-----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, D30jls4GEMqDGvr51M7yrJs3hyWA8I/r2KEszxdJJbeFszYXiGJhYww6Y74gsp3W m9KuoJnU4CCQIYfxqsMcIA== 0000950134-97-000773.txt : 19970211 0000950134-97-000773.hdr.sgml : 19970211 ACCESSION NUMBER: 0000950134-97-000773 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970207 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOPRO INC CENTRAL INDEX KEY: 0000874263 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRICAL INDUSTRIAL APPARATUS [3620] IRS NUMBER: 841042227 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-19167 FILM NUMBER: 97521099 BUSINESS ADDRESS: STREET 1: 2525 W EVANS AVE CITY: DENVER STATE: CO ZIP: 80219 BUSINESS PHONE: 3039351221 MAIL ADDRESS: STREET 1: 2525 W EVANS AVE CITY: DENVER STATE: CO ZIP: 80219 FORMER COMPANY: FORMER CONFORMED NAME: ENTERINVESTMENT CORP DATE OF NAME CHANGE: 19600201 8-K/A 1 TOPRO INC. FORM 8-K AMENDMENT NO. 1 DATED 12/31/96 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A NO. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. December 31, 1996 ---------------------------------------- Date of Report (Date of Earliest Event Reported) TOPRO, INC. ----------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Colorado 84-1042227 ---------------------------------- --------------------------------------- (State or other jurisdiction of I.R.S. Employer I. D. Number incorporation or organization) 2525 West Evans Avenue, Denver, Colorado 80219 - ----------------------------------------- ---------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (303) 935-1221 ------------- 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On December 31, 1996, Topro, Inc. ("Registrant"), entered into an Agreement of Merger pursuant to which a newly formed subsidiary will merge into, and the Registrant will acquire all the outstanding capital stock of All Control Systems, Inc.("ACSI") and ProMeta Consulting, Inc. ("ProMeta") (combined collective company "ACS") independent control systems integrators located in West Chester, PA organized as Subchapter S corporations under the federal tax code. ACS's operations are carried out through two affiliated companies ACS and ProMeta under common ownership. On the effective date of the merger the Registrant's subsidiary will merge with ACSI and ProMeta leaving ACS as a wholly owned subsidiary of the Registrant. ACS's core business parallels that of the Registrant's, with emphasis on some different/additional markets and a generally more technically sophisticated product offering in the food and pharmaceutical industries. ACS is focused on the following vertical markets: food processing, pharmaceutical, and discrete manufacturing. In accordance with an Agreement of Merger, the Registrant will acquire all of the outstanding capital stock of ACS in exchange for 1,800,000 restricted shares of the Registrant's Common Stock. The 3 shares issued under the Agreement of Merger will be held in escrow pending the effective date of the Registrants Form S-3 currently being reviewed by the SEC at which time the shares will be released to the ACS shareholders. The Agreement of Merger will result in ACS's termination of its Subchapter S classification creating a deferred tax liability relating to capitalized software costs deductions previously received by the shareholders. It is estimated that the deferred tax liability relating to the capitalized software assumed by the Registrant will total no more than $340,000. The Agreement of Merger provides for future tax liability to be borne one-half by the Registrant and one-half by the ACS shareholders pro rata according to their respective pre-merger interest in ACS. Shares will be held in escrow to satisfy any incurred tax liability based on a value of $2.25 per share or 151,111 shares. Such shares will be released in annual installments to former ACS shareholders at the rate of one share for each $4.50 total reduction (through amortization of the software costs to earnings) in the capitalized software deferred tax reflected on the June 30, 1997 audited financial statements of the Registrant. Such amortization and escrow period shall not exceed five years. During the term of this escrow period the ACS shareholders shall have the option to replace the escrowed shares valued at $2.25 per share with