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| AIDO.OB > SEC Filings for AIDO.OB > Form 8-K/A on 10-Jul-2008 | All Recent SEC Filings |
10-Jul-2008
Financial Statements and Exhibits
Pneu Logic Limited Financial Statements prepared under US GAAP and in United States Dollars for the years as of and ended 31 January 2005, 31 January 2006 and 31 January 2007 Pneu Logic Limited Page Company Information 1 Report of the Independent Auditors 2 Balance Sheets 3 Statement of Income 4 Statement of cash flows 5 Statement of Shareholders' Equity 6 Notes to Financial Statements 7-15 |
PNEU Logic Ltd
Company Information
For the Year Ended 31 January 2007
DIRECTORS: D G Yeomans
L Yeomans
K Field
R S Lakin
SECRETARY: Mrs G P A Yeomans
REGISTERED OFFICE: Hanover Court
5 Queen Street Lichfield
Staffordshire WS13 6QD
REGISTERED NUMBER: 04357930 (England and Wales)
AUDITORS: Tomkinson Teal
Hanover Court
5 Queen Street
Lichfield
Staffordshire
WS13 6QD
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Pneu Logic Limited
To the Board of Directors and Stockholders of PNEU Logic Limited
We have audited the accompanying balance sheet of PNEU Logic Limited (the "Company") as of January 31, 2005, 2006 and 2007 and the related statements of income (operations), stockholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about 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. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pneu Logic Limited as of January 31, 2005, 2006 and 2007, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Tomkinson Teal
Hanover Court
5 Queen Street
Lichfield
Staffordshire
WS13 6QD
21 January 2008
PNEU Logic Ltd Balance Sheets
31/01/2005 31/01/2006 31/01/2007
ASSETS $US $US $US
Cash and cash equivalents 14,618 27,905 -
Accounts receivable, net 52,901 12,563 65,198
Group company debtors - - -
Inventory, net - 34,476 34,085
Other current assets 2,923 24,687 19,033
Total current assets 70,442 99,631 118,316
Furniture and equipment, net - - 6,709
Patents, net 14,326 12,824 13,336
Total assets 84,768 112,455 138,361
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of
long-term debt 126,114 32,400 43,013
Loan from Director 230,522 236,083 157,246
Accounts payable 52,890 141,161 253,402
Accrued expenses 8,844 29,959 25,052
Total current liabilities 418,370 439,603 478,713
Total liabilities 418,370 439,603 478,713
Shareholders' equity:
Common stock, 1 (pound) par value;
100,000 Shares authorized;
100 shares issued in 2003,
60,000 (issued at par in 2004. 110,402 110,402 110,402
2004.
Accumulated (deficit) (400,136 ) (412,106 ) (393,455 )
Accumulated other comprehensive(loss)income (43,868 ) (25,444 ) (57,299 )
Total shareholders' equity (333, 602 ) (112,455 ) (340, 352 )
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See notes to the financial statements
PNEU Logic Ltd Statements of Income For the periods ended
31/01/2005 31/01/2006 31/01/2007
12 months 12 months 12 months
Net revenues: $ US $ US $ US
Product revenues 53,679 87,148 311,460
Other revenue 0 0 0
Revenues, net 53,679 87,148 311,460
Costs and expenses
Cost of good sold 32,935 58,813 249,249
Marketing, general and administrative 48,487 23,074 38,332
Research and development 51,893 14,005 5,177
Total costs and expenses 133,315 95,892 292,758
(Loss) income from operations (79,636 ) (8,744 ) 18,702
Other (expense) and income:
Interest income 322 74 134
Interest expense (6,032 ) (3,296 ) (174 )
Total other (expense)and income (5,710 ) (3,222 ) (40 )
Net (loss) income before taxes (85,346 ) (11,966 ) 18,662
Provision for income taxes 0 0 (21 )
Net (loss) income (85,346 ) (11,966 ) 18,641
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See notes to the financial statements
Pneu Logic Limited Statements of cash flows For the periods ended
31/01/2005 31/01/2006 31/01/2007
12 months 12 months 12 months
$ US $ US $ US
Net income (85,346 ) (11,966 ) 18,641
Add (deduct) items not using
(providing) cash
Depreciation 0 0 1,087
Amortization 735 725 744
Gain on sale of equipment 35,593 0 0
Increase in deferred taxes 0 0 0
(Increase)decrease in accounts receivable (43,212 ) 38,068 (48,696 )
(Increase) decrease in inventory 19,236 (35,047 ) 3,656
(Increase) decrease in other debtors 5,526 (22,287 ) 7,711
Increase(decrease)in accounts payable 23,063 92,671 92,944
Increase(decrease in other creditors 5,696 21,957 (7,526 )
(Decrease) increase in taxes payable 0 0 21
Net cashflow from operating activities (38,709 ) 84,121 68,582
Cashflow from investing activities
Sale of equipment 35,540 0 0
Purchase of intangible assets 0 0 0
Purchase of equipment 0 0 (7,447 )
Net cash provided by investing activities 35,540 0 (7,447 )
Cashflow from financing activities
Sale of common stock 110,237 0 0
Increase in loans payable (157,277 ) (69,803 ) (131,019 )
Increase in factoring 0 0 0
