8-K 1 b310971_8k.txt CURRENT REPORT 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): April 6, 2001 Mark Solutions, Inc. -------------------- (Exact name of registrant as specified in its charter) Delaware -------- (State or Other Jurisdiction of Incorporation) 0-17118 11-2864481 (Commission File Number) (I.R.S. Employer Identification No.) Parkway Technical Center, Bloomfield, NJ 07003 ---------------------------------------------- (Address and zip code of principal executive offices) 973-893-0500 ------------ (Registrant's telephone Number) ITEM 2. Acquisition or Disposition of Assets On April 6, 2001, the Company closed a transaction involving sale of assets by its majority owned subsidiary Mark Technical, Inc. ("Mark Technical"), formerly known as MarkCare Medical Systems, Inc. ("MarkCare") to MMSI Acquisition Corp. ("MMSI"), a newly established wholly owned subsidiary of MediSolution Ltd. ("MediSolution"), a Canadian based company engaged in offering information systems to the health care industry. Pursuant to the terms of an Asset and Stock Purchase Agreement, MMSI purchased substantially all of the assets of Mark Technical and assumed certain specific liabilities. The sale also included all of the issued and outstanding common stock of Mark Technical's wholly owned United Kingdom subsidiary, MarkCare Medical Systems Ltd. Under the terms of the Agreement, MarkCare Medical Systems Korea is to be liquidated. The total purchase price negotiated by the parties was One Million Six Hundred Eighty-two Thousand Six Hundred Thirty-three Dollars ($1,682,633), subject to certain closing adjustments. Prior to the closing, Mark Technical had received from MMSI a $500,000 advance. At closing, Mark Technical received $476,210 after adjustments. A balance of $500,000 is due within ninety (90) days of closing as evidenced by a promissory note guaranteed by MediSolution. Additionally, MarkCare received 200,000 warrants to purchase the Common Stock of MediSolution at an exercise price of $2.40 (CDN) a share. MediSolution's Common Stock is traded on the Toronto Exchange. As additional compensation, MarkCare is to receive ten percent (10%) of all license revenues received by MMSI from certain projects for a period of one year from closing. Under the terms of the agreement MMSI purchased the name "MarkCare Medical Systems" and as a result MarkCare Medical Systems changed its name to Mark Technical, Inc. simultaneously with the closing. As a result of the sale, Mark Technical will no longer be operating in the medical imaging industry. The Company's Board of Directors in evaluating the sale of the assets took into consideration the past operating results of Mark Technical and its future potential and concluded that it was in the Company'sbest interest to divest its medical imaging business. Accordingly, the Board of Directors unanimously approved the sale of Mark Technical's assets to MMSI. ITEM 7. Financial Statements and Exhibits (a)Financial Statements -- Not Applicable (b)Pro Forma Financial Information -- Attached Hereto (c)Exhibits: 10q)Asset and Stock Purchase Agreement 2 SIGNATURES Pursuantto 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. Mark Solutions, Inc. -------------------------- (Registrant) By: s/ Carl Coppola ------------------------- Carl Coppola, President DATED: April 20, 2001 3 Mark Solutions, Inc. and Subsidiaries Pro Forma Combined Financial Statements The following unaudited pro forma combined financial statements give effect to the sale of Mark's medical imaging segment as set forth in the notes to these pro forma financial statements. These unaudited financial statements should be read in conjunction with Mark's consolidated financial statements and notes thereto. These pro forma financial statements are not necessarily indicative of the results that would have been reported had such events actually occurred on the dates specified, nor are they indicative of Mark's future results. Mark Solutions, Inc. and Subsidiaries Pro Forma Combined Balance Sheet as of June 30, 2000 (in thousands)
