SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 9, 2002
JUNIPER GROUP, INC.
(Exact name of registrant as specified in charter)
Nevada 0-19170 11-2866771
(State or other (Commission File Number) IRS Employer
Jurisdiction of (Identification No.)
incorporation)
111 Great Neck Road, Great Neck, New York 11021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 829-4670
(Former name or former address, if changed since last report.)
This Amendment No.1 to the Current Report on Form 8-K for July 26, 2002 (the
"Report") of Juniper Group, Inc. ("Juniper" or the "Registrant") is submitted in
order to provide the financial statements relating to the registrant's
acquisition of: (i) Tags Golf, Inc., under Item 7(a) of Form 8-K, and the Pro
Forma Financial Information called for under Item 7(b) of Form 8-K, all of which
was unavailable at the time the Registrant filed the Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements of Business Acquired
See the index at Page F-1 of this report for the historical financial statements
of Tags Golf, Inc. for the year ended December 31, 2001, and the six months
ended June 30, 2002.
(b) Pro Forma Financial Information
The pro forma financial information is subject to revision, which could have a
significant impact on total assets, total liabilities, stockholders' equity and
net income.
See the index at Page F-1 of this report for the unaudited pro forma financial
information of Juniper for the year ended December 31, 2001 and the six months
ended June 30, 2002.
Index to Item 7(a) and 7(b)
FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL INFORMATION
FINANCIAL STATEMENTS OF ACQUIRED BUSINESS:
TAGS GOLF, INC.
PAGE
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS F-2
BALANCE SHEET DECEMBER 31, 2001 F-3
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
YEAR ENDED DECEMBER 31, 2001 F-4
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2001 F-5
NOTES TO FINANCIAL STATEMENTS F-6/9
CONDENSED BALANCE SHEET JUNE 30, 2002 (Unaudited) F-10
CONDENSED STATEMENT OF OPERATIONS AND ACCUMULATED
DEFICIT SIX MONTHS ENDED JUNE 30, 2002 (Unaudited) F-11
CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2002 (Unaudited) F-12
NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) F-13/14
PRO FORMA FINANCIAL INFORMATION:
INTRODUCTION F-15
PRO FORMA CONSOLIDATED BALANCE SHEET FOR THE SIX MONTHS
ENDED JUNE 30, 2002 F-16
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME FOR THE
YEAR ENDED DECEMBER 31, 2001 F-17
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME FOR THE
SIX MONTHS ENDED JUNE 30, 3002 F-18
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS F-19
F-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders
Tags Golf Inc.
We have audited the accompanying balance sheet of TAGS GOLF INC. as of December
31, 2001, and the related statements of operations and accumulated 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 Tags Golf Inc. as of December
31, 2001, and its results of operations and cash flows for the year then ended,
in conformity with accounting principles generally accepted in the United States
of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes 1 and 4 to the
financial statements, the Company's operations generated recurring losses since
its inception and substantial negative cash flows during 2001, and it was in
default with respect to certain covenants in the agreement for its bank line of
credit as of December 31, 2001. As a result, the Company may not have the liquid
resources necessary to enable it to meet its obligations as they become due
during 2002. Such matters raise substantial doubt about the Company's 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 these uncertainties.
J.H. Cohn LLP
Roseland, New Jersey
October 2, 2002
F-2
TAGS GOLF INC.
BALANCE SHEET
DECEMBER 31, 2001
ASSETS
------
Current assets:
Accounts receivable, net of allowance for doubtful
accounts of $12,000 $320,180
Inventories 301,728
Receivable from:
Affiliate 96,734
Officer 67,564
Other current assets 88,451
--------
Total current assets 874,657
Furniture, fixtures and equipment, net 34,274
Security deposits 9,550
--------
Totals $918,481
--------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to bank $450,281
Cash overdraft 4,408
Accounts payable and accrued expenses 136,640
--------
Total current liabilities 591,329
Loans payable to stockholders 202,519
--------
Total liabilities 793,848
--------
Commitments
Stockholders' equity:
Common stock, $1 par value; 2,500 shares authorized,
issued and outstanding 2,500
Additional paid-in capital 684,750
Accumulated deficit (560,367)
Less stock subscription receivable for 2,250 shares (2,250)
--------
Total stockholders' equity 124,633
--------
Totals $918,481
========
See Notes to Financial Statements.
