Tvi (TVIN) 8-K/A Financial Statements and Exhibits

Exhibit 99.3

SAFETY TECH INTERNATIONAL, INC.

FINANCIAL STATEMENTS

AND SUPPLEMENTARY INFORMATION

THREE MONTHS ENDED

SEPTEMBER 30, 2005 AND 2004

TABLE OF CONTENTS

	Page
FINANCIAL STATEMENTS
•     Balance Sheets	1 - 2
•     Statements of Income and Retained Earnings	3
•     Statements of Cash Flows	4
NOTES TO FINANCIAL STATEMENTS	5 - 10
SUPPLEMENTARY INFORMATION
•     Schedule “1” - Supplementary Schedules of Operating Expenses	11

SAFETY TECH INTERNATIONAL, INC.

BALANCE SHEETS

SEPTEMBER 30, 2005 AND 2004

ASSETS

	2005		2004
CURRENT ASSETS
Cash and Cash Equivalents	$	82,757	$	406,786
Accounts Receivable, Net of Allowance for Doubtful Accounts of $-0- and $11,607, respectively		835,183		1,097,597
Inventory		852,892		794,989
Prepaid Expenses		89,130		44,549
Note Receivable - Related Party		351,363		—
TOTAL CURRENT ASSETS		2,211,325		2,343,921
PROPERTY AND EQUIPMENT
Buildings and Improvements		204,810		40,000
Office Furniture and Equipment		133,528		108,756
Manufacturing Equipment		683,567		354,956
		1,021,905		503,712
Less: Accumulated Depreciation		272,859		172,276
TOTAL PROPERTY AND EQUIPMENT		749,046		331,436
OTHER ASSETS
Investments		1,916,449		1,017,576
TOTAL OTHER ASSETS		1,916,449		1,017,576
TOTAL ASSETS	$	4,876,820	$	3,692,933

See Accompanying Notes

1

SAFETY TECH INTERNATIONAL, INC.

BALANCE SHEETS - continued

SEPTEMBER 30, 2005 AND 2004

LIABILITIES AND STOCKHOLDERS’ EQUITY

	2005		2004
LIABILITIES
CURRENT LIABILITIES
Accounts Payable	$	110,472	$	270,255
Income Taxes Payable		108,545		215,634
Accrued Expenses		206,291		153,893
Due to Related Parties		471,834		427,295
TOTAL CURRENT LIABILITIES		897,142		1,067,077
LONG-TERM LIABILITIES
Notes Payable		228,421		—
Deferred Income Taxes		98,668		71,936
TOTAL LONG-TERM LIABILITIES		327,089		71,936
TOTAL LIABILITIES		1,224,231		1,139,013
STOCKHOLDERS’ EQUITY
Common Stock; No Par Value; 200,000 Shares Authorized, 99,000 Shares Issued and Outstanding		1,055,500		1,016,750
Retained Earnings		2,587,846		1,529,867
Accumulated Other Comprehensive Income		9,243		7,303
TOTAL STOCKHOLDERS’ EQUITY		3,652,589		2,553,920
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,876,820	$	3,692,933

See Accompanying Notes

2

SAFETY TECH INTERNATIONAL, INC.

STATEMENTS OF INCOME AND RETAINED EARNINGS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

	2005			2004
	Amount		Percent	Amount			Percent
SALES	$	1,169,149	100.0	$	1,599,863		100.0
Cost of Goods Sold		774,113	66.2		871,193		54.4
GROSS PROFIT		395,036	33.8		728,670		45.6
Operating Expenses		369,646	31.6		253,880		16.0
OPERATING INCOME		25,390	2.2		474,790		29.6
OTHER INCOME		73,256	6.3		8,528		.6
INCOME BEFORE INCOME TAXES		98,646	8.5		483,318		30.2
Income Tax Expense		18,218	1.6		182,612		11.4
NET INCOME		80,428	6.9		300,706		18.8
Retained Earnings - Beginning		2,507,418			1,236,661
Repurchase of Corporate Stock		—			(7,500	)
RETAINED EARNINGS - ENDING	$	2,587,846		$	1,529,867

See Accompanying Notes

3

SAFETY TECH INTERNATIONAL, INC.

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Inflows:
Cash Received from Customers	$	959,028		$	1,417,613
Investment Income Received		15,567			7,389
Other Income Received		—			1,139
		974,595			1,426,141
Outflows:
Cash Paid to Suppliers		820,933			1,358,964
Cash Paid to Employees		193,353			159,334
Income Taxes Paid		89,150			343,752
		1,103,436			1,862,050
NET CASH USED BY OPERATING ACTIVITIES		(128,841	)		(435,909	)
CASH FLOWS FROM INVESTING ACTIVITIES
Inflows:
Sale of Investments		49,970			193,662
		49,970			193,662
Outflows:
Purchase of Investments		14,371			—
Purchase of Property and Equipment		16,124			85,299
		30,495			85,299
NET CASH PROVIDED BY INVESTING ACTIVITIES		19,475			108,363
CASH FLOWS FROM FINANCING ACTIVITIES
Outflows:
Repurchase of Corporate Stock		—			7,500
		—��			7,500
NET CASH USED BY FINANCING ACTIVITIES		—			(7,500	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(109,366	)		(335,046	)
Cash and Cash Equivalents - Beginning		192,123			741,832
CASH AND CASH EQUIVALENTS - ENDING	$	82,757		$	406,786

See Accompanying Notes

4

SAFETY TECH INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

Nature of Business

Safety Tech International, Inc. designs, manufactures, and distributes state of the art personal protection equipment which conforms to the National Institute for Occupational Safety and Health (NIOSH) regulations for both military and civilian applications. The company markets these products worldwide.

