SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 25, 2004
(Date of earliest event reported)
NESCO INDUSTRIES, INC.
----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 000-28307 13-3709558
- ------------------ --------------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
Incorporation)
305 Madison Avenue, New York, NY 10165 10165
- -------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 808-0607
- ----------------------------------------------------------------------
(Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-(4c))
1
Item 2.01 - Completion of Acquisition or Disposition of Assets
On June 9, 2004, Nesco Industries, Inc. ("Nesco" or the "Company") filed a
Form 8-K under Item 2 to report that it had completed the acquisition of
Hydrogel Design Systems, Inc. ("HDS"), a manufacturer of hydrogels used for
wound care, medical diagnostics, transdermal drug delivery and cosmetics. In
response to parts (a) and (b) of Item 7 of such Form 8-K, Nesco stated that it
would file the required financial information by amendment, as permitted by
Instructions (a)(4) and (b)(2) to Item 7 to Form 8-K. On August 9, 2004,
Amendment No. 1 form 8-K/A was filed to provide the required financial
information. This form 8-K/A, Amendment No. 2, is being filed to provide
additional information about HDS and to revise the required proforma financial
information.
Item 9.01 - Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired
The required financial statements of HDS for the years ended April 30,
2004 and 2003 were filed as Exhibit 99.2 on 8-K/A (Amendment No. 1) on
August 9, 2004 and are incorporated by reference herein.
(b) Proforma Financial Information
The following unaudited proforma combined condensed financial statements of
the Company consist of the Company's consolidated statements of operations for
the year ended April 30, 2004 and consolidated balance sheet as of April 30,
2004, to give effect to the acquisition of HDS by the Company (collectively, the
"Unaudited Proforma Combined Condensed Financial Statements"). The unaudited
proforma combined condensed statements of operations gives effect to the
acquisition as if it had occurred on May 1, 2003 and the unaudited proforma
combined condensed balance sheet gives effect to the acquisition as if it had
occurred on April 30, 2004. The unaudited Proforma Combined Condensed Financial
Statements are provided for informational purposes only and do not purport to
reflect the results of operations that would have existed or occurred had such
transaction taken place on the date indicated nor do they purport to reflect the
financial condition or results of operations that will exist or occur in the
future. The proforma adjustments are based upon available information and
certain assumptions that management believes are reasonable. The Unaudited
Proforma Combined Condensed Financial Statements should be read in conjunction
with the Company's historical consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for the year
ended April 30, 2004 filed on September 16, 2004, and in conjunction with the
HDS audited financial statements filed as Exhibit 99.2 with Form 8- K/A
(Amendment No.1) on August 9, 2004.
2
UNAUDITED PROFORMA COMBINED CONDENSED STATEMENTS OF
OPERATIONS FOR THE FISCAL YEAR ENDED APRIL 30, 2004
(*)
NESCO HDS
----- ---
YEAR ENDED PROFORMA PROFORMA
APRIL 30,2004 ADJUSTMENTS COMBINED
------------- ------------ ---------
REVENUES $ --- $623,349 $623,349
-------- --------
COST OF REVENUES: --- 912,082 912,082
-------- -------- --------
GROSS MARGIN --- (288,733) (288,733)
-------- -------- --------
OPERATING EXPENSES
General and administrative --- 661,737 612,250 (1) 1,273,987
Amortization and other expenses --- 116,213 -- 116,213
-------- -------- ------- --------
--- 777,950 612,250 1,390,200
-------- -------- ------- --------
LOSS FROM OPERATIONS --- (1,066,683) (612,250) (1,678,933)
-------- -------- ------- --------
OTHER EXPENSES
Amortization of debt discount --- (158,526) (1,089,983)(5) (1,248,509)
Interest expense --- (152,398) (152,398)
Interest expense, related parties --- (121,434) (66,708)(5) (188,142)
-------- -------- ------- --------
--- (432,358) (1,156,691) (1,589,049)
NET LOSS FROM CONTINUING
OPERATIONS --- (1,499,041) (1,768,941) (3,267,982)
======== =========================================
BASIC AND DILUTED NET LOSS
PER SHARE:
LOSS FROM CONTINUING OPERATIONS -- (.03)
NET LOSS PER SHARE - BASIC AND
DILUTED (.--) (.03)
===== =====
WEIGHTED AVERAGE SHARES
OUTSTANDING USED IN COMPUTING
BASIC AND DILUTED LOSS PER
SHARE 7,019,963 109,068,514
========= ===========
<FN>
* = The consolidated operations of Nesco and its subsidiaries for the fiscal
year ended April 30, 2004 were all due to discontinued operations which are not
included in the proforma condensed statements of operations.