F-3
TAGS GOLF INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
YEAR ENDED DECEMBER 31, 2001
OPERATIONS
----------
Net sales $1,410,526
Cost of goods sold 967,731
----------
Gross profit 442,795
Operating expenses 719,559
----------
Loss from operations (276,764)
----------
Other expenses:
Interest expense 36,770
Miscellaneous 3,362
----------
Totals 40,132
----------
Net loss (316,896)
ACCUMULATED DEFICIT
-------------------
Balance, beginning of year (243,471)
----------
Balance, end of year $ (560,367)
==========
See Notes to Financial Statements.
F-4
TAGS GOLF INC.
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2001
Operating activities:
Net loss $(316,896)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 4,320
Bad debts 12,675
Changes in operating assets and liabilities:
Accounts receivable (133,620)
Inventories 177,505
Other current assets 45,113
Security deposits (750)
Accounts payable and accrued expenses (5,472)
---------
Net cash used in operating activities (217,125)
---------
Investing activities:
Purchases of furniture, fixtures and equipment (26,761)
Advances to affiliate (22,331)
---------
Net cash used in investing activities (49,092)
---------
Financing activities:
Proceeds from issuances of notes payable to bank, net 66,409
Proceeds from loan to officer 15,000
Cash overdraft (17,711)
Advances from stockholders 202,519
---------
Net cash provided by financing activities 266,217
---------
Net decrease in cash -
Cash, beginning of year -
---------
Cash, end of year $ -
---------
Supplemental disclosure of cash flow information:
Interest paid $ 32,585
=========
See Notes to Financial Statements.
F-5
TAGS GOLF INC.
NOTES TO FINANCIAL STATEMENTS
Note 1 - Business and summary of significant accounting policies:
Business:
Tags Golf Inc. (the "Company") is engaged in the importing and wholesale
distribution of sporting apparel, principally men's and women's golf shoes,
throughout the United States.
Basis of presentation:
The Company's operations have generated recurring losses since its inception,
and they generated substantial negative cash flows during 2001. As discussed in
Note 4, the Company was in default with respect to certain covenants in the
agreement for its bank line of credit as of December 31, 2001. Management
believes that the Company will continue to incur operating losses and negative
cash flows from operating activities through at least December 31, 2002 and that
it will need additional financing in order to continue to operate through at
least that date. These matters raise substantial doubt about the Company's
ability to continue as a going concern.
Management plans to obtain such financing through additional debt financing or
through the sale of the Company to an investor that will be able to provide the
Company with the additional debt or equity financing it will need to purchase
additional inventory, expand its marketing efforts, increase sales and meet its
obligations as they become due (see Note 7). However, management cannot assure
that it will be able to consummate the sale of the Company or otherwise obtain
any or all of the additional financing the Company will need. If the Company is
unable to obtain the required financing, it may have to curtail or terminate its
operations and liquidate its remaining assets and liabilities.
The accompanying financial statements do not include any adjustments related to
the recoverability and classification of assets or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue its operations as a going concern.
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 certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Concentrations of credit risk:
Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash and accounts receivable. From time to time
the Company's cash balances exceed Federal insurance limits. The Company reduces
its exposure to credit risk by maintaining its cash deposits with major
financial institutions and monitoring their credit ratings.
F-6
TAGS GOLF INC.
NOTES TO FINANCIAL STATEMENTS
Note 1 - Business and summary of significant accounting policies
(concluded):
Concentrations of credit risk (concluded):
The Company extends credit to its customers but offers only
short payment terms. Generally, it does not require any
collateral. The Company closely monitors the extension of
credit while maintaining appropriate allowances for
potential credit losses. Accordingly, management does not
believe that the Company was exposed to significant credit
risk at December 31, 2001.
Inventories:
Inventories consist principally of golf shoes and are valued
at the lower of cost (first-in, first-out basis) or market.
Furniture, fixtures and equipment:
Furniture, fixtures and equipment are recorded at cost.
Depreciation is provided over the estimated useful lives of
the related assets using accelerated methods.
Advertising:
The Company expenses the cost of advertising and promotions
as incurred. Advertising costs charged to operations amounted
to $66,306 in 2001.
Income taxes:
The Company, with the consent of its stockholders, has
elected to be treated as an "S" Corporation under the
applicable sections of the Internal Revenue Code. Under these
sections, corporate income or loss, in general, is allocated
to the stockholders for inclusion in their personal income
tax returns. Accordingly, there is no provision for Federal
income taxes in the accompanying financial statements. The
Company has also elected to be treated as an "S" Corporation
for New Jersey state income tax purposes. However, the State
of New Jersey does impose a tax on "S" Corporation income at
a reduced rate.
