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: December 27, 2004
(Date of earliest event reported)
HEARTLAND, INC.
(Exact name of registrant as specified in its charter)
|
Maryland -------------------------------- |
000-27045 -------------------------------- |
36-4286069 ---------------------------------------------- |
|
(State of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
3300 Fernbrook Lane, Suite 180
Plymouth, Minnesota 55447
(Address of principal executive offices) (Zip Code)
(866) 838-0600
(Registrant’s telephone no., including area code)
22 Mound Park Drive
Springboro, Ohio 45066
-------------------------------------
(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): |
|
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
1
SECTION 2 – FINANCIAL INFORMATION
|
Item 2.01 |
Completion of Acquisition or Disposition of Assets. |
FORWARD-LOOKING STATEMENTS. This current report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. In addition, the Registrant (Heartland, Inc., a Maryland corporation, and its subsidiaries) may from time to time make oral forward-looking statements. Actual results are uncertain and may be impacted by many factors. In particular, certain risks and uncertainties that may impact the accuracy of the forward-looking statements with respect to revenues, expenses and operating results include without imitation; cycles of customer orders, general economic and competitive conditions and changing customer trends, technological advances and the number and timing of new product introductions, shipments of products and components from foreign suppliers, and changes in the mix of products ordered by customers. As a result, the actual results may differ materially from those projected in the forward-looking statements.
Because of these and other factors that may affect the Registrant's operating results, past financial performance should not be considered an indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
On December 30, 2004, the Registrant acquired Evans Columbus, LLC an Ohio limited liability company (hereinafter "Evans Columbus") for Three Million Five Thousand ($3,005,000) Dollars, payable Five Thousand ($5,000) Dollars, which was paid at the closing, plus six-hundred thousand (600,000) shares of common stock of the Registrant which was issued to Ron Evans, the seller at closing. Should the common stock of the Registrant shall not be trading at a minimum of Five Dollars ($5.00) per share per share twelve (12) months after the December 30, 2004 date of closing, then the seller shall be compensated for the difference in additional stock.
Evans Columbus (www.evanscolumbusllc.com), a profitable company with annual sales of around 8 million US Dollars, was originally founded in 1955 as Columbus Steel Drum Company. The Company moved to its current facility consisting of a 70,000 square foot facility on seven and a half acres in 1982. The facility is currently owned by Ron Evans which Evans Columbus, leases and continue to lease at $20,000 per month. The seller purchased the company from Evans Industries, Inc. of Harvey, Louisiana, a company unrelated to the seller, in 2001.
Evans Columbus is a quality supplier of 55 gallon steel drum packaging. Its customers are primarily Fortune 500 companies in the petrol-chemical and paint industries.
SECTION 8 - OTHER EVENTS
|
Item 8.01 |
OTHER EVANTS |
On January 1, 2005 the Registrant moved its corporate headquarters from 22 Mound Park Drive, Springboro, Ohio, where its subsidiary Mound Technologies, Inc. is located, to 3300 Fernbrook Lane, Suite 180, Plymouth, Minnesota, 55447, an office facility specifically set up to manage the consolidated operations of the Registrant.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
|
Item 9.01 |
Financial Statements and Exhibits. |
Financial Statements:
On or about December 27, 2004 the Registrant submitted Form 8K describing the acquisition of Evans Columbus, LLC an Ohio limited liability company, with its corporate headquarters located in Columbus, Ohio.
The audited financial statements were not available at the time of the initial filing on Form 8K are provided in this Form 8K-A.
2
(a) Financial Statements of Business Acquired
Page
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
1 |
EVANS COLUMBUS, LLC FINANCIAL STATEMENTS DECEMBER 31, 2004
|
Balance Sheet |
2 |
|
Statement of Operations and Members Equity |
3 |
|
Statement of Cash Flows |
4 |
|
NOTES TO FINANCIAL STATEMENTS |
5 |
(b) Pro Forma Financial Information.
|
Pro forma Consolidated Balance Sheet as of December 31, 2004. |
13 |
3
MEYLER & COMPANY, LLC
CERTIFIED PUBLIC ACCOUNTANTS
ONE ARIN PARK
1715 HIGHWAY 35
MIDDLETOWN, NJ 07748
Report of Independent Registered Public Accounting Firm
To the Board of Directors
Heartland, Inc.
