-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MQW2dbuADKVxkkYB90UEQJHmYoTwbSz+X3plQRbKXHprz7jfhv2sy7/TwYU75c5N m744s4FrvRlJaXJ34vUijQ== 0000102198-99-000005.txt : 19990615 0000102198-99-000005.hdr.sgml : 19990615 ACCESSION NUMBER: 0000102198-99-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990528 ITEM INFORMATION: FILED AS OF DATE: 19990610 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPETITIVE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000102198 STANDARD INDUSTRIAL CLASSIFICATION: PATENT OWNERS & LESSORS [6794] IRS NUMBER: 362664428 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08696 FILM NUMBER: 99644200 BUSINESS ADDRESS: STREET 1: 1960 BRONSON ROAD STREET 2: P.O. BOX 340 CITY: FAIRFIELD STATE: CT ZIP: 06430 BUSINESS PHONE: 2032256044 MAIL ADDRESS: STREET 1: 1960 BRONSON ROAD STREET 2: P.O. BOX 340 CITY: FAIRFIELD STATE: CT ZIP: 06430 FORMER COMPANY: FORMER CONFORMED NAME: UNIVERSITY PATENTS INC DATE OF NAME CHANGE: 19920703 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 28, 1999 COMPETITIVE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 1-8696 36-2664428 (State or other (Commission file (IRS employer jurisdiction number) identification No. of incorporation) 1960 Bronson Road, P.O. Box 340, Fairfield, Connecticut 06430 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (203) 255-6044 N/A (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets Effective May 28, 1999, Competitive Technologies, Inc. ("CTT" or "the registrant") sold its 14.5% interest in NovaNET Learning, Inc. ("NLI") in connection with the acquisition of NLI by National Computer Systems, Inc. ("NCSI"), for $2,472,602 in cash. From February 15, 1995, through May 28, 1999, CTT accounted for its $159,375 investment in NovaNET Learning, Inc. under the cost method. CTT will recognize its $2,313,227 gain in the quarter ending July 31, 1999. Capital loss carryforwards will substantially shelter the gain from Federal and state income taxes. The cash proceeds are available to support CTT's future operating requirements or investment opportunities as determined by its management and directors. At a special meeting on May 26, 1999, NLI's shareholders approved NCSI's purchase of all the issued and outstanding stock, options and warrants of NLI pursuant to an agreement and plan of merger dated as of May 4, 1999. The purchase price of $2.9732 per share payable in cash was agreed in arms' length negotiations between NLI's management and representatives of NCSI. The total purchase price was approximately $19.2 million. Under the plan of merger, NLI will become an indirect wholly-owned subsidiary of NCSI. There is no relationship between the registrant or any of its officers, directors or affiliates and NCSI. Item 7. Financial Statements and Exhibits A. Financial Statements of Businesses Acquired Not applicable. B. Pro Forma Financial Information (Unaudited) Pro Forma Consolidated Balance Sheet as of January 31, 1999 Pro Forma Consolidated Statement of Operations for the year ended July 31, 1998 Notes to Pro Forma Consolidated Financial Statements C. Exhibits None. COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Financial Information (Unaudited) The following pro forma balance sheet as of January 31, 1999, reflects the registrant's sale of its interest in NovaNET Learning, Inc. as if it had occurred on August 1, 1998. The following pro forma statement of operations for the year ended July 31, 1998, reflects the registrant's sale of its interest in NovaNET Learning, Inc. as if it had occurred on August 1, 1997. No proforma statement of operations for the six months ended January 31, 1999, is presented here. If the registrant had sold its interest in NovaNET Learning, Inc. on August 1, 1997, its statement of operations for the six months ended January 31, 1999, would have been as it was reported in the historical statement of operations. The only difference would have been that the registrant would have had additional funds available for investment or other use during the six months. If the registrant had invested the sale proceeds in short-term investments on August 1, 1997, at the registrant's weighted average interest rate for the six months ended January 31, 1999, the registrant would have earned approximately $69,400 more interest income than the $84,733 reported in the historical statement of operations. The unaudited pro forma financial information should be read in conjunction with the financial statements of the registrant included in its Quarterly Report on Form 10-Q for the quarterly period ended January 31, 1999, and its Annual Report on Form 10-K for the year ended July 31, 1998. The unaudited pro forma statements of operations are not necessarily indicative of what the actual results of operations of the registrant would have been if the sale had occurred on August 1, 1997, nor do they purport to represent the results of operations for future periods. COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Consolidated Balance Sheet January 31, 1999 (Unaudited)
