UNITED
STATES
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 (date of earliest event reported): February 16, 2006 (December 29,
2005)
OMNI
U.S.A., INC.
(Exact
Name of Registrant as Specified in Charter)
Nevada
(State
of
Other Jurisdiction of Incorporation)
|
|
|
0-17493
|
|
88-0237223
|
(Commission
File Number)
|
|
(I.R.S.
Employer Identification Number)
|
|
|
|
2236
Rutherford Road, Suite 107 -
|
|
|
Carlsbad,
California
|
|
92008
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
|
|
|
(760)
929-7500
(Registrant’s
Telephone Number, Including Area Code)
(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:
|
|
o |
Written communications pursuant to
Rule 425 under the Securities Act
(17 CFR 230.425). |
|
|
o |
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12). |
|
|
o |
Pre-commencement communications pursuant
to
Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)). |
|
|
o |
Pre-commencement communications pursuant
to
Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c)). |
TABLE
OF CONTENTS
Section
5 — Corporate Governance and Management
|
3
|
Item
5.03. Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
3
|
|
|
Section
9 — Financial Statements and Exhibits
|
3
|
Item
9.01. Financial Statements and Exhibits.
|
3
|
|
|
SIGNATURE
This
Amendment No. 2 on Form 8-K/A amends the Current Report on Form 8-K, dated
January 5, 2006, of Omni U.S.A., Inc., a Nevada corporation (”Omni”), filed with
the U.S. Securities and Exchange Commission (the “SEC”) on January 5, 2006, as
amended by Amendment No. 1 thereto, filed with the SEC on January 23,
2006.
Section
5 — Corporate Governance and Management
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change n Fiscal
Year
On
December 29, 2005, Omni completed the acquisition of substantially all the
assets of Brendan Technologies Inc. (“Brendan”) pursuant to the Merger Agreement
and completed the disposition of substantially all the assets of Omni-Washington
and Butler pursuant to the Stock Purchase Agreement. As a result of these
transactions and the issuance of common stock to the shareholders, noteholders
and individuals who assisted in the merger, Brendan, a now wholly-owned
subsidiary of Omni, became the accounting acquirer and the transaction was
accounted for as a reverse merger acquisition. Please see the disclosures
regarding the Merger Agreement and the Stock Purchase Agreement and the
transactions contemplated thereby in Item 1.01 of Current Report on Form 8K
filed with the SEC on January 5, 2006, as amended by Amendment No. 1 thereto,
filed with the SEC on January 23, 2006.
As
a
result of Brendan being the accounting acquirer and the post acquisition
financial statements being the historical statements of Brendan, the fiscal
year
end of Brendan is being changed from December 31 to June 30. The report on
which
the transition period will be filed is the Form10-KSB for the six months ended
June 30, 2005.
Section
9 — Financial Statements and Exhibits
Item
9.01. Financial Statements and Exhibits.
(a) Financial
Statements of Business Acquired.
In
accordance with Item 9.01(a), attached hereto are the unaudited financial
statements of Brendan, the accounting acquirer, for the nine months ended
September 30, 2005 and 2004. The audited financial statements of Brendan for
the
years ended December 31, 2004 and 2003 were filed with the Current Report on
Form 8-K as filed with the SEC on January 5, 2006.
(b) Proforma
Financial Information.
In
accordance with Item 9.01(b), attached hereto are the proforma financial
statements of Brendan, the accounting acquirer.
BRENDAN
TECHNOLOGES, INC.
Financial
Statements
For
the Nine Months Ended
September
30, 2005
Brendan
Technologies, Inc.
INDEX
|
Page
|
FINANCIAL
STATEMENTS
|
|
Balance
Sheets as of September 30, 2005 (unaudited) and
December 31, 2004
|
6
|
Statements
of Operations for the three and nine months ended
September 30, 2005 and 2004 (unaudited)
|
7
|
Statements
of Cash Flows for the nine months
ended September 30, 2005 and 2004 (unaudited)
|
8
|
Notes
to Unaudited Financial Statements
|
9
|
Brendan
Technologies Inc.
