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 (Date of earliest event reported): August 31, 1996
ALPHA SOLARCO, INC.
(Exact name of Registrant as specified in its Charter)
Colorado 0-9376 31-0944136
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
Number)
incorporation)
510 E. University Drive, Phoenix, AZ 85004
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602-252-3055
N/A
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired
CYBER REAL ESTATE, INC.
____________________
Financial Statements
March 31, 1996
CYBER REAL ESTATE, INC.
TABLE OF CONTENTS
AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Expenses 4
Statement of Shareholders' Equity 5
Statement of Cash Flow 6
Notes to Financial Statements 7
Sellers & Associates
CERTIFIED PUBLIC ACCOUNTS
3785 Harrison Blvd. Ste 1D, Ogden, Utah 84403.(801) 621-8128.FAX
(801) 627-1639
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Cyber Real Estate, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of Cyber Real
Estate, Inc. and subsidiary as of March 31, 1996, and the related
statements of expense, shareholders' equity, and cash flows for
the period from February 2, 1996 (inception) to March 31, 1996.
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 generally accepted
auditing standards. 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
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 Cyber
Real Estate, Inc. and subsidiary as of March 31, 1996, and the
results of its operations and its cash flows for the period from
February 2, 1996 (inception) to March 31, 1996 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been presented assuming
the Company will continue as a going concern. As discussed in
Note 2 to the financial statements, the Company has not transacted
any business since inception, which raises substantial doubt about
its ability to continue as a going concern. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
The accompanying financial statements have been presented assuming
the Company will continue using the real estate as student
housing. As discussed in Note 4 to the financial statements,
present zoning requirements for parking could prevent using the
building for any other application besides student housing. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Sellers & Associates
May 17, 1996
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
BALANCE SHEET
as of March 31, 1996
__________________________________________________________________
ASSETS
__________________________________________________________________
Current assets
Cash $ -
__________________________________________________________________
__________________________________________________________________
Property, plant and equipment
Building 1,027,500
Land 72,500
__________________________________________________________________
1,100,000
(Less) accumulated depreciation (3,623)
__________________________________________________________________
1,096,377
__________________________________________________________________
Total assets $1,096,377
__________________________________________________________________
See accompanying notes
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
BALANCE SHEET (continued)
as of March 31, 1996
__________________________________________________________________
LIABILITIES AND
SHAREHOLDERS' EQUITY
__________________________________________________________________
LIABILITIES
Current liabilities
Accounts payable $ 6,418
Accrued interest payable 1,833
Note payable 275,000
__________________________________________________________________
283,251
__________________________________________________________________
COMMITMENTS AND CONTINGENCIES
__________________________________________________________________
SHAREHOLDERS' EQUITY
Common stock - $.001 par value,
authorized 20,000,000 shares,
issued 1,000,000 shares 1,000
Preferred stock - $.001 par
value, authorized 5,000,000
shares, issued 825,000 shares 825
Additional paid-in capital -
preferred 824,175
(Deficit) accumulated during the (12,874)
development stage
__________________________________________________________________
__________________________________________________________________
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,096,377
==================================================================
See accompanying notes
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
STATEMENT OF EXPENSES
February 2, 1996 (inception) to March 31, 1996
__________________________________________________________________
Costs and expenses $ 12,874
__________________________________________________________________
Net income (loss) $ (12,874)
==================================================================
Income (loss) per share $ (0.008)
==================================================================
Weighted average shares outstanding
during the period 1,716,379
=================================================================
See accompanying notes
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
STATEMENT OF SHAREHOLDERS' EQUITY
__________________________________________________________________
Stock
_________________________________
(Deficit)
Additional Accumulated
Par Value Paid-In During
Number of (.001/Share) Capital Development
Shares Common Preferred Preferred Stage
__________________________________________________________________
Balance
February 2,
1996
(inception) - $ - $ - $ - $ -
Stock issued
2/5/96 1,000,000 1,000 - - -
Stock issued
2/6/96 825,000 - 825 824,175 -
Net (loss) for
period (12,874)
__________________________________________________________________
Balance
March 31,
1996 1,825,000 $1,000 $825 $824,175 $(12,874)
==================================================================
See accompanying notes
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
February 2, 1996 (inception) to March 31, 1996
CASH FLOWS FROM:
__________________________________________________________________
OPERATING ACTIVITIES:
Net Income (loss) $ (12,874)
Reconciliation of net income (loss) to net
cash provided (used) by operating activities:
Depreciation 3,623
Services rendered for stock acquired 1,000
Change in current assets and liabilities:
Account payable 6,418
Accrued interest payable 1,833
__________________________________________________________________
Net cash provided (used) by operating activities -
__________________________________________________________________
INVESTING ACTIVITIES:
(See supplemental disclosures below) -
__________________________________________________________________
FINANCING ACTIVITIES:
(See supplemental disclosures below) -
__________________________________________________________________
NET INCREASE (DECREASE) IN CASH -
CASH, BEGIN OF PERIOD (2/2/96) (inception) -
__________________________________________________________________
CASH, END OF PERIOD (3/31/96) $ -
==================================================================
Supplemental disclosures of cash flow information:
__________________________________________________________________
On February 5, 1996, 1,000,000 shares of common stock valued at
$1,000 were issued for services at $.001 per share.
