##### 



Exhibit 10.14
 WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
 Financial Statements  Years ended December 31, 2005, 2004 and 2003
 Contents
 PageReport of Independent Registered Public Accounting Firm
    
    1Balance Sheets as of December 31, 2005 and 2004
    
    2Income Statements for the Years Ended December 31, 2005, 2004 and 2003
    
    3Statements of Changes in Equity for the Years Ended December 31, 2005, 2004 and 2003
    
    4Cash Flows Statements for the Year Ended December 31, 2005, 2004 and 2003
    
    5Notes to Financial Statements
    
    6-12




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##### 



Report Of Independent Registered Public Accounting Firm
 To The Members of
WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
    Horwath
 th
 Page 1




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##### 



WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
 Balance Sheets
 As of December 31,2005
    
    2004USD
    
    USDASSETSCurrent AssetsCash and cash equivalents
    
    
    285,467
    
    
    
    268,227Trade accounts receivable
    
    
    22,801
    
    
    
    114,592Trade accounts receivable, related party
    
    
    4,198,586
    
    
    
    7,203,908Inventories
    
    
    1,650,066
    
    
    
    2,011,104Prepaid and other current assets
    
    
    43,012
    
    
    
    21,339Total Current Assets
    
    
    6,199,932
    
    
    
    9,619,170Property, plant and equipment, net
    
    
    262,423
    
    
    
    333,602Deferred tax assets
    
    
    25,618
    
    
    
    0Total Assets
    
    
    6,487,973
    
    
    
    9,952,772LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    
    205,491
    
    
    
    1,206,006Trade accounts payable, related party
    
    
    990,637
    
    
    
    2,587,503Other accounts payable, related party
    
    
    790,837
    
    
    
    70,994Accrued expenses and others
    
    
    292,615
    
    
    
    338,009Bank borrowings
    
    
    1,361,905
    
    
    
    3,404,769Income taxes payable
    
    
    49,495
    
    
    
    11,596Total Current Liabilities
    
    
    3,690,980
    
    
    
    7,618,877Stockholders equity:Common StockRM1.00 per value (equivalent to USD 0.2632); 10,000,000 shares authorized
5,000,000 shares issued at December 31, 2005 and 2004, respectively1,315,789
    
    
    
    1,315,789Retained earnings
    
    
    1,481,204
    
    
    
    1,018,106Total Stockholders Equity
    
    
    2,796,993
    
    
    
    2,333,895Total Liabilities and Stockholders Equity
    
    
    6,487,973
    
    
    
    9,952,772
 The annexed notes form an integral part of these financial statements
    
    Page 2




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
 Statements of Operations
 For the Years Ended December 31,2005
    
    2004
    
    2003USD
    
    USD
    
    USDSALESNet related party sales
    
    
    16,549,707
    
    
    
    19,319,539
    
    
    
    12,639,956Net third party sales
    
    
    38,697
    
    
    
    503,134
    
    
    
    0Net sales
    
    
    16,588,404
    
    
    
    19,822,673
    
    
    
    12,639,956COST OF SALESRelated party purchases
    
    
    8,523,179
    
    
    
    9,408,104
    
    
    
    7,010,278Others
    
    
    6,698,545
    
    
    
    8,939,091
    
    
    
    4,682,822Cost of sales
    
    
    15,221,724
    
    
    
    18,347,195
    
    
    
    11,693,100Gross profits
    
    
    1,366,680
    
    
    
    1,475,478
    
    
    
    946,856OPERATING EXPENSESelling, general and administrative
    
    
    566,814
    
    
    
    476,353
    
    
    
    379,037Research and development
    
    
    165,401
    
    
    
    120,848
    
    
    
    63,158Total operating expense
    
    
    732,215
    
    
    
    597,201
    
    
    
    442,195Operating earnings
    
    
    634,465
    
    
    
    878,277
    
    
    
    504,661Interest income
    
    
    6,481
    
    
    
    3,044
    
    
    
    1,340Interest expense
    
    
    (183,644
    )
    
    
    (95,511
    )
    
    
    (67,658
    )Other income
    
    
    77,774
    
    
    
    21,348
    
    
    
    22,843Earnings before income tax
    
    
    535,076
    
    
    
    807,158
    
    
    
    461,186Income tax
    
    
    (71,978
    )
    
    
    (90,837
    )
    
    
    (34,225
    )Net earnings
    
    
    463,098
    
    
    
    716,321
    
    
    