cash or other collateral acceptable to the Registrant. Any replacement collateral shall be released at the same rate as escrowed shares would be released. ACS operates from a modern 35,000 square foot facility in West Chester, PA. ACS staff currently numbers 65, with over 49 engineers and 4 sales personnel and 12 corporate personnel. The Registrant intends to continue the business of ACS, having effected the transaction in order to establish a market presence for its Control Systems Integration operations in the regions served by ACS. In connection with the Merger, the past President of ACS, Kevin Fallon will enter into an employment agreement with the Registrant. This agreement and its terms will be finalized prior to the closing date of the Agreement of Merger, which the Registrant anticipates will be on or before January 18, 1997. Prior to this transaction, there was no material relationship between ACS and the Registrant or any of its affiliates, any director or officer of the registrant, or any associate of such director or officer. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED - Audited financial statements of ACS for the 12 months ending December 31, 1995 and 1994 along with interim financial statements are not presently available but will be provided in the proscribed filing period. (b) PRO FORMA FINANCIAL INFORMATION - The pro forma financial statements reflect the acquisition of ACSI and ProMeta, (combined company "ACS") accounted for as a purchase. ACS's previous fiscal year end is December 31. The pro forma balance sheet set forth the financial position as of September 30, 1996. The pro forma income statements as of September 30, 1996 reflect the 3 months of operation of ACS for the periods ending September 30, 1996. The unaudited pro forma income 3 4 statement for the year ending June 30, 1996. This pro forma information has been restated to reflect the 12 months of operations of ACS, the six months of operation for Advanced Control Technology, Inc. ("ACT"), and the 10 months of operation of Visioneering Holding Corp ("VHC"). ACT was acquired on January 1, 1996 resulting in 6 months of operation consolidated in the Registrant's financial results and VHC was acquired on May 1, 1996 resulting in 2 months of operations consolidated in the Registrant financial results. The combined pro forma income statement was consolidated to show the cumulative effect of 12 months of operation for the acquisitions of ACS, ACT and VHC. The June 30, 1996 and September 30, 1996 pro forma balance sheet reflects the consolidated position of the Registrant, MDCS, Inc., ACT and VHC and ACS. (c) Exhibits 2.1* Agreement of Merger dated December 31, 1996. - ----------- * Previously filed. 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. Topro, Inc. Date: January 15, 1997 By: /s/ John Jenkins ---------------- ---------------------------------- John P. Jenkins President and CEO 4 5 TOPRO, INC. NOTES TO THE PRO FORMA FINANCIAL INFORMATION Pursuant to an Agreement of Merger dated December 31, 1996, Topro, Inc. ("Registrant"), through a merger undertaken by a newly formed subsidiary, will acquire all the outstanding capital stock of ACSI and ProMeta (collectively "ACS") independent control systems integrators located in West Chester, PA. The Registrant agrees to acquire all of the outstanding capital stock of ACS, in exchange for 1,800,000 restricted shares of the Registrant's Common Stock. The effective date for accounting purposes will be December 1, 1996 for purposes of recording the acquisition of ACS. The September 30, 1996 pro forma income statement of ACS, includes goodwill amortization of $77,000 was recorded for the period. The June 30, 1996 income statement was restated to reflect goodwill amortization of $310,000. The accompanying condensed combined pro forma balance sheet presents the financial position of the Registrant as if the merger between the Registrant's subsidiary and ACS had occurred on September 30, 1996. The pro forma balance sheet was prepared utilizing the September 30, 1996 balance sheet of ACS The pro forma statement of operations combined the statements of operations of the Registrant for the years ended June 30, 1996 and interim period ending September 30, 1996. The ACS financial statements were recast to reflect three months