On February 20, 1996, the Company acquired property for
$1,100,000. It issued 825,000 shares of preferred stock valued at
$825,000 and assumed a $275,000 note payable due in one year for
the balance.
==================================================================
See accompanying notes
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
March 31, 1996
Note 1 Summary of Significant Accounting Policies:
Organization:
The Company was incorporated February 2, 1996 under the laws of
Nevada to engage in the business of residential housing.
The Company is authorized to issue up to 20,000,000 shares of
common stock, par value $.001 and up to 5,000,000 shares of
preferred stock, par value $.001.
A wholly owned subsidiary, also named Cyber Real Estate, Inc., was
incorporated in March 1986 under the laws of Illinois also to
engage in the business of residential housing. The Company's
asset, which is real estate in Illinois, then passed into the
hands of its subsidiary, an Illinois Corporation.
Depreciation:
The cost of the building is depreciated on the straight-line
method over 39 years. Depreciation for the current period is
$3,623.
Income Taxes:
The Company has adopted the provisions of statements of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which
incorporates the use of the asset and liability approach of
accounting for income taxes. The asset and liability approach
requires the recognition of deferred tax assets and liabilities
for the expected future consequences of temporary differences
between the financial reporting basis and tax basis of assets and
liabilities.
At March 31, 1996, the Company has a net operating loss carry
forward of $12,874 that could be offset against future taxable
income, including the remaining of the current taxable year. The
loss carry forward expires in 2011 if not used. A tax benefit has
not been reported in the accompanying financial statements,
however, because the Company is uncertain as to the likelihood of
utilization of the carry forward. Accordingly, the tax benefit of
the $12,874 loss carry forward has been offset by valuation
allowance of the same amount, and thus no reporting is required on
the financial statements.
Statement of Cash Flows:
For purpose of the statement of cash flows, the Company considers
all highly liquid investments with a maturity of three months or
less to be cash equivalents.
Net Income (Loss) Per Share:
Primary net income or loss per share is computed by dividing net
income by the weighted average number of shares outstanding.
Note 2 Going Concern Consideration:
The Company has generated no revenues since inception. There is
also a significant working capital deficit. This raises
substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going
concern is dependent upon sale of stock, securing sufficient
financing, and/or increasing cash flow from operations.
CYBER REAL ESTATE, INC.
(A Development Stage Enterprise)
Notes to Financial Statements (continued)
March 31, 1996
Note 3 Related Party Transaction, Notes Payable and Stock Issued:
On February 20, 1996 the Company bought from a not-for profit
religious corporation a student dormitory in DeKalb, Illinois. It
is temporarily closed for repairs because of a May 1995 fire in
the main floor student recreational area. The Company bought the
facilities for $1,100,000. It exchanged 825,000 shares of
preferred stock for $825,000 and assumed a 6% promissory note for
$275,000 on the balance. The note is secured by the building with
interest payable quarterly and the principal due February 20,
1997.
The not-for profit corporation has none of its management as an
officer or as a director of the Company.
Note 4 Valuation of Real Estate:
As discussed in Note 3 the Company acquired real estate in DeKalb,
Illinois for $1,100,000 from a not-for-profit organization who had
received it as a charitable contribution from an unrelated third
party.