</FN>
See notes to the unaudited proforma combined condensed financial statements.
3
UNAUDITED PROFORMA COMBINED CONDENSED BALANCE SHEET
AS OF APRIL 30, 2004
(*)
NESCO HDS
----- ---
YEAR ENDED PROFORMA PROFORMA
APRIL 30,2004 ADJUSTMENTS COMBINED
------------- ------------ ---------
ASSETS
Current Assets
Cash 135,462 828 136,290
Accounts receivable 4,293 73,692 77,985
Inventories -- 88,338 88,338
Prepaid expenses and other
current assets -- 58,019 58,019
--------- ---------- ------------ -----------
Total current assets 139,755 220,877 --- 360,632
--------- ---------- ------------ -----------
Loan receivable, merger candidate 208,500 -- (208,500) (2) --
--------- ---------- ------------ -----------
Property and equipment, net 4,940 570,101 -- 575,041
--------- ---------- ------------ -----------
Other Assets
Purchased Technology, net -- 85,411 85,411
Investments -- 6,000 6,000
Other -- 41,906 41,906
--------- ---------- ------------ -----------
Total other assets -- 133,317 -- 133,317
--------- ---------- ------------ -----------
TOTAL ASSETS 353,195 924,295 (208,500) 1,068,990
========= ========== ============ ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Notes and interest payable -- 104,500 104,500
Bridge loan, merger candidate -- 208,500 (208,500) (2) --
Customer deposits -- 847,653 847,653
Accounts payable and accrued expenses 928,828 185,214 (883,629) (3) 230,413
Related party accounts payable 95,705 -- ( 95,705) (3) --
Due to affiliates -- 243,554 -- 243,554
--------- ---------- ------------ -----------
Total current liabilities 1,024,533 1,589,421 (1,187,834) 1,426,120
--------- ---------- ------------ -----------
Long-term Liabilities
Notes and interest payable -- 804,868 804,868
Loans payable, shareholders 952,501 -- (952,501) (4) --
Convertible debentures and interest
payable, related parties -- 1,443,108 (453,755) (5) 989,353
Convertible debentures and interest
payable, other -- 731,220 (571,408) (5) 159,812
Accrued payroll -- 544,002 (544,002) (5) --
Due to officer -- 369,846 (369,846) (5) --
Deferred sublease rental,
related party 163,800 -- -- (3) 163,800
--------- ---------- ------------ -----------
Total long-term liabilities 1,116,301 3,893,044 (2,891,512) 2,117,833
--------- ---------- ------------ -----------
Stockholders' deficit
Preferred stock 242,758 52 (242,810) (6) --
Common stock. $.001 par value,
authorized 400,000,000 shares,
109,068,514 outstanding 7,627 470 100,972 (6) 109,069
Additional paid-in-capital 4,193,206 6,317,678 549,269 (6)11,060,153
Accumulated other comprehensive
loss -- (69,000) (69,000)
Accumulated deficit (6,231,230) (10,684,870) 3,340,915(6)(13,575,185)
Note receivable, officer -- (80,000) 80,000 (5) --
--------- ---------- ------------ -----------
(1,787,639) (4,515,670) 3,828,346 (2,474,963)
Less treasury stock, 250,000 shares
at cost -- (42,500) 42,500 (6) --
--------- ---------- ------------ -----------
Total stockholders' deficit (1,787,639) (4,558,170) 3,870,846 (2,474,963)
--------- ---------- ------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT 353,195 924,295 (208,500) 1,068,990
========= ========== ============ ===========
See notes to the unaudited proforma combined condensed financial statements.
