Conflicting statements?
- 1) We acquired Pro Mold after a limited due diligence review and evaluation and we did not rely upon independent third party evaluations or review of the proposed acquisition.
- The Company engaged an independent appraisal to assess the fair value of the property and equipment.
The December 2005 acquisition of Pro Mold was accounted for as a purchase business combination under the provisions of the FASB’s SFAS No. 141, Business Combinations. The aggregate purchase price of $3,680,000 (including $180,000 of professional fees) was allocated to the assets acquired and liabilities assumed based on the respective fair values. The Company engaged an independent appraisal to assess the fair value of the property and equipment. The Pro Mold accounts receivable, inventory, accounts payable and accrued expenses and other assets and long term liabilities were estimates of management. Management is still in the process of finalizing the allocation of the purchase price. The Company will include Pro Mold in its operating results starting January 1, 2006.
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8-K 8th Page of 12
ITEM 7.01 Regulation FD Disclosure
On December 30, 2005, the Company entered into the Acquisition Agreement which, together with the Pledge Agreement (for the pledge of 1,000 shares of Pro Mold’s common stock), the Employment Agreement (for the employment of John P. Murphy, III) and the issuance of a $1,000,000 promissory note, the Company acquired all of the outstanding common stock (the “Pro Mold Shares”) and assets of Pro Mold, Inc., a Missouri corporation.
The Pro Mold Shares were acquired from the John P. Murphy III Revocable Trust No. 1 (the “Trust”), and 10315, LLC, a Missouri limited liability company (the “LLC”) in exchange for the Company’s payment of the purchase price of $3,500,000 as described above. The parties subsequently amended the Acquisition Agreement and entered into the First Amendment, dated April 30, 2006.
E)RISK FACTORS
In General. The purchase of shares of the Company’s common stock is very speculative and involves a very high degree of risk. Our business organization and structure all involve elements of risk. In many instances, these risks arise from factors over which we will have little or no control. Some adverse events may be more likely than others and the consequence of some adverse events may be greater than others. No attempt has been made to rank risks in the order of their likelihood or potential harm.
1) We acquired Pro Mold after a limited due diligence review and evaluation and we did not rely upon independent third party evaluations or review of the proposed acquisition.
We acquired Pro Mold, Inc., a Missouri corporation (“Pro Mold”) after our officers and directors completed a review and evaluation of Pro Mold’s business, operations and future prospects. While we believe that the acquisition will benefit the Company and holds significant opportunity for the future, we did not employ the services of an independent third party professional evaluation to conduct a pre-acquisition due diligence review of Pro Mold and its business, financial, and operating affairs. As a result, we cannot assure you that if we had retained an independent third party professional to review and evaluate Pro Mold, that we would have completed the acquisition or if we did complete it, that we would have completed the acquisition upon the terms set forth in the agreements we executed.
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