Plymouth, MN
We have audited the accompanying balance sheet of Evans Columbus, LLC as of December 31, 2004 and the related statements of operations and member’s equity, and cash flows for the year ended December 31, 2004. 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 audits.
Except as discussed in the following paragraph, 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 audits provide a reasonable basis for our opinion.
We did not observe the physical inventory (stated at $379,465 ) taken as of December 31, 2003, since that date was prior to our initial engagement as auditors for the Company and the Company’s records do not permit adequate retroactive tests of inventory quantities.
In our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary in the statements of operations and members equity, and cash flows had we been able to observe the physical inventory taken as of December 31, 2003, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2004 and the results of its operations and its cash flows for the year ended December 31, 2004 in conformity with accounting principles generally accepted in the United States of America.
Meyler & Company, LLC
Middletown, NJ
February 18, 2005
4
EVANS COLUMBUS, LLC
BALANCE SHEET
December 31, 2004
ASSETS
|
CURRENT ASSETS |
|
|
| |
|
Cash and cash equivalents |
|
$ |
114,016 |
|
|
Accounts receivable, net of allowance for doubtful |
|
|
|
|
|
accounts of $19,922 |
|
|
637,060 |
|
|
Inventory |
|
|
579,762 |
|
|
Prepaid expenses |
|
|
37,179 |
|
|
Total Current Assets |
|
|
1,368,017 |
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT, net of accumulated depreciation |
|
|
|
|
|
of $16,266 |
|
|
388,734 |
|
|
LOANS RECEIVABLE, from related party |
|
|
78,157 |
|
|
OTHER ASSETS |
|
|
2,267 |
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
1,837,175 |
|
LIABILITIES AND MEMBER’S EQUITY
|
CURRENT LIABILITIES |
|
|
| |
|
Line of credit |
|
$ |
810,989 |
|
|
Current portion of note payable |
|
|
9,300 |
|
|
Current portion of capital lease obligations |
|
|
115,423 |
|
|
Accounts payable |
|
|
278,063 |
|
|
Accrued expenses |
|
|
101,945 |
|
|
|
|
|
1,315,720 |
|
|
OTHER LIABILITIES |
|
|
|
|
|
Note payable, less current portion |
|
|
37,207 |
|
|
Capital lease obligations, less current portion |
|
|
269,100 |
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
MEMBER’S EQUITY |
|
|
215,148 |
|
|
|
|
|
|
|
|
Total Liabilities and Member’s Equity |
|
$ |
1,837,175 |
|
The accompanying notes are an integral part of these financial statements.
5
EVANS COLUMBUS, LLC
STATEMENT OF OPERATIONS AND MEMBER’S EQUITY
For the Year Ended December 31, 2004
|
NET SALES |
|
$7,921,792 |
| |
|
|
|
|
|
|
|
COSTS AND EXPENSES |
|
|
|
|
|
Cost of goods sold |
|
|
5,964,650 |
|
|
Selling, general and administrative |
|
|
1,815,881 |
|
|
Depreciation and amortization |
|
|
98,128 |
|
|
|
|
|
|
|
|
Total Costs and Expenses |
|
|
7,878,659 |
|
|
|
|
|
|
|
|
NET OPERATING INCOME |
|
|
43,133 |
|
|
|
|
|
|
|
|
OTHER EXPENSE |
|
|
|
|
|
Interest |
|
|
(59,155 |
) |
|
|
|
|
|
|
|
NET (LOSS) INCOME |
|
|
(16,022 |
) |
|
|
|
|
|
|
|
MEMBER’S EQUITY, beginning |
|
|
246,945 |
|
|
|
|
|
|
|
|
MEMBER’S DISTRIBUTIONS |
|
|
(15,775 |
) |
|
|
|
|
|
|
|
MEMBER’S EQUITY, ending |
|
$ |
215,148 |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
6
EVANS COLUMBUS, LLC
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2004
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
| |
|
Net (Loss) Income |
|
$ |
(16,020 |
) |
|
Adjustments to reconcile net (loss) income to net cash |
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
98,113 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Decrease (increase) in accounts receivable |
|
|
369,374 |
|
|
(Increase) decrease in inventory |
|
|
(200,297 |
) |
|
(Increase) in prepaid expenses |
|
|
(6,291 |
) |
|
Decrease (increase) in loans receivable, related party |
|
|
10,000 |
|
|
(Decrease) increase in accounts payable |
|
|
(162,624 |
) |
|
(Decrease) increase in accrued expenses |
|
|
(13,179 |
) |
|
|
|
|
|
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
79,076 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
Purchase of property and equipment |