Balance
Sheets
|
|
September
30,
|
|
December
31,
|
|
|
|
2005
|
|
2004
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
|
$
|
88,242
|
|
$
|
21,670
|
|
Accounts
receivable, net
|
|
|
36,262
|
|
|
8,943
|
|
Prepaid
expenses and other current assets
|
|
|
712
|
|
|
712
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
125,216
|
|
|
31,325
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
13,783
|
|
|
2,433
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
7,808
|
|
|
7,808
|
|
|
|
|
|
|
|
|
|
|
|
$
|
146,807
|
|
$
|
41,566
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Convertible
notes payable in default
|
|
$
|
1,947,972
|
|
$
|
1,947,972
|
|
Accrued
interest in default
|
|
|
990,761
|
|
|
822,933
|
|
Accrued
interest
|
|
|
353,236
|
|
|
283,282
|
|
Accounts
payable
|
|
|
196,151
|
|
|
149,572
|
|
Accrued
wages
|
|
|
851,523
|
|
|
824,460
|
|
Current
porton of lease obligations
|
|
|
2,296
|
|
|
-
|
|
Deferred
revenue
|
|
|
66,287
|
|
|
84,530
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
4,408,226
|
|
|
4,112,749
|
|
|
|
|
|
|
|
|
|
Long
term portion of lease obligations
|
|
|
9,209
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit
|
|
|
|
|
|
|
|
Common
stock, no par value; 10,000,000 shares authorized:
|
|
|
|
|
|
|
|
4,754,709
and 4,678,876 issued and outatanding at September 30, 2005 and
December
31, 2004, respectively
|
|
|
1,355,986
|
|
|
1,160,361
|
|
Accumulated
deficit
|
|
|
(5,626,614
|
)
|
|
(5,231,544
|
)
|
Total
stockholders' deficit
|
|
|
(4,270,628
|
)
|
|
(4,071,183
|
)
|
|
|
$
|
146,807
|
|
$
|
41,566
|
|
See
accompanying summary of accounting policies and notes to unaudited financial
statements.
Brendan
Technologies Inc.
Statements
of Operation
(Unaudited)
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
121,843
|
|
$
|
96,415
|
|
$
|
541,369
|
|
$
|
258,963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
26,269
|
|
|
74,513
|
|
|
91,442
|
|
|
93,866
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
95,574
|
|
|
21,902
|
|
|
449,927
|
|
|
165,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
242,150
|
|
|
241,084
|
|
|
594,764
|
|
|
564,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(146,576
|
)
|
|
(219,182
|
)
|
|
(144,837
|
)
|
|
(398,969
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(83,722
|
)
|
|
(80,500
|
)
|
|
(250,233
|
)
|
|
(241,600
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes
|
|
|
(230,298
|
)
|
|
(299,682
|
)
|
|
(395,070
|
)
|
|
(640,569
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(230,298
|
)
|
$
|
(299,682
|
)
|
$
|
(395,070
|
)
|
$
|
(640,569
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per share
|
|
$
|
(0.05
|
)
|
$
|
(0.07
|
)
|
$
|
(0.08
|
)
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted weighted-average common shares
outstanding
|
|
|
4,718,758
|
|
|
4,609,079
|
|
|
4,697,670
|
|
|
4,601,873
|
|
See
accompanying summary of accounting policies and notes to unaudited financial
statements.
Brendan
Technologies Inc.
Statements
of Cash Flows
(Unaudited)
|
|
Nine
Months Ended
|
|
|
September
30,
|
|
|
|
2005
|
|
2004
|
|
Operating
activities:
|
|
|
|
|
|
Net
loss
|
|
$
|
(395,070
|
)
|
$
|
(640,569
|
)
|
Adjustments
to reconcile net (loss) income to
cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
3,825
|
|
|
1,320
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
(Increase)
decrease in accounts receivable
|
|
|
(27,319
|
)
|
|
52,538
|
|
(Increase)
decrease in prepaid expense and other assets
|
|
|
-
|
|
|
(1,000
|
)
|
Increase
(decrease) in accounts payable
|
|
|
46,579
|
|
|
56,334
|
|
Increase
(decrease) in accrued liabilities
|
|
|
264,845
|
|
|
230,313
|
|
Increase
(decrease) in deferred revenue
|
|
|
(18,243
|
)
|
|
-
|
|
Net
cash used in operating activities
|
|
|
(125,383
|
)
|
|
(301,064
|
)
|
Investing
activities:
|
|
|
|
|
|
|
|
Note
receivable- shareholder
|
|
|
-
|
|
|
38,000
|
|
Purchase
of property and equipment
|
|
|
(23,673
|
)
|
|
-
|
|
Disposal
of property and equipment
|
|
|
20,810
|
|
|
-
|
|
Net
cash provided by (used in) investing activities
|
|
|
(2,863
|
)
|
|
38,000
|
|
Financing
activities:
|
|
|
|
|
|
|
|
Principal
payments on lease obligations
|
|
|
(807
|
)
|
|
-
|
|
Proceeds
from issuance of common stock
|
|
|
227,500
|
|
|
200,000
|
|
Stock
offering costs
|
|
|
(31,875
|
)
|
|
-
|
|
Net
cash provided by financing activities
|
|
|
194,818
|
|
|
200,000
|
|
Net
increase in cash
|
|
|
66,572
|
|
|
(63,064
|
)
|
Cash,
beginning of period
|
|
|
21,670
|
|
|
88,414
|
|
Cash,
end of period
|
|
$
|
88,242
|
|
$
|
25,350
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
Cash
paid during the period for:
|
|
|
|
|
|
|
|
Interest
|
|
$
|
12,451
|
|
$
|
12,300
|
|
Income
taxes
|
|
$
|
-
|
|
$
|
-
|
|
Non
Cash Investing and Financing Activities:
|
|
|
|
|
|
|
|
Lease
obligation
|
|
$
|
12,312
|
|
$
|
-
|
|
See
accompanying summary of accounting policies and notes to unaudited financial
statements.
