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EX-99.3 - UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET - TaxMasters, Inc. | taxmasters_8ka-ex9903.htm |
EX-99.2 - UNAUDITED CONDENSED BALANCE SHEET - TaxMasters, Inc. | taxmasters_8ka-ex9902.htm |
EX-99.1 - AUDITED FINANCIAL STATEMENTS - TaxMasters, Inc. | taxmasters_8ka-ex9901.htm |
UNITED
STATES
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 (Date of earliest event reported): August 4, 2009
TaxMasters, Inc.
(Exact
name of registrant specified in charter)
Nevada
|
33-11986-LA
|
91-2008803
|
||
(State
of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
||
900
Town & Country Lane, Suite 400, Houston, TX
|
77024 | |
(Address
of principal executive offices)
|
(Zip Code) |
(281)
497-5937
|
(Registrant’s
Telephone Number)
|
Crown
Partners, Inc.,
9663
St. Claude Avenue, Las Vegas, Nevada 89148
(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 (see General Instruction A.2. below):
oWritten
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))
Explanatory
Note
On
August 10, 2009, the Registrant filed a Current Report on Form 8-K (the
“Original Report”) to disclosed that it had acquired all of the outstanding
shares of common stock of TaxMasters, Inc. ("TaxMasters"), a Nevada corporation,
in an exchange of shares of the Registrant’s common stock and certain Preferred
Stock for TaxMasters common stock under Section 368(a)(1)(B) of the Internal
Revenue Code. This Current Report on Form 8-K/A amends and
supplements the Original Report to provide the (i) required financial statements
and pro forma financial information and (ii) Management’s Discussion and
Analysis of Financial Condition and Results of Operations to Item 2.01 of the
Original Report. The other disclosures made in the Original
Report are unchanged.
Item
2.01 Completion of
Acquisition or Disposition of Assets.
I-2 Management’s Discussion
and Analysis of Financial Condition and Results of Operation
Forward
Looking Statements
The
following discussion of the financial condition and results of operations should
be read in conjunction with the consolidated financial statements and related
notes thereto. The words or phrases "would be," "will allow," "expect to",
"intends to," "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are intended to
identify "forward-looking statements". Such statements include those concerning
our expected financial performance, our corporate strategy and operational
plans. Actual results could differ materially from those projected in the
forward-looking statements as a result of a number of risks and uncertainties,
including: (a) our ability to retain and add qualified personnel with
the proper tax and IRS experience and Business acumen, (b) our ability to
execute our business plan, (c) ability to successfully compete against numerous
competitors, some of whom are larger and better financed than us, (d) the amount
and timing of operating costs and capital expenditures relating to the expansion
of our business, (e) the implementation of our marketing programs and (f)
general economic conditions specific to our industry.
Unless
otherwise required by applicable law, we do not undertake, and we specifically
disclaim any obligation, to update any forward-looking statements to reflect
occurrences, developments, unanticipated events or circumstances after the date
of such statement.
Overview
TaxMasters
is a tax resolution company engaged in the business of assisting taxpayers with
matters at the Internal Revenue Service (“IRS”), especially the resolution of
disputes and assessments and the settlement of tax liabilities. We
are a firm of experienced tax professionals that help our clients solve their
Federal tax problems, ranging from filing delinquent tax returns to settling tax
debts. Our tax professionals include tax attorneys, Certified Public
Accountants, Former IRS agents, Licensed Tax Preparers and other tax
professionals who are authorized to practice before the IRS. Our tax
professionals are experienced in analyzing and providing solutions to even the
most complicated tax problems and guiding clients through the bureaucracy of the
IRS.
Our tax
professionals have the skill and knowledge to reduce our client’s tax
liabilities and solve their IRS tax problems. We use the rules
established by the Internal Revenue Code and IRS regulations to help our clients
resolve matters at the IRS. TaxMasters’ tax professionals help our
clients reduce taxes, eliminate penalties, and get representation before the
IRS. We help our clients understand how they developed their tax
problems they have and help them fix the entire problem that caused their tax
debt. We can often reduce the tax our clients owe even before
attempting to develop a tax strategies with the IRS.