Note 2 - Furniture, fixtures and equipment:
Furniture, fixtures and equipment consist of the following:
Furniture and fixtures $56,009
Equipment 10,962
-------
66,971
Less accumulated depreciation 32,697
-------
Totals $34,274
=======
Note 3 - Related party transactions:
At December 31, 2001, the Company had receivables of $96,734
primarily from advances to a commonly controlled entity and a
loan receivable from an officer of $67,564. Such amounts are
noninterest bearing and due on demand.
F-7
TAGS GOLF INC.
NOTES TO FINANCIAL STATEMENTS
Note 3 - Related party transactions (concluded):
At December 31, 2001, the Company had outstanding noninterest
bearing loans payable to its stockholders of $202,519. The
loans, which have no stated repayment terms, have been
classified as noncurrent in the accompanying balance sheet on
the basis of stockholders' representations that they will not
require repayment of the balance during the year ending December
31, 2002.
Note 4 - Notes payable to bank:
The Company has a $800,000 bank line of credit. Borrowings bear
interest at the prime rate plus 2% (an effective rate of 4.75%
at December 31, 2001), are secured by the Company's accounts
receivable, inventories and equipment and are guaranteed by the
Company's stockholders. At December 31, 2001, the Company was in
violation of several loan covenants. The line of credit was due
to expire on June 1, 2002. However, as of October 2, 2002, the
bank had been extending the due date of the loan on a
month-to-month basis.
Note 5 - Lease commitment:
The Company conducts its operations from a leased facility. This
operating lease expires in May 2003. The lease requires the
Company to pay certain expenses in addition to the base rent.
Future minimum rental payments required under the lease
subsequent to December 31, 2001 are $52,275 in 2002 and $13,069
in 2003. Rent expense was $53,970 in 2002.
Note 6 - Restatement of financial statements:
The accompanying financial statements as of and for the year
ended December 31, 2001 have been restated from those originally
issued by the Company to reflect adjustments for the
overstatement of sales and certain assets and the understatement
of accrued expenses. The impact of these adjustments on the
Company's results of operations for 2001 as originally reported
is summarized below:
2001
-------------------------------
As Reported As Restated
----------- -----------
Net sales $1,423,955 $1,410,526
Cost of goods sold 946,293 967,731
Operating expenses 694,176 719,559
Interest expense 34,032 36,770
Net loss (253,908) (316,896)
F-8
TAGS GOLF INC.
NOTES TO FINANCIAL STATEMENTS
Note 6 - Restatement of financial statements (concluded):
The impact of these adjustments on the Company's accumulated
deficit as originally reported is summarized below:
December 31, 2001
-------------------------------
As Reported As Restated
----------- -----------
Balance:
December 31, 2001 $(466,274) $(560,467)
========= =========
December 31, 2000 $(212,366) $(243,471)
========= =========
Note 7 - Subsequent events:
On July 26, 2002, the stockholders of the Company and Juniper
Group, Inc. ("JGI") executed the Stock Exchange Agreement and
Plan of Reorganization pursuant to which Juniper Sports, Inc., a
wholly-owned subsidiary of JGI, will acquire from 80% to 100% of
the common stock of the Company. In addition, JGI agreed to
provide the Company with funding totaling $500,000 in three
installments during the period beginning August 2, 2002 and
ending October 30, 2002. As of October 2, 2002, the Company had
received advances totaling $220,000.
* * *
F-9
TAGS GOLF INC.
CONDENSED BALANCE SHEET
JUNE 30, 2002
(Unaudited)
ASSETS
Current assets:
Accounts receivable, net of allowance for doubtful
accounts of $37,600 $332,864
Inventories 161,363
Receivable from:
Affiliate 98,029
Officer 67,564
Other current assets 56,617
--------
Total current assets 716,437
Furniture, fixtures and equipment, net 30,248
Security deposits 9,550
--------
Total $756,235
========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Notes payable to bank $471,313
Cash overdraft 13,116
Accounts payable and accrued expenses 234,800
--------
Total current liabilities 719,229
Loans payable to stockholders 192,519
--------
Total liabilities 911,748
--------
Commitment
Stockholders' deficiency:
Common stock, $1 par value; 2,500 shares authorized,
issued and outstanding 2,500
Additional paid-in capital 684,750
Accumulated deficit (840,513)
Less stock subscription receivable for 2,250 shares (2,250)
--------
Total stockholders' deficiency (155,513)
--------
Total $756,235
========
See Notes to Condensed Financial Statements.