4
NOTES ON UNAUDITED PROFORMA COMBINED
CONDENSED FINANCIAL INFORMATION
Basis of Presentation
On May 25, 2004, Nesco Industries, Inc. ("Nesco"), a Nevada corporation,
Hydrogel Design Systems, Inc., a privately-held Delaware corporation ("HDS"),
certain stockholders of Nesco (the "Nesco Stockholders") and certain
stockholders of HDS (the "HDS Stockholders") completed the transactions
contemplated by the Share Exchange Agreement, dated as of April 29, 2004, by and
among Nesco, HDS, the Nesco Stockholders and the HDS Stockholders (the "Exchange
Agreement"), whereby HDS has become a majority owned subsidiary of Nesco and the
holders of HDS common stock and debt hold a majority interest of Nesco.
The unaudited proforma combined condensed statements of operations are
presented as if the acquisition of HDS by the Company occurred on May 1, 2003
and the unaudited proforma combined condensed balance sheet is presented as if
the acquisition of HDS by the Company occurred on April 30, 2004. The unaudited
proforma combined condensed statement of operations for the year ended April 30,
2004 was derived from the Company's audited statement of operations for the year
ended April 30, 2004 which was included in its Form 10-KSB filed on September
16, 2004 and from HDS's audited statement of operations for the year ended April
30, 2004 which was filed as Exhibit 99.2 with Form 8-K/A (Amendment No. 1) on
August 9, 2004.
Nesco had intended to issue shares of its common stock in exchange for the
equity securities of HDS in certain ratios as provided for in the Exchange
Agreement. However, because Nesco did not have the required number of authorized
shares of common stock to complete the exchange on this basis, it issued shares
of its newly designated Series B Preferred Stock for among others, equity and
debt of HDS. Upon filing of the Certificate of Amendment to the Certificate of
Incorporation to increase the number of shares of common stock which Nesco is
authorized to issue to 400,000,000, each share of Preferred stock will be
automatically converted into shares of Nesco common stock. For purposes of
shares outstanding and issued, all stock is presented as if the conversion had
taken place at the time of the transaction.
As a result of the execution of the Share Exchange Agreement, HDS is
considered for accounting purposes to be the acquiring Company since the
stockholders of HDS acquired more than 50% of the issued and outstanding stock
of Nesco.
ProForma Adjustments Related to the Acquisition
The accompanying unaudited proforma combined condensed financial
information has been prepared as if the acquisition was completed on April 30,
2004 for balance sheet purposes and as of May 1, 2003 for statements of
operations purposes and reflect the following proforma adjustments:
(1) To record the issuance of 6,500,000 Advisor shares in connection with the
transaction valued at fair value ($.15) on the date of the transaction. The
total amount of $975,000 is being charged as $694,510 to operations and
$$280,490 to equity which is the net remaining amount of cash received from
the acquisition after other merger costs. This transaction is a one- time
charge to operations and directly attributed to the share exchange and is
not included in the proforma statement of operations.
5
To record the exchange of HDS outstanding warrants and options which were
exchanged for Nesco outstanding warrants and options based on the same
ratios as the share exchange. Compensation expense of $1,793,555 is
recorded for the increase in the fair value of the vested HDS warrants and
options as a result of the merger. This transaction is a one-time charge to
operations and directly attributed to the share exchange and is not
included in the proforma statement of operations.
To record the issuance of 2,681,667 shares of common stock issued under two
consulting agreements at the time of the share exchange at the fair value
at the time of the exchange ($.15) of $402,250 and to record consulting
fees under these two agreements in the amount of $165,000.
To record additional employee compensation in the amount of $45,000 for the
issuance of an employee agreement with an officer entered into at the time
of the share exchange. Included in the statement of operations for HDS for
the period presented was $75,000 in compensation expense for this officer.
Under the terms of the new employment agreement, effective at the date of
the exchange, the officer would receive $120,000 annually.
(2) Elimination of advances made between Company and HDS prior to closing of
transaction.
(3) To record sale of Company subsidiaries. Purchaser acquired all of the
outstanding stock of each of Nesco's subsidiaries and assumed all of their
liabilities in exchange for 3,000,000 shares of Nesco common stock. Nesco
liabilities which were not assumed were accrued expenses and other payables
in the amount of $45,199 and deferred sublease rental for a lease which
Nesco retained in the amount $163,800.