    426,961
 The annexed notes form an integral part of these financial statements
    
    Page 3




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
 Cash Flows Statements
 
 For the Years Ended December 31,2005
    
    2004
    
    2003USD
    
    USD
    
    USDCASH FLOWS FROM OPERATING ACTIVITIESNet earnings
    
    
    463,098
    
    
    
    716,321
    
    
    
    426,961Adjustments to reconcile net ernings to net cash
provided by /(used in) operating activities:-Allowance for slow moving inventories
    
    
    
    
    
    
    0
    
    
    
    26,316Depreciation
    
    
    78,793
    
    
    
    78,955
    
    
    
    69,825Loss on sale of property, plant and equipment
    
    
    1,667
    
    
    
    0
    
    
    
    0Changes in net assets and liabilitiesTrade accounts receivable
    
    
    91,791
    
    
    
    (114,592
    )
    
    
    0Trade accounts receivable  related party
    
    
    3,005,322
    
    
    
    (2,813,946
    )
    
    
    259,651Inventories
    
    
    361,038
    
    
    
    (537,331
    )
    
    
    376,790Prepaid and other current assets
    
    
    (21,673
    )
    
    
    (7,019
    )
    
    
    4,173Deferred tax assets
    
    
    (25,618
    )
    
    
    30,789
    
    
    
    (8,421
    )Trade accounts payable
    
    
    (1,000,515
    )
    
    
    661,612
    
    
    
    473,439Trade accounts payable  related party
    
    
    (1,596,866
    )
    
    
    167,471
    
    
    
    (2,311,148
    )Accrued expenses and others
    
    
    674,449
    
    
    
    178,554
    
    
    
    (51,869
    )Income taxes payable
    
    
    37,899
    
    
    
    1,201
    
    
    
    (14,079
    )Net cash provided by/(used in) operating activities
    
    
    2,069,385
    
    
    
    (1,637,985
    )
    
    
    (748,362
    )CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of property, plant and equipment
    
    
    5,789
    
    
    
    0
    
    
    
    0Purchase of property, plant and equipment
    
    
    (15,070
    )
    
    
    (18,952
    )
    
    
    (67,604
    )Net cash used in investing activities
    
    
    (9,281
    )
    
    
    (18,952
    )
    
    
    (67,604
    )CASH FLOWS FROM FINANCING ACTIVITIES(Decrease)/Increase in bank borrowings
    
    
    (2,042,864
    )
    
    
    1,531,085
    
    
    
    (399,474
    )Net cash (used in)/provided by financing activities
    
    
    (2,042,864
    )
    
    
    1,531,085
    
    
    
    (399,474
    )Net increase/(decrease) in cash and cash equivalents
    
    
    17,240
    
    
    
    (125,852
    )
    
    
    (1,215,440
    )Cash and cash equivalents at beginning
    
    
    268,227
    
    
    
    394,079
    
    
    
    1,609,519Cash and cash equivalents at ending
    
    
    285,467
    
    
    
    268,227
    
    
    
    394,079Supplemental cash flow informationCash paid for interest
    
    
    183,644
    
    
    
    95,511
    
    
    
    67,616Cash paid for income tax
    
    
    59,697
    
    
    
    58,847
    
    
    
    56,725
 The annexed notes form an integral part of these financial statements
    
    Page 4




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##### 



WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
 Statements Of Changes in Equity
 Common Stock
    
    RetainedAmount
    
    earnings
    
    TotalShares
    
    USD
    
    USD
    
    USDBalance at December 31, 2002
    
    
    2,508,000
    
    
    
    660,000
    
    
    
    530,613
    
    
    
    1,190,613Net earnings for the year
    
    
    0
    
    
    
    0
    
    
    
    426,961
    
    
    
    426,961Balance at December 31, 2003
    
    
    2,508,000
    
    
    
    660,000
    
    
    
    957,574
    
    
    
    1,617,574Issuance of bonus stock
    
    
    2,492,000
    
    
    
    655,789
    
    
    
    (655,789
    )
    
    
    0Net earnings for the year
    
    
    0
    
    
    
    0
    
    
    
    716,321
    
    
    
    716,321Balance at December 31, 2004
    
    
    5,000,000
    
    
    
    1,315,789
    
    
    
    1,018,106
    
    
    
    2,333,895Net earnings for the year
    
    
    0
    
    
    
    0
    
    
    
    463,098
    
    
    
    463,098Balance at December 31, 2005
    
    
    5,000,000
    
    
    
    1,315,789
    
    
    
    1,481,204
    
    
    
    2,796,993
 The annexed notes form an integral part of these financial statements
    
    Page 5




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
 Notes To The Financial Statements
 1.
    
