UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
April 10, 2002 (March 26, 2002)
Date of Report (Date of earliest reported):
MICRONETICS WIRELESS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-17966 22-2063614
(State or other jurisdiction (Commission (I.R.S. Employee
incorporation or organization) File Number) Identification
No.)
26 Hampshire Drive, Hudson, New Hampshire 03051
(Address of principal executive offices ) (Zip Code)
Registrant's telephone number, including area code: (603) 883-2900
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On March 26, 2002 (the "Closing Date"), Micronetics Wireless,
Inc. ("Micronetics") acquired Enon Microwave, Inc. ("Enon") through
a statutory merger of Enon with and into Vectronics Microwave
Corp., a wholly-owned subsidiary of Micronetics (the "Merger"),
with Vectronics changing its name to Enon Microwave, Inc. (the
Surviving Corporation"). As a result of the Merger, Enon became
a wholly-owned direct subsidiary of Micronetics and the holders of
shares of Enon Common Stock outstanding immediately prior to the
Merger (all of which were cancelled upon consummation of the
Merger) became entitled to receive (a) .1709 shares of restricted
Micronetics Common Stock, and (b) $.8659 for each share of Enon
Common Stock held.
At the closing of the Merger (the "Closing"), the Surviving
Corporation entered into agreements with two individuals (who were
directors and executive officers of Enon) that provide for them to
provide certain services for the Surviving Corporation from the
Closing Date until March 26, 2003 and March 26, 2004, respectively.
The agreements with these individuals include covenants prohibiting
them from engaging in certain activities that may be competitive
with the Surviving Corporation's business. In these agreements,
the Surviving Corporation has agreed to pay to these individuals
compensation in the amount of $75,000 for one year and $110,000 per
year for two years, respectively.
The amount of the Merger consideration and the compensation
payable to the individuals engaged by the Surviving Corporation
were determined through arms' length negotiations between
Micronetics, on the one hand, and Enon and the individuals,
respectively, on the other hand.
The entire cost of the Merger, including without limitation
the Merger consideration and the fees and expenses incurred by the
parties to the Merger, was funded out of Micronetics' cash reserves
and a term loan from Banknorth, N.A.
Enon designs and manufactures high power, solid state
microwave switches, attenuators, limiters, phase shifters, filters
and control devices and assemblies. Enon's power capabilities range
from 10 watts to 10,000 watts, with average power capabilities as
high as 1,600 watts. Enon's customer base includes Lockheed Martin,
Northrop Grumman and Raytheon.
The Merger was recorded in accordance with Statements of
Financial Accounting Standards No. 141, Business Combinations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
1. Enon's financial statements as of December 31, 2001
and for the two years then ended.
(b) Pro Forma Financial Information.
(c) Exhibits.
Number Description
2.1 Agreement of Merger dated as of February 14, 2002,
among Micronetics Wireless, Inc., Vectronics Microwave
Corp., and Enon Microwave, Inc. (the Agreement of
Merger").*
2.2 Amendment dated as of February 21, 2002 to Agreement
of Merger.*
2.3 Second Amendment dated as of March 26, 2002 to
Agreement of Merger.*
2.4 Voting Agreement dated January 4, 2002 among
Micronetics Wireless, Inc. and certain stockholders of
Enon Microwave, Inc.*
23.1 Consent of Independent Public Auditor.
____________________
* Previously filed with original Form 8-K dated April 10,
2002.
INDEX TO FINANCIAL STATEMENTS AND
PRO FORMA FINANCIAL INFORMATION
Financial Statements of Enon Microwave, Inc. (Audited)
Report of Independent
Auditor...................................................... F-1
Balance Sheets as of December 31, 2001 and 2000.............. F-2
Statement of Operations for the years
ended December 31, 2001 and 2000............................. F-4
Statement of Changes in Shareholders' Equity for
the years ended December 31, 2001 and 2000................... F-5
Statement of Cash Flows for the
years ended December 31, 2001 and 2000....................... F-6
Notes to Financial Statements................................ F-7
Pro Forma Consolidated Condensed Financial Statements (Unaudited)
Introduction................................................. F-10
Unaudited Pro Forma Consolidated Condensed Balance
Sheet as of December 31, 2001................................ F-11
Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the nine months ended December 31,
2001......................................................... F-12
Unaudited Pro Forma Consolidated Condensed Statement of
Operations for the year ended March 31, 2001..................F-13
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements......................................... F-14
Signatures................................................... F-16
Exhibit Index................................................ F-17
Paul A. Taylor
Certified Public Accountant
62 Pleasant Street
Marblehead, MA 01945
Independent Auditors Report
To the Board of Directors:
ENON MICROWAVE, INC.