(4) To record the exchange of Nesco shareholder debt for 15,000,000 shares of
Nesco common stock.
(5) To record exchange of HDS accrued payroll and net officer's loans to
convertible debt in the amount of $833,848 and to record interest expense
in the amount of $66,708 on this debt.
6
ProForma Adjustments Related to the Acquisition (Cont'd)
To record debt discount in the aggregate of $1,859,011 for the issuance of
warrants to prior HDS debt holders and for the intrinsic value of the
beneficial conversion feature of the prior HDS debt to the new Nesco
convertible debt and to record amortization of debt discount in the amount
of $1,089,983.
Below is a summary of the transaction as related to the convertible
debentures on the balance sheet of HDS:
Convertible Convertible
debentures, debentures,
related parties other
--------------- -----------
Balance April 30, 2004 $ 1,443,108 $ 731,220
Exchange of payroll and net
officers loans to debt 833,848 --
Recording of debt discount
for issuance of warrants
and intrinsic value of the
beneficial conversion feature
from HDS debt to Nesco debt (1,287,603) (571,408)
--------------- ------------
Balance, proforma,
April 30, 2004 $ 989,353 $ 159,812
============= ===========
(6) To record the following adjustments to stockholders' deficit:
Total
(6a) (6b) (6c) 6(d) (6e) Adjustment
------- ------- --------- --------- ---- ----------
Preferred Stock (242,758) (52) (242,810)
Common Stock (7,627) 108,599 100,972
Additional paid-in-capital (4,193,206) 2,881,133 1,859,011 2,331 549,269
Accumulated deficit 6,231,230 (2,890,315) 3,340,915
Treasury stock -- 42,500 -- -- -- 42,500
<FN>
(6a) To eliminate the historical stockholders' deficit of Nesco.
(6b) To record the issuance of common stock and recapitilization of HDS, the
acquiring Company for accounting purposes, as follows:
- Cancellation of HDS treasury stock, 250,000 shares at cost of $42,500
7
- Stock issued as follows:
Issued
Shares Par $.001
---------- ----------
Nesco debtholder 15,000,000 $ 15,000
Nesco preferred shareholders exchange,
512,500 shares 15,375,000 15,375
HDS preferred shareholders exchange,
522,487 shares 18,809,574 18,810
HDS common shareholders exchange, 4,702,856 (470)
shares 40,075,167 40,075
Nesco common shares prior to exchange 7,627,106 7,627
Advisor shares issued at exchange 6,500,000 6,500
Shares issued to purchaser of Nesco subsidiaries 3,000,000 3,000
Shares issued to consultants 2,681,667 2,682
----------- ----------
109,068,514 $ 108,599
----------- ----------
(6c) To record the following:
Accumulated Additional
deficit paid-in-capital
----------- ---------------
- Advisor shares (See (1) above): $ 694,510 688,010
- Exchange of HDS warrants/options (See (1) above): 1,793,555 1,793,555
- Issuance of consultants shares (See (1) above): 402,250 399,568
---------- ----------
$2,890,315 $2,881,133
========== ==========
(6d) To record debt discount (see (5) above.
(6e) Various adjustments made to additional paid-in-capital as a result of share
exchange to record proper recapitalization of HDS, the acquiring entity for
accounting purposes, including recording of opening Nesco balance sheet and
reclassification of equity accounts.
</FN>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
-------------
On May 25, 2004, Nesco Industries, Inc. ("Nesco"), a Nevada corporation,
Hydrogel Design Systems, Inc., a privately-held Delaware corporation ("HDS"),
certain stockholders of Nesco (the "Nesco Stockholders") and certain
stockholders of HDS (the "HDS Stockholders") completed the transactions
contemplated by the Share Exchange Agreement, dated as of April 29, 2004, by and
among Nesco, HDS, the Nesco Stockholders and the HDS Stockholders (the "Exchange
Agreement"), whereby HDS has become a majority owned subsidiary of Nesco and the
holders of HDS common stock and debt hold a majority interest of Nesco. HDS is a
manufacturer of hydrogels used for wound care, medical diagnostics, transdermal
drug delivery and cosmetics.