Through
our tax professionals, we offer the following services:
·
|
Get
our clients into compliance with their obligation to file income tax
returns and pay back taxes due;
|
·
|
Reduce
taxes by reducing penalties and interest on tax
debts;
|
·
|
Settle
our client’s tax debt for the lowest amount possible under the
law;
|
·
|
Stop
IRS wage garnishments;
|
·
|
Stop
IRS property seizure;
|
2
·
|
Defend
our client in an IRS audit or IRS criminal
investigation;
|
·
|
Recover
seized funds; and
|
·
|
Remove
an IRS levy or lien.
|
Description
of Revenues
We offer
our clients a no-charge initial consultation regarding their tax
problems. The free initial consultation enables our tax consultants
to get information from the potential client about his or her tax problem and
understand the nature of the problem. From the initial consultation,
we can determine what services and forms the client will need and we can present
a cost estimate for the client.
We charge
our clients a flat fee based on the type of tax problem we are addressing and
the service we are providing: (i) an IRS collection matter, (ii)
preparing or amending tax returns (including schedules), (iii) negotiated
settlements and/or (iv) audits. In addition, some of our rates will
vary depending on whether our client is an individual or a
business. Built into all of our fees are the initial consultation we
have with the IRS to determine all of the client’s problems and the preparation
by us of a findings letter outlining the tax problems. In addition to
the flat fee, certain services will require our tax consultants to interact with
the IRS, such as a settlement negotiation or an audit, for which we charge our
clients additional consulting fees. We may provide our services on a
“pay-as-you-go” basis and an installment plan.
TaxMasters’
revenue is generated from the sale of our proprietary tax resolution products
and services. TaxMasters uses the proportionate completion method for
revenue recognition. With this method, we determine our revenue by
gathering the completion points of six major services rendered by the
company. These services are Consultations, Tax Returns, Automated
Collection Service (ACS), Revenue Officer Case (ROC), Collection Due Process
(CDP), and Settlement Analysis. Revenue is recognized when it is
earned, typically when our services have been rendered. Upon
execution of an agreement, if services have not been provided then the amount to
be paid under such agreement is recorded as deferred revenue on the balance
sheet and is reclassified as revenue on the statement of operations after
services have been provided and such revenue earned.
Description
of Expenses
Our
expenses include the following: (i) Costs of services, which consists primarily
of salaries and benefits to our tax consultants, customer service consultants,
outside services and professional fees use to provide our tax services;
including associated marketing expenses (ii) Marketing costs (a significant
portion of which consists of our advertising expense); and general
administrative costs, which consists of overhead expenses, such as rent,
utilities and telecommunications.
We
currently have no material research and development expenses.
Results
of Operations
The
following table sets forth selected statement of operations data as a percentage
of total revenues for the years indicated
Six
Months ended June 30,
|
||||||||||||||||
Statement of Operations
Data:
|
2009
|
2008
|
||||||||||||||
Total
revenue
|
$
|
18,758,000
|
100.0
|
%
|
$
|
6,410,000
|
100.0
|
%
|
||||||||
Operating
Costs and Expenses:
|
||||||||||||||||
Selling,
general and Administrative
|
7,734,000
|
41
|
%
|
4,444,000
|
69
|
%
|
||||||||||
Compensation
|
6,459,000
|
34
|
%
|
3,274,000
|
51
|
%
|
||||||||||
Depreciation
|
37,000
|
0.2
|
%
|
35,000
|
0.5
|
%
|
||||||||||
Total
Operating expenses
|
14,230,000
|
72
|
%
|
7,771,000
|
119
|
%
|
||||||||||
Interest
income
|
21,000
|
0.1
|
%
|
4,000
|
-
|
%
|
||||||||||
Other
income
|
(19,000 | ) | ||||||||||||||
-
|
||||||||||||||||
Net
income (loss)
|
$
|
4,530,000
|
24
|
%
|
$
|
(1,357,000
|
)
|
21
|
%
|
3
Results for the six months ended June 30, 2009 versus the six months ended June 30, 2008.
Revenues. Revenues
for the six months ended June 30, 2009 increased by approximately $12,348,000,
or 193%, from approximately $6,410,000 for the six months end June 30, 2008 to
approximately $18,758,000 for the same period in 2009. This increase
in sales was due to increased sales volume attributable to an increase in our
advertising expense.
Compensation
expense. Compensation expense, which is comprised of salaries
and payroll taxes and fees, for the six months ended June 30, 2009 was
approximately $6,459,000, which was an increase of approximately $3,185,000, or
97%, from the compensation expense of approximately $3,274,000 for the six
months ended June 30, 2008. The increase in compensation expense was
mainly due to an increase in the number of tax consultant personnel hired to
support our increase in the number of clients (and, therefore, sales
volume). Salaries alone increased to approximately $5,981,000 for the
six months ended June 30, 2009.