    General InformationThe Company was incorporated in 2000 and is principally engaged in the manufacture of
colour video monitors. There are two major stockholders, Wells-Gardner Electronics
Corporation and Eastech Electronics (M) Sdn. Bhd., each holding 50% of the paid up capital
of the Company.The local currency of the Company is Ringgit Malaysia (RM). The reporting currency used in
presenting this set of financial statements is United States Dollars (USD).2.
    
    Summary of Significant Accounting Policies
 2.1
    
    Basis of Preparation of Financial StatementsThe financial statements of the Company are prepared under the historical cost
convention, modified to include other bases of measurement as disclosed in other
sections of the significant accounting policies, and in compliance with the
accounting principles generally accepted in the United States of America.2.2
    
    Management EstimatesThe preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.2.3
    
    Revenue RecognitionIn general, the Company recognizes revenue when shipment has occurred, the sales
price is fixed and determinable and collectibility is reasonably assured.2.4
    
    Financial InstrumentsThe fair value of the Companys financial instruments does not materially vary from
the carrying value of such instruments due to their short maturity.2.5
    
    ReceivablesReceivables are carried at original invoice or closing statement amount less
estimates made for doubtful receivables. Management determines the allowances for
doubtful accounts by reviewing and identifying troubled accounts at regular
intervals. Receivables are written off when deemed uncollectible. Recoveries of
receivables previously written off are recorded when received.
 Page 6




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.   
 Notes To The Financial Statements
 2.
    
    Significant Accounting Policies (contd)
 2.6
    
    Inventory Obsolescence and Costing MethodInventory is stated at the lower of cost (determined on the first-in, first-out
basis) and net realisable value after making due allowance for any obsolete or
slow-moving items. The company provides an allowance for estimated obsolete or
excess inventory based on assumptions about future demands for its products.2.7
    
    Property, Plant and EquipmentProperty, plant and equipment are stated at cost and are depreciated for financial
reporting purposes over the estimated useful lives on a straight-line basis as
follows:-
 Plant and machinery
    
    5  10 yearsElectrical installation and renovation
    
    10 yearsMotor vehicles
    
    5 yearsOffice equipment
    
    5 yearsFurniture and fittings
    
    10 yearsComputer
    
    5  10 yearsFactory tools and equipment
    
    5 yearsMould
    
    10 years
 2.8
    
    Research and Development CostResearch and development costs for the year ended December 31, 2005, 2004 and 2003
were approximately USD165,000, USD123,000 and USD63,000 respectively, which were 1%,
0.6% and 0.5% of annual sales respectively.2.9
    
    Income TaxesWe use the asset and liability method of accounting for income taxes. Under the
asset and liability method, we recognize deferred tax assets and liabilities for the
future consequences attributable to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities. A valuation
allowance is provided for deferred tax assets when it is more likely than not that
the asset will not be realized.
 Page 7




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.   
 Notes To The Financial Statements
 2.
    
    Significant Accounting Policies (contd)
 2.10
    
    Recently Issued Accounting PronouncementsIn December 2004, the FASB issued SFAS No. 123, Share-Based Payment. SFAS No.
123(R) will require that the compensation cost relating to share-based payment
transactions be recognized in financial statements. That cost will be measured
based on the fair value of the equity or liability instruments issued. SFAS No.
123(R) covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance based awards, share appreciation rights
and employee share purchase plans. SFAS No. 123(R) replaces FASB No. 123,
Accounting for Stock-Based Compensation and supersedes Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123, as
originally issued in 1995, established as preferable a fair value-based method of
accounting for share-based payment transactions with employees. However, that
Statement permitted entities the option of continuing to apply the guidance in APB
Opinion No. 25, as long as the footnotes to the financial statements disclosed what
net income would have been had the preferable fair value-base method been used. The
Company will be required to apply SFAS No. 123(R) as of the first interim or annual
reporting period that begins after December 15, 2005. The impact the adoption of
SFAS No. 123(R) will have an immaterial impact on our financial position, results of
operations and cash flows.In December 2003, the FASB issued FASB Interpretation No. 46R, Consolidation of
Variable Interest Entities, (FIN 46R), which clarified some of the provisions of
FIN 46 and exempted certain entities from its requirements. FIN 46R was effective
at the end of the first interim period ending after December 15, 2003. We have
considered the provisions of FIN 46R and believe that it is not necessary to include
in our financial statements any assets, liabilities or activities of any third party
entity that deals with the Company and that the requirements do not impact the
Companys financial statements.In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
CompensationTransition and Disclosure, this statement, which is effective for the
years ending after December 15, 2003 which amends Statement No. 123 Accounting for
Stock-Based Compensation and provides alternative methods of transition for
voluntary change to the fair value-based method of accounting for stock-based
employee compensation. In addition, Statement No. 148 amends the disclosure
requirements of Statement No. 123 regardless of the accounting method used to
account for stock-based compensation. The SFAS No. 123 and SFAS No. 148 do not
impact the Companys financial statements, as the Company does not have any
stock-based employee compensation.
 Page 8




