U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 13, 2002
FORCE PROTECTION, INC.
(Exact name of registrant as specified in its charter)
Colorado
(State or jurisdiction of incorporation or organization)
0-22273
(Commission File Number)
84-1383888
(I.R.S. Employer Identification Number)
2031 Avenue B, Building 44, North Charleston, South Carolina 29405
(Address of principal executive offices)
Registrant's telephone number: (843) 740-7015
Sonic Jet Performance, Inc.
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 13, 2002, the Registrant entered into a Stock Purchase
Agreement with Technical Solutions Group, Inc., a Nevada Corporation
("TSG"), Garth Barrett, an individual, and TS Group, LLC, a Texas
limited liability company (collectively the "Seller"), whereby the
Registrant purchased 100% of the issued and outstanding common stock
from the Seller. In exchange for all of the outstanding common stock
of the Seller, the Registrant agreed to deliver to the Seller
$400,000 of working capital and 6,000,000 shares of restricted common
stock of the Registrant. These shares were allocated as follows:
(a) Garth Barrett: 2,000,000 shares, in exchange for 8,000
shares of TSG common stock.
(b) TS Group, LLC: 4,000,000 shares for 16,000 shares of TSG
common stock, which is subject to a security interest from a note due
to TSG from TS Group.
The Registrant formed its subsidiary TSG International, Inc., a
Nevada corporation (90% owned by the Registrant and 10% owned by
Ashford Capital, LLC), for the purpose of holding 100% of the issued
and outstanding stock of TSG. TSG manufactures a line of specialty
vehicles for the military and law enforcement markets.
ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE.
Effective on September 16, 2003, with the filing of Articles of
Amendment to Articles of Incorporation with the Colorado Secretary of
State, the name of the Registrant was changed from "Sonic Jet
Performance, Inc." to "Force Protection, Inc." This change was
approved by the Registrant's shareholders at the annual meeting held
on August 23, 2003.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements.
The Registrant has determined that this acquisition must comply
with Securities and Exchange Commission rules regarding financial
disclosure. Therefore, financial statements are being furnished for
TSG as follows:
(a) audited financial statements for the two most recent fiscal
years (prior to the date of acquisition) ended December 31;
(b) pro forma financial information.
Exhibits.
Exhibits included are set forth in the Exhibit Index pursuant
to Item 601 of Regulation S-B.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Force Protection, Inc.
Dated: October 22, 2003 By: /s/ Madhava Rao Mankal
Madhava Rao Mankal, President
EXHIBIT INDEX
Number Description
2 Stock Purchase Agreement between the Registrant, Garth
Barrett, and TS Group, LLC., dated June 13, 2002
(incorporated by reference to Exhibit 2.1 of the Form 8-K
filed on June 5, 2002).
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Technical Solutions Group, Inc.
Charleston, South Carolina
We have audited the accompanying balance sheets of Technical
Solutions Group, Inc. as of December 31, 2001 and 2000, and the
related statements of operations, stockholders' equity (deficit) and
cash flows for the years 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
audits.
We conducted our audits in accordance with auditing standards
generally accepted in the 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
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 audits
provide 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 Technical
Solutions Group, Inc., as of December 31, 2001 and 2000, and the
results of its operations and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in
the United States.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 1 to the financial statements, the Company's recurring losses
from operations and its difficulties in generating sufficient cash
flow to meet its obligation and sustain its operations raise
substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in
Note 1. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
/s/ Michael Johnson & Co., LLC
Michael Johnson & Co., LLC.
Denver, Colorado
July 1, 2003
TECHNICAL SOLUTIONS GROUP, INC.