Topsfield, Massachusetts
I have audited the accompanying balance sheets of Enon
Microwave, Inc. as of December 31, 2001 and 2000 and the related
statements of income (loss) and retained earnings (deficit) and
cash flows for years then ended. These financial statements are
the responsibility of company management. My responsibility is to
express an opinion on these financial statements based on my
audits.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I 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. I believe that my audits provide
a reasonable basis for my opinion.
In my opinion, the financial statements referred to above
present fairly, in all materials respects, the financial position
of Enon Microwave, Inc. as of December 31, 2001 and 2000, and the
results of its operations, changes in its shareholders' equity and
its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Paul Taylor
January 23, 2002
ENON MICROWAVE, INC.
Balance Sheet
December 31, 2001 and 2000
2001 2000
--------- ----------
Current Assets:
Cash $ 57,376 $ 161,963
Accounts receivable 327,721 149,185
Inventory 750,851 794,940
Prepaid expenses 11,764 16,709
--------- ---------
Total current assets 1,147,712 1,122,797
--------- ---------
Plant and equipment 1,591,119 1,577,064
Less accumulated depreciation 1,369,548 1,284,343
--------- ---------
Total 221,571 292,721
--------- ---------
Total Assets $1,369,283 $1,415,518
--------- ---------
The accompanying notes are an integral part of these financial
statements.
ENON MICROWAVE, INC.
Balance Sheet
December 31, 2001 and 2000
Liabilities and Shareholders' Equity
2001 2000
---------- ----------
Current Liabilities:
Current portion of debt $ 60,000 $ 229,092
Accounts payable 46,856 149,088
Other accrued liabilities 52,439 57,430
Customer deposits - 6,604
Accrued income taxes 21,644 966
Shareholder loans - 55,000
------- --------
Total 180,939 498,180
------- --------
Long Term Debt:
Notes and leases payable 130,000 211,594
Loans payable officers 161,273 161,273
Accrued interest on officers'
loans payable 42,264 154,822
------- --------
333,537 527,689
------- --------
Shareholders' Equity:
Common stock - $.15 par value
2,000,000 shares authorized,
1,067,813 shares issued and
outstanding in 2001 and 2000 160,172 160,172
Additional paid-in capital 457,576 457,576
Retained earnings 237,059 (228,099)
------- --------
854,807 389,649
--------- ---------
Total Liabilities &
Shareholders' Equity $1,369,283 $1,415,518
========= =========
The accompanying notes are an integral part of these financial
statements.
ENON MICROWAVE, INC.
Statement of Operations
for the year ended December 31, 2001 and 2000
2001 2000
----------- ----------
Sales $2,779,138 $2,452,444
Cost of Sales 1,508,058 1,891,683
--------- ---------
Gross Profit 1,271,080 560,761
--------- ---------
Other Expenses:
General and administrative 627,191 582,565
Interest expense 42,400 68,606
Research and development 112,754 104,949
--------- ---------
Total 782,345 756,120
--------- ---------
Income (Loss) before taxes 488,735 (195,359)
State Income Taxes 17,808 2,740
Federal Income Taxes 5,769 -
--------- ---------
Total Income Taxes 23,577 2,740
--------- ---------
Net Income 465,158 (198,099)
Retained Earnings beginning of period (228,099) (30,000)
--------- ---------
Retained earnings (deficit) end of period $ 237,059 $ (228,099)
========= =========
The accompanying notes are an integral part of these financial
statements.
ENON MICROWAVE, INC.
Statement of Changes in Shareholders' Equity
for the Year Ended December 31, 2001 and 2000
Common Stock Additional
Par Paid-In Retained
Shares Value Capital Earnings Total
------ ----- ---------- -------- -----
Balance -
December 31, 2000 1,067,813 $160,172 $457,516 $(228,099) $389,649
--------- ------- ------- -------- -------
Net income - - - 456,158 456,158
--------- ------- ------- -------- -------
Balance -
December 31, 2001 1,067,813 $160,172 $457,516 $ 237,059 $854,807
--------- ------- ------- -------- -------
The accompanying notes are an integral part of these financial statements.