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements
NOTE
1 -
ORGANIZATION
AND LINE OF BUSINESS
Brendan
Technologies, Inc. (the “Company”) was incorporated on October 30, 1997 in the
state of Michigan. The Company develops and markets scientific computer software
for applications in the pharmaceutical/biotechnical research, clinical
diagnostic, environmental, and other life and physical science
markets.
NOTE
2- GOING CONCERN
These
financial statements have been prepared on a going concern basis. However,
during the nine months ended September 30, 2005 and the year ended December
31,
2004, the Company incurred net losses of $395,070 and $901,421, respectively,
and had an accumulated deficit of $5,626,614 and $5,231,544, at September 30,
2005 and December 31, 2004, respectively. In addition, the Company is in default
with unsecured notes payable and the related accrued interest in the aggregate
amount of $2,938,733 at of September 30, 2005. The Company’s ability to continue
as a going concern is dependent upon its ability to generate profitable
operations in the future and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business operations
when they come due. The outcome of these matters cannot be predicted with any
certainty at this time. Since inception, the Company has satisfied its capital
needs through debt and equity financings.
As
described in Note 9, on December 29, 2005, the Company consummated a reverse
merger with a public company, then sold the operating divisions of the public
company to the original founders for a note receivable of $672,000, and raised
approximately $400,000 by selling the note receivable at a discount to a group
of individuals. In addition, the Company converted $2,978,085 of notes payable
and accrued interest into 4,929,053 common shares of the public company. The
Company’s shareholders converted 4,754,709 shares of common stock into
19,018,836 common shares of the public company. An additional 900,000 shares
of
the public company’s common stock was issued to individuals who participated in
the reverse merger. It is unlikely that the cash proceeds from the sale of
the
note will be sufficient to meet the Company’s ongoing liquidity requirements.
Therefore, the Company will likely need to seek additional financing to meet
its
liquidity requirements.
Management
plans to continue to provide for its capital needs during the twelve months
ending September 30, 2006, by increasing sales through the continued development
of its products and by debt and/or equity financings. These financial statements
do not include any adjustments to the amounts and classification of assets
and
liabilities that may be necessary should the Company be unable to continue
as a
going concern.
NOTE
3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue
Recognition
The
Company recognizes revenues related to software licenses and software
maintenance in accordance with the American Institute of Certified Public
Accountants (“AICPA”) Statements of Position (“SOP”) No. 97-2, “Software Revenue
Recognition,” as amended by SOP No. 94-4 and SOP No. 98-9. We follow the
guidance established by the SEC in Staff Accounting Bulletin No. 104, as well
as
generally accepted criteria for revenue recognition, which require that, before
revenue
is recorded, there is persuasive evidence of an arrangement, the fee is fixed
or
determinable, collection is reasonably assured, and delivery to our customer
has
occurred. The
Company’s software is sold with an indefinite license period, and as such,
product revenue is recorded at the time of the customer’s acceptance (generally
30 days after shipment), net of estimated allowances and returns. Post-contract
customer support (“PCS”) obligations are for annual services and are recognized
over the period of service. Revenues for which payment has been
received are treated as deferred revenue until services are provided and
revenues have been earned. The Company provides, for a fee, additional training
and service calls to its customers and recognizes revenue at the time the
training or service call is provided.
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
Trade
Accounts Receivable
The
Company provides for the possible inability to collect accounts receivable
by
recording an allowance for doubtful accounts. The Company writes off an account
when it is considered to be uncollectible.
Property
and Equipment
Property
and equipment are stated at cost. The Company provides for depreciation and
amortization using the straight-line and accelerated methods over the estimated
useful lives of the principal classes of property of three years.
Stock-Based
Compensation
SFAS
No.
123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148,
“Accounting for Stock-Based Compensation-Transition and Disclosure,” defines a
fair value based method of accounting for stock-based compensation. However,
SFAS No. 123 allows an entity to continue to measure compensation cost related
to stock and stock options issued to employees using the intrinsic method of
accounting prescribed by Accounting Principles Board (“APB”) Opinion No. 25,
“Accounting for Stock Issued to Employees.” Entities electing to remain with the
accounting method of APB Opinion No. 25 must make pro forma disclosures of
net
income and earnings per share as if the fair value method of accounting defined
in SFAS No. 123 had been applied The Company has elected to account for its
stock-based compensation to employees under APB Opinion No. 25 using the
intrinsic value method.