Selling, general and administrative
costs. Selling, general and administrative costs increased by
approximately $3,290,000, or 74%, from approximately $4,444,000 for the six
months ended June 30, 2008 to approximately $7,734,000 for the same period in
2009. Selling expenses, which consists mainly of advertising expenses
and cost of customer service personnel, increased approximately
100%. Advertising expense for the six months ended June 30, 2009 was
approximately $4,652,000, an increase of approximately 100% from the same period
in 2008. Outside service and professional fees for the six months
ended June 30, 2009 was approximately $554,000, an increase of approximately 50%
from the same period in 2008. This increase in such fees was due to
services to keep abreast of the latest tax law development. The
remaining expenses in general and administrative costs consisted of overhead
expenses, such as utilities, customer telecommunication expenses and insurance
costs. Other general administrative was approximately $2,106,000 for
the six months ended June 30, 2009. The increase was mainly due to
the increase in sales volume. Rent increased approximately $20,000,
or 12%, from $161,000 for the same period in 2008.
Total Operating
Expenses. Total operating expenses for the six months ended
June 30, 2009 were approximately $14,230,000, an increase of $6,459,000, or 83%,
from total operating expenses of $7,771,000 for the same period in
2008. Total operating expenses for the six months ended June 30, 2009
increased due to increases in compensation and advertising expenses as described
above
Total Other Income
and Expenses. Total other income and other expenses
consist of interest income and interest expense. Interest expense for
the six months ended June 30, 2009 was approximately $19,400, a 100%
increase from the same period in 2008. Interest income for the
six months ended June 30, 2009 was approximately $21,300, an increase of
approximately $17,000, a 393% increase. The increase in mainly due to
surplus in cash invested in short-term CD investments.
Net Income. Net
income increased by approximately $5,887,000, from a loss of approximately
$1,357,000 for the six months ended June 30, 2008 to income of approximately
$4,530,000 for the six months ended June 30, 2009.
Twelve
Months ended December 31,
|
||||||||||||||||
Statement of Operations
Data:
|
2008
|
2007
|
||||||||||||||
Total
revenue
|
$
|
15,183,000
|
100.0
|
%
|
$
|
6,543,000
|
100.0
|
%
|
||||||||
Operating
Costs and Expenses:
|
||||||||||||||||
Selling,
general and Administrative
|
11,544,000
|
76
|
%
|
4,712,000
|
69
|
%
|
||||||||||
Compensation
|
8,266,000
|
54
|
%
|
2,915,000
|
45
|
%
|
||||||||||
Depreciation
|
107,000
|
0.7
|
%
|
35,000
|
0.5
|
%
|
||||||||||
Total
Operating expenses
|
19,917,000
|
131
|
%
|
7,662,000
|
117
|
%
|
||||||||||
Interest
income
|
29,000
|
0.2
|
%
|
|||||||||||||
Interest
expense
|
(38,000
|
)
|
(0.3
|
%)
|
(12,000
|
)
|
(0.2
|
%)
|
||||||||
Other
income
|
||||||||||||||||
Net
income (loss)
|
$
|
(4,744,000
|
)
|
(23
|
%)
|
$
|
(1,131,000
|
)
|
17
|
%
|
4
Results for the year ended December 31, 2008 versus the year ended December 31, 2007.
Revenues. Revenues
for 2008 increased by approximately $8,640,000, or 132%, from $6,543,000 for the
year ended December 31, 2007 to approximately $15,181,000 for the year ended
December 31, 2008. This increase in sales was due to an increase in sales and in
clients attributable to an increase in our advertising
expense.
Compensation
Expense. Compensation expense, which is comprised of the
salaries and payroll taxes and fees, for the twelve months ended December 31,
2008, was approximately $8,266,000, which is an increase of approximately
$5,351,000, or 184%, from approximately $2,915,000 in compensation expense for
the twelve months ended December 31, 2007. The increase is mainly due
to an increase in the tax consultant personnel hired to support increased sales
volume. Salaries alone increased by approximately $4,969,000, to
approximately $7,671,000 for the year ended December 31, 2008, from
approximately $2,702,000 for the year ended December 31, 2007.