|
|
(72,480 |
) |
|
|
|
|
|
|
|
NET CASH USED IN INVESTING ACTIVITIES |
|
|
(72,480 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
Increase in line of credit |
|
|
150,000 |
|
|
Payments on notes payable |
|
|
(88,000 |
) |
|
Payments on capitalized lease obligations |
|
|
(88,123 |
) |
|
Distributions to member |
|
|
(15,775 |
) |
|
|
|
|
|
|
|
NET CASH USED IN FINANCING ACTIVITIES |
|
|
(41,898 |
) |
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
(35,302 |
) |
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR |
|
|
149,318 |
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS AT END OF YEAR |
|
$ |
114,016 |
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
Interest paid |
|
$ |
53,532 |
|
|
|
|
|
|
|
|
Non-Cash Investing and Financing Activities: |
|
|
|
|
|
Exchange of property and equipment in a sale/leaseback transaction: |
|
|
|
|
|
Increase in property and equipment |
|
$ |
(3,162 |
) |
|
Decrease in notes payable |
|
$ |
(217,493 |
) |
|
Increase in capitalized lease obligations |
|
$ |
220,655 |
|
The accompanying notes are an integral part of these financial statements.
7
EVANS COLUMBUS, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
NOTE A - DESCRIPTION OF BUSINESS
The Company and Nature of Business
Evans Columbus, LLC (the “Company”) was originally incorporated under the name Central Ohio Drum LLC on April 4, 2001. The Company manufactures 55-gallon steel drums and distributes them throughout the Midwestern United States. In December 2004, the Company was acquired by Heartland, Inc.
NOTE B - SUMMARY OF 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 affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Cash and Cash Equivalents
The company considers all highly-liquid investments, with a maturity of three months or less when purchased, to be cash equivalents.
Fair Value of Financial Instruments
Carrying amounts of certain of the Company’s financial instruments, including cash, accounts receivable and accounts payable approximate fair value due to their relatively short maturities. The notes and capital leases payable are recorded at carrying value with terms as in Note G. It is not practical to estimate fair value of these amounts because of the uncertainty of the timing of the payments.
Allowance for Doubtful Accounts
The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in accounts receivable. Management determines the allowance based on known troubled accounts, historical experience, and other available evidence.
Inventory
Inventory consists of 55-gallon steel drum packaging, steel, and related products, and are stated on the first-in, first-out basis at the lower of cost or market.
Property and Equipment
Property and equipment is stated at cost and is being depreciated using the straight-line method over the estimated useful lives of the assets ranging from three (3) to thirty-nine (39) years. Repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income.
Shipping
The Company’s policy is to include shipping costs in cost of sales.
8
EVANS COLUMBUS, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company has elected to be taxed as a limited liability corporation for Federal and State purposes. The Company is treated as a partnership for income tax purposes and does not incur income taxes. Accordingly, the member is taxed individually on the Company’s earnings and accordingly, no provision for income taxes is included in the financial statements.
Revenue Recognition
Revenue is recognized at the time of shipment to the customer.
NOTE C – INVENTORY
Inventory at December 31, 2004 consists of the following:
|
|
|
|
| |
|
Raw materials |
|
$ |
450,394 |
|
|
Work-in-process |
|
|
125,658 |
|
|
Finished goods |
|
|
3,710 |
|
|
|
|
|
|
|
|
Total Inventory |
|
$ |
579,762 |
|
NOTE D – PROPERTY AND EQUIPMENT
Property and equipment at December 31, 2004 consists of the following:
|
|
|
|
| |
|
Equipment held under capital lease |
|
$ |
405,000 |
|
|
|
|
$ |
405,000 |
|
|
Less: Accumulated depreciation |
|
|
16,266 |
|
|
|
|
|
|
|
|
Property and Equipment, net |
|
$ |
388,734 |
|
Depreciation Expense for the year ended December 31, 2004 amounted to $95,374.