BALANCE SHEETS
ASSETS
December 31 December 31
2001 2000
Current Assets:
Cash $ 2,325 $ 6,434
Accounts Receivable -trade - 66,640
Total Current Assets 2,325 73,074
Fixed Assets:
Machinery and equipment 147,958 138,275
Computers and software 14,484 12,494
Furniture and fixtures 270 664
Vehicles 35,521 38,021
198,233 189,454
Less accumulated depreciation (118,410) (93,128)
Net Fixed Assets 79,823 96,326
Total Assets 82,148 169,400
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable - trade 250,947 217,601
Accrued expenses - 17,986
Lines of credit 75,000 75,000
Loans from shareholders 81,500 -
Loans from related parties 60,478 117,000
Total Current Liabilities 467,925 427,587
Long-Term Debt:
Notes payable - long-term portion 151,840 94,514
Total Long-term Debt 151,840 94,514
Total Liabilities 619,765 522,101
Stockholders' Equity:
Common stock, par value $1.00, 25,000 shares
authorized, 24,000, issued and outstanding 24,000 24,000
Additional paid-in capital 103,106 103,106
Retained deficit (664,723) (479,807)
Total Stockholders' Equity (537,617) (352,701)
Total Liabilities and Stockholders' Equity 82,148 169,400
The accompanying notes are an integral part of these financial statements
TECHNICAL SOLUTIONS GROUP, INC.
STATEMENTS OF OPERATIONS
For the Years Ended
December 31 December 31
2001 2000
Revenues:
Specialty vehicle contracts $ 860,705 $1,103,583
Ammunition sales 117,324 693,998
978,029 1,797,581
Job Costs and Cost of Sales:
Direct materials 340,373 1,443,551
Direct labor 20,541 59,481
Contract labor 7,169 12,524
Overhead expenses (includes depreciation
of $26,249) 155,158 128,004
523,241 1,643,560
Gross Profit 454,788 154,021
General, Administrative, and Selling Expenses
(Includes depreciation of $1,915) 616,510 455,586
Operating Loss (161,722) (301,565)
Other income (Expenses)
Gain (loss) on sale of assets (6,284) 5,854
Miscellaneous income 257 -
Interest expense (17,167) (20,753)
(23,194) (14,899)
Net Income (Loss) (184,916) (316,464)
Per Share Information:
Weighted average number
of common shares outstanding 24,000 24,000
Net loss per common share (7.71) (13.19)
The accompanying notes are an integral part of these financial statements
TECHNICAL SOLUTIONS GROUP, INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Additional Retained Total
Common Stock Paid-In Earnings Stockholders'
Shares Amount Capital (Deficit) Equity
Balance, December 31, 1999 24,000 $ 24,000 $ 103,106 $(163,343) $ (36,237)
Net Loss for year ended - - - (316,464) (316,464)
Balance, December 31, 2000 24,000 24,000 103,106 (479,807) (352,701)
Corporate restructure
adjustments - - - (33,860) (33,860)
Net Loss for year ended - - - (151,056) (151,056)
Balance, December 31, 2001 24,000 24,000 103,106 (664,723) (537,617)
The accompanying notes are an integral part of these financial statements
TECHNICAL SOLUTIONS GROUP, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended
December 31 December 31
2001 2000
Cash Flows from Operating Activities:
Net Loss $ (184,916) $ (316,464)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 25,282 28,164
Loss on sale of assets 6,284 -
Changes in Assets & Liabilities:
(Increase) in accounts receivable 66,640 (66,640)
Increase in accounts payable 33,346 217,601
Increase in accrued expenses and other
current liabilities (17,986) 4,036
Net Cash Used In Operating Activities (71,350) (133,303)
Cash Flows from Investing Activities
Cash receipts for the sale of fixed assets 22,900 -
Purchase of fixed assets (8,779) (61,226)
Cash Flows Provided by (Used In)
Investing Activities 14,121 (61,226)
Cash Flows from Financing Activities
Proceeds from related party loans 103,373 83,000
Proceeds from line of credit - 75,000
Note principal payments (50,253) (26,000)
Cash Flows Provided By Financing Activities 53,120 132,000
Net (Decrease) Increase in Cash and Cash
Equivalents (4,109) (62,529)
Cash and Cash Equivalents at Beginning of Period 6,434 68,963
Cash and Cash Equivalents at End of Period 2,325 6,434
Supplemental Information:
Interest paid 4,365 7,735
Income taxes paid - -
The accompanying notes are an integral part of these financial statements
TECHNICAL SOLUTIONS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company.
Technical Solutions Group, Inc. ("Company"), is design and
manufacturers of specialized military vehicles for various purposes.
