A hypothetical question:
If Plasticon "acquired all the stock of Pro Mold" and there was a contract which stipulated that the the stock would not be finally handed over until the agreed price was paid in full, does Plasticon really OWN Pro Mold and all its assets if that price was not paid in full?
In other words does defaulting on the contract mean that ownership of Pro Mold has not been finally transferred to Plasticon?
Plasticon International/Inc · 10QSB · For 9/30/06 Filed On 3/15/07
secinfo.com
1. GENERAL
In December 2005, the Company acquired all the stock of Pro Mold, Inc. (Pro Mold), an injection molding facility in the Midwest.
2. ACQUISITIONS
Pro Mold Acquisition
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 $3,866,852 (including $366,852 of professional fees) was allocated to the assets acquired and liabilities assumed based on the respective fair values. The Company, with the help of an independent appraiser, has assessed 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, including the consideration of other intangible values. The Company has included Pro Mold in its operating results since January 1, 2006.
9. SUBSEQUENT EVENTS
...
During December 2006, the former owner of Pro Mold filed a lawsuit against the Company for alleged contract violations. The suit ended when the attorneys for John Murphy withdrew due to a conflict of interest. Management has since resolved the issues and no further actions are anticipated.
. NOTES PAYABLE
Notes payable consists of the following as of September 30, 2006 and December 31, 2005:
September 30, 2006 December 31, 2005
Note payable to First National Bank of Barnesville, Barnesville, Georgia $ 470,000 $ 500,000
Note payable to John P. Murphy (seller of Pro Mold, see Note 2), payable over a five year period in equal installments of $175,000 and shall bear interest at the rate of 5% per annum 875,000 875,000
Notes payable to John P. Murphy (seller of Pro Mold, see Note 2) 436,558 -
Note payable with All Points Capital 600,000 -
Notes payable with Sam Sems (seller of SEMCO, see Note 2) 53,436 -
Notes payable- related party 4,292,086 558,364
Other note payable 21,296 383,634
Total notes payable 6,748,376 2,316,998
Less current portion (485,692 ) (983,108 )
Long-term portion of notes payable $ 6,262,684 $ 1,333,890 |
