SPARTA COMMERCIAL SERVICES, LLC
(A development stage company)
STATEMENT OF MEMBERS' CAPITAL
FOR THE PERIOD OCTOBER 1, 2001 (Date of Inception) THROUGH
DECEMBER 31, 2003
Deficit Total
Membership Accumulated (Deficiency)
Membership Interest Other During in
interest Shares Comprehensive Development Members'
Shares Amount Income Stage Capital
---------- ---------- ------------- ----------- ------------
Balance at December 31, 2001 $ -- $ -- $ -- $ -- $ --
Issuance of shares of membership
interest to the founders 5,100,000 250 -- -- 250
Proceeds from capital
contributions 50,000 50,000 -- -- 50,000
Net Loss -- -- -- (50,015) (50,015)
Balance at December 31, 2002 5,150,000 50,250 -- (50,015) 235
Proceeds from capital
contributions 640,000 640,000 -- -- 640,000
Membership interests issued to
consultants in exchange for
services in June 2003 at $1
per unit 448,000 448,000 -- -- 448,000
Membership interests
issued in exchange for
licensing and management fees in
December, 2003 at $1 per unit 330,433 330,433 -- -- 330,433
Unrealized gain on marketable
securities -- -- 8,711 -- 8,711
Net Loss -- -- -- (1,411,157) (1,411,157)
Balance at December 31, 2003 6,568,433 $1,468,683 $8,711 $(1,461,172) $ 16,222
See accompanying notes to financial statements
F-6
SPARTA COMMERCIAL SERVICES, LLC
(A development stage company)
STATEMENT OF CASH FLOWS
For the Period
October 1, 2001
(date of inception)
through
For the Year Ended December 31, December 31, 2003
2003 2002
----------- ----------- -----------
Cash Flows From Operating Activities:
Net loss $(1,411,157) $ (50,015) $(1,461,172)
Adjustments to reconcile net loss to
net cash (used in) operating activities:
Shares issued in exchange for
licensing fees 330,433 -- 330,433
Shares issued to founders -- 250 250
----------- ----------- -----------
Shares issued to consultants for services 448,000 -- 448,000
----------- ----------- -----------
(Increase) decrease in:
Accounts payable 30,152 -- 30,152
Due to related party 42,885 -- 42,885
----------- ----------- -----------
Net Cash Used In Operating Activities (559,687) (49,765) (609,452)
Cash Flows From Investing activities:
Net payments for purchase of
marketable securities (4,866) -- (4,866)
----------- ----------- -----------
Net Cash Used In Investing Activities (4,866) -- (4,866)
Cash Flows From Financing Activities:
Capital contributions from members 640,000 50,000 690,000
----------- ----------- -----------
Net Cash Provided By Financing Activities 640,000 50,000 690,000
Net increase in cash and equivalents 75,447 235 75,682
Cash and equivalents at beginning of period 235 -- --
Cash and equivalents at end of period $ 75,682 $ 235 $ 75,682
=========== =========== ===========
Supplemental disclosures of
cash flow information:
Cash paid during the period for interest $ -- $ -- $ --
----------- ----------- -----------
Cash paid during the period for taxes $ -- $ -- $ --
----------- ----------- -----------
Non Cash Investing and Financing Transactions:
Shares issued in exchange for
licensing fees $ 330,433 $ -- $ 330,433
Shares issued to founders $ -- $ 250 $ 250
----------- ----------- -----------
Shares issued to consultants for services $ 448,000 $ -- $ 448,000
----------- ----------- -----------
See accompanying notes to financial statements
F-7
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of
the accompanying financial statements follows.
Business and Basis of Presentation
----------------------------------
Sparta Commercial Services, LLC (the "Company") was formed on October 1, 2001
under the laws of the State of Delaware under the name of Sparta Financial
Services, LLC. In September, 2003, the Company changed its name to Sparta
Commercial Services, LLC. The liabilities of the Company's members are limited.
The Company is in the development stage, as defined by Statement of Financial
Accounting Standards No. 7 ("SFAS No. 7") and its efforts have been principally
devoted to developing business as an originator and indirect lender for retail
installment loan and lease financing for the purchase or lease of new and used
motorcycles (specifically 500cc and higher) and utility-oriented 4-stroke all
terrain vehicles (ATVs).
