8-K 1 v01923_8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): January 5, 2005 Walker Financial Corporation (Exact name of registrant as specified in its charter) Delaware 0-5418 13-2637172 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 990 Stewart Avenue - Suite 60A Garden City, New York 11530 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (516) 832-7000 Not Applicable (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-4(c)) 1 Item 3.02. Unregistered Sales of Equity Securities. On January 5, 2005, we, Walker Financial Corporation, issued a total of 2,936,890 shares of our common stock to the holders of our outstanding 10% Senior Subordinated Secured Convertible Promissory Notes in the aggregate principal amount of $795,000 in exchange for such holders waiving substantially all of their rights under such 10% notes, including their right to payment of principal and accrued interest due under such 10% notes. The accrued interest due under such 10% notes totaled approximately $287,000. In effect, such 10% notes were exchanged for shares of our common stock at the rates of one share for each (a) $0.30 of principal so exchanged and (b) $0.23 of accrued interest so exchanged. In connection with the issuance of said 2,936,890 shares, we agreed to (x) use our best efforts to expeditiously register for resale the shares that such holders of the 10% notes received and (y) issue additional shares to such holders in the event that we issued shares to certain third parties for consideration less than $0.30 at any time prior to December 4, 2006. We believe that the issuance of said 2,936,891 shares was exempt from the registration requirements of the Securities Act pursuant to the provisions of Sections 3(a)(9) and 4(2) of the Securities Act. The Company additionally expects to record a charge for the conversion expense since the conversion price on the exchange was less than the conversion price of the 10% notes. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 6, 2005 Walker Financial Corporation By: /s/ Mitchell S. Segal ------------------------------------- Mitchell S. Segal, President 3

NATIONAL PREPLANNING, INC. (A Development Stage Company) BALANCE SHEETS December 31, 2001 and 2000 -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' DEFICIENCY ---------------------------------------- 2001 2000 ----------------------------------- CURRENT LIABILITIES Accounts payable and accrued expenses $ 426,110 $ 360,487 Due to stockholders 33,199 49,552 ------------- ------------- TOTAL CURRENT LIABILITIES 459,309 410,039 OTHER LIABILITIES Note payable and accrued interest, net of deferred debt current discount of $10,260 and $26,400, respectively 155,865 130,725 ------------ ------------ TOTAL LIABILITIES 615,174 540,764 ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIENCY Common stock, authorized 15,000,000 par value $0.01; 7,374,398 and 6,310,340 shares issued and outstanding 73,743 63,103 Additional paid-in capital 2,040,873 665,878 Deficit accumulated during development stage (2,701,738) (1,229,717) ----------- ----------- TOTAL STOCKHOLDERS' DEFICIENCY (587,122) (500,736) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 28,052 $ 40,028 ============ ============

NATIONAL PREPLANNING, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS For the Years Ended December 31, 2001 and 2000 and ------------------------------------------------------------------------------------------------------------------------------ Cumulative from January 13, 1999 (Inception) Cumulative from January 13, 2001 2000 1999 ------------------------------------------------------------------------- OPERATING EXPENSES Website development costs $ 987 $ 472,388 $ 526,347 General and administrative expenses 1,418,534 530,516 2,076,166 ------------ ---------- ----------- TOTAL OPERATING EXPENSES 1,419,521 1,002,904 2,602,513 ----------- ---------- ----------- OPERATING LOSS (1,419,521) (1,002,904) (2,602,513) ----------- ----------- ----------- OTHER EXPENSE Interest expense 52,500 46,725 99,225 ----------- ----------- ----------- NET LOSS $(1,472,021) $(1,049,629) $(2,701,738) =========== =========== ===========

NATIONAL PREPLANNING, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' DEFICIENCY For the Years Ended December 31, 2001 and 2000 and Cumulative from January 13, 1999 ------------------------------------------------------------------------------------------------------------------------------- Common Stock Additional --------------------------- Paid-in Accumulated Shares Amounts Capital Deficit Total ------------------------------------------------------------------------------------------ BALANCE - January 13, 1999 -- $ -- $ -- $ -- $ -- ------- Issuance of Common Stock to Founders 950 10 -- -- 10 Capital contributions -- -- 76,645 -- 76,645 Net loss -- -- -- (180,088) (180,088) ---------- ------- -------- ----------- ------------ BALANCE - December 31, 1999 950 10 76,645 (180,088) (103,433) ------- Issuance of Common Stock to Founders 795,841 7,958 -- -- 7,958 Issuance of Common Stock in settlement of accrued salaries 5,149,209 51,492 -- -- 51,492 Issuance of a warrant -- -- 66,000 -- 66,000 Capital contributions -- -- 34,651 -- 34,651 Sale of Common Stock 60,240 602 99,398 -- 100,000 Issuance of Common Stock to consultants 304,100 3,041 389,184 -- 392,225 Net loss -- -- -- (1,049,629) (1,049,629) ---------- ------- -------- ----------- ------------ BALANCE - December 31, 2000 ------- 6,310,340 $63,103 $665,878 $(1,229,717) $ (500,736) ---------- ------- -------- ----------- ------------