Selling, general and administrative
costs. Selling, general and administrative costs increased by
approximately $6,612,000, or 148%, from approximately $4,516,000 for the year
ended December 31, 2007 to approximately $11,128,000 for the same period in
2008. Selling expenses consist mainly of advertising expenses and
customer service expenses, which increased by approximately 122% to
approximately 4,100,000 for the year ended December 31,
2008. Advertising expense for the year ended December 31, 2008 was
approximately $3,774,000, an increase of approximately $2,081,000, or 123%, from
approximately $1,693,000 for the year ended December 31,
2007. Outside service and professional fees increased by
approximately $315,000, or 112%, from 282,000 in 2007 to $597,000 in
2008. This increase was due to services to keep abreast of the latest
tax law development. The remaining general and administrative costs
consist of overhead expenses, such as utilities, customer telecommunications and
insurance costs. Other general administrative increased by
approximately $4,209,000, or 166%, from approximately $2,537,000 in 2007 to
$6,746,000 in 2008. This increase was due to our need to support our
increase in sales volume. Rent
increased approximately $201,000, or 103%, from $196,000 in 2007 to
approximately $416,000, in 2008.
Total Other Income and
Expenses. Total other income and other expenses consist of
interest income and interest expense, respectively. Interest expense
for the twelve months ended December 31, 2008 was approximately $38,700, a 69%
increase from approximately $12,400 for 2007. Interest income for the
year ended December 31, 2008 was approximately $28,800, an increase of 100% from
2007. The increase in interest income was mainly due to surplus in
cash invested in short-term CD investments. The increase in interest
expense was mainly due to increase in banking fees.
Net Loss. Net loss
increased by approximately $2,560,000, from a loss of approximately $1,131,000
for the year ended December 31, 2007 to a loss of approximately $3,691,000 for
the year ended December 31, 2008. The increase in our loss was due to the
increase in operating expenses as described above.
Liquidity
and Capital Resources
As of
June 30, 2009, the Company had total current assets of approximately $17,618,000
and total current liabilities of approximately $8,123,000, resulting in working
capital of $9,495,000. At June 30, 2009, the Company's current assets consisted
of approximately $4.0 million in cash, $0.3 million in short-term investments
and approximately $12.9 million in net accounts receivable.
As of
December 31, 2008, the Company had total current assets of approximately
$9,712,000 and total current liabilities of approximately $10,899,000, resulting
in negative working capital of $1,187,000. At December 31, 2008, the Company's
current assets consisted of approximately $3.7 million in cash, $0.3 million in
short-term investments and approximately $5.7 million in net accounts
receivable.
Operating
Activities
Net cash
provided by operating activities was approximately $2,308,000 for the six months
ended June 30, 2009 compared to approximately $2,201,000 for the six months
ended June 31, 2008, a change of $107,000 or 5%.
5
Investing Activities
Net cash
used in investing activities was approximately $411,000 for the six months ended
June 30, 2009 compared to $704,000 for the six months ended June 30, 2008, a
decrease of approximately $293,000, or 42%. The primary reason
for the decrease in investing activities for the six months ended June 30, 2009
was the reduce amount of investment CDs we purchased in
2008. During the six months ended June 30, 2009, the Company
purchased CD investments in the amount of $704,000, which was offset by the
issuance of a $400,000 note receivable.
Financing Activities
Net cash
used in investing activities was $1,581,000 for the six months ended June 30,
2009 compared to $653,000 for the six months ended June 30, 2008, an increase of
$928,000, or 143%. The primary reasons for the increase was a distribution to
shareholders in the amount of $1,512,000 for the six months ended June 30, 2009
versus a distribution on $653,000, for the same period 2008.
Commitments
and Contingencies
We
currently have two separate lease agreements for our office space under an
operating lease through May 2014. Our monthly lease payment under
these agreements amounts to approximately $25,162 and $67,431. Total
obligation through 2014 under these agreements is approximately $6.2
million.
We also
lease certain computer equipment under capital leases. Our obligation
under these leases continues until July 2014. Our total obligation under these
leases is approximately $1,758,000.
These
obligations are summarized in the table below:
Contractual
Obligations
The
following table presents future contractual obligations due by fiscal period as
of June 30, 2009:
2009 | 2010-2011 | 2012-2013 |
2014
and
Thereafter
|
Total | ||||||||||||||||
Operating
lease commitments
|
$ | 302,000 | $ | 2,259,000 | $ | 2,502,000 | $ | 1,158,000 | $ | 6,221,000 | ||||||||||
Capital
& Equipment leases
|
292,000 | 729,000 | 573,000 | 164,000 | 1,758,000 | |||||||||||||||
Total
|
$ | 594,000 | $ | 2,988,000 | $ | 3,705,000 | $ | 1,322,000 | $ | 7,979,000 |
Off-Balance
Sheet Arrangements
We
currently have no off-balance sheet arrangements.