ENON MICROWAVE, INC.
Statement of Cash Flows
for the Year Ended December 31, 2001 and 2000
2001 2000
----------- -----------
Cash Flow from Operating Activities:
Net income $ 465,158 $ (198,099)
Adjustments to reconcile income
to cash provides (applies to)
operating activities
Depreciation 85,205 105,065
(Increase) decrease in
Accounts receivable (178,536) 259,027
Inventories 44,089 287,132
Prepaid expenses 4,945 (5,429)
Tax refund receivable - 5,396
Increase (Decrease) in:
Accounts payable (102,232) (277,190)
Income taxes 20,678 966
Other accrued liabilities (4,991) 18,685
Accrued interest - long term (112,558) 12,902
Customer deposits (6,604) 6,604
-------- --------
Cash provided (applied to operating
activities) 215,154 215,059
-------- --------
Cash flow from investing activities
addition to equipment (14,055) (28,389)
-------- --------
Cash flow from financing activities:
Shareholder loans (55,000) -
Proceeds from borrowings - 515,122
Repayment of debt (250,686) (543,340)
-------- --------
Cash flow from financing activities (305,686) (28,218)
-------- --------
Cash flow (104,587) 158,452
Cash - beginning of year 161,963 3,511
-------- --------
Cash - end of year $ 57,376 $ 161,963
======== =========
The accompanying notes are an integral part of these financial
statements.
ENON MICROWAVE, INC.
Notes to Financial Statements
for the Year Ended December 31, 2001 and 2000
Significant Accounting Policies
1. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Actual
results could differ from those estimates.
Certain prior year balances have been reclassified to conform
to the current year presentation.
2. Accounts Receivables - No provision is made for doubtful
accounts. All receivables are deemed collectable by management
as of the Report date.
3. Parts and Finished Goods - Parts and finished goods are valued
at lower of cost or market determined by the average cost.
The value is $670,614 in 2001 and $612,027 in 2000.
4. Work in Process Inventory - Work in process is recorded at
lower of cost or market. Cost is determined as the cost of
materials, direct labor and an allocation of overhead expenses
based upon the percentage of total direct labor hours per job
to the total direct labor hours. Work in process inventory is
$80,237 in 2001 and $182,913 in 2000.
5. Plant and Equipment - Plant and Equipment is recorded at cost
and depreciated over their estimated useful lives using the
straight line method.
December 31, December 31,
2001 2000
------------ ------------
Shop equipment $ 142,433 $ 132,742
Test equipment 883,046 881,766
Office F&F 29,237 29,237
Computer equipment 71,591 68,507
Leasehold improvements 111,170 111,170
Leased equipment 353,642 353,642
--------- ---------
Total 1,591,119 1,577,064
Less accumulated depr. 1,369,548 1,284,343
--------- ---------
Total $ 221,571 $ 292,721
--------- ---------
ENON MICROWAVE, INC.
Notes to Financial Statements
for the Year Ended December 31, 2001 and 2000 (Continued)
Depreciation expense totals $85,205 in 2001 and $105,065 in 2000.
Estimated useful lives are:
Shop, test, office and computer equipment 5-7 years
Leasehold improvements 5-10 years
Leased equipment 5-7 years
6. Research and Development Cost - Research and development costs
are costs incurred in engineering and new product development,
over and above amounts funded by contract programs. These
costs are for initial design and prototypes. The Company has
been awarded Federal Grants to develop new products. The
receipts under these grants are offset against the expenses
incurred in such development.
7. Income Taxes - Income taxes are accounted for by the asset and
liability approach in accordance with statement of financial
accounting standards No. 109. Deferred taxes would represent
the expected tax consequences when the reported amounts of
assets and liabilities are recovered or paid. They arise from
temporary differences between taxable and book income and the
future tax impact of unused credits.
The Company has a research and development tax credit available
of $47,517 available through 2010 that would calculate to a
deferred tax asset of approximately $14,255. However, the
valuation allowance would be the same amount leaving a deferred
tax asset of $0.
Current federal tax liability for 2001 is $5,769. There was no
tax liability for 2000.