The
Company has adopted only the disclosure provisions of SFAS No. 123. Accordingly,
no compensation cost other than that required to be recognized by APB 25 for
the
difference between the fair value of the Company’s common stock at the grant
date and the exercise price of the options has been recognized. Had compensation
cost for the Company’s stock option plan been determined based on the fair value
at the grant date for awards consistent with the provisions of SFAS No. 123,
the
Company’s net loss and basic and diluted loss per share for the year ended
December 31, 2004 would have been increased to the pro forma amounts indicated
below:
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
|
|
Three
months ended
|
|
Nine
months ended
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss), as reported
|
|
$
|
(230,298
|
)
|
$
|
(299,682
|
)
|
$
|
(395,070
|
)
|
$
|
(640,569
|
)
|
Stock-based
employee compensation, net of tax effects
|
|
|
(1,281
|
)
|
|
(1,281
|
)
|
|
(28,635
|
)
|
|
(3,683
|
)
|
Proforma
net income (loss)
|
|
$
|
(231,579
|
)
|
$
|
(300,963
|
)
|
$
|
(423,705
|
)
|
$
|
(644,252
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted- as reported
|
|
$
|
(0.05
|
)
|
$
|
(0.07
|
)
|
$
|
(0.08
|
)
|
$
|
(0.14
|
)
|
Basic
and diluted- proforma
|
|
$
|
(0.05
|
)
|
$
|
(0.07
|
)
|
$
|
(0.09
|
)
|
$
|
(0.14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
purposes of computing the pro forma disclosures required by SFAS No. 123, the
fair value of each option granted to employees and directors is estimated using
the Black-Scholes option-pricing model with the following weighted-average
assumptions for the year ended December 31, 2004: dividend yield of 0%; expected
volatility of 0%; risk-free interest rate of 2.76%; and expected life of three
years. The weighted-average fair value of options granted during the year ended
December 31, 2004 for which the exercise price equals the market price on the
grant date was $3, and the weighted-average exercise price was
$3.
No stock options were granted during the nine months ended September 30, 2005.
and no stock options were granted during the year ended December 31, 2004 for
which the exercise price was less than or greater than the market prices on
the
grant date.
Loss
Per Share
The
Company utilizes SFAS No. 128, “Earnings per Share.” Basic loss per share is
computed by dividing loss available to common shareholders by the
weighted-average number of common shares outstanding. Diluted loss per share
is
computed similar to basic loss per share except that the denominator is
increased to include the number of additional common shares that would have
been
outstanding if the potential common shares had been issued and if the additional
common shares were dilutive. Common equivalent shares are excluded from the
computation if their effect is anti-dilutive.
At
September 30, 2005 and 2004, the following common equivalent shares were
excluded from the computation of loss per share since their effects are
anti-dilutive.
|
|
September
30,
|
|
|
|
2005
|
|
2004
|
|
Options
|
|
|
960,000
|
|
|
960,000
|
|
Warrants
|
|
|
13,500
|
|
|
89,600
|
|
Total
|
|
|
973,500
|
|
|
1,049,600
|
|
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
Fair
Value of Financial Instruments
The
Company’s financial instruments include cash, accounts receivable, notes
receivable, accounts payable, and accrued wages. The book value of all other
financial instruments is representative of their fair values.
Research
and Development
Research
and Development costs are charged to operations as incurred. Such costs were
included in the total operating expenses for the nine months ended September
30,
2005 and 2004, that amounted to $594,764 and $564,066,
respectively.
Income
Taxes
The
Company utilizes SFAS No. 109, “Accounting for Income Taxes,” which requires the
recognition of deferred tax assets and liabilities for the expected future
tax
consequences of events that have been included in the financial statements
or
tax returns. Under this method, deferred income taxes are recognized for the
tax
consequences in future years of differences between the tax bases of assets
and
liabilities and their financial reporting amounts at each period-end based
on
enacted tax laws and statutory tax rates applicable to the periods in which
the
differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.
Estimates
The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Concentrations
of Credit Risk
Financial
instruments which potentially subject the Company to credit risk are primarily
cash and accounts receivable. The Company deposits its cash with what it
considers high-credit, quality financial institutions. At times, balances are
in
excess of the Federal Deposit Insurance Corporation insured limit. As of
September 30, 2005, the Company did not have any uninsured cash. Credit risk
concentration with respect to receivables is limited due to the geographic
dispersion of the Company’s customer base. The Company conducts ongoing credit
evaluations but does not obtain collateral or other forms of security. The
Company believes its credit policies do not result in significant adverse risk
and historically has not experienced significant credit-related
losses.