The principal executive office is located in Charleston, South Carolina.
Going Concern.
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As
shown in the financial statements, during the years ended December
31, 2001 and 2000, the Company incurred losses of $184,916 and
$316,464 respectively, and the Company's current liabilities exceed
current assets by $465,600 as of December 31, 2001. Realization of a
major portion of the assets in the accompanying balance sheet is
dependent upon continued operations of the Company, obtaining
additional financing, and the success of its future operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash Equivalents.
For purposes of reporting cash flows, the Company considers all
highly liquid debt instruments purchased with maturity of three
months or less to be cash equivalents.
Property and Equipment.
Property and equipment are stated at cost or at the value of the
operating agreement. Depreciation and amortization are computed
using the straight-line method over the following estimated useful
lives:
Vehicles 20 years
Furniture and fixtures 7 years
Machinery and equipment 7 years
Computers and software 5 years
Impairment of Long-Lived Assets.
The Company reviews long-lived assets to be held and used for
impairment whenever events or changes in circumstances indicated that
the carrying amount of an asset might not be recoverable. If the sum
of the expected future cash flows (undiscounted and without interest
charges) is less than the carrying amount of the asset, the Company
would recognized an impairment loss based in the estimated fair value
of the asset.
Income Taxes.
The Company uses the asset and liability method of accounting for
income taxes. The asset and liability method accounts for deferred
income taxes by applying enacted rates in effect for periods in which
the difference between the book value and the tax bases of assets and
liabilities are scheduled to reverse. The resulting deferred tax
asset or liability is adjusted to reflect changes in tax laws or
rates. Because the Company has incurred losses from operations, no
benefit is realized for the tax effect of the net operating loss
carryforward due to the uncertainty of its realization
Loss per Share.
The Company utilizes Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share." Basic loss per share is
computed by dividing loss available to common stockholders by the
weighted-average number of common share outstanding. Diluted loss
per share is computed similar to basic loss per share except that the
denominator is increased to include the number of additional common
shares that would have been outstanding if the potential common
shares had been issued and if the additional common shares were
dilutive. Because the Company has incurred net losses, basic and
diluted loss per share is the same.
Estimates.
The preparation of financial statements in conformity with U.S.
generally accepted accounting principles, 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
revenue and expenses during the reporting period. Actual results
could differ from those estimates.
Revenue Recognition.
Revenues from products and services are recognized at the time goods
are shipped or accepted by the customer, or services are provided to
the customer.
Comprehensive Income (Loss).
The Company utilizes SFAS No. 130, "Reporting Comprehensive Income."
This statement establishes standards for reporting comprehensive
income (loss) and its components in a financial statement.
Comprehensive income (loss) as defined includes all changes in equity
(net assets) during a period from non-owner sources. Examples of
items to be included in comprehensive income (loss), which are
excluded from net loss, include foreign currency translation
adjustments and unrealized gains and losses on available-for-sale
securities. Comprehensive income (loss) consists of foreign currency
translation adjustments and is presented in the consolidated
statements of stockholders' equity (deficit).
NOTE 3 - LINES OF CREDIT
The Company has $75,000 of total lines of credit outstanding from two
lending sources. These lines are collateralized by furniture,
fixtures, equipment, inventory, and accounts receivable. Amounts of
each line of credit and interest rates are as follows:
Interest 2001 2000
Rate Balance Balance
Line of Credit from Wells Fargo 16.25% $25,000 $25,000
Line of Credit from Washington Mutual Bank 12.00% 50,000 50,000
Total $75,000 $75,000
NOTE 4 - RELATED PARTY TRANSACTIONS
In August 1997, the Company borrowed $62,500 from J. Hoffman, who is
a shareholder. The note is payable in installment payments of $1,892
for 36 months beginning in February 2001 and is collateralized by a
military vehicle.
In August 1997, the Company borrowed $20,000 from A. Login, who is a
shareholder. The note is payable with annual interest payments of
$2,400 with balloon payment due on date of August 1, 2004 and is
collateralized by a military vehicle.
In August 1997, the Company borrowed $30,000 from H. Login, who is a
shareholder. The note is payable with annual interest payments of
$3,600 with balloon payment due on date of August 1, 2004 and is
collateralized by a military vehicle.
