An other SEC filling today:
Page1
TYPE: 8-K/A
SEQUENCE: 1
DESCRIPTION: FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Date of report (Date of earliest event reported): June 2, 1999
Commission File No. 0-24833
FUTURELINK DISTRIBUTION CORP.
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(Exact Name of Registrant as Specified in Its Charter)
Colorado 95-3895211
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
300, 250 - 6th Avenue S.W., Calgary, Alberta CANADA T2P 3H7
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(Address of principal executive offices) (ZIP Code)
(403) 216-6000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 2, 1999, the Registrant entered into an arm's length agreement
to acquire all of the issued and outstanding shares of Executive LAN Management,
Inc. of Irvine, California, which carries on business as Micro Visions ("Micro
Visions"). Founded in 1987, Micro Visions is one of North America's leading
server-based computing systems integrators. As well as Irvine, Micro Visions has
branch offices in Atlanta, Las Vegas, Los Angeles, Phoenix and Raleigh/Durham.
Micro Visions has approximately 80 employees and had revenues of $13.7 million
in 1998.
In 1998, Micro Visions was the no. 1 (1997 - no. 2) reseller and
integrator of products from Citrix Systems Inc. in North America. Citrix
products provide the foundation for the Registrant's main Application Service
Provider (ASP) business.
The closing of the acquisition, expected by September of 1999, is
subject to several conditions, including approval by the Registrant's
shareholders. Under the agreement, Micro Vision' shareholders (the family of
Glen Holmes) will receive $12 million in cash and 6 million post-reverse split
shares of the Registrant's common stock upon closing. In addition, Micro
Visions' shareholders could gain a further 2.4 million post-reverse split shares
of the Registrant based on achievement of certain performance criteria in 1999.
The Registrant has advanced a $1 million deposit toward the cash portion of the
acquisition price in conjunction with the signing of the acquisition agreement.
Based on the Registrant's stock price at close of market on June 2, 1999, the
consideration to be paid to Micro Visions' shareholders (not including the up to
2.4 million additional shares of the Registrant, which can be earned) is worth
approximately $51 million.
The initial $1 million deposit was funded from the proceeds of the
Registrant's recently completed private placement offering through Commonwealth
Associates (see the Form 8-K of the Registrant filed May 7, 1999). The
Registrant plans to fund the remaining $11 million cash portion of the purchase
price by raising additional debt and equity financing between now and the
closing which is anticipated to occur in late September, 1999.
Upon closing, it is anticipated that Cameron Chell, currently the
Registrant's President and Chief Executive Officer ("CEO"), will remain CEO of
the combined companies. Glen Holmes, 42, the founder and CEO of Micro Visions,
will become President of the Registrant and is to be nominated to the
Registrant's board of directors. It is intended that the merged company will be
renamed FutureLink Corp. (subject to shareholder approval) and be headquartered
in Irvine, California, with the Registrant retaining executive offices in
Calgary, Alberta.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS OF BUSINESS TO BE ACQUIRED:
The financial statements for Micro Visions for the 12 month periods
ended December 31, 1997 and 1998 and for the three month periods ended March 31,
1998 and 1999 required by this item are attached.
2
(B) PRO FORMA FINANCIAL INFORMATION:
Pro forma financial information for the merged companies based on
financial statements for the three month period ended March 31, 1999
and for the twelve month period ended December 31, 1998 are attached.
EXHIBITS:
10.1 Agreement and Plan of Reorganization and Merger dated June 2,
1999 among the Registrant, FutureLink California Acquisition
Corp., Executive LAN Management, Inc. (d.b.a. Micro Visions),
and Holmes Trust, Glen C. Holmes and Christine M. Holmes
(without schedules).*
99.1 News Release of the Registrant dated June 3, 1999. Note: These
Exhibits are attacked to the original form 8-K filed by the
Registrant with regard to these matters on June 16, 1999.*
* Note: These Exhibits are attached to the original Form 8-K filed by the
Registrant with regard to these matters on June 16, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FUTURELINK DISTRIBUTION CORP.