NATIONAL PREPLANNING, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' DEFICIENCY, Continued For the Years Ended December 31, 2001 and 2000 and Cumulative from January 13, 1999 ------------------------------------------------------------------------------------------------------------------------------- Common Stock Additional --------------------------------- Paid-in Accumulated Shares Amounts Capital Deficit Total ------------------------------------------------------------------------------------------------- BALANCE - December 31, 2000 6,310,340 $63,103 $665,878 $(1,229,717) $ (500,736) ------- Issuance of Common Stock in settlement of accounts payable 110,000 1,100 123,900 -- 125,000 Sale of Common Stock 60,240 602 99,398 -- 100,000 Issuance of Common Stock upon conversion of note payable 25,000 250 12,250 -- 12,500 Issuance of Common Stock to consultants 868,818 8,688 1,112,087 -- 1,120,775 Warrant repricing on note payable -- -- 27,360 -- 27,360 Net loss -- -- -- (1,472,021) (1,472,021) --------- ------- ---------- ----------- ----------- BALANCE - December 31, 2001 7,374,398 $73,743 $2,040,873 $(2,701,738) $ (587,122) ========= ======= ========== =========== ============

NATIONAL PREPLANNING, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2001 and 2000 and ------------------------------------------------------------------------------------------------------------------------------- Cumulative from January 13, 1999 (Inception) Cumulative from 2001 2000 January 13, 1999 ---------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(1,472,021) $(1,049,629) $(2,701,738) ----------- ----------- ----------- Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 5,305 5,701 12,211 Stock based compensation 1,120,775 392,225 1,513,000 Accrued interest and amortization of deferred debt discount 52,500 46,725 99,225 Changes in operating assets and liabilities: Other assets -- -- (20,800) Accounts payable and accrued expenses 190,623 323,840 602,602 ------------ ------------ ------------ TOTAL ADJUSTMENTS 1,369,203 768,491 2,206,238 ----------- ------------ ----------- NET CASH USED IN OPERATING ACTIVITIES (102,818) (281,138) (495,500) ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment -- (8,428) (19,463) ----------------- -------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from note payable 12,500 150,000 162,500 Net (repayments) advances from stockholders (16,353) 3,628 33,199 Capital contributions -- 34,651 111,296 Proceeds from the issuance of Common Stock 100,000 107,958 207,968 ------------ ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 96,147 296,237 514,963 ------------- ------------ ------------ NET (DECREASE) INCREASE IN CASH $ (6,671) $ 6,671 $ -- -------------- -------------- -----------------

NATIONAL PREPLANNING, INC. (A Development Stage Company) STATEMENTS OF CASH FLOWS, Continued For the Years Ended December 31, 2001 and 2000 and ------------------------------------------------------------------------------------------------------------------------------- Cumulative from January 13, 1999 (Inception) Cumulative from 2001 2000 January 13, 1999 ----------------------------------------------------------- CASH - Beginning $ 6,671 $ -- $ -- ---- -------------- -------------- ---------------- CASH - Ending $ -- $ 6,671 $ -- ---- ============== ============== ================

Estimated 2001 2000 Useful Life ------------------- -------------------- ------------------ Office equipment $ 6,753 $ 6,753 5-7 years Furniture and fixtures 12,710 12,710 5-7 years ------- ------- 19,463 19,463 Less: Accumulated depreciation (8,431) (4,766) -------- -------- Property and Equipment, Net $11,032 $14,697 ======= =======

AMERICAN DATASOURCE, INC. BALANCE SHEETS December 31, 2001 and 2000 --------------------------------------------------------------------------------------------------------------------------- ASSETS 2001 2000 -------------------------------------- CURRENT ASSETS Cash $ 8,398 $ 32,547 Accounts receivable 191,775 150,511 Due from Affiliate 50,000 -- --------- --------- Total Current Assets 250,173 183,058 PROPERTY AND EQUIPMENT, Net 376,856 167,806 ---------------------- Deferred tax asset 25,000 75,000 --------- --------- TOTAL ASSETS $652,029 $425,864 ======== ========

AMERICAN DATASOURCE, INC. BALANCE SHEETS December 31, 2001 and 2000 --------------------------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDER'S EQUITY 2001 2000 ------------------------------ CURRENT LIABILITIES Accounts payable and accrued expenses $151,041 $ 69,425 Loan Payable, bank 61,000 -- --------- --------- Total Current Liabilities 212,041 69,425 OTHER LIABILITIES Negative goodwill, net of accumulated amortization of $34,593 and $17,297 138,378 155,674 -------- ------- TOTAL LIABILITIES 350,419 225,099 -------- -------- COMMITMENTS AND CONTINGENCIES Stockholder's Equity Common Stock - no par value, $.01 stated value, 100,000 shares authorized, 100,000 shares issued and outstanding 1,000 1,000 Additional paid in capital 99,000 99,000 Retained earnings 201,610 100,765 -------- -------- TOTAL STOCKHOLDER'S EQUITY 301,610 200,765 -------- -------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $652,029 $425,864 ======== ========