To date, the Company has generated no sales revenues, has incurred expenses and
has sustained losses. Consequently, its operations are subject to all the risks
inherent in the establishment of a new business enterprise. For the period from
October 1, 2001 (date of inception) through December 31, 2003, the Company has
accumulated losses of $1,461,172.
Estimates
---------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Revenue Recognition
-------------------
For revenue from products and services, the Company recognizes revenue in
accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements" ("SAB 101"). SAB 101 requires that four basic criteria
must be met before revenue can be recognized: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the selling price is fixed and determinable; and (4) collectibility is
reasonably assured. Determination of criteria (3) and (4) are based on
management's judgments regarding the fixed nature of the selling prices of the
products delivered/services rendered and the collectibility of those amounts.
Provisions for discounts and rebates to customers, estimated returns and
allowances, and other adjustments are provided for in the same period the
related sales are recorded. The Company defers any revenue for which the product
has not been delivered or services has not been rendered or is subject to refund
until such time that the Company and the customer jointly determine that the
product has been delivered or services has been rendered or no refund will be
required.
On December 17, 2003, the SEC staff released Staff Accounting Bulletin (SAB) No.
104, Revenue Recognition. The staff updated and revised the existing revenue
recognition in Topic 13, Revenue Recognition, to make its interpretive guidance
consistent with current accounting guidance, principally EITF Issue No. 00-21,
"Revenue Arrangements with Multiple Deliverables." Also, SAB 104 incorporates
portions of the Revenue Recognition in Financial Statements - Frequently Asked
Questions and Answers document that the SEC staff considered relevant and
rescinds the remainder. The company's revenue recognition policies are
consistent with this guidance; therefore, this guidance will not have an
immediate impact on the company's financial statements.
F-8
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF ACCOUNTING POLICIES (Continued)
Cash Equivalents
----------------
For the purpose of the accompanying financial statements, all highly liquid
investments with a maturity of three months or less are considered to be cash
equivalents.
Marketable Securities
---------------------
The Company classifies its marketable securities as "available for sale"
securities which may be sold in response to changes in interest rates, liquidity
needs and for other purposes. Securities classified as "available for sale" are
carried in the financial statement at fair value. Realized gains and losses are
included in other income. Unrealized gains and losses are reported as a separate
component of stockholders' equity.
At December 31, 2003, marketable securities consist of:
Fair Market
Cost Unrealized Gain Value
Equity securities $ 4,489 $ 8,711 $13,200
Mutual funds 377 -- 377
------- ------- -------
Total $ 4,866 $ 8,711 $13,577
At December 31, 2002, marketable securities balance was $0.
Income Taxes
------------
The Company has chosen to be treated as a partnership for federal and state
income tax purposes. A partnership is a not a tax paying entity for federal or
state income tax purposes. Accordingly, no income tax expense has been recorded
in the financial statements. All income or losses will be reported on the
individual members' income tax returns. The Company is however liable for New
York City income taxes.
The Company has adopted Financial Accounting Standard No. 109 (SFAS 109) which
requires the recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statement or tax returns. Under this method, deferred tax liabilities and assets
are determined based on the difference between financial statements and tax
basis of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse. Temporary differences between
taxable income reported for financial reporting purposes and income tax purposes
for New York City are insignificant.
Impairment of Long-Lived Assets
-------------------------------
The Company has adopted Statement of Financial Accounting Standards No. 121
(SFAS 121). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. SFAS No. 121 also requires assets to be
disposed of be reported at the lower of the carrying amount or the fair value
less costs to sell.
F-9
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)
Intangible Assets
-----------------
Organization costs have been expensed as incurred.
Comprehensive Income
--------------------
Statement of Financial Accounting Standards No. 130 ("SFAS 130"), Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. At December 31, 2003 and 2002, the Company has $8,711 and
$0, respectively, as accumulated unrealized gain (loss) on marketable securities
classified as held for sale.
Segment Information
-------------------
The Company adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS
131"). SFAS establishes standards for reporting information regarding operating
segments in annual financial statements and requires selected information for
those segments to be presented in interim financial reports issued to
stockholders. SFAS 131 also establishes standards for related disclosures about
products and services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker, or decision
making group, in making decisions how to allocate resources and assess
performance. The information disclosed herein, materially represents all of the
financial information related to the Company's principal operating segment.
Guaranteed Payments to the Members
----------------------------------
The Company has included compensation paid to the Company's Managing Member as a
charge to operations. During the years ended December 31, 2003 and 2002, the
Company paid $115,140 and $0, respectively, to the Company's Managing Member in
the form of compensation.
