REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Plasticon International, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of Plasticon International, Inc. and its subsidiary (Formerly Wicklund Holding), as of December 31, 2005 and 2004, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Plasticon International, Inc. and its subsidiary as of December 31, 2005 and 2004, and the results of its consolidated operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Mendoza Berger & Company, LLP
Irvine, California
August 18, 2006, except for footnote 13 which is dated September 1, 2006
[...]
13. Subsequent events
In January 2006, the Company acquired all the stock of SEMCO Manufacturing (SEMCO), a Nevada business that manufactures and sells concrete coating products. The purchase terms are payment of $2,650,000 consisting of $650,000 in cash and $2,000,000 in performance payments (50% of Net Profits as defined) plus Plasticon restricted common stock worth $100,000. Additionally, the Company will pay a royalty payment (4% of Net Profits as defined) for twenty years beginning after the $2,000,000 of performance payments are made. The agreement includes a five year employment agreement with a base salary and other benefits specified.
Management is in the process of gathering information to apply purchase accounting to the SEMCO acquisition. The operations from SEMCO will be included in the operating results of the Company starting January 1, 2006.
On April 4, 2006, the Company increased authorized shares of common stock to 13,500,000,000 shares. Also on that date the authorized shares of preferred stock increased to 6,000,000,000 shares.
On January 3, 2006, Jim Turek Sr., the Company’s president and majority shareholder, forgave approximately $5,800,000 of obligations consisting of notes payable, accrued interest, and accrued salaries and bonuses.
On January 3, 2006, James N. Turek Jr. the son of the Company’s president forgave certain liabilities, which included compensation and interest owed to him, of approximately $344,000. On January 3, 2006 James Bonn the Company’s secretary forgave certain liabilities which included interest owned to him, amounting to $344,034.
On September 1, 2006, the Company, through its subsidiary, Pro Mold, entered into a $600,000 loan agreement. The note is secured by certain assets of Pro Mold. The interest rate is 9.76% and is due on September 6, 2011.
sec.gov |