The value assigned to the charitable gift was determined by an MRI
appraisal in an "as is" condition assuming that the fire damage
which occurred in May, 1995 was repaired. The Company bought the
facilities at the appraised value of $1,100,000.
The building is presently being repaired. The Company estimates
the fire damage repairs will not exceed $30,000. The Company
plans to have it available for occupancy as student housing before
the local institutions of higher learning start in the fall of
1996.
If the property is converted to another use, the parking will not
meet the present zoning requirements and the value of the property
would, therefore, be impaired.
Cyber Real Estate
Balance Sheet
June 30, 1996
Assets
Assets
Current Assets
Interco-CPI (9,990.00)
Total Current Assets (9,990.00)
Investments
Property, Plant and Equipment
Building 1,027,500.00
Land 72,500.00
Leasehold Improvements 15,911.02
Total Property, Plant
and Equipment 1,115,911.02
Other Assets
------------
Total Assets 1,105,921.02
============
Liabilities
Liabilities
Current Liabilities
A/P-RP-CFS 23,557.23
Accrued Property Taxes 5,921.02
Accrued Interest 5,958.33
Current Portion - Notes Payable 275,000.00
Total Current - Liabilities 310,436.58
Income Taxes
Other Current Liabilities
Notes Payable
Other Liabilities
------------
Total Liabilities 310,436.58
Stockholders Equity
Preferred Stock 825.00
Additional Paid in
Capital-Preferred 824,175.00
Common Stock 1,000.00
Current Retained Earnings (30,515.56)
Total Stockholders Equity 795,484.44
------------
Total Liabilities and Capital 1,105,921.02
============
(b) Proforma financial information
INDEX TO FINANCIAL STATEMENTS AND
SUPPLEMENTARY FINANCIAL DATA
Pro Forma Condensed Combined Financial Statements:
Pro Forma Condensed Combined Balance Sheet - May 31, 1996
(unaudited)
Pro Forma Condensed Combined Statement of Operations - Year
Ended May 31, 1996 (unaudited)
Notes to Pro Forma Condensed Combined Financial Statements
Cyber Real Estate, Inc.:
Report of Independent Certified Public Accountants
Balance Sheet - March 31, 1996
Statement of Expenses - February 2, 1996 (inception) to March 31,
1996
Statement of Stockholders' Equity - February 2, 1996 (inception)
to March 31, 1996
Statement of Cash Flows - February 2, 1996 (inception) to March
31, 1996
Notes to Consolidated Financial Statements
Balance Sheet - June 30, 1996 (unaudited)
Income Statement - Three Months Ended June 30, 1996 (unaudited)
ALPHA SOLARCO INC.
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
The following pro forma condensed combined balance sheet as
of May 31, 1996, and the pro forma condensed consolidated
statements of operations for the year ended May 31, 1996, give
effect to the acquisition of 90% of the outstanding common shares
of Cyber Real Estate, Inc. ("Cyber") by Alpha Solarco Inc.
("Alpha"). The pro forma information is based on the historical
financial statements of Alpha and Cyber (as of June 30, 1996)
giving effect to the transaction under the purchase method of
accounting and the assumptions and adjustments in the accompanying
notes to the pro forma financial statements.