NOTE E - LOANS RECEIVABLE FROM RELATED PARTY
Loans receivable from related party represents mortgage payments and expenses paid by the Company on behalf of PAR Investments Columbus, LLC (“PAR”). PAR paid $10,000 on behalf of the Company in 2004. PAR is owned by the sole member of the Company. The amount due at December 31, 2004
is $78,157, is non-interest bearing, and has no stated terms of repayment.
9
EVANS COLUMBUS, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
NOTE F – LINE OF CREDIT
The Company has a $2,000,000 revolving line of credit with a bank through July 2005 of which $1,189,011 is available at December 31, 2004. The line bears interest at 1.85% plus London InterBank Offered Rate (“LIBOR”). At December 31, 2004, the LIBOR was 3.10%. The line is limited to 80% of eligible accounts receivable plus 50% of eligible inventory. The line is collateralized by substantially all of the Company’s assets and a $1,500,000 life insurance policy on the life of the Company’s member. At December 31, 2004, the Company had an outstanding balance due of $810,989.
NOTE G – NOTES PAYABLE
Notes payable consists of the following at December 31,2004:
Note payable to bank due December 2009, payable
in 59 principal installments of $775 plus interest at
prime. The note is collateralized by substantially
all of the Company’s assets and a $1,500,000 life
insurance policy on the Company’s member. Prime
|
was 5.25% at December 31, 2004. |
$ |
46,507 |
|
Less: current portion |
9,300 | |
|
Long-term portion |
$ 37,207 | |
As of December 31, 2004, maturities of the note is as follows:
|
For the |
Years Ending
|
|
December 31, |
Amount | |||||
|
|
|
|
|
| |||
|
2005 |
|
$ |
9,300 |
|
| ||
|
2006 |
|
|
9,300 |
|
| ||
|
2007 |
|
|
9,300 |
|
| ||
|
2008 |
|
|
9,300 |
|
| ||
|
2009 |
|
|
9,307 |
|
| ||
|
|
|
|
|
|
| ||
|
Total |
|
$ |
46,507 |
|
| ||
|
|
|
|
|
|
| ||
10
EVANS COLUMBUS, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
NOTE H – CAPITAL LEASE OBLIGATIONS
The Company entered into a sale/leaseback arrangement
with the bank in November 2004 for all property
and equipment. The arrangement was for 36 monthly
payments of $11,141 including interest at an effective
rate of 5.5% with final payment of $40,500 due
|
November 2007. |
$ 419,294 |
|
Total minimum lease payments |
419,294 |
| |
|
Less: amount representing interest |
34,771 | ||
|
Net minimum lease payments |
384,523 |
| |
|
Less: current maturities |
115,423 |
| |
|
Long-term portion |
$ 269,100 |
As of December 31, 2004, minimum future lease payments were as follows:
|
For the |
Years Ending
|
|
December 31, |
Amount | |||||
|
|
|
|
|
| |||
|
2005 |
|
$ |
133,692 |
|
| ||
|
2006 |
|
|
133,692 |
|
| ||
|
2007 |
|
|
151,910 |
|
| ||
|
|
|
|
|
|
| ||
|
Total |
|
$ |
419,294 |
|
| ||
NOTE I – COMMITMENTS AND CONTINGENCIES
The Company leases its manufacturing facility from PAR, a related party (see Note E). The lease calls for monthly lease payments of not less than PAR’s monthly mortgage payment, currently $20,000 per month and expires on September 30, 2007 with renewal options for four terms of five years each. The Company has guaranteed PAR’s obligation under its mortgage obligation on the facility. Management believes that the value of the premises pledged as collateral for the guaranteed obligation is in excess of
any future amount of the payments that may be required pursuant to the terms of the guarantee. Minimum future lease payments under the lease are as follows:
|
For the |
Years Ending
|
|
December 31, |
Amount | |||||
|
|
|
|
|
| |||
|
2005 |
|
$ |
240,000 |
|
| ||
|
2006 |
|
|
240,000 |
|
| ||
|
2007 |
|
|
180,000 |
|
| ||
|
|
|
|
|
|
| ||
|
Total |
|
$ |
660,000 |
|
| ||
Rent expense amounted to $240,000 for each of the years ended December 31, 2004 and 2003.