8. Note payable to Bank - At December 31, 2001, the Company had
available a line of credit which provides for borrowings up to
$250,000 in 2001 and $150,000 in 2000. Borrowings under the
agreement are secured by certain assets of the Company.
Outstanding amounts under the line of credit bear interest at
1.50 percent above the bank's prime rate. The amount of the
line of credit outstanding at December 31, 2001 and 2000 are $0
and $150,000, respectively.
ENON MICROWAVE, INC.
Notes to Financial Statements
for the Year Ended December 31, 2001 and 2000 (Continued)
The Company also has a term loan that was established in 2000
for $300,000. The loan is payable over 60 months at $5,000 per
month plus interest at the base rate currently 4.25%. Both of
these credit facilities are secured by certain assets of the
Company. Officer/shareholders, who have guaranteed this loan,
have granted a second mortgage on the property rented by the
Company to secure their guaranty.
In conjunction with a debt refinancing, property rented by the
Company which is owned by a related party was remortgaged
during 2000. The mortgage has a term of 60 months. Repayment
is based on a 240 month principal amortization together with
interest at 9.7%. The proceeds from this new mortgage were
used to pay the note payable to MBDC (see Note 9) in 2000.
9. Note Payable to MBDC - Due in monthly installments of $2,292
per month plus interest at prime plus 2-3/4%, through April 1,
2004, secured by equipment. The note was repaid in 2000.
$25,000 of this loan was repaid by the Company. The remaining
debt of $96,436 was repaid by a related party owning the
premises rented by the Company.
10. Commitments - The Company rents office and manufacturing
facilities under non-cancelable operating lease agreements from
one related party and one unrelated party. Future minimum
lease payments on operating leases are as follows:
2002 120,700
2003 73,000
Rent expense was $113,500 and $103,207 in fiscal years 2001 and
2000 respectively.
11. 401(k) Savings and Retirement Plan - The Company has a 401(k)
savings and retirement plan for all employees. Under
provisions of the plan, employees may voluntarily contribute up
to 15% of their compensation up to the statutory limit. In
addition, the Company can make a matching contribution at its
discretion. There was no Company match in 2001 and 2000.
12. Interest on Officer Loans - Subsequent to the issuance of
financial statements dated February 21, 2000, it was discovered
that officer loans were subject to interest provisions since
1988. Interest expense and the accrual of accrued interest
liability had not been provided for in any financial statements
ENON MICROWAVE, INC.
Notes to Financial Statements
for the Year Ended December 31, 2001 and 2000 (Continued)
through December 31, 1999 due to covenants in prior loan
agreements. The effect of this is to reduce income by $12,902
in 2000.
There is no income tax effect on the correction of this
interest accrual. Federal Tax Law requires that interest
expense be paid by the entity to shareholder/officers in order
for it to be deductible by the corporation.
13. Revenue Recognition - Revenues are recognized when there is
persuasive evidence of an arrangement, delivery has occurred,
the price is fixed and determinable, and collectability is
reasonable assured. This generally occurs when products are
shipped and the risk of loss has passed. Revenue related to
products shipped subject to customers' evaluation, if any, is
recognized upon final acceptance within a reasonable amount of
time.
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated condensed
financial statements as of March 31, 2001 and for the nine months
ended December 31, 2001 give effect to the acquisition of Enon
Microwave, Inc. ( Enon"). The pro forma consolidated condensed
balance sheet presents Micronetics Wireless, Inc.'s ( Micronetics")
financial position as if the acquisition of Enon had occurred on
December 31, 2001. The pro forma consolidated condensed statements
of operations present Micronetics results as if the acquisition of
Enon had occurred on April 1, 2000. Micronetics fiscal year end is
March 31 and Enon's fiscal year end is December 31. Micronetics
third quarter of its current fiscal year ended on December 31, 2001.
The pro forma consolidated condensed balance sheet as of December
31, 2001 is based upon Micronetics historical balance sheet as of
December 31, 2001, which has been adjusted for the effects of the
Enon acquisition. The pro forma consolidated condensed statement of
operations for the nine months ended December 31, 2001 is based upon
Micronetics historical results and the pro forma statement of
operations for Enon for the nine months ended September 30, 2001.
