8-K/A 1 mb8ka263.txt AMENDMENT NO. 2 TO 8-K CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934 Report for Event: June 3, 2003 M-B TECH INC. (Formerly Inspiration Products Group, Inc.) (Exact name of registrant as specified in its charter) Nevada 000-264569 88-9399260 -------------------------------------------------------------------------- (State or other (Commission File No.) (IRS Employer jurisdiction of Identification No.) incorporation) 11300 West Olympic Blvd., Suite 800 Los Angeles, CA 90064 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (416) 512-3777 Registrant's Attorney: Warren J. Soloski, Esq., 11300 W. Olympic Blvd., Suite 800, Los Angeles, CA 90064. (310) 477-9742 1890 Avenue of the Stars, Los Angeles, CA 90067 --------------------------------------------------- (Former name or former address, if changed since last report.) ITEM 1 CHANGES IN CONTROL OF REGISTRANT None ITEM 2 ACQUISITION ON DISPOSITION OF ASSETS None ITEM 3 BANKRUPTCY OR RECEIVERSHIP Not Applicable. ITEM 4 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not Applicable. ITEM 5 OTHER EVENTS NONE ITEM 6 RESIGNATIONS OF REGISTRANT'S DIRECTORS None ITEM 7 FINANCIAL STATEMENT AND EXHIBITS Financial Statements of M-B TECH, INC. are filed herewith. ITEM 8 SUPPLEMENTARY INFORMATION None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. M-B TECH, INC. (Registrant) Dated: August 8, 2003 By: /S/ Hanwook Bae ------------------- Hanwook Bae Chief Executive Officer M-B TECH INC. FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2002 AND 2001 CONTENTS Independent Auditors' Report F-2 Balance Sheet F-3 Statements of Shareholders' Deficiency F-4 Statements of Operations F-5 Schedule of Expenses F-6 Statements of Cash Flows F-7 Notes to Financial Statements F-8- F-12 F-1 INDEPENDENT AUDITORS' REPORT To the Stockholders of M-B TECH INC. We have audited the accompanying balance sheets of M-B Tech Inc. (the "Company") as of December 31, 2002 and 2001, and the related statements of shareholders' deficiency, operations, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2002 and 2001, and the results of its operation, accumulated deficit and its cash flows for the years ended, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses and negative working capital from operations, which raises substantial doubt about its ability to continue as a going concern. Management's plan in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ SF PARTNERSHIP, LLP ----------------------- SF PARTNERSHIP, LLP TORONTO, CANADA CHARTERED ACCOUNTANTS July 18, 2003 F-2 M-B TECH INC. Balance Sheets December 31, 2002 and 2001 2002 2001 ASSETS CURRENT Cash $ 640 $ 537 Term deposit 2,430 - Accounts receivable - 77,577 Inventories 26,573 517,006 ----------- -------- 29,643 595,120 EQUIPMENT (note 3) 167,467 149,481 OTHER ASSETS 49,403 55,249 ----------- -------- $ 246,513 $ 799,850 =========== ========= LIABILITIES CURRENT Bank loan (note 4) $ 105,300 $ - Accounts payable 377,475 598,607 Loans payable - current portion (note 5) 14,680 14,680 Loans from shareholders and directors (note 6) 37,890 160,290 ----------- -------- 535,345 773,577 LOANS PAYABLE (note 5) 12,255 25,448 ----------- -------- 547,600 799,025 ----------- -------- SHAREHOLDERS' DEFICIENCY CAPITAL STOCK (note 7) 585,000 468,000 PAID IN CAPITAL 383,938 151,980 ACCUMULATED OTHER COMPREHENSIVE LOSS (18,357) (13) ACCUMULATED DEFICIT (1,251,668) (619,142) ----------- -------- (301,087) 825 ----------- -------- $ 246,513 $ 799,850 APPROVED ON BEHALF OF THE BOARD -------- -------- Director Director F-3

F-4 M-B TECH INC. Statements of Operations Years Ended December 31, 2002 and 2001 2002 2001 SALES $ 1,360,295 $ 74,194 COST OF SALES 1,100,323 44,334 ----------- ---------- GROSS PROFIT 259,972 29,860 ----------- ---------- EXPENSES (page 6) 884,732 648,163 ----------- ---------- OPERATING LOSS (624,760) (618,303) ----------- ---------- OTHER INCOME Interest income 154 46 ----------- ---------- NON-OPERATING EXPENSES Interest expense 5,486 - Other 2,434 885 ----------- ---------- 7,920 885 ----------- ---------- NET LOSS $ (632,526) $ (619,142) =========== ========== LOSS PER SHARE $ (0.43) $ (0.83) =========== ========== WEIGHTED AVERAGE NUMBER OF SHARES 1,474,521 742,188 =========== ========== F-5 M-B TECH INC. Schedule of Expenses Years Ended December 