11
EVANS COLUMBUS, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
NOTE I – COMMITMENTS AND CONTINGENCIES (CONTINUED)
any future amount of the payments that may be required pursuant to the terms of the guarantee. Minimum future lease payments under the lease are as follows:
|
For the |
Years Ending
|
|
December 31, |
Amount | |||||
|
|
|
|
|
| |||
|
2008 |
|
$ |
240,000 |
|
| ||
|
2009 |
|
|
240,000 |
|
| ||
|
2010 |
|
|
180,000 |
|
| ||
|
|
|
|
|
|
| ||
|
Total |
|
$ |
660,000 |
|
| ||
Rent expense amounted to $240,000 for each of the years ended December 31, 2004 and 2003.
In November 2004, the Company signed a letter of intent to enter into a joint venture for the purpose of operating a 55 gallon barrel factory-line in Libya. Pursuant to the letter of intent, the Company is to build a knock-down plant in that country. The Company is also to produce all necessary barrel pieces, and ship them to the knock-down plant for assembly. The Company will be paid the cost of steel plus $3 and shipping. The Libyan’s are to sign a guarantee contract for three years to purchase minimum orders of 600,000 drums in year one, 900,000 drums in year two, and 1,200,000 drums in year three. The Company has paid a refundable deposit of $19,800 at December 31, 2004 in connection with this letter of intent.
NOTE J – CONCENTRATION OF CREDIT RISK
The Company maintains its cash balance in one financial institution. The balance is insured by the Federal Deposit Insurance Corporation up to $100,000. At December 31, 2004, the Company’s uninsured cash balance was approximately $122,000.
Two customers accounted for approximately 31 % of accounts receivable at December 31, 2004. The same two customers accounted for approximately 26% of net sales for the year then ended.
12
HEARTLAND, INC. AND SUBSIDIARIES
PROFORMA - CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2004
|
|
|
|
|
Evans |
|
Karkela |
|
Monarch |
|
|
|
|
|
|
| ||||||
|
|
|
Heartland |
|
Columbus, |
|
Construction |
|
Homes |
|
Eliminating |
|
|
|
|
| ||||||
|
|
|
Inc. |
|
LLC |
|
Inc. |
|
Inc. |
|
Adjustments |
|
|
|
Consolidated |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
119,921 |
|
$ |
114,016 |
|
$ |
193,421 |
|
$ |
150,996 |
|
$ |
|
|
|
|
$ |
578,354 |
|
|
Accounts receivable |
|
|
1,366,959 |
|
|
637,060 |
|
|
1,446,951 |
|
|
|
|
|
|
|
|
|
|
3,450,970 |
|
|
Costs in excess of billings |
|
|
113,724 |
|
|
|
|
|
73,897 |
|
|
|
|
|
|
|
|
|
|
187,621 |
|
|
Inventory |
|
|
509,297 |
|
|
579,762 |
|
|
|
|
|
3,843,570 |
|
|
|
|
|
|
|
4,932,629 |
|
|
Prepaid expenses and other |
|
|
6,990 |
|
|
37,179 |
|
|
73,086 |
|
|
|
|
|
|
|
|
|
|
117,255 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets |
|
|
2,116,891 |
|
|
1,368,017 |
|
|
1,787,355 |
|
|
3,994,566 |
|
|
|
|
|
|
|
9,266,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and Equipment, net |
|
|
|
1 |
|
|
4 |
|
|
4 |
|
|
4 |
|
|
2 |
|
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advances to related party |
|
|
|
|
|
78,157 |
|
|
|
|
|
202,965 |
|
|
|
|
|
|
|
281,122 |
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,748,637 |
|
1,2,3,4 |
|
|
1,748,637 |
|
|
Security deposits |
|
|
11,520 |
|
|
2,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
13,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Assets |
|
|
11,520 |
|
|
80,424 |
|
|
— |
|
|
202,965 |
|
|
1,748,637 |
|
|
|
|
2,043,546 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in subsidiaries |
|
|
4,335,490 |
|
|
|
|
|
|
|
|
|
|
|
(4,335,490 |
) |
1,2,3 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
7,683,222 |
|
$ |
1,837,175 |
|
$ |
1,823,299 |
|
$ |
4,358,365 |
|
$ |
(2,515,001 |
) |
|
|
$ |
13,187,060 |
|
|
1 |
