTORS LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2003 4. LONG-TERM DEBT (Continued) (b) The estimated principal payments on long-term debt contracts in each of the next five years are as follows: 2004 $ 95,000 2005 41,347 2006 30,000 2007 35,000 2008 40,000 (c) The term loans payable to HSBC Bank Canada are secured by the following: (iii) general security agreements creating a first fixed charge over all present and future personal property of the companies (iv) accounts receivable, inventory and guaranteed investment certificate (v) unlimited guarantees executed by the companies 5. SHARE CAPITAL a) The Company is authorized to issue an unlimited number of common shares of no par value. To date, a total of 94,163 common shares have been issued for cash. No shares were issued during the year b) In a previous year, the Company redeemed 20,000 common shares held by Simmonds Capital Limited for $270,000, which shares had been issued for $20,000. The excess of the redemption price over the issued price, amounting to $250,000, is shown as a reduction of shareholders' equity. 6. SUBSEQUENT EVENT In February, 2004, the subsidiary company completed negotiations to acquire distribution rights to Motorized Fun Company ("MFC") products in the provinces of British Columbia, Alberta and Yukon Territory in Canada and the states of Washington, Oregon and Idaho in the United States. It is anticipated that the acquisition of these rights will substantially increase the sales and net income figures of the subsidiary during the next two years. 7. OPERATING LEASE The companies are obligated to monthly lease payments for operating premises of $4,494 until June, 2005. There is an option to renew the lease for an additional two years. MARLON DISTRIBUTORS LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2003 Unaudited 8. INVENTORY WRITE-DOWN The Company wrote down its inventory at the end of 2003 to account for obsolete and unusable mobile radios and accessories, thereby increasing cost of sales by $21,710. # # # -----END PRIVACY-ENHANCED MESSAGE-----