Critical
Account Policies and Estimates
The
preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make estimates and judgments that affect our reported assets,
liabilities, revenues, and expenses, and the disclosure of contingent assets and
liabilities. We base our estimates and judgments on historical experience and on
various other assumptions we believe to be reasonable under the
circumstances. Future events, however, may differ markedly from our
current expectations and assumptions. While there are a number of significant
accounting policies affecting our consolidated financial statements, we believe
the following critical accounting policies involve the most complex, difficult
and subjective
estimates
and judgments:
6
Revenue Recognition
The Company’s revenue is generated from the sale of our
proprietary tax resolution products and services and is comprised principally of
flat fees charged for services. The Company recognizes revenue in
accordance with Securities and Exchange Commission Staff Accounting Bulletin
No. 104 “Revenue
Recognition” (“SAB 104”). Revenue is
recognized when the price is fixed or determinable, persuasive evidence of an
arrangement exists, the service is performed and collectability of the resulting
receivable is reasonably assured. We use the proportionate
completion method for revenue recognition. With this method, we determine
our revenue by gathering the completion points of six major services rendered by
the company. These services are Consultations, Tax Returns, Automated
Collection Service, Revenue Officer Case, Collection Due Process, and Settlement
Analysis. Revenue is recognized when it is earned, typically when our
services have been rendered.
Flat fees
charged for services are recognized as revenue in the same period the services
are rendered. Fees received prior to services being rendered are
initially deferred and not until the services are completed are they recognized
as revenue. Deferred revenue as of December 31, 2008 and 2007 was
$16,897,025 and $5,574,744, respectively
In
addition to the flat fee, certain services require our tax consultants to
interact with the IRS, such as a settlement negotiation or an audit, for which
we charge our clients additional consulting fees. We provide our
services on a “pay-as-you-go” basis and an installment plan. These
consulting fees are recognized when the services are rendered.
Any
contracts where revenue earned is expected to take longer than twelve months is
classified on the balance sheet as Deferred Revenue
long-term.
Trade
Receivables
Trade
accounts receivable are stated at the amount the Company expects to
collect. The Company maintains allowances for doubtful accounts for
estimated losses resulting from the inability of its customers to make required
payments. Management considers the following factors when determining
the collectability of specific customer accounts: customer
credit-worthiness, past transaction history with the customer, current economic
and industry trends, and changes in customer payment terms. If the
financial condition of the Company’s customers were to deteriorate,
adversely affecting their ability to make payments, additional allowances would
be required. The Company provides for estimated uncollectible amounts
through a charge to earnings and an increase to a valuation
allowance. Balances that remain outstanding after the Company has
used reasonable collection efforts are written off through a charge to the
valuation allowance and a credit to accounts receivable.
The
Company’s trade receivables are generally unsecured. The Company has
no concentration of revenue with any one or any few customers that the loss of
any one or a few customers could impact its operations materially unless such a
loss of customers were a general loss of customers.
Income
Taxes
The
Company and its stockholders have elected to be taxed under the provision of
Subchapter S of the Internal Revenue Code. This election effectively
eliminates federal income tax expense at the corporate level as the Company's
stockholders are taxed directly on their respective shares of the Company's
profits. The Company also has elected to be treated as an "S
Corporation" for Federal tax purposes. The stockholders are
subject to state income tax on their respective share of profits of the
Company. Accordingly, only the reduced state tax provision has been
made in the accompanying financial statements.
Recent
Accounting Pronouncements
On April
9, 2009, the FASB issued FASB Staff Position (“FSP”) FAS 107-1, “Interim Disclosures about Fair Value of Financial
Instruments” (“FSP FAS 107-1”). FAS FSP 107-1 amends SFAS No. 107, “Disclosures about Fair Value of
Financial Instruments”, to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. FAS FSP 107-1 also amends APB No. 28,
“Interim Financial
Reporting”, to require those disclosures in summarized financial
information at interim reporting periods. FAS FSP 107-1 shall be effective for
interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. An entity may early adopt
this FSP if certain requirements are met. This FSP does not require disclosures
for earlier periods presented for comparative purposes at initial adoption. In
periods after initial adoption, this FSP requires comparative disclosures only
for periods ending after initial adoption. The adoption of this FSP did not have
a material impact on its consolidated financial statements.
