SECURITIES AND EXCHANGE COMMISSION 			Washington, D.C. 20549 				Form 8-K/A 			 (Amendment No. 1) 	Current Report Pursuant to Section 13 or 15(d) of 	the Securities Exchange Act of 1934 	Date of Report (Date of earliest event reported): March 26, 2001 				TelVue Corporation 		(Exact Name of Registrant as Specified in Charter) 		Delaware		0-17170		51-0299879 	(State or Other Jurisdiction	(Commission (I.R.S. Employer 	 of Incorporation)		File Number) Identification No.) 	16000 Horizon Way, Suite 500, Mt. Laurel, New Jersey	08054 	(Address of Principal Executive Offices) 	 (Zip Code) 	Registrant's telephone number, including area code: (856) 273-8888 The Current Report on Form 8-K filed by TelVue Corporation on March 26, 2001 is hereby amended to include the financial information required in Item 7. Item 7.	Financial Statements, Pro Forma Financial Information and Exhibits. 	(a)	Financial Statements of Business Acquired: 		See below for the audited financial statements 		required by this Item. 	(b)	Pro Forma Financial Information: 		See below for the pro forma financial 		information required by this Item. 	(c)	Exhibits: None 			TABLE OF CONTENTS 								Page 								 No. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FINANCIAL STATEMENTS 	Balance Sheet 	Statement of Operations 	Statement of Changes in Stockholder's Equity (Deficit) 	Statement of Cash Flows 	Notes to Financial Statements REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To The Board of Directors J.D. Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source Communications Group Mullica Hill, New Jersey We have audited the accompanying balance sheet of J.D. Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source Communications Group (an S Corporation) as of December 31, 2000, and the related statements of operations, changes in stockholder's equity (deficit) 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 J.D. Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source Communications Group as of December 31, 2000, 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. /s/ Pressman Ciocca Smith LLP Huntingdon Valley, PA 19006 May 10, 2001 J.D. KRAENGEL AND ASSOCIATES, INC. F/K/A DACON CORPORATION D/B/A SOURCE COMMUNICATIONS GROUP BALANCE SHEET December 31, 2000 ASSETS CURRENT ASSETS Cash and cash equivalents $ 51,100 Accounts receivable - trade, less allowance for doubtful accounts of $3,600 256,695 Inventory 8,891 Other current assets 100 ---------- TOTAL CURRENT ASSETS 316,786 PROPERTY AND EQUIPMENT 319,663 Less accumulated depreciation 230,059 ---------- 89,604 $ 406,390 ========== LIABILITIES AND STOCKHOLDER'S DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 168,126 Payroll and sales taxes payable 10,854 Accrued pension contribution 45,228 Due to stockholder 421,584 ---------- 645,792 STOCKHOLDER'S EQUITY (DEFICIT) Common stock, $1 par value, 1,000 shares authorized, 100 shares issued and outstanding 100 Additional paid-in capital 14,900 Accumulated deficit (254,402) ---------- (239,402) ---------- $ 406,390 ========== See accompanying notes. J.D. KRAENGEL AND ASSOCIATES, INC. F/K/A DACON CORPORATION D/B/A SOURCE COMMUNICATIONS GROUP STATEMENT OF OPERATIONS Year Ended December 31, 2000 REVENUES $1,934,164 COST OF GOODS SOLD 1,361,944 ---------- GROSS PROFIT 572,220 OPERATING EXPENSES 568,493 ---------- INCOME BEFORE OTHER INCOME 3,727 OTHER INCOME Interest income 5,193 ---------- NET INCOME $ 8,920 ========== See accompanying notes. J.D. KRAENGEL AND ASSOCIATES, INC. F/K/A DACON CORPORATION D/B/A SOURCE COMMUNICATIONS GROUP STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT) Year Ended December 31, 2000 COMMON STOCK Balance at beginning and end of year $ 100 ========== ADDITIONAL PAID-IN CAPITAL Balance at beginning and end of year $ 14,900 ========== ACCUMULATED DEFICIT Balance at beginning of year $ (263,322) Net income 8,920 ---------- $ (254,402) ========== TOTAL STOCKHOLDER'S EQUITY (DEFICIT) $ (239,402) ========== See accompanying notes. J.D. KRAENGEL AND ASSOCIATES, INC. F/K/A DACON CORPORATION D/B/A SOURCE COMMUNICATIONS GROUP STATEMENT OF CASH FLOWS Year Ended December 31, 2000 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,920 Adjustments to reconcile net income to net cash (used in) operating activities Depreciation 35,914 Changes in operating assets and liabilities: Accounts receivable - trade (156,255) Inventory 83,708 Other current assets 1,847 Accounts payable and accrued expenses (53,090) Payroll and sales tax payable 8,299 Accrued pension contribution 45,228 ---------- NET CASH (USED IN) OPERATING ACTIVITIES (25,429) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment (7,012) CASH FLOWS FROM FINANCING ACTIVITIES Reduction in due to stockholder (104,498) ---------- NET DECREASE IN CASH (136,939) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 188,039 ---------- CASH AND CASH EQUIVALENTS AT END OF YEAR $ 51,100 ========== Supplementary Disclosures of Cash Flow Information Cash paid during the year for: Interest $ - ========== Income taxes $ - ========== See accompanying notes. J.D. KRAENGEL AND ASSOCIATES, INC. F/K/A DACON CORPORATION D/B/A SOURCE COMMUNICATIONS GROUP NOTES TO FINANCIAL STATEMENTS December 31, 2000 