Historical Pro Forma ------------------------------- ------------------------------- Mark and Disposition Adjustments for Subsidiaries (1) Disposition (2) Combined -------------- -------------- -------------- -------------- Current Assets: Cash and cash equivalents .......................... $ 1,536 $ (398) $ 976 $ 2,114 Marketable securities .............................. 406 406 Note receivable .................................... 225 500 725 Accounts receivable ................................ 1,868 (221) 1,647 Inventories ........................................ 60 60 Deferred tax asset ................................. 572 (66) 506 Prepaid expenses and other current assets .......... 84 (63) -- 21 -------------- -------------- -------------- -------------- Total Current Assets ............................. 4,751 (748) 1,476 5,479 -------------- -------------- -------------- -------------- Property and equipment, net ......................... 1,254 (465) -- 789 -------------- -------------- -------------- -------------- Other Assets: Cost in excess of net assets, net of amortization .. 193 (193) -- Other assets ....................................... 131 (41) -- 90 -------------- -------------- -------------- -------------- Total Other Assets ................................ 324 (41) (193) 90 -------------- -------------- -------------- -------------- Total Assets ........................................ $ 6,329 $ (1,254) $ 1,283 $ 6,358 ============== ============== ============== ==============
Mark Solutions, Inc. and Subsidiaries Pro Forma Combined Balance Sheet as of June 30, 2000 (in thousands)
Historical Pro Forma ------------------------------- ------------------------------- Mark and Disposition Adjustments for Subsidiaries (1) Disposition (2) Combined -------------- -------------- -------------- -------------- Current Liabilities: Accounts payable .................................... $ 2,061 $ (296) $ 1,765 Short term borrowings ............................... 250 250 Current maturities of long-term debt ................ 402 402 Current portion of obligations under capital leases . 125 (32) 93 Notes payable to officers/stockholders .............. 100 100 Deferred revenues ................................... 159 (159) -- Accrued liabilities ................................. 282 (67) -- 215 -------------- -------------- -------------- -------------- Total Current Liabilities ........................ 3,379 (554) -- 2,825 -------------- -------------- -------------- -------------- Other Liabilities: Long-term portion of obligations under capital leases 94 (20) 74 Convertible notes ................................... 2,000 -- -- 2,000 -------------- -------------- -------------- -------------- Total Other Liabilities .......................... 2,094 (20) -- 2,074 -------------- -------------- -------------- -------------- Commitments and Contingencies Stockholders' Equity: Common stock ........................................ 71 71 Preferred stock ..................................... 20 20 Additional paid-in capital .......................... 36,671 36,671 Deficit ............................................. (36,305) (230) 1,283) (35,252) Accumulated other comprehensive income .............. 450 (450) -- Treasury stock ...................................... (51) -- -- (51) -------------- -------------- -------------- -------------- Total Stockholders' Equity ....................... 856 (680) 1,283 1,459 -------------- -------------- -------------- -------------- Total Liabilities and Stockholders' Equity .......... $ 6,329 $ (1,254) $ 1,283 $ 6,358 ============== ============== ============== ==============
Mark Solutions, Inc. and Subsidiaries Pro Forma Combined Statement of Operations For the Year Ending June 30, 2000 (in thousands)
Historical Pro Forma ---------------------------------- ---------------------------------- Mark and Disposition Adjustments for Subsidiaries (1) Disposition (3) Combined -------------- -------------- -------------- -------------- Revenues $ 13,724 $ (2,054) $ -- $ 11,670 -------------- -------------- -------------- -------------- Costs and Expenses: Cost of sales 11,698 (1,970) 9,728 General, and administrative expenses 4,201 (1,818) (210) 2,173 Marketing costs 1,454 (785) 669 Software costs 778 (778) -- -- -------------- -------------- -------------- -------------- Total Costs and Expenses 18,131 (5,351) (210) 12,570 -------------- -------------- -------------- -------------- Operating Loss (4,407) (3,297) 210 (900) -------------- -------------- -------------- -------------- Other Income (Expenses): Interest income 89 (2) 87 Interest expense (370) 30 (340) Other 127 (14) 154 267 -------------- -------------- -------------- -------------- Total Other Income (Expense) (154) 14 154 14 -------------- -------------- -------------- -------------- Loss from before Income Tax Benefit (4,561) (3,283) 364 (886) Income Tax Benefit 173 (66) -- 107 -------------- -------------- -------------- -------------- Net Loss $ (4,388) $ (3,349) $ 364 $ (779) ============== ============== ============== ============== Basic Income (Loss) per Share $ (0.72) $ (0.55) $ 0.06 $ (0.13) ============== ============== ============== ============== Weighted Average Number of Basic Shares Outstanding 6,112,534 6,112,534 6,112,534 6,112,534 ============== ============== ============== ==============