On April
9, 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly” (“FSP
FAS 157-4”). FSP FAS 157-4 affirms that the objective of fair value when the
market for an asset is not active is the price that would be received to sell
the asset in an orderly transaction; clarifies and includes additional factors
for determining whether there has been a significant decrease in market activity
for an asset when the market for that asset is not active; eliminates the
proposed presumption that all transactions are distressed (not orderly) unless
proven otherwise. The FSP instead requires an entity to base its conclusion
about whether a transaction was not orderly on the weight of the evidence. In
addition, FSP FAS 157-4 requires an entity to disclose a change in valuation
technique (and the related inputs) resulting from the application of the FSP and
to quantify its effects, if practicable. FSP FAS 157-4 is effective for interim
and annual periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009 if certain requirements are met. It must be
applied prospectively and retrospective application is not permitted. The
adoption of this FSP did not have a material impact on its consolidated
financial statements.
7
On April
9, 2009, the FASB issued FSP FAS 115-2 and FSP FAS 124-2 “Recognition and Presentation
of Other-Than-Temporary
Impairments.” These FSP’s are intended to bring consistency to the timing
of impairment recognition, and provide improved disclosures about the credit and
noncredit components of impaired debt securities that are not expected to be
sold. The measure of impairment in comprehensive income remains fair value.
These FSP’s also require increased and more timely disclosures regarding
expected cash flows, credit losses, and an aging of securities with unrealized
losses. These FSP’s shall be effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009. Earlier adoption for periods ending before March 15, 2009,
is not permitted. If an entity elects to adopt early either FSP FAS 157-4 or FSP
FAS 107-1 and APB. No. 28-1, “Interim Disclosures about Fair Value
of Financial Instruments”, the entity also is required to adopt early
these FSP’s. Additionally, if an entity elects to adopt early these FSP’s, it is
required to adopt FSP FAS 157-4.
These
FSP’s do not require disclosures for earlier periods presented for comparative
purposes at initial adoption. In periods after initial adoption, these FSP’s
require comparative disclosures only for periods ending after initial
adoption.
In May
2009, the FASB issued SFAS No. 165, “Subsequent Events”
(“SFAS No. 165”). SFAS No. 165 is intended to
establish general standards of accounting for and disclosures of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. SFAS No. 165 became
effective for financial statements issued for fiscal years and interim periods
beginning after June 15, 2009. The Company will be adopting
SFAS No. 165 in the third quarter of 2009. The adoption of
SFAS No. 165 is not anticipated to have a material impact on the
consolidated financial statements.
In June
2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles” (“SFAS 168”). SFAS 168 authorized the FASB
Accounting Standards Codification as the sole source for authoritative U.S.
GAAP. SFAS 168 will be effective for financial statements
issued for reporting periods that end after September 15,
2009. Once effective, SFAS 168 will supersede all accounting
standards in U.S. GAAP, other than those issued by the SEC. SFAS 168
replaces SFAS No. 162 to establish a new hierarchy of GAAP sources for
non-governmental entities under the FASB Accounting Standards
Codification.
Item 9.01 Financial Statements and
Exhibits.
(a) Financial
Statements of Business Acquired.
The
audited financial statements required by this item for the years ended
December 31, 2008 and 2007 are included herein as
Exhibit 99.1.
The
unaudited condensed financial statements for the interim periods required by
this item as of June 30, 2009 and for the six months ended June 30,
2009 and 2008 are included herein as Exhibit 99.2.
(b) Pro
Forma Financial Information.
The pro
forma financial information required by this item as of and for the six months
ended June 30, 2009 and for the year ended December 31, 2008 is included
herein as Exhibit 99.3.
(d) Exhibits.
Exhibit
Number
|
Description
|
|||
99.1
|
Audited
financial statements of TaxMasters, Inc. as of and for the years ended
December 31, 2008 and 2007.
|
|||
99.2
|
Unaudited
condensed balance sheet of TaxMasters, Inc. as of June 30,
2009 and unaudited condensed statements of operations and cash flows for
the six months ended June 30, 2009 and 2008.
|
|||
99.3
|
Unaudited
pro forma condensed consolidated balance sheet as of June 30, 2009
and unaudited pro forma condensed consolidated statements of operations
for the six months ended June 30, 2009 and for the year ended
December 31, 2008.
|
8
SIGNATURE
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
TAX MASTERS, INC. | |||
Dated:
October 20, 2009
|
By:
|
/s/ Patrick R. Cox | |
Patrick R. Cox, Chief Executive Officer | |||
9