To record goodwill and eliminate investment in Karkela Construction, Inc. |
| ||
|
2 |
To record goodwill and eliminate investment in Monarch Homes, Inc. |
| ||
|
3 |
To record negative goodwill and eliminate investment in Evans Columbus, LLC. |
| ||
|
4 |
To adjust reduce cost of property, plant and equipment and negative goodwill in Evans Columbus, LLC. | |||
13
HEARTLAND, INC. AND SUBSIDIARIES
PROFORMA - CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2004
|
|
|
|
|
Evans |
|
Karkela |
|
Monarch |
|
|
|
|
|
|
| |||
|
|
|
Heartland |
|
Columbus, |
|
Construction |
|
Homes |
|
Eliminating |
|
|
|
|
| |||
|
|
|
Inc. |
|
LLC |
|
Inc. |
|
Inc. |
|
Adjustments |
|
|
|
Consolidated |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank lines of credit |
|
|
|
$ |
810,989 |
|
|
|
|
|
|
|
|
|
|
$ |
810,989 |
|
|
Notes payable – land purchases |
|
|
|
|
|
|
|
|
1,965,698 |
|
|
|
|
|
|
|
1,965,698 |
|
|
Convertible promissory notes payable |
|
1,026,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,026,550 |
|
|
Current portion of notes payable |
|
35,833 |
|
|
9,300 |
|
|
|
|
|
|
|
|
|
|
|
45,133 |
|
|
Current portion of capitalized lease obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
1,433,279 |
|
|
278,063 |
|
936,975 |
|
215,995 |
|
|
|
|
|
|
|
2,864,312 |
|
|
Intercompany |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
Acquisition notes payable to related parties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Obligations to relatedparties |
|
465,812 |
|
|
|
|
200,000 |
|
5,095 |
|
|
|
|
|
|
|
670,907 |
|
|
Accrued payroll taxes |
|
693,630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
693,630 |
|
|
Accrued expenses |
|
362,344 |
|
|
101,945 |
|
|
|
20,666 |
|
|
|
|
|
|
|
484,955 |
|
|
Billings in excess of costs on uncompleted contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer deposits |
|
|
|
|
|
|
|
|
21,068 |
|
|
|
|
|
|
|
21,068 |
|
|
Deferred Income Taxes |
|
|
|
|
|
|
43,637 |
|
328,240 |
|
|
|
|
|
|
|
371,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
7,326,390 |
|
|
1,315,720 |
|
1,325,049 |
|
2,556,762 |
|
|
— |
|
|
|
|
12,523,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM OBLIGATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable, less current portion |
|
504,106 |
|
|
37,207 |
|
|
|
|
|
|
|
|
|
|
|
541,313 |
|
|
Capital lease obligation, less current portion |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable to an individual |
|
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000 |
|
|
Deferred Income Taxes |
|
36,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,126 |
|
|
Total Long-Term Liabilities |
|
690,232 |
|
|
306,307 |
|
— |
|
— |
|
|
— |
|
|
|
|
996,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
|
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
18,244 |
|
|
|
|
100 |
|
10,000 |
|
$ |
(10,900 |
) |
1,2 |
|
|
18,244 |
|
|
Additional paid-in Capital |
|
5,656,911 |
|
|
|
|
900 |
|
|
|
|
900 |
|
|
|
|
5,656,911 |
|
|
Accumulated Deficit |
|
(6,008,555 |
) |
|
215,148 |
|
497,250 |
|
1,791,603 |
|
|
(2,504,001 |
) |
|
|
|
(6,008,555 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity (Deficit) |
|
|
2 |
|
|
5 |
|
9 |
|
5 |
|
|
|
|
|
|
|
0 |
15
Exhibits:
|
Exhibit No. |
Document Description |
|
10.1 |
Acquisition Agreement dated December 23, 2004 |
SIGNATURES
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.
HEARTLAND, INC.
(Registrant)
|
Date: June 29, 2005 |
By: /s/ TRENT SOMMERVILLE |
Trent Sommerville
Chief Executive Officer
(Duly Authorized Officer)
|
Date: June 29, 2005 |
By: /s/ JERRY GRUENBAUM |
Jerry Gruenbaum
Secretary and Interim
Chief Financial Officer
(Principal Financial
and Accounting Officer)
16