F-10
TAGS GOLF INC.
CONDENSED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
SIX MONTHS ENDED JUNE 30, 2002
(Unaudited)
OPERATIONS
----------
Net sales $ 617,311
Cost of goods sold 453,379
----------
Gross profit 163,932
Operating expenses 426,210
----------
Loss from operations (262,278)
----------
Other expenses:
Interest expense (16,722)
Miscellaneous (1,146)
----------
Total (17,868)
----------
Net loss (280,146)
----------
ACCUMULATED DEFICIT
-------------------
Balance, beginning of period (560,367)
----------
Balance, end of period $(840,513)
----------
See Notes to Condensed Financial Statements.
F-11
TAGS GOLF INC.
CONDENSED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2002
(Unaudited)
Operating activities:
Net loss $(280,146)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 4,026
Bad debts 25,600
Changes in operating assets and liabilities:
Accounts receivable (38,284)
Inventories 140,365
Other current assets 31,834
Accounts payable and accrued expenses 98,160
---------
Net cash used in operating activities (18,445)
---------
Investing activities - advances to affiliate (1,295)
---------
Financing activities:
Proceeds from issuances of notes payable to bank 21,032
Cash overdraft 8,708
Advances from stockholders (10,000)
---------
Net cash provided by financing activities 19,740
---------
Net increase in cash -
Cash, beginning of period -
Cash, end of period $ -
---------
Supplemental disclosure of cash flow information:
Interest paid $ 19,515
---------
See Notes to Condensed Financial Statements.
F-12
TAGS GOLF INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of presentation:
In the opinion of management, the accompanying unaudited
condensed financial statements reflect all adjustments,
consisting of normal recurring accruals, necessary to present
fairly the financial position of Tags Golf Inc. (the "Company")
as of June 30, 2002, and its results of operations and cash
flows for the six months ended June 30, 2002. Pursuant to the
rules and regulations of the United States Securities and
Exchange Commission (the "SEC"), certain information and
disclosures normally included in financial statements prepared
in accordance with accounting principles generally accepted in
the United States of America have been condensed in or omitted
from these unaudited condensed financial statements unless
significant changes have taken place since the end of the most
recent fiscal year. Accordingly, these unaudited condensed
financial statements should be read in conjunction with the
audited financial statements as of and for the year ended
December 31, 2001 and the notes thereto (the "Audited Financial
Statements") and the other information also included in this
amendment to the Current Report on Form 8-K dated July 26, 2002
being file by Juniper Group, Inc.
As explained in Note 1 to the Audited Financial Statements, the
Company's operations have generated recurring losses since its
inception, and they generated substantial negative cash flows
during the year ended December 31, 2001 and the six months ended
June 30, 2002. As discussed in Note 4 to the Audited Financial
Statements, the Company was in default with respect to certain
covenants in the agreement for its bank line of credit.
Management believes that the Company will continue to incur
operating losses and negative cash flows from operating
activities through at least June 30, 2003 and that it will need
additional financing in order to continue to operate through at
least that date. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
Management plans to obtain such financing through additional
debt financing or through the sale of the Company to an investor
that will be able to provide the Company with the additional
debt or equity financing it will need to purchase additional
inventory, expand its marketing efforts, increase sales and meet
its obligations as they become due (see Note 7 to the Audited
Financial Statements). However, management cannot assure that it
will be able to consummate the sale of the Company or otherwise
obtain any or all of the additional financing the Company will
need. If the Company is unable to obtain the required financing,
it may have to curtail or terminate its operations and liquidate
its remaining assets and liabilities.
The accompanying unaudited condensed financial statements do not
include any adjustments related to the recoverability and
classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable
to continue its operations as a going concern.
F-13
TAGS GOLF INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 2 - Restatement of financial statements:
The accompanying unaudited condensed financial statements as of
and for the six months ended June 30, 2002 have been restated
from those originally issued by the Company to reflect
adjustments for the overstatement of certain assets and the
understatement of accrued expenses. The impact of these
adjustments on the Company's results of operations for the six
months ended June 30, 2002 as originally reported is summarized
below:
Six Months Ended
June 30, 2002
-------------------------------
As Reported As Restated
----------- -----------
Cost of goods sold $413,757 $453,379
Operating expenses 441,904 426,210
Interest expense 19,460 16,722
Net loss (258,956) (280,146)
The impact of these adjustments on the Company's accumulated
deficit as originally reported is summarized below:
June 30, 2002
-------------------------------
As Reported As Restated
----------- -----------
Balance:
June 30, 2002 $(725,230) $(840,513)
========= =========
December 31, 2001 $(466,274) $(560,367)
========= =========
* * *
F-14
Pro Forma Financial Information
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following pro forma combined financial statements were prepared to
illustrate the estimated effects of Juniper's acquisition of the Tags Golf, Inc.