During 2001, the Company borrowed $101,500 from S. Gregory, who is a
shareholder. The note is payable with annual interest payments of
$3,600 with balloon payment due on date of January 1, 2008, with no
interest due for the first 5 years and 10% interest due the second 5 years.
NOTE 5 - SHAREHOLDER DEBT
During 2001, the Company borrowed $31,500 from G. Barrett, who is a
shareholder. The note is due on demand and bears interest at the
rate of 10%.
During 2001, the Company borrowed $50,000 from TS Group, LLC, which
is a shareholder. The note is due on demand and bears interest at
the rate of 10%.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Rental Lease
In September 2001, the Company entered into a rental lease agreement
that expires in September 2004 for office and warehouse space in
Charleston, South Carolina.
Minimum future lease payments under current lease agreements at December 31,
2001 are as follows;
2002 $108,000
2003 120,000
2004 96,000
$324,000
NOTE 6 - CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of temporary cash
investments and trade accounts receivable.
The Company maintains a cash account at one bank. At December 31,
2001, the Company's carry amount of deposits was $2,325. $100,000
was covered by the Federal Deposit Insurance Corporation for each of
the bank accounts. The Company had no uninsured cash balances as of
December 31, 2001.
The Company is a manufacturer of specialty military vehicles. The
Company grants credit to established customers. Collateral is not
required for credit. The accounts receivable balances were $0 and
$66,640 as of December 31, 2001 and December 31, 2000 respectively.
NOTE 7 - INCOME TAXES
Significant components of the Company's deferred tax liabilities and
assets at December 31, 2001 are as follows:
Deferred Tax Assets
Net Operating Loss Carryforwards $578,674
Less Valuation Allowance (578,674)
Total Deferred Tax Assets -
As of December 31, 2001, the Company had a net operating loss
carryforward for federal income tax purposes approximately equal to
the accumulated deficit recognized for book purposes, which will be
available to reduce future taxable income. The full realization of
the tax benefit associated with the carryforward depends
predominantly upon the Company's ability to generate taxable income
during the carryforward period. Because of the current uncertainty
of realizing such tax assets in the future, a valuation allowance has
been recorded equal to the amount of the net deferred tax assets,
which caused the Company's effective tax rate to differ from the
statutory income tax rate. The net operating loss carryforward, if
not utilized, will begin to expire in the year 2007.
PRO FORMA CONSOLIDATED FINANCIAL DATA
The Unaudited Pro Forma Consolidated Balance Sheet and the Unaudited
Pro Forma Consolidated Statement of Operations of Sonic Jet
Performance, Inc. ("Company") have been prepared to illustrate the
estimated effect of the acquisition of Technical Solutions Group,
Inc. as if it had occurred on January 1, 2002. The acquisition was
accounted for by the purchase method of accounting. The Pro Forma
Consolidated Financial Statements do not purport to be indicative of
the results of operations or financial position of the Company that
would have actually been obtained had such transactions been
completed as of the assumed dates and for the period presented, or
which may be obtained in the future. The pro forma adjustments are
described in the accompanying notes and are based upon available
information and certain assumptions that the Company believes are
reasonable.
A preliminary allocation of the purchase price has been made to major
categories of assets and liabilities in the accompanying Pro Forma
Consolidated Financial Statements based on available information. The
actual allocation of purchase price and the resulting effect on
income from operations may differ significantly from the pro forma
amounts included herein. These pro forma adjustments represent the
Company's preliminary determination of purchase accounting
adjustments and are based upon available information and certain
assumptions that the Company believes to be reasonable.
Consequently, the amounts reflected in the Pro Forma Consolidated
Financial Statements are subject to change, and the final amounts may
differ substantially.
The accompanying Pro Forma Consolidated Financial Statements should
be read in conjunction with the historical financial statements and
related notes thereto for Sonic Jet Performance, Inc. and Technical
Solutions Group, Inc.
/s/ Michael Johnson & Co., LLC
Michael Johnson & Co., LLC.