As a result of the execution of the Share Exchange Agreement, HDS is
considered for accounting purposes to be the acquiring Company since the
stockholders of HDS acquired more than 50% of the issued and outstanding stock
of Nesco.
The following discussion and analysis pertains to the operations of HDS for
the two years ended April 30, 2004.
8
Liquidity, Capital Resources, and Going Concern
- -----------------------------------------------
The following table sets forth the working capital (deficiency) position of
HDS as at April 30, 2004:
As at April 30,
2004
---------------
Current assets $ 220,877
Current liabilities 1,589,421
-----------
Working capital (deficiency) $(1,368,544)
===========
The Company has incurred cumulative losses of approximately $10,685,000
since inception and utilized cash of approximately $569,000 for operating
activities during the two years ended April 30, 2004. The Company has a working
capital deficit of approximately $1,369,000 and a stockholders' deficit of
approximately $4,558,000 as of April 30, 2004.
Management recognizes that the Company must generate additional revenue to
achieve profitable operations. Management's plans to increase revenues include
the continued building of its customer base, especially in the medical and
cosmetic industries, through its ability to manufacture goods on a custom basis
or to the exacting standards required by medical customers. Management also will
seek to increase revenues through the development of alternative uses of its
equipment, such as irradiation and sterilization services.
As a result of the completion of the Share Exchange Agreement with Nesco on
May 25, 2004, the Company was effectively able to obtain debt extensions on a
significant portion of its current debt obligations to December 31, 2005. In
addition, the Company received net cash of approximately $328,000 as part of the
terms of the agreement, of which approximately $208,000 was received as a bridge
loan prior to April 30, 2004 and is included in current liabilities at April 30,
2004. Management believes that this transaction will enable the Company to seek
additional debt or equity financing. In June 2004, Nesco entered into an
Investment Banking Agreement with a third party whereby Nesco would issue 8%
Senior Convertible Notes to private investors for an aggregate of a minimum of
$250,000 and a maximum of $1,700,000. In June and July 2004, the Company
received approximately $705,000 in connection with this transaction.
There can be no assurance that the Company will be able to obtain
sufficient debt or equity financing on favorable terms if at all, or that it
will be successful in building its customer base or developing alternative uses
for its equipment. If the Company is unsuccessful in building its customer base
and developing alternative uses for its equipment or is unable to obtain
additional financing on terms favorable to the Company there could be a material
adverse effect on the financial position, results of operations and cash flows
of the Company. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.
9
Results of Operations
- ---------------------
Fiscal years ended April 30, 2004 and 2003
Revenues for the year ended April 30, 2004 decreased by $508,000 to
$623,000, or 45% as compared with revenues of $1,131,000 for the prior fiscal
year. This decline is due primarily to revenue derived from one customer in the
prior period which aggregated $557,000 as compared to $57,000 in the current
period. This customer ceased production of the product for which HDS was a
supplier in the year ended April 30, 2004 due to problems with production and
its parent Company. Cost of revenues for the year ended April 30, 2004 decreased
by $117,000 from $1,029,000 to $912,000 in the prior fiscal year. Cost of
revenues consists primarily of direct labor and other manufacturing fixed costs.
The decrease relates to material costs which are attributable to the decreased
revenue. Material costs generally range between 10-20% of revenue depending on
the type of gel related product.
General and administrative expenses for the year ended April 30, 2004
decreased to $662,000 from $1,057,000 for the prior fiscal year. This decrease
of $395,000 is primarily due to reduction of salaries and layoffs aggregating
approximately $295,000 inclusive of payroll taxes and benefits and reduction of
professional fees and other administrative costs as a result of the loss of a
major customer as described above.
The net loss for the year ended April 30, 2004 decreased to $1,499,000 from
$1,663,000 for the year ended April 30, 2003. The loss from operations remained
relatively the same as the decrease in revenues and corresponding decrease in
gross margin of approximately $390,000 was offset by the savings in general and
administrative expenses of $395,000. This decrease of $164,000 is primarily
attributable to the decrease in amortization of debt discount of $161,000 as
most of the debt was fully amortized in 2003 and was due in early fiscal 2004.
