8-K/A 1 nesco8ka-aug2004.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A (Amendment No. 1) CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: May 25, 2004 (Date of earliest event reported) NESCO INDUSTRIES, INC. ---------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 000-28307 13-3709558 ------------------ --------------- ------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) Incorporation) 305 Madison Avenue, New York, NY 10165 10165 -------------------------------------- ------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 808-0607 22-09 Queens Plaza North, Long Island City, New York 11101 ---------------------------------------------------------------------- (Former name or former address, if changed since last report Item 2 - Acquisition or Disposition of Assets On June 9, 2004, Nesco Industries, Inc. ("Nesco" or the "Company") filed a Form 8-K under Item 2 to report that it had completed the acquisition of Hydrogel Design Systems, Inc. ("HDS"), a manufacturer of hydrogels used for wound care, medical diagnostics, transdermal drug delivery and cosmetics. In response to parts (a) and (b) of Item 7 of such Form 8-K, Nesco stated that it would file the required financial information by amendment, as permitted by Instructions (a)(4) and (b)(2) to Item 7 to Form 8-K. This form 8- K/A is being filed to provide the required financial information. Item 7 - Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Business Acquired The required financial statements of HDS for the years ended April 30, 2004 and 2003 are attached hereto as Exhibit 99.2 and are incorporated by reference herein. (b) Proforma Financial Information The following unaudited proforma combined condensed financial statements of the Company consist of the Company's consolidated statements of operations for the year ended April 30, 2004 and consolidated balance sheet as of April 30, 2004, to give effect to the acquisition of HDS by the Company (collectively, the "Unaudited Proforma Combined Condensed Financial Statements"). The unaudited proforma combined condensed statements of operations gives effect to the acquisition as if it had occurred on May 1, 2003 and the unaudited proforma combined condensed balance sheet gives effect to the acquisition as if it had occurred on April 30, 2004. The unaudited Proforma Combined Condensed Financial Statements are provided for informational purposes only and do not purport to reflect the results of operations that would have existed or occurred had such transaction taken place on the dated indicated nor do they purport to reflect the financial condition or results of operations that will exist or occur in the future. The proforma adjustments are based upon available information and certain assumptions that management believes are reasonable. The Unaudited Proforma Combined Condensed Financial Statements should be read in conjunction with the Company's historical consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended April 30, 2004 to be filed on August 13, 2004, and in conjunction with the HDS audited financial statements contained herein as Exhibit 99.2. 1 UNAUDITED PROFORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS FOR THE FISCAL YEAR ENDED APRIL 30, 2004

See notes to the unaudited proforma combined condensed financial statements. 2 UNAUDITED PROFORMA COMBINED CONDENSED BALANCE SHEET AS OF APRIL 30, 2004