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
NOTE
4- ACCOUNTS RECEIVABLE
Accounts
receivable at September 30, 2005 and December 31, 2004, consisted of the
following:
|
|
September
30,
|
|
December
31,
|
|
|
|
|
2005
|
|
|
2004
|
|
|
|
|
|
|
|
|
|
Accounts
receivable - trade
|
|
$
|
41,262
|
|
$
|
26,700
|
|
Allowance
for doubtful accounts
|
|
|
(5,000
|
)
|
|
(17,757
|
)
|
|
|
|
|
|
|
|
|
Accounts
receivable, net
|
|
$
|
36,262
|
|
$
|
8,943
|
|
NOTE
5- PROPERTY AND EQUIPMENT
Property
and equipment at September 30, 2005 and December 31, 2004, consisted of the
following:
|
|
September
30,
|
|
December
31,
|
|
|
|
2005
|
|
2004
|
|
|
|
|
|
|
|
Computer
equipment
|
|
$
|
98,420
|
|
$
|
119,230
|
|
Furniture
and fixtures
|
|
|
31,909
|
|
|
31,909
|
|
|
|
|
130,329
|
|
|
151,139
|
|
|
|
|
|
|
|
|
|
Less
accumulated depreciation
|
|
|
(116,546
|
)
|
|
(148,706
|
)
|
|
|
|
|
|
|
|
|
|
|
$
|
13,783
|
|
$
|
2,433
|
|
Depreciation
expense was $3,825 and $1,320, for the nine months ended September 30, 2005,
and
2004.
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
NOTE
6- CONVERTIBLE NOTES PAYABLE IN DEFAULT
Convertible
notes payable in default consisted of the following:
|
|
|
September
30,
2005
|
|
|
December
31,
2004
|
|
Forty-six
convertible, unsecured, senior subordinated notes payable, due
on
various dates
on or before September 2004, bearing interest at 8% per annum.
The notes
are convertible into the Company’s common stock in the event the Company
completes a public offering. The conversion price will be the
number of
shares of the Company’s common stock valued at the public offering price
equal to the outstanding principal and interest of the Company’s
convertible notes payable. The
notes payable are currently in default.
|
|
$
|
1,387,500
|
|
$
|
1,387,500
|
|
Six
convertible, unsecured, bridge notes payable, due various dates
on or
before December 2004, bearing interest at 12% per annum. The notes
are convertible into the Company’s common stock in the event the Company
completes a public offering. The conversion price
will be the number of shares of the Company’s
common stock valued at the public offering price equal to the
outstanding
principal and interest of the Company’s convertible notes payable. The
notes payable are currently in default.
|
|
|
435,472
|
|
|
435,472
|
|
Unsecured,
convertible note payable for $125,000, which bears interest
at a rate of
12% per annum. The convertible note may be converted into
shares of the
Company’s common stock at a conversion price equal to $2.44 per
share. The
note payable is convertible upon issuance. In connection
with the
transaction the Company recognized interest expense in
the amount of
$28,689, for the year ended December 31, 2003 related to
the beneficial
conversion feature of the convertible note payable. The
Company accounted
for the interest expense as the difference between the
conversion price
and the Company’s stock price on the date of issuance of the note payable.
The note is currently in default.
|
|
$
|
125,000
|
|
$
|
125,000
|
|
|
|
|
1,947,972
|
|
|
1,947,972
|
|
Less
current portion
|
|
|
1,947,972
|
|
|
1,947,972
|
|
Long-term
portion
|
|
$
|
-
|
|
$
|
-
|
|
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
NOTE
7- SHAREHOLDER’S DEFICIT
Common
Stock
The
Company has authorized 10,000,000 shares of common stock at no par value. At
September 30, 2005, the Company had 4,754,709 shares of common stock issued
and
outstanding.
During
the nine months ended September 30, 2005, the Company issued 75,833 shares
of
common stock for proceeds of $227,500 to a group of individual investors. In
addition, the Company recorded $31,875 as stock offering costs related to the
issuance of the shares.
Warrants
In
August
2005, the Company issued a warrant exercisable into 13,500 shares of the
Company’s stock at an exercise price of $3 per share with an expiration date of
five years from the date of grant. The Company estimated the fair value of
the
warrant at the issuance date by using the Black-Scholes pricing model with
the
following weighted average assumptions used for the three and nine months ended
September 30, 2005: dividend yield of zero percent; expected volatility of
100%;
risk free interest rate of 4.08%; and expected life of 5 years. The valuation
of
the warrant, $7,407, was recorded as a stock offering cost.
Stock
Option Plan
In
January 1999, the Board of Directors adopted and the shareholders approved
the
1999 Stock Option Plan (the “Option Plan”) under which a total of 310,000 shares
of common stock had been reserved for issuance. In August 2000, the shareholders
approved an increase in the number of shares that may be granted under the
Option Plan to 410,000. In January 2002, the shareholders approved an increase
in the number of shares that may be granted under the Option Plan to 610,000.
In
January 2004, the shareholders approved an increase in the number of shares
that
may be granted under the option plan to 960,000. The Option Plan terminates
in
2012, subject to earlier termination by the Board of Directors.