Denver, Colorado
September 5, 2002
SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
(Unaudited)
Sonic Jet Technical Pro Pro Forma
Performance, Solutions Group, Forma Consolidated
Inc. Inc. Adjustments Balances
ASSETS:
Current Assets:
Cash $ 90,711 $ 3,102 $ - $ 93,813
Restricted cash 166,457 - - 166,457
Accounts receivable 86,582 1,338 - 87,920
Note receivable - 458,729 - 458,729
Investment 50,000 - (3) (50,000) -
Inventories 182,970 - - 182,970
Other current assets 2,506 - - 2,506
Total Current Assets 579,226 463,169 (50,000) 992,395
Property and Equipment, Net 1,109,217 214,892 - 1,324,109
Other Assets:
Acquisition - - (1) 1,200,000 1,200,000
Licensing rights 267,500 - - 267,500
Total Other Assets 267,500 - 1,200,000 1,467,500
Total Assets $1,955,943 $ 678,061 $1,150,000 $3,784,004
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 421,416 $ 746,481 $ - $ 1,167,897
Advance from customers - 974,980 - 974,980
Accrued payroll taxes 50,575 - - 50,575
Accrued interest and
other expenses 255,254 47,396 - 302,650
Line of credit - 81,314 - 81,314
Loan from shareholder 55,000 15,689 - 70,689
Total Current Liabilities 782,245 1,865,860 - 2,648,105
Long-Term Liabilities:
Notes payable - 799,700 (3) (50,000) 749,700
Total Long-term Liabilities - 799,700 (50,000) 749,700
Total Liabilities 782,245 2,665,560 (50,000) 3,397,805
Stockholders' Equity:
Preferred stock 365,000 - - 365,000
Common stock 12,648,235 24,000 (2) (24,000) 13,848,235
(1) 1,200,000
Additional paid-in capital - 458,729 (2) (458,729) -
Accumulated deficit (11,839,537) (2,470,228) (2) 482,729 (13,827,036)
Total Stockholders' Equity 1,173,698 (1,987,499) 1,200,000 386,199
Total Liabilities and
Stockholders' Equity $ 1,955,943 $ 678,061 $1,150,000 $ 3,784,004
See accompanying notes to pro forma consolidated financial statements
SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX-MONTHS ENDED JUNE 30, 2002
(Unaudited)
Revenues: $ 362,632 $ 748,700 $ - $ 1,111,332
Cost of Sales 209,614 1,058,568 - 1,268,182
Gross Profit 153,018 (309,868) - (156,850)
Operating Expenses:
Sales, general,
and administrative 1,018,189 969,804 - 1,987,993
Total Operating Expenses 1,018,189 969,804 - 1,987,993
Net Loss from Operations (865,171) (1,279,672) - (2,144,843)
Other Income/Expenses
Other income 31,426 52 - 31,478
Interest income 3,213 - - 3,213
Interest expenses - (18,363) - (18,363)
34,639 (18,311) - 16,328
Net Loss $ (830,532) $(1,297,983) $ - $(2,128,515)
Net Loss Per Share $ (0.03) $ (0.21) $ (0.06)
Weighted average number of
shares outstanding 27,928,115 6,000,000 33,928,115
See accompanying notes to pro forma consolidated financial statements
SONIC JET PERFORMANCE, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The estimated purchase price and preliminary adjustments to
historical book value of Sonic Jet Performance as a result of the
Technical Solutions Group, Inc. ("TSG") acquisition as follows:
Purchase price:
Estimate value of stock issued $1,200,000
Book value of net assets acquired 1,172,245
Adjustment to reflect fair market value of net assets (1,172,245)
Purchase price in excess of net assets acquired $ 1,200,000
Preliminary allocation of purchase price in excess of net assets required:
Estimated goodwill $1,200,000
(2) The adjustments to additional paid-in capital, accumulated
deficit, and capital stock as a result of the TSG acquisition:
Elimination of TSG additional paid in capital $(458,729)
Elimination of TSG pre business combination
accumulated deficit 482,729
Elimination of TSG capital stock (24,000)
Total 0
(3) The adjustments to eliminate intercompany receivables and
payables as a result of the TSG acquisition:
Investment $(50,000)
Notes Payable 50,000
Total $ 0