Fiscal years ended April 30, 2003 and 2002
Revenues for the year ended April 30, 2003 increased by $87,000 to
$1,131,000, or 8% as compared with revenues of $1,044,000 for the prior fiscal
year. This increase is due primarily to revenue derived from one customer in the
current period which aggregated $557,000 as compared to $202,000 in the prior
period. This customer increased production of the product for which HDS was a
supplier in the year ended April 30, 2003. This increase was offset by a
decrease in revenue from another customer of $62,000 in the current period as
compared to $238,000 in the prior period as this customer has downsized its
operations. The remainder of the change in revenues is a result of the customer
mix changing as there were some new customers entering into development
contracts and some prior customers either reducing production or completing
developmental work for which no product was finalized. Cost of revenues for the
10
year ended April 30, 2003 increased by $41,000 to $1,029,000 from $988,000 in
the prior fiscal year. Cost of revenues consists primarily of direct labor and
other manufacturing fixed costs. The increase relates to material costs which
are attributable to the increased revenue and also to an increase in certain
fixed costs. Material costs generally range between 10-20% of revenue depending
on the type of gel related product.
General and administrative expenses for the year ended April 30, 2003
decreased to $1,057,000 from $1,339,000 for the prior fiscal year. This decrease
of $282,000 is primarily due to reduction of salaries aggregating approximately
$110,000 inclusive of payroll taxes and benefits and reduction of consulting
fees of approximately $150,000 due to the termination of a sales consultant
contract.
The net loss for the year ended April 30, 2003 decreased by $306,000 to
$1,663,000 from $1,969,000 for the year ended April 30, 2002. The loss from
operations decreased by approximately $322,000 as a result of the reduction of
general and administrative costs as described above of $282,000 and the increase
in gross margin of $46,000 due to increased revenues as described above.
Critical Accounting Policies
Revenue Recognition
Revenues are generally recognized as product is shipped to a customer. In
cases where a customer requests a development project for a gel or a gel to be
used as a component of a new product, the Company will recognize revenue at the
time the project is completed.
Stock Compensation
Stock options and warrants issued to non-employees are valued using the
fair value of the securities issued. This valuation is made using the
Black-Scholes option-pricing model.
The Company applies APB No. 25, Accounting for Stock Issued to Employees,
and related interpretations in accounting for its employee stock option plans
and, accordingly, no compensation cost has been recognized because all stock
options granted to employees under the plans were at exercise prices which were
equal or above the market value of the underlying stock at date of grant.
On December 16, 2004, the FASB issued Statement No. 123 (revised)
("Statement No. 123(R)"), Share-Based Payment, an Amendment of FASB Statements
No. 123 and APB No. 25, that addressed the accounting for share-based awards to
employees, including employee-stock-purchase plans, or ESPPs. Statement No.
123(R) requires companies to recognize the fair value of stock options and other
stock-based compensation to employees. The statement eliminates the ability to
account for share- based compensation transactions using APB Opinion No. 25,
Accounting for Stock Issued to Employees, and generally requires instead, that
such transactions be accounted for using a fair-value-based method. The
requirements of Statement No. 123(R) will be effective for the Company effective
February 1, 2006.
11
(c) Exhibits
2.1* Share Exchange Agreement dated April 29, 2004 among Nesco
Industries, Inc., Hydrogel Design Systems, Inc. and certain
signatory shareholders of Nesco and HDS
3.1* Amendment to Certificate of Designation of Series A Preferred
Stock
3.2* Certificate of Designation of Series B Preferred Stock.
3.3* Amendment to Articles of Incorporation of Nesco Industries, Inc.
23.1**Consent of Independent Public Accounting Firm
99.2**Hydrogel Design Systems,Inc. Audited Consolidated Financial
Statements for the years ended April 30, 2004 and 2003.
*Incorporated by reference to the registrant's current report on Form 8-K dated
May 25, 2004 as filed on June 9, 2004.
** Incorporated by reference to the registrant's current report on Form 8-K/A
(Amendment No. 1) dated May 25, 2004 as filed on August 9, 2004.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
NESCO INDUSTRIES, INC.
By: /s/ Matthew Harriton
--------------------
Matthew Harriton
President
Dated: May 16, 2005