The pro forma statements have been prepared by Alpha
management based upon the financial statements of Cyber included
elsewhere herein. These pro forma statements may not be
indicative of the results that actually would have occurred if the
combination had been in effect on the dates indicated or which may
be obtained in the future. The pro forma financial statements
should be read in conjunction with the audited financial
statements and notes of Alpha and Cyber.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
MAY 31, 1996
HISTORICAL PRO FORMA PRO FORMA
ASSETS ALPHA CYBER ADJUSTMENTS COMBINED
Current assets $ 458,173 $ 0 $ 0 $ 458,173
Property and
equipment - net 173,202 1,115,911 0 1,289,113
Other assets 1,080,533 0 0 1,080,533
Goodwill 0 0 1,249,114 (2) 1,249,114
Investment in Cyber 0 0 1,250,000 (1) 0
(1,250,000)(2)
----------- ---------- -------------- -----------
$ 1,711,908 $1,115,911 $ 1,249,114 $ 4,076,933
=========== ========== ============== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities $ 846,179 $ 320,427 $ 0 $ 1,166,606
Long-term debt 52,627 0 0 52,627
Minority interest 0 0 794,598(2) 794,598
Stockholders' equity:
Preferred stock 0 825 (825)(2) 0
Additional paid-in
capital - prefer 0 824,175 (824,175)(2 0
Common
stock 14,787,416 1,000 1,250,000 (1) 16,037,416
(1,000)(2)
Accumulated deficit (13,974,314) (30,516) 30,516 (2) (13,974,314)
----------- --------- -------------- ------------
Total stockholders' 813,102 795,484 454,516 2,063,102
----------- --------- -------------- ------------
$ 1,711,908 $1,115,911 $ 1,249,114 $ 4,076,933
=========== ========= ============== ============
See notes to pro forma condensed combined financial statements
ALPHA SOLARCO INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1996
HISTORICAL PRO FORMA PRO FORMA
ALPHA CYBER ADJUSTMENTS COMBINED
Revenues $1,035,242 $ 0 $ 30,000 $1,065,242
Costs and expenses:
Cost of sales 314,187 0 0 314,187
General and
administrative 909,085 20,934 20,000 950,019
Depreciation 51,561 3,623 23,131 78,315
Amortization 0 0 124,914 124,914
Interest 15,547 5,959 10,541 32,047
--------- ------- -------- ----------
1,290,380 30,516 178,586 1,499,482
--------- ------- -------- ----------
Loss from continuing
operations $ (255,138) $(30,516) $(148,586) $ (434,240)
========= ======= ========= ==========
Loss per share from
continuing operation $ (0.15) $ (0.13)
========= ==========
See notes to pro forma condensed combined financial statements
ALPHA SOLARCO INC.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Effective August 31, 1996, Alpha Solarco Inc. ("Alpha") acquired
90% of the outstanding common stock of Cyber Real Estate, Inc.
("Cyber") in exchange for 625,000 shares of Alpha common stock.
The pro forma financial statements combine the assets and
liabilities of the two companies at May 31, 1996, and their
results of operations for the year then ended. In combining the
entities, the following pro forma adjustments have been made.
(1) Reflects the exchange of 625,000 Alpha Common shares valued
at $2 per share for 9,000,000 common shares of Cyber.
(2) Under the purchase method of accounting, Cyber's assets and
liabilities are required to be adjusted to reflect their fair
market value. Based on current appraisals of the real estate,
management believes that fair values approximate Cyber's book
values. The following adjustments have been made to eliminate
the preferred stock and reflect such amount as minority interest,
and record goodwill:
Net assets at fair value $795,484
Less amount attributable to
preferred stock (794,500)
--------
984
Percent purchased 90 %
--------
886
Goodwill 1,249,114
--------
Investment $1,250,000
=========
Management is pursuing the conversion of the preferred shares to
common shares which, if completed would require an adjustment of
the minority interest and goodwill amounts.
(3) For purposes of presenting the pro forma condensed combined
statement of operations, the following adjustments (which are
expected to be recurring) have been made:
Increase (decrease) in net
income:
Rental revenue from
property $30,000
Additional operating
expenses including
repairs, utilities, etc. (20,000)
Full year depreciation
expense on Cyber real
property (39 years) (23,131)
Interest on note payable (10,541)
Amortization of goodwill
(10 years) (124,914)
--------
($148,586)
=========
(4) The pro forma statement of operations has not been adjusted
for non-recurring charges that are expected to be incurred within
the ensuing year. Such charges include additional professional
fees incurred as a result of the acquisition and repair costs
needed to repair the property. In addition, the pro forma does
not reflect any possible write-downs of goodwill or long-lived
assets that may be necessary should expected rents not be achieved
or management's plans for the property change.
(c) Exhibits
Exhibit No. Description Page
2 Stock Exchange Agreement as of *
August 31, 1996 by and
among Premier Sales
Corporation, Ltd., a
Channel Islands corporation ("PSC")
East-West Trading Corporation,
Ltd., a West Indies corporation
("EWT"), Karston Electronics,
Inc., a British Virgin
Islands corporation ("KEL")
collectively known as
the "Companies" and Alpha
Solarco, Inc., a Colorado
corporation with its principal
place of business at 510
E. University Dr., Phoenix,
AZ 85005 ("Alpha").
* Previously filed
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 thereunto duly authorized.
ALPHA SOLARCO, INC.
Date: November 14, 1996 By: /s/ Edward C. Schmidt
Edward C. Schmidt, President