Mark Solutions, Inc. and Subsidiaries Pro Forma Combined Balance Sheet as of December 31, 2000 (in thousands)
Historical Pro Forma ---------------------------------- ---------------------------------- Mark and Disposition Adjustments for Subsidiaries (1) Disposition (2) Combined -------------- -------------- -------------- -------------- Current Assets: Cash and cash equivalents $ 343 $ (38) $ 976 $ 1,281 Note receivable 214 500 714 Accounts receivable 2,642 (972) 1,670 Inventories 60 60 Deferred tax asset 438 438 Prepaid expenses and other current assets 92 (53) -- 39 -------------- -------------- -------------- -------------- Total Current Assets 3,789 (1,063) 1,476 4,202 -------------- -------------- -------------- -------------- Property and equipment, net 1,113 (470) -- 643 -------------- -------------- -------------- -------------- Other Assets: Cost in excess of net assets, net of amortization 87 (87) -- Other assets 151 (61) -- 90 -------------- -------------- -------------- -------------- Total Other Assets 238 (61) (87) 90 -------------- -------------- -------------- -------------- Total Assets $ 5,140 $ (1,594) $ 1,389 $ 4,935 ============== ============== ============== ==============
Mark Solutions, Inc. and Subsidiaries Pro Forma Combined Balance Sheet as of December 31, 2000 (in thousands)
Historical Pro Forma ---------------------------------- ---------------------------------- Mark and Disposition Adjustments for Subsidiaries (1) Disposition (2) Combined -------------- -------------- -------------- -------------- Current Liabilities: Accounts payable $ 2,552 $ (713) $ 1,839 Short term borrowings 219 219 Current portion of obligations under capital leases 185 (26) 159 Notes payable to officers/stockholders 155 155 Deferred revenues 263 (263) -- Accrued liabilities 490 (279) -- 211 -------------- -------------- -------------- -------------- Total Current Liabilities 3,864 (1,281) -- 2,583 -------------- -------------- -------------- -------------- Other Liabilities: Long-term portion of obligations under capital leases 90 (20) 70 Convertible notes 2,000 -- -- 2,000 -------------- -------------- -------------- -------------- Total Other Liabilities 2,090 (20) -- 2,070 -------------- -------------- -------------- -------------- Commitments and Contingencies Stockholders' Equity: Common stock 76 76 Additional paid-in capital 36,630 36,630 Deficit (38,057) 295 1,389 (36,373) Accumulated other comprehensive income 588 (588) -- Treasury stock, at cost (51) -- -- (51) -------------- -------------- -------------- -------------- Total Stockholders' Equity (814) (293) 1,389 282 -------------- -------------- -------------- -------------- Total Liabilities and Stockholders' Equity $ 5,140 $ (1,594) $ 1,389 $ 4,935 ============== ============== ============== ==============
Mark Solutions, Inc. and Subsidiaries Notes to Pro Forma Combined Financial Statements (1) The unaudited combined pro forma balance sheet as of June 30, 2000 and December 31, 2000 gives effect to the sale of Mark's medical imaging segment on April 6, 2001 as though the transaction was consummated at the end of the respective periods presented. The unaudited combined statement of operations for the year ended June 30, 2000 and for the six months ended December 31, 2000, gives effect to the transaction as though the transaction was consummated at the beginning of the respective periods presented. (2) The pro forma balance sheet adjustments reflect the (a) sales proceeds received, (b) receipt of promissory note and (c) adjustment of costs in excess of net assets of business acquired. (3) The pro forma statement of operations adjustment reflects Mark's estimated earn out from sales of licensed software revenue during the periods presented and elimination of amortization of costs in excess of net assets of business acquired. EXHIBITS 10q) Asset and Stock Purchase Agreement 4