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of J.D. Kraengel and Associates, Inc. f/k/a Dacon Corporation d/b/a Source Communications Group ("the Company") is presented to assist in understanding the Company's financial statements. These accounting policies conform to generally accepted accounting principles. Business Activity and Concentration of Cash and Credit Risk The Company provides communications solutions and network integration primarily to customers located in the Mid-Atlantic states. Consequently, the Company's ability to collect amounts due from customers is affected by economic conditions in this area. The Company maintains cash balances at three major financial institutions in the Philadelphia area. One account is insured by the Bank Insurance Fund up to $100,000. At times, the Company maintains a cash balance in excess of the insured amount. The other accounts are uninsured. During 2000, two customers accounted for 30% and 12% of sales and 16% and 0% of receivables at December 31, 2000. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers securities purchased with an original maturity of three (3) months or less to be cash equivalents. Accounts Receivable - Trade The Company uses the allowance method to provide for uncollectible accounts receivable. The allowance is determined based on historical experience and management's evaluation of outstanding accounts receivable. Inventory Inventory is stated at the lower of cost or market. Cost is determined by the first-in, first-out method, and market represents the lower of replacement cost or estimated net realizable value. Property and Equipment Property and equipment are carried at cost. Depreciation of property and equipment is provided using the accelerated and straight-line methods. For income tax purposes, recovery of capital costs for property and equipment is made using accelerated methods over statutory recovery periods. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Valuation of Long-Lived Assets The Company continually evaluates whether events or circumstances have occurred that indicate that the remaining useful lives of its long-lived assets should be revised or that the remaining balance of such assets may not be recoverable using objective methodologies. Such methodologies include evaluations based on the cash flows generated by the underlying assets or other determinants of fair value. As of December 31, 2000, management believes that no revisions to the remaining lives or write-downs of deferred charges are required. Advertising The Company follows the policy of expensing the cost of advertising when incurred. S Corporation The Company, with the consent of the sole shareholder, has elected to be treated as an "electing small business corporation" for federal and state income tax purposes. In lieu of corporation income taxes, the shareholders of an S Corporation are taxed on their proportionate share of the Company's taxable income. Therefore, no provision or liability for corporate income taxes has been included in these financial statements. NOTE 2 - PROPERTY AND EQUIPMENT The schedule of property and equipment at December 31, 2000 is as follows: Estimated Useful Lives In Years Furniture and fixtures $ 74,404 7 Equipment 245,259 5 --------- $ 319,663 ========= NOTE 3 - DUE TO STOCKHOLDER At December 31, 2000, the Company had a payable of $421,584 due to its sole stockholder. No repayment terms have been established. NOTE 4 - DEFINED BENEFIT PENSION PLAN The Company has a defined benefit pension plan covering all employees who are at least 21 years of age and have completed two years of service. Benefits are based on years of service and the employee's compensation. The Company's funding policy to contribute annually at least the maximum amount deductible for Federal income tax purposes. The following table provides further information about the plan at October 1, 2000 and amounts recognized in the accompanying balance sheet at December 31, 2000: Fair value of plan assets at October 1, 2000 $ 388,934 Present value of benefits 1,000,642 Present value of vested accrued benefits 277,324 Benefit cost 155,948 Employer contributions 145,228 Benefits paid - Weighted average assumptions as of October 1, 2000: Expected return on plan assets 7% NOTE 5 - RELATED PARTY TRANSACTIONS The Company leases its facilities from the sole stockholder under a month- to-month lease. Rental expense was $24,000 for the year ended December 31, 2000. NOTE 6 - SUBSEQUENT EVENTS In February 2001, the Company changed its name to J.D. Kraengel and Associates, Inc. On March 9, 2001, the Company sold substantially all of its assets, consisting primarily of material contracts with equipment, software and communication service providers, to TelVue Corporation ("TelVue") for $1.3 million under the terms of an asset purchase agreement which was signed on February 14, 2001. TelVue, a Delaware Corporation located in Mt. Laurel, New Jersey, sells automatic number identification telecommunications services to the cable television industry. The proceeds consisted of $1,000,000 in cash and $300,000 pursuant to a promissory note. Unaudited Pro Forma Financial Statements The unaudited pro forma financial