By: [signed: C. Chell] Date: July 27, 1999
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Cameron Chell, Chief Executive Officer
By: [signed: R. Kilambi] Date: July 27, 1999
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Raghu Kilambi, Chief Financial Officer
3
INDEX TO FINANCIAL STATEMENTS
A.1 Financial Statements of Executive LAN Management, Inc., dba Micro
Visions, for the twelve months ended December 31, 1998 and 1997
Report of Independent Auditors....................................... F-1
Financial Statements
Balance Sheets..................................................... F-2
Statements of Income............................................... F-3
Statements of Shareholders' Equity................................. F-4
Statements of Cash Flows........................................... F-5
Notes to Financial Statements...................................... F-6
A.2 Financial Statements of Executive LAN Management, Inc., dba Micro
Visions, for the three months ended March 31, 1999 and 1998
Financial Statements
Balance Sheets..................................................... F-14
Statements of Income and Retained Earnings......................... F-15
Statements of Changes in Stockholders' Equity...................... F-16
Consolidated Statements of Cash Flows.............................. F-17
Notes to Consolidated Financial Statements......................... F-18
B.1 Pro forma financial information for the merged companies based on
financial statements for the 12 month period ended December, 31
1998 and the three month period ended March 31, 1999
Financial Statements
March 31, 1999 Pro Forma Balance Sheet............................. F-19
March 31, 1999 Pro Forma Statement of Income and Loss.............. F-20
December 31, 1998 Pro Forma Statement of Income and Loss........... F-21
Notes to Unaudited Pro Forma Consolidated Financial Statements..... F-22
5
Report of Independent Auditors
The Board of Directors
Executive LAN Management, Inc., dba Micro Visions
We have audited the accompanying balance sheets of Executive LAN Management,
Inc., dba Micro Visions as of December 31, 1998 and 1997, and the related
statements of income, shareholders' equity, 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 generally accepted auditing
standards. 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 Executive LAN Management, Inc.,
dba Micro Visions at December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
[Signed: Ernst & Young LLP]
Irvine California,
April 30, 1999,
Except for Note 8, as to which the date is
June 24, 1999
F-1
Executive LAN Management, Inc.,
dba Micro Visions
Balance Sheets
DECEMBER 31
--------------------------
1998 1997
---------- ----------
ASSETS
Current assets:
Cash $ 157,000 $ 690,000
Accounts receivable, less allowance for doubtful accounts of
$115,000 in 1998 and $79,000 in 1997 2,063,000 1,052,000
Inventories 815,000 231,000
Advances due from officers 2,000 72,000
Other current assets 15,000 1,000
---------- ----------
Total current assets 3,052,000 2,046,000
Property and equipment, less accumulated depreciation of $122,000 in
1998 and $83,000 in 1997 389,000 83,000
Other assets 146,000 33,000
---------- ----------
Total assets $3,587,000 $2,162,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 797,000 $ 169,000
Line of credit 261,000 150,000
Income taxes payable 153,000 237,000
Deferred income taxes 435,000 235,000
Accrued expenses and other liabilities 464,000 432,000
Deferred revenues 73,000 90,000
---------- ----------
Total current liabilities 2,183,000 1,313,000
Commitments
Shareholders' equity
Common stock, no par value:
Authorized shares - 1,000,000
Issued and outstanding shares - 200 in 1998 and 1997 10,000 10,000
Retained earnings 1,394,000 839,000
---------- ----------
Total shareholders' equity 1,404,000 849,000
---------- ----------
Total liabilities and shareholders' equity $3,587,000 $2,162,000
========== ==========
See accompanying notes.
F-2
Executive LAN Management, Inc.,
dba Micro Visions
Statements of Income
YEAR ENDED DECEMBER 31
-------------------------------
1998 1997
------------ ------------
Revenues:
Consulting revenues $ 5,088,000 $ 2,709,000
Software revenues 3,274,000 1,478,000
Computer equipment sales 4,797,000 4,972,000
Training revenues 290,000 62,000
Maintenance revenues and other income 220,000 344,000
------------ ------------
13,669,000 9,565,000
Costs and expenses:
Cost of revenues 8,867,000 6,734,000
Selling, general and administrative 3,937,000 1,951,000
Interest expense (income), net 10,000 (53,000)
------------ ------------
12,814,000 8,632,000
------------ ------------
Income before income taxes 855,000 933,000
Provision for income taxes 178,000 395,000
------------ ------------
Net income $ 677,000 $ 538,000
============ ============
Basic and diluted earnings per share $ 3,385 $ 2,690
============ ============
Weighted average shares (basic and diluted) 200 200
============ ============
See accompanying notes.
F-3
Executive LAN Management, Inc.,
dba Micro Visions
Statements of Shareholders' Equity
COMMON STOCK
-------------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------- ----------- -----------
Balance at December 31, 1996 200 $10,000 $ 301,000 $ 311,000
Net income -- -- 538,000 538,000
--- ------- ----------- -----------
Balance at December 31, 1997 200 10,000 839,000 849,000
--- ------- ----------- -----------
Net income -- -- 677,000 677,000
Distributions to shareholders -- -- (122,000) (122,000)
--- ------- ----------- -----------
Balance at December 31, 1998 200 $10,000 $ 1,394,000 $ 1,404,000
=== ======= =========== ===========
See accompanying notes.
F-4
Executive LAN Management, Inc.,
dba Micro Visions
Statements of Cash Flows
YEAR ENDED DECEMBER 31
-----------------------------
1998 1997
------------ ----------
OPERATING ACTIVITIES
Net income $ 677,000 $ 538,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 39,000 20,000
Change in operating assets and liabilities:
Accounts receivable (1,011,000) (495,000)
Inventories (584,000) (183,000)
Other current assets (14,000) --
Advance due from officers 70,000 (72,000)
Other assets (113,000) (25,000)
Accounts payable and accrued expenses 660,000 281,000
Income taxes payable (84,000) 237,000
Deferred income taxes 200,000 141,000
Deferred revenues (17,000) 90,000
------------ ----------
Net cash (used in) provided by operating activities (177,000) 532,000
INVESTING ACTIVITIES
Purchases of equipment (345,000) (50,000)
FINANCING ACTIVITIES
Distribution to shareholders (122,000) --
Net borrowings (repayment) from/of line of credit 111,000 (93,000)
------------ ----------
Net cash used in financing activities (11,000) (93,000)
Increase (decrease) in cash (533,000) 389,000
Cash at beginning of year 690,000 301,000
------------ ----------
Cash at end of year $ 157,000 $ 690,000
============ ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid $ 4,000 $ 11,000
Income taxes paid 62,000 17,000
See accompanying notes. |