Historical Pro Forma Balance Pro Forma Balance Sheet Adjustments Sheet ASSETS Current assets: Cash and cash equivalents $ 213,591 $ 2,472,602 A $ 2,686,193 Short-term investments, at market 2,070,905 2,070,905 Receivables, including $10,076 receivable from related parties 1,539,256 1,539,256 Prepaid expenses and other current assets 79,322 79,322 Total current assets 3,903,074 2,472,602 6,375,676 Property and equipment, net 135,738 135,738 Investments 208,689 (159,375) A 49,314 Intangible assets acquired, principally licenses and patented technologies, net 1,374,678 1,374,678 TOTAL ASSETS $ 5,622,179 $ 2,313,227 $ 7,935,406 LIABILITIES AND SHAREHOLDERS' INTEREST Current liabilities: Accounts payable, including $291 payable to related parties $ 87,437 $ 87,437 Accrued liabilities 1,452,749 1,452,749 Total current liabilities 1,540,186 -- 1,540,186 Commitments and contingencies Shareholders' interest: 5% preferred stock, $25 par value 60,675 60,675 Common stock, $.01 par value 60,032 60,032 Capital in excess of par value 25,626,938 25,626,938 Treasury stock (common), at cost; 20,965 shares (108,206) (108,206) Accumulated other comprehensive loss (12,499) (12,499) Accumulated deficit (21,544,947) 2,313,227 A (19,231,720) Total shareholders' interest 4,081,993 2,313,227 6,395,220 TOTAL LIABILITIES AND SHAREHOLDERS'INTEREST $ 5,622,179 $ 2,313,227 $ 7,935,406
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Pro Forma Consolidated Statement of Operations For the year ended July 31, 1998 (Unaudited)
Historical Pro Forma Statement of Pro Forma Statement of Operations Adjustments Operations Revenues: Retained royalties $ 2,400,534 $ $ 2,400,534 Revenues under services contracts and grants, including $101,281 from related parties 211,300 211,300 2,611,834 -- 2,611,834 Costs of technology management services 2,087,234 2,087,234 General and administration expenses, of which $6,504 was paid to related parties 1,606,503 1,606,503 Contract settlement expense 300,000 300,000 3,993,737 -- 3,993,737 Operating loss (1,381,903) (1,381,903) Gain on sale of investment in NovaNET Learning, Inc. -- 2,313,227 B 2,313,227 Interest income 170,051 C 170,051 Interest expense (37,688) (37,688) Income related to equity method affiliates, net 182 182 Other expense, net (8,852) (8,852) Income (loss) before minority interest (1,258,210) 2,313,227 1,055,017 Minority interest in losses of subsidiary 22,721 22,721 Net income (loss) $(1,235,489) $ 2,313,227 $ 1,077,738 Net income (loss) per share: Basic and diluted $ (0.21) $ 0.18 Weighted average number of common shares outstanding: Basic 5,969,434 5,969,434 Diluted 6,011,506 6,011,506
See accompanying notes COMPETITIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Pro Forma Financial Statements (Unaudited) A. This pro forma adjustment reflects the sale of the registrant's 14.5% interest in NovaNET Learning, Inc. for $2,472,602 in cash as if it had occurred on January 31, 1999. It reflects the addition of the cash proceeds of $2,472,602 and the reduction of investments for the registrant's $159,375 carrying value on January 31, 1999. It also reflects the registrant's gain of $2,313,227 as a reduction of the accumulated deficit. Since capital loss carryforwards would have substantially sheltered the gain from Federal and state income taxes, no tax effect has been reflected. B. This pro forma adjustment reflects the sale of the registrant's 14.5% interest in NovaNET Learning, Inc. for $2,472,602 in cash as if it had occurred on August 1, 1997. It reflects the registrant's gain of $2,313,227 on the sale. Since capital loss carryforwards would have substantially sheltered the gain from Federal and state income taxes, no tax effect has been reflected. C. This pro forma statement of operations reflects no pro forma adjustment for an assumed investment of the cash proceeds. If the registrant had invested the sale proceeds in short-term investments on August 1, 1997, at the registrant's weighted average interest rate for the year ended July 31, 1998, the registrant would have earned approximately $138,000 more interest income than the $170,051 reported in the historical statement of operations for the year ended July 31, 1998, and approximately $69,400 more interest income than the $84,733 reported in the historical statement of operations for the six months ended January 31, 1999. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMPETITIVE TECHNOLOGIES, INC. Registrant Date: June 11, 1999 S/ Frank R. McPike, Jr. By: Frank R. McPike, Jr. President, Chief Operating Officer, Chief Financial Officer and Authorized Signer -----END PRIVACY-ENHANCED MESSAGE-----