("Tags") accounted for under the purchase method of accounting. The unaudited
pro forma combined balance sheet as of June 30, 2002, assumes the Juniper, Tags
transaction occurred on June 30, 2002.The unaudited pro forma combined statement
of income for the year ended December 31, 2001 combines Juniper's historical
results for the year ended December 31, 2001 and Tags's historical results
prepared in accordance with accounting principles generally accepted in the
United States for the year ended December 31, 2001, giving the effect to the
transactions as if they occurred as of January 1, 2001, the first day of
Juniper's most recently completed year-end. The unaudited pro forma combined
statement of income for the six months ended June 30, 2002 combines Juniper's
historical results for the six months ended June 30,2002 and Tags's historical
results prepared in accordance with accounting principles, generally accepted in
the United States for the six months ended June 30, 2002, also giving effect to
the transactions as if they occurred as of January 1, 2002. The most recently
completed year-end of Tags was December 31, 2001.
For purposes of developing the unaudited pro forma combined balance sheet as of
June 30, 2002, Tags assets and liabilities have been recorded at their estimated
fair values and the excess purchase price has been assigned to goodwill.
The pro forma adjustments are based upon available information and certain
assumptions that Juniper believes are reasonable under the circumstances. The
unaudited pro forma combined financial statements do not purport to be
indicative of the operating results or financial position that would have been
achieved had the acquisition taken place on the date indicated or the results
that may be obtained in the future.
The pro forma combined statements are based on, and should be read in
conjunction with, the audited financial statements and the unaudited interim
financial statements, including the notes thereto, of Juniper as previously
filed and the Tags audited financial statements, included herein. The pro forma
adjustments related to the purchase price allocation and financing of the Tags
acquisition are preliminary and based on information obtained to date that is
subject to revision as additional information becomes available. Any such
revisions could have a significant impact on total assets, total liabilities and
shareholders' equity and net income (loss).
Recapitalization
On August 14, 2002, the shareholders approved a reverse stock split of the
Company's common shares at the rate of one share for each ten outstanding
shares. Unless stated otherwise, all amounts have been restated after giving
effect to this one for ten reverse split.
F-15
JUNIPER GROUP, INC./
TAGS GOLF, INC.
UNAUDITED PRO FORMA COMBINED
BALANCE SHEET AS OF JUNE 30, 2002
Pro Forma
Historical Historical Pro Forma Juniper Group/
Juniper Group Tags Golf Adjustments Tags Golf, Inc.
------------- ------------ ----------- ---------------
ASSETS
Current Assets:
Cash .................................... $ 49,761 $ 49,761
Accounts receivable - trade ............. 123,704 $ 332,864 456,568
Inventory................................ - 161,363 161,363
-
Prepaid expenses and other current assets . 228,499 222,210 450,709
---------- ----------- -------------
Total current assets .................. 401,964 716,437 1,118,401
Film licenses ........................... 2,389,248 - 2,389,248
Property and equipment net............... 333,920 30,248 364,168
Investment in NetDIVE, Inc. ............. 200,000 - 200,000
Goodwill ................................ 209,106 - $ 363,263 572,369
Other assets ............................ 10,174 9,550 - 19,724
----------- ---------- --------- -------------
$ 3,544,412 $ 756,235 $ 363,263 $ 4,663,910
========== ========= ========== =============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Accounts payable and accrued expenses ... $ 924,242 $ 247,916 1,172,158
Notes payable - current ................. 113,599 471,313 584,912
Due to officer .......................... 86,140 - 86,140
Due to shareholders ..................... 7,000 192,519 199,519
----------- ---------- -------------
Total current liabilities ............. 1,130,981 911,748 2,042,729
Notes payable - long term ............... 21,643 21,643
Due to producers - long term ............ 911 - 911
----------- ---------- -------------
Total liabilities ..................... 1,153,535 911,748 2,065,283
Shareholder's Equity
12% Non-voting convertible redeemable preferred
stock:................................... 2,686 - 2,686
Common Stock:............................. 1,198 2,500 $ (2,360) 1,338
Capital contributions in excess of par:
Attributed to preferred stock ........... 23,943 23,943
Attributed to common stock .............. 16,031,614 684,750 (474,890) 16,241,474
Retained earnings (deficit).............. (13,566,606) (840,513) 840,513 (13,566,606)
Preferred stock dividend payable......... 3,042 - 3,042
----------- ------------ ---------- -------------
2,495,877 (153,263) 363,263 2,705,877
Less: Subscription receivable ............. (105,000) (2,250) - (107,250)
----------- ----------- ---------- ------------
Total shareholders' equity ................ 2,390,877 (155,513) 363,263 2,598,627
----------- ----------- ---------- ------------
$ 3,544,412 $ 756,235 $ 363,263 4,663,910
=========== =========== ========== ============
See Notes to Unaudited Pro Forma Combined Financial Statements
F-16
JUNIPER GROUP, INC./
TAGS GOLF, INC.