During
the year ended December 31, 2004, the Company granted options to purchase
350,000 shares of common stock to employees with an exercise price of $3 per
share. The options vest on a straight-line basis over a period of three years
and expire 10 years from the date of grant. A compensation charge was not
recorded in connection with the issuance of such options as the exercise price
of the stock options granted was not less than the fair market value of the
Company’s stock price as of the date of grant.
As
of
September 30, 2005, 960,000 options are outstanding at prices ranging from
$0.10
to $3.00 per share with expiration dates ranging from 2009 to 2014.
BRENDAN
TECHNOLOGIES, INC.
Notes
to the Unaudited Financial Statements (continued)
NOTE
8- INCOME TAXES
Deferred
income taxes are provided for by recognizing temporary differences in certain
income and expense items for financial and tax reporting purposes. Deferred
tax
assets consist primarily of income tax benefits from net operating loss
carry-forwards. A valuation allowance has been recorded to fully offset the
deferred tax asset as it is more likely than not that the assets will not be
utilized. The valuation allowance increased approximately $249,000 for the
nine
months ended September 30, 2005, from $2,051,438 at December 31, 2004 to
$2,300,000 at September 30, 2005.
As
of December 31, 2005, the Company had net operating
loss carry-forwards for federal and state income tax purposes of approximately
$5,103,000 and $2,551,000 respectively, which expire from 2012 through
2025.
NOTE
9- SUBSEQUENT EVENT
Merger
of Brendan Technologies, Inc. into Omni, U.S.A., Inc.
On
December 29, 2005, Omni U.S.A., Inc., a Nevada corporation, through its
wholly-owned subsidiary, Omni Merger Sub, Inc., a Michigan corporation, Jeffrey
Daniel and Edward Daniel entered into an Agreement and Plan of Merger with
Brendan Technologies, Inc., pursuant to which Omni Merger Sub, Inc. was merged
with and into Brendan and Brendan became the surviving corporation in the merger
and a wholly-owned subsidiary of Omni U.S.A., Inc.. Brendan continued its
corporate existence under the laws of the State of Michigan.
Concurrently
with the merger, 4,754,709
shares
of
Brendan common stock outstanding immediately before the merger were converted
into 19,018,836
shares
of
Omni common stock, a four for one ratio. Also concurrently with the merger,
(i)
4,679,053
shares
of
Omni common stock were issued to the holders of Brendan Senior and Bridge Notes
totaling $2,853,085
in
aggregate principal and interest, a conversion rate of 1.64 shares per $1.00
under such debt; (ii) 250,000
shares
of
Omni common stock were issued to another Brendan note holder in exchange for
a
note with a principal balance of $125,000;
and
(iii) 900,000 shares of Omni common stock was issued to individuals who
participated in the arrangement of the merger.
Common
stock options and warrants exercisable into 973,500
shares
of
Brendan before the merger will become exercisable into 3,894,000
common
shares of Omni after the merger. The exercise price of the Omni stock options
and warrants will be 25% of the exercise price of the Brendan stock options
and
warrants.
The
merger was accounted for as a reverse merger and for accounting purposes,
Brendan is the acquirer in the reverse acquisition transaction, and
consequently, the financial statements of Omni going forward will be the
historical financial statements of Brendan and the reverse merger will be
treated as a recapitalization of Omni. The consideration and other terms of
these transactions were determined as a result of arm’s-length negotiations
between the parties.
Following
the closing of the Reverse Merger, Brendan’s existing management has assumed
their same positions with Omni.
As
a
result of the reverse merger, the Company has become a wholly-owned subsidiary
of the publicly traded company, Omni, trading on the NASD’s OTC Bulletin Board
(OUSA.OB) and, accordingly, subject to the information and reporting
requirements of the U.S. securities laws. The public company costs of preparing
and filing annual and quarterly reports, proxy statements and other information
with the SEC and furnishing audited reports to shareholders will cause the
Company’s expenses to be higher than they would have been had it remained
privately held.
Omni
U.S.A. Inc. and Subsidiary
Pro
Forma Financial Information
As
of September 30, 2005 and
For
the Nine Months Ended September 30-, 2005 and
Year
Ended December 31, 2004
On
December 29, 2005, Omni U.S.A., Inc., a Nevada corporation, through its
wholly-owned subsidiary, Omni Merger Sub, Inc., a Michigan corporation, Jeffrey
Daniel and Edward Daniel entered into an Agreement and Plan of Merger with
Brendan Technologies, Inc., pursuant to which Omni Merger Sub, Inc. was merged
with and into Brendan and Brendan became the surviving corporation in the merger
and a wholly-owned subsidiary of Omni U.S.A., Inc.. Brendan continued its
corporate existence under the laws of the State of Michigan.