statements are based on the historical financial statements of TelVue Corporation ("TelVue") and the historical financial statements of J.D. Kraengel and Associates f/k/a Dacon Corporation d/b/a Source Communications Group ("Source"). The Pro Forma Statements of Operations give effect to the Source acquisition as if it had occurred as of January 1, 2000. The pro forma adjustments are described in the accompanying notes and are based upon available information and certain assumptions that management believes are reasonable. The Pro Forma Financial Statements do not purport to represent what TelVue's results of operations would actually have been had the Source acquisition in fact occurred on January 1, 2000, or to project TelVue's results of operations for any future date or period. The Pro Forma Financial Statements should be read in conjunction with the historical financial statements of TelVue (included in TelVue's Form 10-KSB, dated March 28, 2001) and Source (included elsewhere in this Form 8-K/A). TELVUE CORPORATION PRO FORMA STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2001 Historical Historical Pro Forma TelVue TelVue Source Adjustments Pro Forma REVENUES $1,368,720 $ 307,977 $ - $1,676,697 OPERATING EXPENSES Service 558,770 241,932 - 800,702 Selling and marketing 177,236 13,401 - 190,637 General and administrative 209,121 91,202 (45,228)(a) 209,909 (12,186)(b) (33,000)(h) Depreciation and amortization 83,297 - 1,786 (d) 105,916 20,833 (e) --------- --------- --------- --------- TOTAL OPERATING EXPENSES 1,028,424 346,535 (67,795) 1,307,164 --------- --------- --------- --------- OPERATING INCOME (LOSS) 340,296 (38,558) 67,795 369,533 OTHER INCOME (EXPENSE) Interest income 10,500 240 - 10,740 Interest expense (57,056) - (23,063)(f) (80,119) --------- --------- --------- --------- (46,556) 240 (23,063) (69,379) --------- --------- --------- --------- INCOME BEFORE TAXES 293,740 (38,318) 44,732 300,154 INCOME TAX (102,595) - (2,565)(g) (105,160) --------- --------- --------- --------- NET INCOME 191,145 $ (38,318) $ 42,167 194,994 ========= ========= DIVIDENDS ON REDEEMABLE CONVERTIBLE PREFERRED STOCK (105,561) (105,561) --------- --------- NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 85,584 $ 89,433 ========= ========= NET INCOME PER COMMON SHARE Basic $0.00 $0.00 ========= ========= Diluted $0.00 $0.00 ========= ========= See notes to unaudited pro forma financial statements. TELVUE CORPORATION PRO FORMA STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2000 Historical Historical Pro Forma TelVue TelVue Source Adjustments Pro Forma REVENUES $4,941,575 $1,934,164 $ - $6,875,739 OPERATING EXPENSES Service 1,999,597 1,361,944 - 3,361,541 Selling and marketing 583,328 146,941 - 730,269 General and administrative 605,801 385,638 (145,228)(a) 822,211 (24,000)(b) Depreciation and amortization 385,409 35,914 (35,914)(c) 475,885 7,143 (d) 83,333 (e) --------- --------- --------- --------- TOTAL OPERATING EXPENSES 3,574,135 1,930,437 (114,666) 5,389,906 --------- --------- --------- --------- OPERATING INCOME 1,367,440 3,727 114,666 1,485,833 OTHER INCOME (EXPENSE) Interest income 22,853 5,193 - 28,046 Interest expense (269,815) - (92,250)(f) (362,065) --------- --------- --------- --------- (246,962) 5,193 (92,250) (334,019) --------- --------- --------- --------- INCOME BEFORE TAXES 1,120,478 8,920 22,416 1,151,814 INCOME TAX (400,336) - (12,535)(g) (412,871) --------- --------- --------- --------- NET INCOME 720,142 $ 8,920 $ 9,881 738,943 ========= ========= DIVIDENDS ON REDEEMABLE CONVERTIBLE PREFERRED STOCK (422,244) (422,244) --------- --------- NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 297,898 $ 316,699 ========== ========== NET INCOME PER COMMON SHARE Basic $0.01 $0.01 ========== ========== Diluted $0.01 $0.01 ========== ========== See notes to unaudited pro forma financial statements NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS The unaudited pro forma statements of operations for the year ended December 31, 2000 and for the three months ended March 31, 2001, give effect to the Source acquisition as if it had occurred on January 1, 2000. The following pro forma adjustments have been made to the unaudited pro forma statements of operations to reflect the Source acquisition. (a)	To eliminate Source's defined benefit plan expense. 	The defined benefit plan was excluded from the Source acquisition. (b)	To reverse duplicative facilities expenses of Source not retained by TelVue. (c)	To reverse historical depreciation expense of Source. (d)	To record depreciation expense of property and equipment acquired from Source. (e)	To record amortization expense of goodwill and covenant-not-to compete acquired from Source. (f)	To record interest expense as a result of $950,000 of additional debt incurred with the acquisition of Source. (g)	To record the tax effect of the pro forma income at an assumed combined 	federal and state income tax rate of 40%. (h)	To eliminate one-time transaction expenses incurred. 				SIGNATURE 	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. 			TELVUE CORPORATION 			By:	/s/ FRANK J. CARCIONE 				Frank J. Carcione, 				President and Chief Executive Officer 			Date:	May 25, 2001