The pro forma consolidated statement of operations for the year
ended March 31, 2001 is based on Micronetics' historical statement
of operations and the pro forma statement of operations of Enon for
the year ended December 31, 2001, as adjusted .
As set forth below, since the date of Enon's most recent fiscal
year is more than 93 days after the date of Micronetics' most
recent fiscal year end in accordance with applicable rules, we
have subtracted the information in Enon's most recent fiscal
year that occurred from April 1, 2001 through December 31, 2001
and added the information from Enon's prior fiscal year that
occurred from April 1, 2000 through December 31, 2000. As a
result of this adjustment, we have included financial information
for the period January 1, 2001 through March 31, 2001 from Enon
in both the pro forma Consolidated Statement of Operations for
the year ended March 31, 2001 and proforma consolidated statement
of operations for the nine months ended December 31, 2001.
The pro forma consolidated condensed financial statements
include, in management's opinion, all material adjustments necessary
to reflect the acquisition of Enon. The pro forma consolidated
condensed financial statements do not represent the Company's actual
results of operations, including the acquisition, nor do they
purport to predict or indicate Micronetics' financial position or
results of operations at any future date or for any future period.
MICRONETICS WIRELESS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
Assets
Micro(a) Enon(b) Pro(c) Micronetics
December 31, December 31, Forma Wireless, Inc.
2001 2001 Adjustments Pro Forma
------------ ----------- ----------- -------------
Cash $2,141,743 $ 57,376 $ (924,623) $ 1,274,496
Accounts receivable 1,697,337 327,721 (16,386) 2,008,672
Inventories 2,374,928 750,851 (112,628) 3,013,151
Other current assets 80,154 11,764 - 91,918
Property and equipment
- net 1,947,455 221,571 - 2,169,026
Deferred tax asset - - 47,517 47,517
Intangibles and other
assets 459,136 - 1,048,607 1,507,743
--------- --------- --------- ----------
Total assets $8,700,753 $1,369,283 $ 42,487 $10,112,523
========= ========= ========= ==========
Liabilities and Shareholders' Equity
Total current liabilities $ 732,422 $ 180,939 $ 222,081 $ 1,135,442
Long-term debt 739,857 333,537 - 1,073,388
Shareholders' equity:
Common stock 41,423 160,172 (153,420) 48,175
Additional paid -
in capital 3,774,859 457,576 210,885 4,443,320
Retained earnings 3,515,461 237,059 (237,059) 3,515,461
Treasury stock (103,263) - - (103,263)
--------- ------- -------- ---------
Total liabilities and
shareholders' equity $8,700,753 $1,369,283 $ 42,487 $10,112,523
========= ========= ========= ==========
The accompanying notes to the pro forma consolidated condensed financial
statements are an integral part of these pro forma financial statements.
MICRONETICS WIRELESS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED DECEMBER 31, 2001
(UNAUDITED)
Micronetics
Micronetics Enon Pro Forma Wireless, Inc.
Wireless, Microwave, Adjustments & Subsidiaries
Inc. (d) Inc. (e) (f) Pro Forma
----------- ---------- ----------- --------------
Revenues $5,644,680 $2,132,134 $ - $7,776,814
Cost of revenues 3,155,186 1,156,971 - 4,312,157
--------- --------- ---------- ---------
Gross profit 2,489,494 975,163 - 3,464,657
Selling, general and
administrative expense 1,490,383 470,393 19,661 1,980,437
Research and development 295,951 84,565 - 380,516
--------- -------- -------- ---------
Operating income 703,160 420,205 19,661 1,103,704
Other income (expense) 26,479 (31,800) - (5,321)
--------- -------- -------- ---------
Income before provision
for taxes $ 729,639 $ 388,405 $ (19,661) $1,098,383
Provision for income
taxes 117,931 18,400 84,000 220,331
--------- -------- -------- ---------
Net income $ 611,708 $ 370,005 $ (103,661) $ 878,052
========= ========= ========= =========
Net income per share .14 .35 - .20
========= ========= ======== =========
Weighted average number
of shares outstanding 4,222,909 1,067,813 $ - 4,405,399
========= ========= ========= =========
The accompanying notes to the pro forma consolidated condensed financial
statements are an integral part of these pro forma financial statements.
MICRONETICS WIRELESS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2001
(UNAUDITED)
Micronetics
Micronetics Enon Pro Forma Wireless, Inc.