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.   
 Notes To The Financial Statements
 3.
    
    InventoryInventory consist of the following as of December 31, 2005 and 2004:
 2005
    
    2004USD
    
    USDRaw materials
    
    
    1,417,906
    
    
    
    1,752,117Work-in-progress
    
    
    157,848
    
    
    
    65,137Finished goods
    
    
    124,734
    
    
    
    235,695Goods-in-transit
    
    
    0
    
    
    
    8,577Total
    
    
    1,700,488
    
    
    
    2,061,526Inventory obsolescence reserve
    
    
    (50,422
    )
    
    
    (50,422
    )1,650,066
    
    
    
    2,011,104
 4.
    
    property and EquipmentProperty and equipment consist of the following as of December 31, 2005 and 2004:
 2005
    
    2004USD
    
    USDPlant, machinery, factory tools and equipment
    
    
    570,837
    
    
    
    562,096Electrical installation and renovation
    
    
    13,952
    
    
    
    11,399Motor vehicles
    
    
    13,916
    
    
    
    27,074Office equipment, furniture and fittings and computers
    
    
    44,776
    
    
    
    41,000Total
    
    
    643,481
    
    
    
    641,569Less : Accumulated depreciation
    
    
    (381,058
    )
    
    
    (307,967
    )Property and equipment, net
    
    
    262,423
    
    
    
    333,602
 Included in property and equipment as of December 31, 2004 was a motor vehicle with a
carrying amount of USD1,623 acquired under a capital lease.5.
    
    Prepaid and Other Current AssetsPrepaid and other current assets consists of the following as of December 31, 2005 and
2004:
 2005
    
    2004USD
    
    USDSundry deposits
    
    
    361
    
    
    
    359Advance to suppliers
    
    
    34,624
    
    
    
    0Prepaid expenses
    
    
    7,629
    
    
    
    20,913Other
    
    
    398
    
    
    
    43Total
    
    
    43,012
    
    
    
    21,339
 Page 9




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WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.   Notes To The Financial Statements
 6.
    
    Accrued Expenses and OtherAccrued expenses and other consists of the following as of December 31, 2005 and 2004:
 2005
    
    2004USD
    
    USDAccrued expenses
    
    
    79,325
    
    
    
    51,163Employee payables
    
    
    73,824
    
    
    
    28,042Other payables
    
    
    139,466
    
    
    
    258,804Total
    
    
    292,615
    
    
    
    338,009
 7.
    
    Significant customersThe Company has a major concentration of credit risk as the largest customer accounted
for 99% of total sales for 2005 and 2004 and 100% of total sales for 2003 respectively, and
99% and 98% of total accounts receivable as of December 31, 2005 and 2004 respectively.8.
    
    Bank Borrowings  Unsecured
 2005
    
    2004USD
    
    USDBanker acceptance I
    
    
    239,683
    
    
    
    656,052Banker acceptance II
    
    
    352,381
    
    
    
    791,316Banker acceptance III
    
    
    401,852
    
    
    
    1,200,263Banker acceptance IV
    
    
    47,355
    
    
    
    227,895Export credit refinancing I
    
    
    160,317
    
    
    
    0Export credit refinancing II
    
    
    160,317
    
    
    
    01,361,905
    
    
    
    2,875,526Short-term loans
    
    
    0
    
    
    
    529,2431,361,905
    
    
    
    3,404,769
  Facility
    
    Bank
    
    Maturity
    
    InterestBanker acceptance I
    
    Affin Bank Berhad
    
    January  February 2006
    
    
    3.05%  3.35
    %Banker acceptance II
    
    EON Bank Berhad
    
    January  February 2006
    
    
    2.91%  3.00
    %Banker acceptance III
    
    Southern Bank Berhad
    
    January  March 2006
    
    
    2.91%  3.40
    %Banker acceptance IV
    
    Malayan Banking Berhad
    
    February 2006
    
    
    2.70
    %Export Credit
Refinancing I
    
    Southern Bank Berhad
    
    February 2006
    
    
    3.50
    %Export Credit
Refinancing II
    
    Malayan Banking Berhad
    
    February 2006
    
    
    3.25
    %
 Page 10




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##### 



WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.   Notes To The Financial Statements
 8.
    