Concurrently
with the merger, 4,754,709
shares
of
Brendan common stock outstanding immediately before the merger were converted
into 19,018,836
shares
of
Omni common stock, a four for one ratio. Also concurrently with the merger,
(i)
4,679,053
shares
of
Omni common stock were issued to the holders of Brendan Senior and Bridge Notes
totaling $2,853,085
in
aggregate principal and interest, a conversion rate of 1.64 shares per $1.00
under such debt; (ii) 250,000
shares
of
Omni common stock were issued to another Brendan note holder in exchange for
a
note with a principal balance of $125,000;
and
(iii) 900,000 shares of Omni common stock was issued to individuals who
participated in the arrangement of the merger.
Common
stock options and warrants exercisable into 973,500
shares
of
Brendan before the merger will become exercisable into 3,894,000
common
shares of Omni after the merger. The exercise price of the Omni stock options
and warrants will be 25% of the exercise price of the Brendan stock options
and
warrants.
In
addition, immediately following the reverse acquisition, Omni U.S.A. sold its
operating divisions, Butler and Omni Gear, to the original founders of Omni
U.S.A. for a note receivable of $672,000, and raised approximately $400,000
in
cash by selling the note receivable at a discount to a group of
individuals.
The
merger was accounted for as a reverse acquisition and for accounting purposes,
Brendan (the wholly-owned subsidiary of Omni U.S.A., Inc.) is the acquirer
in
the reverse acquisition transaction, and consequently, the financial statements
of Omni going forward will be the historical financial statements of Brendan
and
the reverse merger will be treated as a recapitalization of Omni. The
consideration and other terms of these transactions were determined as a result
of arm’s-length negotiations between the parties.
The
unaudited pro forma condensed consolidated balance sheet and statement of
operations should be read in conjunction with the notes thereto and with the
historical financial statements of Brendan for the year ended December 31,
2004,
included in its Form 8K filed with the Securities and Exchange Commission on
January 5, 2006 and its unaudited interim financial information as of September
30, 2005 and for the nine months then ended filed herewith. The unaudited pro
forma condensed consolidated balance sheet as of September 30, 2005 reflects
the
merger and concurrent sale of the operating divisions of Omni as if they had
occurred on September 30, 2005. The statements of operations for the nine months
ended September 30, 2005 and the year ended December 31, 2004 reflect the
transactions as if they had occurred on January 1, 2005 and January 1, 2004,
respectively. The pro forma financial statements are not necessarily indicative
of Brendan’s financial position or results of operations that would have been
achieved had the merger been effected on such dates. The pro forma adjustments
reflect the transactions based on currently available information. Certain
estimates and assumptions, as set forth in the notes to the unaudited pro forma
information, may differ from actual amounts.
Brendan
Technologies Inc
Proforma
Balance Sheets
September
30, 2005
(Unaudited)
|
|
|
Historical
September
30,
2005
|
|
|
|
|
|
|
|
|
Profoma
September
30,
2005
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
88,242
|
|
$
|
400,000
|
|
|
F
|
|
$
|
488,242
|
|
Accounts
receivable, net
|
|
|
36,262
|
|
|
1,502
|
|
|
F
|
|
|
37,764
|
|
Prepaid
expenses and other current assets
|
|
|
712
|
|
|
-
|
|
|
|
|
|
712
|
|
Total
current assets
|
|
|
125,216
|
|
|
401,502
|
|
|
|
|
|
526,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and equipment, net
|
|
|
13,783
|
|
|
-
|
|
|
|
|
|
13,783
|
|
Deposits
|
|
|
7,808
|
|
|
-
|
|
|
|
|
|
7,808
|
|
|
|
$
|
146,807
|
|
$
|
401,502
|
|
|
|
|
$
|
548,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
notes payable in default
|
|
$
|
1,947,972
|
|
$
|
(1,947,972
|
)
|
|
A
|
|
$
|
-
|
|
Accrued
interest in default
|
|
|
990,761
|
|
|
(990,761
|
)
|
|
A
|
|
|
-
|
|
Accrued
interest
|
|
|
353,236
|
|
|
-
|
|
|
|
|
|
353,236
|
|
Accounts
payable
|
|
|
196,151
|
|
|
(35,000
|
)
|
|
D
|
|
|
161,151
|
|
Accrued
wages
|
|
|
851,523
|
|
|
-
|
|
|
|
|
|
851,523
|
|
Current
porton of lease obligations
|
|
|
2,296
|
|
|
-
|
|
|
|
|
|
2,296
|
|
Deferred
revenue
|
|
|
66,287
|
|
|
-
|
|
|
|
|
|
66,287
|
|
Total