Net cash provided by financing activities (47,040 ) (69,803 ) (131,019 )
Effect of exchange rate changes 924 (1,031 ) (1,034 )
Net increase in cash and cash Equivalents (49,285 ) 13,287 (70,918 )
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year 63,903 14,618 27,905
14,618 27,905 (43,013 )
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See notes to the financial statements
PNEU Logic Limited
Statements of Shareholders' Equity
Common stock Accumulated
Shares Amount deficit
No. $ US $ US $ US $ US
Balance at 31 January
2004 100 165 (314,790 ) (32,416 ) (347,041 )
Comprehensive income:
Net income (85,346 ) (85,346 )
Foreign currency
translation (11,452 ) (11,452 )
Total comprehensive
income - - (85,346 ) (11,452 ) (96,798 )
New issue 60,000 110,237 - - 110,237
Balance at 31 January
2005 60,100 110,402 (400,136 ) (43,868 ) (333,602 )
Comprehensive income:
Net income - - (11,966 ) - (11,966 )
Foreign currency
translation - - - 18,424 18,424
Unidentified - - (3 ) - (4 )
Total comprehensive
income - - (11,969 ) 18,424 6,454
Balance at 31 January
2006 60,100 110,402 (412,105 ) (25,444 ) (327,148 )
Comprehensive income:
Net income - - 18,641 - 18,641
Foreign currency
translation - - - (31,855 ) (31,854 )
Unidentified - - 9 - 9
Total comprehensive
income - - 18,650 (31,855 ) (13,204 )
Balance at 31 January
2007 60,100 110,402 (393,455 ) (57,299 ) (340,352 )
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See notes to the financial statements
1. Description of business
Pneu Logic Limited ("Pneu Logic") is a company incorporated in England and Wales specialising in the manufacture and sale of electronic equipment. Pneu Logic's principle markets are the UK, Europe and the USA. The company ceased trading on 30 June 2007.
2. Use of these financial statements
These financial statements have been prepared by the Company solely for group consolidation purposes and internal company use.
3. Significant accounting policies
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and the expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, to be cash and cash equivalents.
Revenue recognition
The Company recognizes revenue from the sale of its products at the time of shipment, when title and risk of loss transfer. The Company provides products to its distributors at agreed wholesale prices and the balance of customers at set retail prices. Distributors can receive discounts for accepting high volume shipments. The discounts are reflected immediately in the net invoice price, which is the basis for revenue recognition. No further material discounts or sales incentives are given.
The Company's considerations for recognizing revenue upon shipment of product to a distributor are based on the following:
- Persuasive evidence that an arrangement (purchase order and sales invoice) exists between a willing buyer (distributor0 and the Company that outlines the terms of sale (company information, quantity of goods, purchase price and payment terms). The buyer (distributor) does not have a right of return.
- Shipping terms are ex-factory shipping point. At this point, the buyer (distributor) takes title to the goods and is responsible for all risks and rewards of ownership, including insuring the goods as necessary.
- The buyer (distributor) places a purchase order with the Company. The terms of the sale are cash, COD or credit Customer credit is determined based on the Company's policy and procedures related to the buyer's (distributor's) creditworthiness. Based on this determination, the Company believes that collectibility is reasonably assured.
Provision has been made for estimated sales returns based on historical experience.
Shipping and Handling revenues and Costs
Shipping and Handling revenues are included in product revenue and the related costs are included in cost of good sold.
Inventories
Inventories are recorded at lower of cost (first -in, first out) or marker value
31/01/2005 31/01/2006 31/01/2007
$ US $ US $ US
Inventories - - -
Finished goods - 34,476 34,085
- 34,476 34,085
Valuation allowance - - -
Total inventory - 34,476 34,085
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Accounts receivable
Accounts receivable are recorded at net realizable value.The Company performs ongoing credit evaluations of customers' financial condition and does not require collateral for accounts receivable arising in the normal course of business. The Company maintains allowances for potential credit losses based on the Company's historical trends, specific customer issues and current economic trends. Accounts are written off when they are determined to be uncollectible based on managements' assessment of individual accounts. Credit losses, when realized, have been within the range of management's expectations.No provision for bad debts has been considered necessary.