31, 2002 and 2001 2002 2001 EXPENSES Research and development $ 188,096 $ 217,539 Salaries 183,229 118,615 Depreciation 120,177 35,754 Realized foreign exchange loss 106,585 - Entertainment 70,123 47,524 Travel 48,545 107,372 Employee benefits 36,231 27,523 Rent 31,861 27,482 Export expenses 26,865 - Fees and charges 17,463 8,359 Office & General 14,527 10,946 Communications 9,526 2,062 Car maintenance 8,199 5,009 Taxes and dues 6,438 339 Other 5,149 5,992 Insurance 3,933 441 Repairs and maintenance 3,838 2,776 Supplies 3,510 27,498 Utilities 437 2,932 ----------- ----------- $ 884,732 $ 648,163 ----------- ----------- F-6 M-B TECH INC. Statements of Cash Flows Years Ended December 31, 2002 and 2001 2002 2001 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (632,526) $ (619,142) Adjustments for: Depreciation 122,809 37,022 Gain on disposition of equipment (2,274) - Foreign currency translation (18,344) (13) Accounts receivable 77,577 (77,577) Inventories 490,433 (517,006) Other assets 5,846 (55,249) Accounts payable (221,132) 598,607 --------- ---------- (177,611) (633,358) --------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of equipment (138,521) (186,503) Term deposit (2,430) - --------- ---------- (140,951) (186,503) --------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 348,958 619,980 Loans payable (13,193) 40,128 Bank loan 105,300 - Loans from shareholders and directors (122,400) 160,290 --------- ---------- 318,665 820,398 --------- ---------- NET INCREASE IN CASH 103 537 CASH - BEGINNING OF YEAR 537 --------- ---------- CASH - END OF YEAR $ 640 $ 537 --------- ---------- F-7 M-B TECH INC. Notes to Financial Statements December 31, 2002 and 2001 1. DESCRIPTION OF BUSINESS AND GOING CONCERN a) Description of Business M-B Tech Inc. ("the Company"), a company operating in Seoul, Korea, was established on April 21, 2001 to manufacture and sell satellite receiving system components including their Low Noise Block Down Converter and other related products. b) Going Concern The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced recurring losses since inception and has negative cash flows from operations that raise substantial doubt as to its ability to continue as a going concern. For the years ended December 31, 2002 and 2001, the Company experienced net losses of $632,526 and $619,142 respectively. The Company's ability to continue as a going concern is contingent upon its ability to secure additional financing, initiating sale of its product and attaining profitable operations. Management is pursuing various sources of equity financing in addition to increasing its sales base. Subsequent to the year end, it entered into a reverse-takeover agreement with a public shell corporation (see note 9b). In addition it initiated two large sales agreements (see note 9c and 9d) and is pursuing others. Although the Company has plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or obtain such on terms satisfactory to the Company, if at all. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. F-8 M-B TECH INC. Notes to Financial Statements December 31, 2002 and 2001 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the company are in accordance with generally accepted accounting principles of the United States of America, and their basis of application is consistent. Outlined below are those policies considered particularly significant: a) Use of Estimates Preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and related notes to financial statements. These estimates are based on management's best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from estimates, although management does not believe such changes will materially affect the financial statements in any individual year. b) Revenue Recognition The Company recognizes revenues upon delivery of merchandise sold. c) Currency Translation The Company's functional currency is Korean won. Adjustments to translate those statements into U.S. dollars at the balance sheet date are recorded in other comprehensive income. Foreign currency transactions of the Korean operation have been translated to Korean Won at the rate prevailing at the time of the transaction. Realized foreign exchange gains and losses have been charged to income in the year. d) Cash Highly liquid investments with maturities