Stock Based Compensation
------------------------
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, this
statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The Company has chosen to continue to account
for stock-based compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related interpretations. Accordingly, compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the Company's stock at the date of the grant over the exercise price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its financial reports for the period from January 1, 2003 through
December 31, 2003 and will adopt the interim disclosure provisions for its
financial reports for the subsequent periods. The Company does not have stock
based awards of compensation to employees granted or outstanding during the
period from October 1, 2001 (date of inception) through December 31, 2003.
F-10
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)
Liquidity
---------
As shown in the accompanying financial statements, the Company incurred a net
loss of $(1,461,172) during the period October 1, 2001 (date of inception)
through December 31, 2003. The Company's current assets exceeded its current
liabilities by $16,221 as of December 31, 200
Concentrations of Credit Risk
-----------------------------
Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents
and trade receivables. The Company places its cash and temporary cash
investments with high credit quality institutions. At times, such investments
may be in excess of the FDIC insurance limit.
Research and Development
------------------------
Company-sponsored research and development costs related to both present and
future products will be expended in the period incurred.
Advertising
-----------
The Company follows a policy of charging the costs of advertising to expenses
incurred. During the years ended December 31, 2003 and 2002, and the period
October 1, 2001 (date if inception) through December 31, 2003, the Company
incurred advertising costs of $282, $0 and $282, respectively.
New Accounting Pronouncements
-----------------------------
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity. The
consolidation requirements of Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim period beginning
after June 15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The adoption of Interpretation No. 46
will not have a material impact on the Company's results of operations or
financial position.
In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES. SFAS 149 amends SFAS No. 133 to provide clarification on the
financial accounting and reporting of derivative instruments and hedging
activities and requires that contracts with similar characteristics be accounted
for on a comparable basis. The provisions of SFAS 149 are effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of SFAS 149 will not
have a material impact on the Company's results of operations or financial
position.
F-11
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE A - SUMMARY OF ACCOUNTING POLICIES (continued)
New Accounting Pronouncements (continued)
-----------------------------------------
In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS 150
establishes standards on the classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. The provisions
of SFAS 150 are effective for financial instruments entered into or modified
after May 31, 2003 and to all other instruments that exist as of the beginning
of the first interim financial reporting period beginning after June 15, 2003.
The adoption of SFAS 150 will not have a material impact on the Company's
results of operations or financial position.
In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88 AND 106. This statement retains the disclosure
requirements contained in FASB statement no. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The required
information should be provided separately for pension plans and for other
postretirement benefit plans. The revision applies for the first fiscal or
annual interim period ending after December 15, 2003 for domestic pension plans
and June 15, 2004 for foreign pension plans and requires certain new disclosures
related to such plans. The adoption of this statement will not have a material
impact on the Company's results of operations or financial position.
NOTE B - RELATED PARTY TRANSACTIONS
The Company entered in to a licensing agreement relating to the use of a
proprietary operating system, with an entity controlled by the Company's
managing member. During the years ended December 31, 2003 and 2002, the Company
charged to operations $300,000 in connection with the licensing agreement. Also,
in December 2003, the Company issued 330,433 shares of its membership interests
valued at $330,433 which was charged to operations in exchange for licensing the
proprietary operating systems. (see Note D)
During the years ended December 31, 2003 and 2002, the Company paid $115,140 and
$0, in exchange for services to the Company's Managing Member. These amounts
were charged to operations.
The Company leases office space from an entity controlled by the Company's
managing member (see Note D)
NOTE C - MEMBERS' CAPITAL
The Company is authorized to issue 6,818,433 shares of membership interests,
with no par value. At the option of the Company, the shares may be designated as
a separate class or subclass of the Company's membership interests for the
purposes of delineating the particular rights and shares/units of ownership may
be diluted by future issuance of securities. At December 31, 2003 and 2002, the
Company has issued and outstanding shares of 6,568,433 and 5,150,000,
respectively.
In 2002, the Company issued 5,100,000 shares to the founder members in exchange
for services relating to formation of the Company. The Company charged $250 to
expenses in relation to the issuance.
In April 2002, the Company issued 50,000 shares of membership interest for cash
consideration of $50,000.
F-12
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE C - MEMBERS' CAPITAL (continued)
In June 2003, the Company issued 448,000 shares of membership interest to
various consultants in exchange for services valued at $1 per share.