    Bank Borrowings  Unsecured (contd)All the bank borrowings are guaranteed by Eastern Asia Technology Limited, which is the
holding corporation of a substantial shareholder of the Company. The bank borrowings have
been settled when payments are due.9.
    
    Income Taxes
 2005
    
    2004
    
    2003USD
    
    USD
    
    USDTax based on results for the year:-Malaysian income tax
    
    
    97,596
    
    
    
    60,281
    
    
    
    43,553Deferred tax
    
    
    (25,367
    )
    
    
    30,789
    
    
    
    (11,579
    )72,229
    
    
    
    91,070
    
    
    
    31,974Tax (over)/underprovided in prior year:-Malaysian income tax
    
    
    0
    
    
    
    (233
    )
    
    
    (907
    )Deferred tax
    
    
    (251
    )
    
    
    0
    
    
    
    3,15871,978
    
    
    
    90,837
    
    
    
    34,225
 The effective income tax rates differed from the expected statutory income tax rate (28%)
for the following reasons:
 2005
    
    2004
    
    2003USD
    
    USD
    
    USDComputed expected tax expense
    
    
    145,773
    
    
    
    226,004
    
    
    
    129,132Non-deductible expenses
    
    
    9,131
    
    
    
    3,732
    
    
    
    3,447Income exempted from tax
under pioneer status
    
    
    (82,675
    )
    
    
    (138,666
    )
    
    
    (100,605
    )72,229
    
    
    
    91,070
    
    
    
    31,974
 The Company was granted pioneer status incentive by the Ministry of International Trade and
Industry of Malaysia. Under this incentive, the Company received a tax holiday for a period
of 5 years from 1 August 2000 to 31 July 2005 whereby 70% of its taxable earnings were
exempt from Malaysian Income Tax.Deferred income taxes reflect the impact of temporary differences between the amounts of
assets and liabilities for financial reporting purposes and as measured by income tax
regulations. Temporary differences which gave rise to deferred tax assets and deferred tax
liabilities consisted of:
 2005
    
    2004USD
    
    USDDeferred tax assetsInventory obsolescence reserve
    
    
    14,193
    
    
    
    14,118Accrued expenses and other
    
    
    47,135
    
    
    
    20,619Total deferred tax assets
    
    
    61,328
    
    
    
    34,737Deferred tax liabilitiesProperty, plant and equipment, principally depreciation
    
    
    (35,710
    )
    
    
    (34,737
    )25,618
    
    
    
    0
 Page 11




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##### 



WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.   Notes To The Financial Statements
 10.
    
    Significant Transactions With Related PartiesThe following represent related party transactions for each of the financial years
ended December 31:
 2005
    
    2004
    
    2003USD
    
    USD
    
    USDSale of goods to Wells-Gardner
Electronics Corporation *
    
    
    16,549,707
    
    
    
    19,319,539
    
    
    
    12,639,956Purchase of goods from
Wells-Gardner Electronics
Corporation *
    
    
    4,481,625
    
    
    
    4,365,523
    
    
    
    3,560,749Management fee charged by
Eastech Electronics (M) Sdn.
Bhd. **
    
    
    132,740
    
    
    
    149,114
    
    
    
    113,200Purchase of goods from Eastech
Electronics (M) Sdn. Bhd. **
    
    
    4,041,554
    
    
    
    5,042,581
    
    
    
    3,449,529Purchase of property and
equipment from Eastech
Electronics (M) Sdn. Bhd. **
    
    
    0
    
    
    
    0
    
    
    
    13,158Rental of premises charged by
Eastech Electronics (M) Sdn.
Bhd. **
    
    
    51,340
    
    
    
    51,340
    
    
    
    51,340
 
 *
    
    A substantial shareholder which holds 50% of the equity interest in the
Company.**
    
    A substantial shareholder which holds 50% of the equity interest in the
Company. Page 12