of three months or less when purchased are considered cash equivalents and recorded at cost, which approximates fair value. e) Inventories Inventories are stated at the lower of cost or net realizable value. Net realizable value is determined by deducting selling expenses from selling price. The cost of inventories is determined on the first-in first-out method, except for materials-in-transit for which the specific identification method is used. F-9 M-B TECH INC. Notes to Financial Statements December 31, 2002 and 2001 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D) f) Equipment Equipment is stated at cost. Depreciation is computed by the declining balance method using rates based on estimated useful lives of the respective assets. Useful lives (years) -------------------- Structures and fixtures 5 Furniture and office equipment 5 Vehicles 5 Moulds 2 Software 5 g) Financial Instruments Fair values of cash equivalents, short-term and long-term investments and short-term debt approximate cost. The estimated fair values of other financial instruments, including debt, equity and risk management instruments, have been determined using market information and valuation methodologies, primarily discounted cash flow analysis. These estimates require considerable judgment in interpreting market data, and changes in assumptions or estimation methods could significantly affect the fair value estimates. 3. EQUIPMENT Equipment is comprised as follows:

F-10 M-B TECH INC. Notes to Financial Statements December 31, 2002 and 2001 4. BANK LOAN Bank loan is unsecured, due on demand and bears interest at a rate of 9% per annum. 5. LOANS PAYABLE 2002 2001 CURRENT LONG-TERM TOTAL Total --------------------------------------------------------------------- Vehicle loan #1 $ 7,843 $ 7,189 $ 15,032 $ 22,055 Vehicle loan #2 6,837 5,066 11,903 18,073 --------------------------------------------------------------------- $ 14,680 $ 12,255 $ 26,935 $ 40,128 --------------------------------------------------------------------- Vehicle loan #1 The loan bears interest at 9% per annum calculated monthly, repayable in monthly payments of $654 including interest and matures November 2004. The loan is secured by the related vehicle included in note 3. Vehicle loan #2 The loan bears interest at 15% per annum calculated monthly, repayable in monthly payments of $570 including interest and matures September 2004. The loan is secured by the related vehicle included in note 3. 6. LOANS FROM SHAREHOLDERS AND DIRECTORS The loans from the shareholders and directors are non-interest bearing and due on demand. 7. CAPITAL STOCK Authorized 2,400,000 common shares, par value $0.39 2002 2001 Issued 1,500,000 common shares (2001 - 1,200,000) $ 585,000 $ 468,000 ----------- ----------- F-11 M-B TECH INC. Notes to Financial Statements December 31, 2002 and 2001 8. INCOME TAXES The Company accounts for income taxes pursuant to SFAS No. 109, "Accounting for Income Taxes". Corporate income tax rates applicable to the Company in 2002 and 2001 are 16.5 percent of the first 100 million Korean Won of taxable income and 29.7 percent of the excess. However, no income tax is payable in 2002 and 2001 due to tax losses. Deferred tax assets due to future benefits of net operating losses have not been recorded in the financial statements due to uncertainties. Benefits from net operating losses of $632,526 and $619,142 for 2002 and 2001, if not utilized will expire in 2007 and 2006 respectively. 9. SUBSEQUENT EVENTS a) The Company implemented a reverse split canceling 1,050,000 shares of common stock without cash payment on a pro rata basis for all shareholders of record on May 13, 2003 and subsequently issued 1,000,000 new shares of common stock at its par value of 500 Korean Won ($0.39) per share (amounting to $405,000), which resulted in 1,450,000 outstanding common shares. The Company's major shareholder has been changed due to these capital transactions. b) On May 13, 2003, in accordance with a Share Exchange Agreement dated May 8, 2003, the Company entered into a reverse-takeover transaction with Inspiration Products Group Inc. ("ISRP"), a public Nevada shell corporation, whereby all the outstanding shares of the Company were exchanged for 22,000,000 shares of ISRP. As a result of the transaction, the shareholders of M-B