Wireless, Microwave, Adjustments & Subsidiaries
Inc. (d) Inc. (e) (f) Pro Forma
----------- --------- ----------- -------------
Net sales $ 7,793,306 $3,056,973 $ - $10,850,279
Cost of sales 5,315,344 2,227,717 - 7,543,061
---------- --------- --------- ----------
Gross Profit 2,477,962 829,256 - 3,307,218
Selling, general and
administrative expense 1,196,874 711,631 26,215 1,934,720
Research and development 270,484 112,871 - 383,355
--------- -------- -------- ----------
Income (loss) from
operations 1,010,604 4,754 (26,215) 989,143
Other income (expense) 77,428 (80,943) - (3,515)
--------- -------- -------- ----------
Income before provision
for income taxes $ 1,088,032 $ (76,189) $ (26,215) $ 985,628
Provision for income
taxes 214,800 7,132 (9,000) 212,932
--------- -------- -------- ----------
Net Income (loss) $ 873,232 $ (83,321) $ (17,215) $ 772,696
========== ========= ========= ==========
Basic and diluted earnings
(loss) per common share:
Net income - Basic $ .22 $ (.08) $ - $ .18
Net income - Diluted $ .21 $ (.08) $ - $ .18
Weighted average shares
outstanding:
Basic 4,025,701 1,067,817 - 4,208,191
Diluted 4,216,739 1,067,817 - 4,399,229
The accompanying notes to the pro forma consolidated condensed financial
statements are an integral part of these pro forma financial statements.
MICRONETICS WIRELESS, INC. AND SUBSIDIARIES
NOTES TO THE PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(UNAUDITED)
(a) Reflects the historical financial position of Micronetics at
December 31, 2001.
(b) Reflects the historical financial position of Enon at
December 31, 2001.
(c) Pro Forma adjustments to record the acquisition as of
December 31, 2001 reflect:
- An increase in equity of approximately $675,000
relating to the issuance of 182,490 shares of
Micronetics common stock. The Micronetics common
stock to be issued was valued based on a price per
share of $3.70, which was the market price on the date
of merger.
- An increase in accrued expenses of approximately
$222,000 relating to the incurence of transaction
costs by Micronetics and Enon and a reduction of
income taxes paid by Enon.
- An increase in deferred tax assets to reflect research
and development credit carryforwards of Enon.
- A decrease in equity of approximately $850,000
relating to the elimination of Enon's historical
shareholders' equity.
- The preliminary allocation of the excess of the
$1,843,561 purchase price over the fair value of net
assets acquired to:
Goodwill in the amount of $1,048,607;
Write-down of accounts receivable in the amount
of $16,386; and
Write-down of inventories in the amount of
$112,628.
(d) Reflects the historical operating results of Micronetics for
the nine months ended December 31, 2001, and the year ended
March 31, 2001. Outstanding share and per share information
has been adjusted to reflect the issuance of additional
shares of Micronetics in the merger.
MICRONETICS WIRELESS, INC. AND SUBSIDIARIES
NOTES TO THE PRO FORMA CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
(UNAUDITED) (Continued)
(e) Reflects the historical operating results of Enon for the
nine months ended September 30, 2001 and the year ended
March 31, 2001 (by inclusion of financial information from
Enon's prior fiscal year for the period April 1, 2000
through December 31, 2000 and exclusion of financial
information from its current fiscal year for the period
April 1, 2001 through December 31, 2001).
(f) Pro Forma adjustments to record the merger for the nine
months ended December 31, 2001 and the year ended March 31,
2001 reflect:
- Increase of $19,661 and $26,215, respectively, in
amortization of goodwill relating to the amortization
of the excess of the purchase price to acquire Enon
over the fair value of its net assets acquired which
has been allocated to goodwill and is amortized on a
straight-line basis over forty years.
- Increase of $84,000 and decrease of $9,000,
respectively, in income taxes provided at a 34% tax
rate.
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 hereunto duly authorized.
Dated: November 26, 2002 MICRONETICS WIRELESS, INC.
By:/s/Richard S. Kalin
Name: Richard S. Kalin,
Title: President (Principal
executive and
financial officer)
EXHIBIT INDEX
Exhibit
Number Description
23.1 Consent of Independent Public Auditor.
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