Property and Equipment

Property and equipment are recorded at cost. Depreciation and amortization are provided using the straight-line method over the estimated lives of the various assets.

Inventory

Inventory is valued at the lower of cost using the first-in, first-out method or market.

Income Taxes

Income taxes are provided on all revenue and expense items included in the income statement, with the exception of permanent differences between financial earnings and taxable income. Deferred income taxes result principally from using accelerated depreciation methods for income tax purposes and unrealized gains on marketable securities.

Allowance for Doubtful Accounts

The Company periodically reviews accounts receivable balances and records an allowance if amounts are deemed uncollectible.

Cash and Cash Equivalents

Liquid investments with a maturity of three months or less are treated as cash equivalents.

Use of Estimates

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.

Advertising

The Company follows the policy of charging the costs of advertising to expense as incurred.

5

SAFETY TECH INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS - continued

Note 2. Concentration of Risk

In the three months ending September 30, 2005, the three largest customers accounted for 21%, 11%, and 11% of sales, as well as 30%, 15%, and 15% of accounts receivable. In the three months ending September 30, 2004, the two largest customers accounted for 43% and 21% of sales and 63% and 15% of accounts receivable.

The Company is dependent on third-party equipment manufacturers, distributors, and dealers for all of its supply of raw materials. In 2005 and 2004, products purchased from the Company’s two largest suppliers accounted for approximately 48% and 34% of product purchases, respectively. The Company is dependent on the ability of its suppliers to provide products on a timely basis and on favorable pricing terms. The loss of certain principal suppliers or a significant reduction in product availability from principal suppliers could have a material adverse effect on the Company. The Company believes that its relationships with its suppliers are satisfactory.

Note 3. Related Party Transactions

In the normal course of business, the Company has transactions with Safety Tech International AG, an affiliated company owned by the Company’s major stockholder.

Safety Tech International, AG provides ongoing consulting and engineering services related to product research and development.

Related party activity with Safety Tech International, AG for the three months ended September 30, 2005 and 2004 was:

	2005		2004
Engineering Fees	$	36,000	$	25,500
Consulting Fees	$	36,000	$	25,500
Balance Due to Related Party	$	471,834	$	427,295

As of September 30, 2005, the Company held an unsecured demand note from its major stockholder for $341,000. The loan, which bears interest at 4.5% per year, matures January 2006.

6

SAFETY TECH INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS - continued

Note 4. Investments

Investments consist of marketable securities and mutual funds. Balances at September 30 are as follows:

	2005		2004
Cost	$	1,912,281	$	1,007,546
Unrealized Holding Gain		4,168		10,030
Market Value	$	1,916,449	$	1,017,576

Note 5. Inventory

At September 30, the inventory balances consisted of the following:

	2005		2004
Raw Materials	$	801,991	$	754,201
Finished Goods		50,901		40,788
	$	852,892	$	794,989

Note 6. Research and Development Costs

Expenditures for research activities relating to product development and improvement are charged to expense as incurred. Such expenditures amounted to $72,767 and $50,000 for the three months ended September 30, 2005 and 2004, respectively.

Note 7. Notes Payable

The balance at September 30, 2005 consisted of a line of credit with Merrill Lynch, payable in quarterly installments of interest only at prime plus 1%, with no fixed date for principal repayment. The debt is collateralized by the Company’s marketable securities investments account. The interest rate was 7.31% at September 30, 2005. At September 30, 2005, the Company had an additional $482,358 available on this loan.

Interest expense for the three months ended September 30, 2005 and 2004 was $3,421 and $-0-, respectively.

7

SAFETY TECH INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS -continued

Note 8. Other Comprehensive Income

	2005			2004
Other Comprehensive Income, July 1	$	6,393		$	444
Changes:
Holding Gain Arising During the Year		4,168			10,030
Related Income Tax (Deferred)		(1,318	)		(3,171	)
Total Other Comprehensive Income	$	9,243		$	7,303

Note 9. Retirement Plan

The Company has established a 401(k) plan whereby employees who meet age and length of service requirements may elect to make contributions to the plan through a salary reduction arrangement not to exceed 15%. The employer may make a matching contribution for participating employees up to a maximum of 8% of their annual compensation. Profit sharing contributions are determined annually by the Board of Directors.

The Company’s contribution to the plan was $8,245 and $9,378 for the three months ended September 30, 2005 and 2004, respectively.

Note 10. Operating Lease

The Company leases its office, warehouse, and storage facilities from an unrelated party under a five-year lease agreement that expires in June 2008. The annual escalation rate is three-percent. In addition, the Company pays its share of common area charges.