Tech Inc. will control 84% of ISRP. While ISRP is the legal parent, the Company, as a result of the reverse-takeover, became the parent company for accounting purposes. c) On April 11, 2003, the Company signed a one year contract with a Korean customer. The total value of this contract is $938,000. The Company began filling orders on this contract in June 2003. d) On June 13, 2003, the Company signed a one year contract with a Japanese customer. The total value of this contract is $600,000, however, it is renewable at the end of the contract for another one-year term. The Company began filling orders on this contract in July 2003. F-12 M-B TECH INC. PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2003 UNAUDITED CONTENTS Pro-forma Consolidated Balance Sheet F-14 Pro-forma Consolidated Statement of Deficit F-15 Pro-forma Consolidated Statement of Operations F-16 Notes to Pro-forma Consolidated Financial Statements F-17 - F-18 F-13

APPROVED ON BEHALF OF THE BOARD Director Director --------------------- ------------------- F-14

F-15

F-16 M-B TECH INC. Notes to Pro-Forma Consolidated Financial Statements June 30, 2003 1. BASIS OF PRESENTATION: These unaudited pro-forma consolidated financial statements have been prepared to give effect to the following: a) The reverse takeover at May 18, 2003 whereby Inspiration Products Group, Inc. ("ISRP"), (the legal parent), issued 22,000,000 common shares in return for all outstanding common shares of M-B Tech Inc. ("M-B Tech") a Korean company (the acquirer for accounting purposes). As a result of this transaction, the former shareholders of M-B Tech received approximately 80% ownership of ISRP. After the transaction ISRP has 27,648,806 common shares issued and outstanding. b) M-B Tech maintains its books and records in Korean won. Balance sheet monetary accounts are translated using closing exchange rates in effect at the balance sheet date and nonmonetary items are translated at their historical value. Income and expense accounts are translated using an average exchange rate prevailing during each reporting period. No representation is made that the Korean won could have been, or could be, converted into United States dollars at the rates on the respective dates and or at any other certain rates. Adjustments resulting from the translation are included in the accumulated other comprehensive income (loss) in stockholders' equity. c) Subsequent to the reverse takeover ISRP changed its name to M-B Tech Inc. For the purposes of these statements, the legal parent is denoted as "U.S." and the accounting parent is denoted as "Korean" so as to differentiate between the companies having the same name. The pro-forma consolidated financial statements are based on the balance sheets of the following: a) ISRP as at June 30, 2003 (unaudited) and December 31, 2002 (audited). b) M-B Tech as at June 30, 2003 (unaudited) and December 31, 2002 (audited). The pro-forma consolidated financial statements include the statement of earnings for the following: a) ISRP for the six months ended June 30, 2003 (unaudited) and the year ended December 31, 2002 (audited). b) M-B Tech for the six months ended June 30, 2003 (unaudited) and for the year ended December 31, 2002 (audited). The pro-forma consolidated balance sheet as at June 30, 2003 and December 31, 2002 gives effect to the transactions as at May 18, 2003 and the pro- forma statement of earnings for the six months ended June 30, 2003 and year ended December 31, 2002 gives effect to the transactions as if they had taken place at the beginning of each period. F-17 M-B TECH INC. Notes to Pro-Forma Consolidated Financial Statements June 30, 2003 1. BASIS OF PRESENTATION (CONT'D) The pro-forma consolidated financial statements are not necessarily indicative of the actual results that would have occurred had the proposed transactions occurred on the dates indicated and not necessarily indicative of future earnings or financial position. 2. PRO-FORMA ADJUSTMENTS: 1) To record the consolidation of ISRP with M-B Tech including: a) The merger of ISRP and M-B Tech was accounted for as the recapitalization of M-B Tech, with the net assets of M-B Tech brought forward at their historical basis. b) To eliminate the pre-acquisition shareholders' equity of the ISRP at December 31, 2002. F-18

M-B TECH INC 8-K/A