Equipment
Equipment is recorded at cost. Depreciation on equipment is recorded using the
straight line method over the stimulated economic useful life of the related
assets. Estimated useful lives are 3 years for equipment. Depreciation expense,
which is included in marketing, general and administrative costs in the Income
Statement,for each
period was:
Period Ended
31/01/2005 31/01/2006 31/01/2007
$ US $ US $ US
Depreciation expense - - 1,087
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Property and equipment consist of the following at:
As at:
31/01/2005 31/01/2006 31/01/2007
$ US $ US $ US
Equipment 3,205 3,029 11,190
3,205 3,029 11,190
Less: Accumulated
Depreciation (3,205 ) (3,029 ) (4,481 )
- - 6,709
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Long lived assets
Management assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from its future undiscounted cash flows. If it is determined that an impairment has occurred, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value.
Intangible assets
The company follows Statement of Financial Accounting Standards No.142 ("SFAS 142"), "Goodwill and Other Intangible Assets," which discontinues the amortization of goodwill and identifiable intangible assets that have indefinite lives. In accordance with SFAS 142, these assets are tested for impairment on an annual basis.
Intangible assets comprise expenditure on patents and are amortized over 20 years:
As at:
31/01/2005 31/01/2006 31/01/2007
$ US $ US $ US
Patents 15,080 14,250 15,689
15,080 14,250 15,689
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Less: Accumulated
amortization 754 1,426 2,353
14,326 12,824 13,336
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Research and development
All research and development costs are charged to operations as incurred.
Advertising costs
Advertising costs are charged to operations as incurred
Advertising expense was as follows:
Period ended
31/01/2005 31/01/2006 31/01/2007
$ US $ US $ US
Advertising expense 1,710 1,376 -
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Income taxes
The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on the difference between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates in effect in the years when those temporary differences are expected to reverse. The impact on deferred taxes of a change in tax rates, should a change occur, is recognized in income in the period that include the enactment date.
Comprehensive Income
The Company reports comprehensive income in accordance with the provision of SFAS No 130, "Reporting Comprehensive Income," which establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive Income, as defined, includes al changes in equity during a period from non-owner sources.
Foreign currency translation
The Company's functional currency is GB pounds. Assets and liabilities are
translated to US dollars at year end exchange rates. Stockholders' equity is
translated at historical exchange rates. Income and expense items are translated
at the average rates of exchange prevailing during the year. The adjustment
resulting from translating the financial statements is reflected as a component
of accumulated other
comprehensive income (loss) within stockholders' equity. Foreign currency
transaction gains or losses are recognized in current operations.
4. The current portion comprises a number of lines of credit arranged with various banks.
31/01/2005 31/01/2006 31/01/2007
Loan from a company by a $ US $ US $ US
Director of Pneu Logic 85,682 32,400 -
Factoring facility 40,432 - -
Bank line of credit - - 43,013
126,114 32,400 43,013
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The key terms of the line of credit are:
Loan from a company controlled by a director of Pneu Logic - unsecured and
interest free
Factoring facility with Barclays Bank PLC
Bank line of credit - 43,013
5. Accrued Expenses The following table presents accrued expenses:
31/01/2005 31/01/2006 31/01/2007
$ US $ US $ US
Corporate taxes - - -
Other accrued liabilities 8,844 29,969 25,052
Total accrued expenses 8,844 29,969 25,052
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6. Capital stock transactions
The ownership of the Company changed during 2007 and the Company ceased trading on 30 June 2007.
7. Income taxes The provision for income taxes consists of the following:
Period ended
31/01/2005 31/01/2006 31/01/2007
12 months 12 months 12 months
$ US $ US $ US
Current income tax provision
Federal - - 21
State - - -
- - 21
Deferred income tax
Provision
Federal - - -
State - - -
Change in valuation
allowance - - -
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Income taxes as a percentage of income differ from statutory federal income tax rate due to:
Period ended
31/01/2005 31/01/2006 31/01/2007
12 months 12 months 12 months
Statutory Federal income % % %
Tax rate (30.0 ) (30.0 ) (30.0 )
Losses carry forward 30.0 30.0 30.0
Effective income tax rate 0.0 0.0 0.0
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The components of the net deferred income tax assets and liabilities are as follows:
Period ended
31/01/2005 31/01/2006 31/01/2007
$ $ $
Change in valuation
allowance - - -
- - 21
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8. Retirement and Post-Retirement Plans The Company does not have any retirement and post retirement plans
9. Segment reporting
Management considers that the Company comprises of one segment, that of sale of electronic equipment. Management evaluates the performance of the segment based on profit before income taxes but not including interest income, interest expense and other income.
a) Net sales Net sales consist of the following:
Period ended
31/01/2005 31/01/2006 31/01/2007
12 months 12 months 12 months
$ $ $
Sale of electronic
equipment 53,679 87,148 311,460
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Geographical analysis of net sales is as follows:
Period ended
31/01/2005 31/01/2006 31/01/2007
12 months 12 months 12 months
$ $ $
United Kingdom 13 ,420 21,787 77,865
. . .
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