See notes to the unaudited proforma combined condensed financial statements. 3 NOTES ON UNAUDITED PROFORMA COMBINED CONDENSED FINANCIAL INFORMATION Basis of Presentation On May 25, 2004, Nesco Industries, Inc. ("Nesco"), a Nevada corporation, Hydrogel Design Systems, Inc., a privately-held Delaware corporation ("HDS"), certain stockholders of Nesco (the "Nesco Stockholders") and certain stockholders of HDS (the "HDS Stockholders") completed the transactions contemplated by the Share Exchange Agreement, dated as of April 29, 2004, by and among Nesco, HDS, the Nesco Stockholders and the HDS Stockholders (the "Exchange Agreement"), whereby HDS has become a majority owned subsidiary of Nesco and the holders of HDS common stock and debt hold a majority interest of Nesco. The unaudited proforma combined condensed statements of operations are presented as if the acquisition of HDS by the Company occurred on May 1, 2003 and the unaudited proforma combined condensed balance sheet is presented as if the acquisition of HDS by the Company occurred on April 30, 2004. The unaudited proforma combined condensed statement of operations for the year ended April 30, 2004 was derived from the Company's unaudited statement of operations for the year ended April 30, 2004 which will be included in its Form 10-KSB upon completion of its audit to be filed on August 13, 2004 and from HDS's audited statement of operations for the year ended April 30, 2004 which is included in this filing as Exhibit 99.2. Nesco had intended to issue shares of its common stock in exchange for the equity securities of HDS in certain ratios as provided for in the Exchange Agreement. However, because Nesco did not have the required number of authorized shares of common stock to complete the exchange on this basis, it issued shares of its newly designated Series B Preferred Stock for among others, equity and debt of HDS. Upon filing of the Certificate of Amendment to the Certificate of Incorporation to increase the number of shares of common stock which Nesco is authorized to issue to 400,000,000, each share of Preferred stock will be automatically converted into shares of Nesco common stock. For purposes of shares outstanding and issued, all stock is presented as if the conversion had taken place at the time of the transaction. As a result of the execution of the Share Exchange Agreement, HDS is considered for accounting purposes to be the acquiring Company since the stockholders of HDS acquired more than 50% of the issued and outstanding stock of Nesco. 4 ProForma Adjustments Related to the Acquisition The accompanying unaudited proforma combined condensed financial information has been prepared as if the acquisition was completed on April 30, 2004 for balance sheet purposes and as of May 1, 2003 for statements of operations purposes and reflect the following proforma adjustments: (1) To record the issuance of 6,500,000 Advisor shares in connection with the transaction valued at fair value ($.12) on the date of the transaction. (2) To record the following adjustments to the operations of Nesco as if the transaction had occurred on May 1, 2003: Elimination of revenue, cost of revenues and general and administrative costs as related to subsidiaries which were sold in connection with the transaction in the net amount of ($12,543). Elimination of interest on shareholder loan as the loan was converted to equity in connection with transaction for fixed number of shares in the amount of $58,876. Elimination of Preferred Stock Dividends in Kind and penalty shares never issued as they were forfeited in connection with the transaction of $162,867. All amounts are included in the loss from discontinued operations of Nesco. (3) Elimination of advances made between Company and HDS prior to closing of transaction. (4) To record sale of Company subsidiaries. Purchaser acquired all of the outstanding stock of each of Nesco's subsidiaries, assumed all of their liabilities and $17,500 in accounts receivable in exchange for 3,000,000 shares of Nesco common stock. (5) To record the exchange of Nesco shareholder debt for 15,000,000 shares of Nesco common stock. (6) To record exchange of HDS accrued payroll and net officer's loans to convertible debt. (7) To record the exchange of Nesco's and HDS's preferred stock for the Company's common stock, the exchange of HDS common stock for Nesco common stock, and the cancellation of the Company's preferred stock dividends and HDS's treasury stock. Nesco preferred shareholders exchanged 512,500 shares of stock for 15,375,000 shares of common stock, HDS preferred shareholders exchanged 522,487 shares of stock for 18,809,574 shares of common stock, and HDS common shareholders exchanged 4,452,806 shares of stock for 40,075,167 shares of common stock. 5 (c) Exhibits 2.1* Share Exchange Agreement dated April 29, 2004 among Nesco Industries, Inc., Hydrogel Design Systems, Inc. and certain signatory shareholders of Nesco and HDS 3.1* Amendment to Certificate of Designation of Series A Preferred Stock 3.2* Certificate of Designation of Series B Preferred Stock. 3.3* Amendment to Articles of Incorporation of Nesco Industries, Inc. 23.1 Consent of Independent Public Accounting Firm 99.2 Hydrogel Design Systems, Inc. Audited Consolidated Financial Statements for the years ended April 30, 2004 and 2003. ------ *Incorporated by reference to the registrant's current report on Form 8-K dated May 25, 2004 as filed on June 9, 2004. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunder duly authorized. NESCO INDUSTRIES, INC. By: /s/ Matthew Harriton Matthew Harriton President Dated: August 9, 2004 6

NESCO INDUSTRIES INC 8-K/A