AMERICAN DATASOURCE, INC. STATEMENTS OF INCOME AND RETAINED EARNINGS For the Years Ended December 31, 2001 and 2000 --------------------------------------------------------------------------------------------------------------------------- 2001 2000 ------------------------------- NET SALES $1,521,190 $1,807,128 --------- ---------- ---------- OPERATING EXPENSES Selling, general and administrative 1,360,101 1,602,703 Research and development -- 58,800 ---------- ---------- Total Operating Expenses 1,360,101 1,661,503 ---------- ---------- OPERATING INCOME 161,089 145,625 INTEREST EXPENSE 1,840 -- ---------------- ---------- ---------- INCOME BEFORE INCOME TAXES 159,249 145,625 PROVISION FOR INCOME TAXES 58,404 44,860 -------------------------- ---------- ---------- NET INCOME 100,845 100,765 RETAINED EARNINGS - Beginning 100,765 -- ----------------- ---------- ---------- RETAINED EARNINGS - Ending $ 201,610 $ 100,765 ----------------- =========== ===========

AMERICAN DATASOURCE, INC. STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2001 and 2000 --------------------------------------------------------------------------------------------------------------------------- 2001 2000 ------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 100,845 $ 100,765 --------- --------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 5,010 916 Amortization (17,296) (17,297) Deferred income taxes 50,000 44,000 Loss on disposal 4,095 -- Changes in operating assets and liabilities: Accounts receivable (41,264) (12,729) Accounts payable and accrued expenses 81,616 66,864 ---------- ---------- TOTAL ADJUSTMENTS 82,161 81,754 ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 183,006 182,519 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (20,655) (4,534) Software development costs (197,500) (164,188) Due from Affiliate (50,000) -- ---------- --------- NET CASH USED IN INVESTING ACTIVITIES (268,155) (168,722) ---------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from loan payable, bank 61,000 -- ---------- ---------- NET (DECREASE) INCREASE IN CASH (24,149) 13,797 ---------- ---------- CASH - Beginning 32,547 18,750 ---- ---------- ---------- CASH - Ending $ 8,398 $ 32,547 ---- =========== ==========

AMERICAN DATASOURCE, INC. STATEMENTS OF CASH FLOWS, Continued For the Years Ended December 31, 2001 and 2000 --------------------------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION ------------------------------------------------- Cash paid during the years for: 2001 2000 --------------------------- Interest $1,840 $-- Taxes $8,464 $--

Estimated 2001 2000 Useful Life ------------------------ ---------------------- -------------------- Equipment $ 21,094 $ 4,534 3 years In-Process Software Development (1) 361,688 164,188 N/A -------- -------- 382,782 168,722 Less: Accumulated depreciation (5,926) (916) -------- -------- Property and Equipment, Net $376,856 $167,806 ======== ========

Term Section Acquisition Transaction 7.4 Applicable Laws 4.6 Benefit Plans 4.10 Certificate of Merger 2.3 Certificates 3.2 Closing 2.2 Closing Date 2.2 Company Affiliate 7.5 Company Common Stock 3.1 Company Consents 4.5 Company Disclosure Letter 3.3 Company Option 3.3 Company Representations 7.4 Company Warrants 7.7 Confidential Information 6.3 Converted Option 3.3 Effective Time 2.3 Employment Agreement 8.1 Escrow Agreement 8.1 Exchange Ratio 3.1 Intellectual Property Rights 4.16 Parent Affiliate 7.5 Parent Consents 5.4 Parent Disclosure Letter 5.2 Parent SEC Documents 5.6 Stockholder Approval 4.4 Tax Returns 4.9

Schedule A Principal Amount of Notes Shares Mitchell Segal $506,221 187,552 Fusebox 34,407 12,749 Scott Piscitelli 14,746 5,463 Perry Weitz 14,746 5,463 Arthur Luxenberg 9,830 3,642 Stella Spivack 4,915 1,821 Gary Brustein 17,695 6,556 Michael Todd 3,441 1,275 Stuart Ball 14,746 5,463 Callaghan & Nawrocki 2,458 910 Paolo Ferrari 2,458 910 Charles Adkins 11,844 4,388 Otto Kozak 7,373 2,732 Whitmore 51,494 19,078 Chris Johnson 5,922 2,194 J & V 5,922 2,194 Neil Weissman 2,458 910 Franco DiLullo 983 364 John Bach 22,119 8,195 Joshua Nacham 5,135 1,902 Scott Pontone 7,373 2,732 Glen Marin 3,668 1,359 Zachary Prensky 49 18 ----------- ------------ Total 750,000 277,870

Schedule A Party Principal Amount of Notes Number of Shares James N. Lucas, Sr. $125,000 46,893 James N. Lucas and Taresa Lucas Irrevocable Trust Agreement 2000 $250,000 93,784 James N. Lucas, Jr. $125,000 46,893 -------- ------ TOTAL $500,000 187,570

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