During the year ended December 31, 2003, the Company issued 640,000 shares of
membership interest for $640,000.
In December 2003, the Company issued 330,433 shares of membership interest for
licensing fees payable to a company related to the principal members of the
Company.
NOTE D - COMMITMENTS AND CONTINGENCIES
Operating Lease Commitments
---------------------------
The Company leases office space under operating lease with an entity controlled
by the Company's managing member. (Note B)
NOTE E - GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the accompanying
financial statements during the period October 1, 2001 (date of inception)
through December 31, 2003, the Company incurred a loss of $1,461,172 and had no
revenue. These factors among others may indicate that the Company will be unable
to continue as a going concern for a reasonable period of time.
The Company's existence is dependent upon management's ability to develop
profitable operations. Management is devoting substantially all of its efforts
to developing its business and raising capital and there can be no assurance
that the Company's efforts will be successful. However, the planned principal
operations have not commenced and no assurance can be given that management's
actions will result in profitable operations or the resolution of its liquidity
problems. The accompanying statements do not include any adjustments that might
result should the Company be unable to continue as a going concern.
In order to improve the Company's liquidity, the Company's management is
actively pursing additional equity financing through discussions with investment
bankers and private investors. There can be no assurance the Company will be
successful in its effort to secure additional equity financing.
F-13
SPARTA COMMERCIAL SERVICES, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE F - SUBSEQUENT EVENTS
On February 27, 2004, the Company entered into an Agreement of Plan and
Reorganization ("Agreement") with Tomahawk Industries, Inc. ("Tomahawk") an
inactive publicly registered shell corporation with no significant assets or
operations. In accordance with SFAS No. 141, the Company was the acquiring
entity. While the transaction is accounted for using the purchase method of
accounting, in substance the Agreement is a recapitalization of the Company's
capital structure.
For accounting purposes, the Company accounted for the transaction as a reverse
acquisition and Sparta is the surviving entity. The total purchase price and
carrying value of net assets acquired was $61,187. From April 1988 until the
date of the Agreement, Tomahawk was an inactive corporation with no significant
assets and liabilities The Company did not recognize goodwill or any intangible
assets in connection with the transaction.
Effective with the Agreement, all previously outstanding membership interests
owned by the Company's members were exchanged for an aggregate of 143,362,772
shares of Tomahawk common stock. The value of the stock that was issued was the
historical cost of the Tomahawk's net tangible assets, which did not differ
materially from their fair value.
Subject to shareholder approval, Tomahawk is obligated to issue an additional
486,511,854 shares of its common stock to the Company's members.
F-14
(B) PRO FORMA FINANCIAL INFORMATION.
Condensed Consolidated Pro Forma Unaudited Balance Sheet F-16
as of December 31, 2003
Condensed Consolidated Pro Forma Unaudited Statement of Losses F-17
for the Year Ended December 31, 2003
Notes to Condensed Consolidated Pro Forma F-18
Unaudited Financial Statements
Unaudited Pro Forma Condensed Financial Information
On February 27, 2004, Sparta Commercial Services LLC ("Sparta") completed an
Agreement and Plan of Reorganization ("Agreement") with Tomahawk Industries,
Inc. ("Tomahawk") an inactive publicly registered shell corporation with no
significant assets or operations. For accounting purposes, Sparta shall be the
surviving entity. The transaction is accounted for using the purchase method of
accounting. The total purchase price and carrying value of net assets acquired
of Tomahawk was $61,187. From April, 1988 until the date of the merger, Tomahawk
was an inactive corporation with no significant assets and liabilities.
Effective with the Agreement, all previously outstanding membership interest
owned by Sparta's members were exchanged for an aggregate of 143,362,772 shares
of Tomahawk common stock. The value of the stock that was issued was the
historical cost of Tomahawk's net tangible assets, which did not differ
materially from their fair value. In accordance with Statement of Financial
Accounting Standard 141, Sparta is the acquiring entity.
The Proforma Unaudited Financial Statements have been prepared by management of
Sparta in order to present consolidated financial position and results of
operations of Tomahawk and Sparta as if the acquisition had occurred as of
December 31, 2003 for the pro forma condensed balance sheet and to give effect
to the acquisition of Tomahawk, as if the transaction had taken place at January
1, 2003 for the pro forma condensed consolidated statement of losses for the
year ended December 31, 2003.