current liabilities
|
|
|
4,408,226
|
|
|
(2,973,733
|
)
|
|
|
|
|
1,434,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
term portion of lease obligations
|
|
|
9,209
|
|
|
-
|
|
|
|
|
|
9,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1,355,986
|
|
|
24,620
|
|
|
A
|
|
|
|
|
|
|
|
|
|
|
(1,260,987
|
)
|
|
B
|
|
|
|
|
|
|
|
|
|
|
6,129
|
|
|
C
|
|
|
|
|
|
|
|
|
|
|
500
|
|
|
D
|
|
|
|
|
|
|
|
|
|
|
3,996
|
|
|
E
|
|
|
130,244
|
|
Additional
paid-in capital
|
|
|
-
|
|
|
2,953,465
|
|
|
A
|
|
|
|
|
|
|
|
|
|
|
1,260,987
|
|
|
B
|
|
|
|
|
|
|
|
|
|
|
(6,129
|
)
|
|
C
|
|
|
|
|
|
|
|
|
|
|
34,500
|
|
|
D
|
|
|
|
|
|
|
|
|
|
|
596,004
|
|
|
E
|
|
|
|
|
|
|
|
|
|
|
498,000
|
|
|
F
|
|
|
5,336,827
|
|
Accumulated
deficit
|
|
|
(5,626,614
|
)
|
|
(39,352
|
)
|
|
A
|
|
|
|
|
|
|
|
|
|
|
(600,000
|
)
|
|
E
|
|
|
|
|
|
|
|
|
|
|
(96,498
|
)
|
|
F
|
|
|
(6,362,464
|
)
|
Total
stockholders' deficit
|
|
|
(4,270,628
|
)
|
|
3,375,235
|
|
|
|
|
|
(895,393
|
)
|
|
|
$
|
146,807
|
|
$
|
401,502
|
|
|
|
|
$
|
548,309
|
|
A Reflects
the conversion of notes payable and accured interest into common stock of
Onmi
USA. See Note 9 to the unaudited
September
30, 2005
financial statements included elsewhere in this Form
8K/A.
B Reflects
the conversion of the common stock of Brendan into the common stock of
Omni USA.
C Reflects
the
common stock held by the stockholders of Omni USA.
D Reflects
the conversion of accounts payable into common stock of Omni
USA
E Reflects
Omni USA stock issued to individuals responsible for the
acquisition
F Reflects
the cash collection from the discounted note receivable from the sale
of the
operating divisions of Omni
USA
Brendan
Technologies, Inc.
Proforma
Statement of Operations
Nine
Months Ended September 30, 2005
(Unaudited)
|
|
Six
Months
Ended
September
30,
2005
|
|
|
|
Six
Months
Ended
September
30, 2005
Proforma
|
|
Ne
sales
|
|
$
|
541,369
|
|
$
|
-
|
|
$
|
541,369
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
91,442
|
|
|
-
|
|
|
91,442
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
449,927
|
|
|
-
|
|
|
449,927
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
594,764
|
|
|
-
|
|
|
594,764
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(144,837
|
)
|
|
-
|
|
|
(144,837
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(250,233
|
)
|
|
177,075
|
|
|
(73,158
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes
|
|
|
(395,070
|
)
|
|
177,075
|
|
|
(217,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(395,070
|
)
|
$
|
177,075
|
|
$
|
(217,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per share
|
|
$
|
(0.08
|
)
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted weighted-average comon shares
outstanding
|
|
|
4,697,670
|
|
|
21,377,298
|
|
|
26,074,968
|
|
A Reflects
the
reversal of interest expense on liabilities that were
converted
into common stock upon closing of the reverse
acquisition.
Brendan
Technologies, Inc.
Proforma
Statement of Operations
Year
Ended December 31, 2004
(Unaudited)
|
|
Year
Ended
December
31, 2004
Historical
|
|
|
|
Year
Ended
December
31, 2004
Proforma
|
|
Net
sales
|
|
$
|
386,477
|
|
$
|
-
|
|
$
|
386,477
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
159,542
|
|
|
-
|
|
|
159,542
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
226,935
|
|
|
-
|
|
|
226,935
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
805,340
|
|
|
-
|
|
|
805,340
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(578,405
|
)
|
|
-
|
|
|
(578,405
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(322,218
|
)
|
|
216,455
|
|
|
(105,763
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes
|
|
|
(900,623
|
)
|
|
216,455
|
|
|
(684,168
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
800
|
|
|
-
|
|
|
800
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(901,423
|
)
|
$
|
216,455
|
|
$
|
(683,368
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per share
|
|
$
|
(0.20
|
)
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted weighted-average comon shares
outstanding
|
|
|
4,489,878
|
|
|
21,377,298
|
|
|
25,867,176
|
|
A Reflects
the
reversal of interest expense on liabilities that were
converted
into common stock upon closing of the reverse
acquisition.
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.
|
|
|
|
OMNI
U.S.A., INC. |
|
|
|
|
By: |
/s/ JOHN
R.
DUNN II |
|
John
R. Dunn II |
|
President
and
Chief Executive Officer |