UNAUDITED PRO FORMA COMBINED
STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2001
Pro Forma
Historical Historical Pro Forma Juniper Group
Juniper Group Tags Golf Adjustments Tags Golf, Inc.
------------- ---------- ------------- ---------------
Revenues:
Entertainment and Technology Services........ $ 388,542 $ 1,410,526 $ 1,799,068
Healthcare .................................. 44,232 - 44,232
----------- ----------- ----------
432,774 1,410,526 1,843,300
----------- -----------
Operating Costs
Entertainment and Technology Services........ 290,906 967,731 1,258,637
Healthcare .................................. 15,474 - 15,474
Selling, general and administrative expenses. 1,993,296 722,921 2,716,217
Revaluation of film licenses ................ 151,199 - 151,199
Revaluation of investment in NCI ............ 133,213 - 133,213
Settlement expenses ......................... 72,975 - 72,975
Preferred stock dividend..................... 68,518 - 68,518
Interest Expense............................. - 36,770 36,770
----------- ----------- -----------
2,725,581 1,727,422 4,453,003
----------- ----------- -----------
Net income (loss) ........................... $(2,292,807) $ (316,896) $(2,609,703)
=========== =========== ===========
Weighted average number of shares outstanding 337,250 517,250
=========== ===========
Per share data:
Basic and diluted net income (loss).......... $ (6.80) $ (5.05)
=========== ===========
See Notes to Unaudited Pro Forma Combined Financial Statements
F-17
JUNIPER GROUP, INC./
TAGS GOLF, INC.
UNAUDITED PRO FORMA COMBINED
STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2002
Pro Forma
Historical Historical Pro Forma Juniper Group
Juniper Group Tags Golf Adjustments Tags Golf, Inc.
------------- ----------- ------------- ---------------
Revenues:
Entertainment and Technology Services........ $ 358,741 $ 617,311 $ 976,052
Healthcare .................................. - - -
----------- ----------- ------------
358,741 617,311 976,052
----------- ----------- ------------
Operating Costs
Entertainment and Technology Services........ 293,002 453,379 746,381
Healthcare .................................. - - -
Selling, general and administrative expenses. 1,066,772 444,078 1,510,850
Revaluation of film licenses ................ 56,939 - 56,939
Revaluation of investment in NCI ............ - - -
Settlement expenses ......................... - - -
Preferred stock dividend..................... 3,042 - 3,042
----------- ----------- ------------
1,419,755 897,457 2,317,212
----------- ----------- ------------
Net income (loss) ........................... $(1,061,014) $ (280,146) $ (1,341,160)
=========== =========== ============
Weighted average number of shares outstanding 861,737 1,041,737
=========== ============
Per share data:
Basic and diluted net income (loss).......... $ (1.23) $ (1.29)
=========== ============
See Notes to Unaudited Pro Forma Combined Financial Statements
F-18
JUNIPER GROUP, INC./
TAGS GOLF, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The initial purchase price of Junipers' interest in Tags consisted of 140,000
shares of Juniper's common stock valued at $270,000 for an 80% interest in Tags.
The acquisition agreement also requires Juniper to pay a total of $200,000 in
two equal installments, or, at the option of Juniper to deliver 70,000 shares of
Juniper's common stock to acquire the remaining 20% of Tags. Each installment,
if made, will increase Juniper's ownership in Tags by 10%. Through October 9,
2002, Juniper has issued only 140,000 shares of its common stock for its initial
80% interest. Accordingly, the Unaudited Pro Forma Combined Financial Statements
reflect only this initial issuance of shares. The excess of cost over fair value
of the net assets acquired is recorded as goodwill which amounted to
approximately $363,000.
F-19