The pro forma information is based on historical financial statements giving
effect to the proposed transactions using the purchase method of accounting and
the assumptions and adjustments in the accompanying notes to the pro forma
financial statements. The unaudited pro forma financial information is not
necessarily indicative of the actual results of operations or the financial
position which would have been attained had the acquisitions been consummated at
either of the foregoing dates or which may be attained in the future. The pro
forma financial information should be read in conjunction with the historical
consolidated financial statements of Sparta Commercial Services, LLC (including
notes thereto) included in this Form.
F-15
TOMAHAWK INDUSTRIES, INC.
CONDENSED CONSOLIDATED PRO FORMA UNAUDITED BALANCE SHEET
DECEMBER 31, 2003
ASSETS
Pro Forma Pro Forma
TOMAHAWK SPARTA Adjustments Consolidated
---------- ------- ----------- ------------
Current Assets:
Cash and equivalents $ 594 $75,682 $ 76,276
Marketable securities -- 13,577 13,577
----------- ------- ------------
Total Current Assets $ 594 $89,259 $ 89,853
=========== ======= ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Accounts payable $ -- $30,152 $ 30,152
Advances from stockholders 5,144 -- 5,144
Due to related party -- 42,885 42,885
----------- ------- ------------
Total Current Liabilities 5,144 73,037 78,181
Members' Capital -- 16,222 (16,222) (1) --
Stockholders' Equity:
Common stock 56,637 143,363 (1) 200,000
Additional paid-in-capital 5,443,447 (5,443,447) (1) --
Accumulated deficit (5,504,634) 5,504,634 (2) (188,328)
----------- ------------
16,222 (1)
(61,187) (2)
(143,363) (1)
Total (Deficiency) in Stockholders' Equity (4,550) 11,672
----------- ------------
Total Liabilities and Stockholders' Equity $ 594 $89,259 $ 89,853
=========== ======= ============
See accompanying notes to the proforma unaudited consolidated
financial statements
F-16
TOMAHAWK INDUSTRIES, INC.
CONDENSED CONSOLIDATED PRO FORMA UNAUDITED STATEMENT OF LOSSES
FOR THE YEAR ENDED DECEMBER 31, 2003
Pro Forma Pro Forma
TOMAHAWK SPARTA Adjustments Consolidated
-------- ---------- ----------- ------------
Operating Expenses:
General and administrative $ 5,144 $1,411,157 $ 61,187 (1) $ 1,477,488
-------- ---------- ------------
Total Operating Expenses 5,144 1,411,157 1,477,488
Loss from Operations (5,144) (1,411,157) (1,477,488)
-------- ---------- ------------
Other Income -- -- --
-------- ---------- ------------
Interest (Expenses) Income -- -- --
-------- ---------- ------------
Income Taxes -- -- --
-------- ---------- ------------
Net Loss $ (5,144) (1,411,157) $ (1,477,488)
======== ========== ============
See accompanying notes to proforma unaudited consolidated
financial statements
F-17
TOMAHAWK INDUSTRIES, INC.
NOTES TO CONDENSED PRO FORMA UNAUDITED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
The Proforma Unaudited Condensed Financial Statements have been prepared in
order to present consolidated financial position and results of operations of
Tomahawk Industries, Inc. ("Tomahawk") and Sparta Commercial Services LLC
("Sparta") as if the acquisition had occurred as of December 31, 2003 for the
pro forma condensed balance sheet and to give effect to the acquisition of
Tomahawk, as if the transaction had taken place at January 1, 2003 for the pro
forma condensed consolidated statement of losses for the year ended December 31,
2003.
The following pro forma adjustments are incorporated into the pro forma
condensed consolidated balance sheet as of December 31, 2003 and the pro forma
condensed consolidated statement of losses for the year ended December 31, 2003.
(1) To record the issuance of 143,362,772 shares of Tomahawk common stock in
exchange for one hundred percent (100%) of the issued and outstanding membership
interests of Sparta; the cancellation of Sparta membership interests and
related cost of $61,187.
(2) To record the acquisition of Tomahawk for stock. The significant components
of this transaction are:
Common stock retained by Tomahawk shareholders $ 56,637
Assets acquired (594)
Liabilities assumed 5,144
--------
Total consideration paid $ 61,187
========
In accordance with SOP 98-5, the Company will expense as organization costs
the $61,187.
F-18
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.
TOMAHAWK INDUSTRIES, INC.
Date: June 14, 2004 By: /s/ Anthony Havens
--------------------------
Anthony Havens, President
F-19