Allocated future minimum lease payments required by the non-cancelable lease are as follows:

Fiscal year ending June 30,	2006	$	159,500
	2007	$	218,700
	2008	$	224,800

Total rent expense for the three months ending September 30, 2005 and 2004 was $53, 193 and $51,753, respectively.

8

SAFETY TECH INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS - continued

Note 11. Income Taxes

Income tax expense for the three months ended September 30 contains the following components:

	2005			2004
Current	$	19,061		$	172,487
Deferred		(843	)		10,125
	$	18,218		$	182,612

Note 12. Stock Purchase Agreements

The Company and its shareholders have an informal agreement in the event of death or withdrawal from the Company. The shareholders must first offer their stock to the Company for redemption; if the Company chooses not to repurchase the stock, then it must be offered to the other existing shareholders before it is sold to an unrelated party.

Note 13. Foreign Currency Transactions

The Company’s functional currency for all operations worldwide is the U.S. dollar. Non-monetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Income statement accounts are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included in current results of operations. Gains and losses resulting from foreign currency transactions are also included in current results of operations. Aggregate foreign currency translation and transaction losses included in operations totaled $2,059 and $5,666 for the three months ended September 30, 2005 and 2004, respectively.

Note 14. Depreciation Expense

Depreciation expense for the three months ended September 30, 2005 and 2004 was $32,751 and $18,756, respectively.

Note 15. Advertising Expense

Advertising expense for the three months ended September 30, 2005 and 2004 was $9,351 and $19,539, respectively.

9

SAFETY TECH INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS - continued

Note 16. Reconciliation of Net Income to Net Cash Provided By Operating Activities:

	2005			2004
Net Income	$	80,428		$	300,706
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation		32,751			18,756
Loss on Sale of Investments		30			—
(Increase) Decrease in Current Assets
Accounts Receivable		(268,643	)		(182,250	)
Inventory		68,462			(143,054	)
Prepaid Expenses		20,895			15,039
Accrued Interest		(2,618	)		—
Increase (Decrease) in Liabilities
Accounts Payable		(37,725	)		(74,202	)
Accrued Expenses		123,431			(56,256	)
Income Taxes Payable		(70,089	)		(171,265	)
Deferred Tax Liability		(843	)		10,125
Amount Due to Related Party		(74,920	)		(153,508	)
Net Cash Used By Operating Activities	$	(128,841	)	$	(435,909	)

Note 17. Capital Stock Transactions

During the three month period ended September 30, 2004, the Company repurchased 500 shares of common stock. The excess of the purchase price over the original sale amount has been charged to retained earnings.

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SUPPLEMENTARY INFORMATION

Schedule “1”

SAFETY TECH INTERNATIONAL, INC.

SUPPLEMENTARY SCHEDULES OF OPERATING EXPENSES

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

	2005			2004
	Amount		Percent	Amount		Percent
OPERATING EXPENSES
Advertising and Promotion	$	9,351	.8	$	19,539	1.2
Automobile Expense		6,861	.6		2,228	.1
Bank Service Charges		2,003	.2		1,120	.1
Commissions		15,746	1.3		19,938	1.2
Condo Expenses		107	—		—	—
Consulting		144,524	12.4		25,500	1.6
Depreciation		32,751	2.8		18,756	1.2
Directors’ Fees		12,000	1.0		24,000	1.5
Employee Benefits		2,696	.2		—	—
Employer 401(k) Expense		8,245	.7		9,378	.6
Engineering Costs		36,767	3.1		25,500	1.6
Equipment Calibration		1,500	.1		—	—
Equipment Rental		600	.1		—	—
Factory Supplies		7,529	.6		34,326	2.1
Foreign Exchange Rates		2,059	.2		5,666	.4
Freight and Duty		9,009	.8		12,813	.8
Insurance - General		48,370	4.2		18,903	1.2
Insurance - Health		23,459	2.0		11,139	.7
Licenses and Permits		—	—		1,076	.1
Membership Dues		800	.1		—	—
Miscellaneous		9,587	.8		10,814	.7
NIOSH Testing		18,639	1.6		—	—
Office Expense		3,494	.3		3,669	.2
Payroll		196,041	16.5		159,766	10.0
Payroll Processing Cost		401	—		460	—
Payroll Taxes		12,822	1.1		13,523	.8
Postage and Delivery		558	—		1,318	.1
Professional Fees		88,120	7.5		27,829	1.7
Rent		53,193	4.5		51,753	3.2
Repairs and Maintenance		4,664	.4		—	—
Software		9,052	.8		1,327	.1
Telephone		2,012	.2		2,347	.1
Trade Show Expenses		250	—		4,900	.3
Training		—	—		1,750	.1
Travel and Meals		15,518	1.3		26,928	1.7
Utilities		6,417	.6		2,986	.2
Less: Overhead Applied		415,499	35.2		285,372	17.6
TOTAL OPERATING EXPENSES	$	369,646	31.6	$	253,880	16.0

See Accountants’ Report

11