of operations for the period ending September 30, 1996. The combined consolidated income statement for the period ending June 30, 1996 reflects the recast operating results of ACS for the twelve months ending June, 30, 1996. The Registrant's September 30, 1996 consolidated income statements reflects the 3 months of operation of ACT, MDCS, Inc, VHC. Additionally, 6 months of operations for ACT ending 12/31/96 was included to reflect 12 months of operations ended June 30, 1996 for the acquisition of ACT included in previous 8-K filings. The combined consolidated income statements for June 30, 1996 and September 30, 1996 reflect the combined acquisitions of MDCS, Inc (pooling of interest), Advanced Control Technology, Inc. (purchase method), Visioneering Holding Corporation (purchase method), and ACS (purchase method) for the respective periods. These statements are not necessarily indicative of future operations or the actual results that would have occurred had the transactions been consummated at the beginning of the periods indicated. The pro forma condensed combined financial statements should be read in conjunction with the notes thereto of the Registrant's financial statements included in it annual report on Form 10-K and notes to financials of ACS included elsewhere in this 8-K. 5 6 TOPRO INC., AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET PURCHASE OF ACS (UNAUDITED)
TOPRO, INC. TOPRO, INC. CONSOLIDATED ACS PRO FORMA CONSOLIDATED PRO 09/30/96 09/30/96 ADJUST FORMA ---------------------------------------------------------------- ASSETS ------ CURRENT ASSETS: Cash $156,000 $129,786 $285,786 Receivables: Trade, net of allowance for doubtful accounts 5,234,000 3,380,816 8,614,816 Other 1,000 10,401 11,401 Cost and estimated earnings in excess of billings on uncompleted contracts 2,866,000 700,449 3,566,449 Inventories 151,000 0 151,000 Prepaid expense 244,000 24,161 268,161 Assets of discontinued operations 581,000 581,000 Refundable income taxes 222,000 222,000 ---------------------------------------------------------------- Total current assets 9,455,000 4,245,613 0 13,700,613 PROPERTY AND EQUIPMENT, AT COST: Building and land 850,000 0 850,000 Equipment, fixture & equipment 2,497,000 1,478,243 (1,322,876) 2,652,367 Leasehold improvements 784,000 24,262 808,262 4,131,000 1,502,505 (1,322,876) 4,310,629 Less accumulated depreciation (1,370,700) (1,322,876) 1,322,876 (1,370,700) ---------------------------------------------------------------- Net property and equipment 2,760,300 179,629 0 2,939,929 CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net of amortization 680,700 671,192 1,351,892 OTHER ASSETS Goodwill, net of amortization - 5,024,000 0 4,565,917 9,589,917 Debt issuance costs, net of amortization 333,000 0 0 333,000 Other assets 145,000 44,818 0 189,818 ---------------------------------------------------------------- TOTAL ASSETS $ 18,398,000 $ 5,141,252 $ 4,565,917 $ 28,105,169 =================================================================
6 7 TOPRO INC., AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET PURCHASE OF ACS (UNAUDITED)
TOPRO, INC. TOPRO, INC. CONSOLIDATED ACS PRO FORMA CONSOLIDATED PRO 09/30/96 09/30/96 ADJUST FORMA ---------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Line-of-credit $ 927,000 $1,237,000 $2,164,000 Current portion of long-term debt: Related parties 230,000 230,000 Financial institutions and other 1,422,000 1,422,000 Capital Lease obligation 41,000 16,729 57,729 Accounts payable 5,770,000 1,853,012 7,623,012 Billings in excess of costs and estimated earnings 988,000 2,135,545 3,123,545 on uncompleted contracts Accrued expenses 1,362,000 479,093 1,841,093 Deferred gain & expense 24,000 10,737 34,737 ---------------------------------------------------------------- Total current liabilities 10,764,000 5,732,116 0 16,496,116 LONG-TERM DEBT, NET OF CURRENT PORTION: Renaissance 3,500,000 0 3,500,000 Financial institutions and other 861,000 0 861,000 ---------------------------------------------------------------- Capital Lease Obligations 146,000 2,441 148,441 ---------------------------------------------------------------- Total long-term debt 4,507,000 2,441 0 4,509,441 DEFERRED GAIN Sale of bldg 39,000 39,000 STOCKHOLDERS' EQUITY: Preferred stock, par value $1.00 per share; authorized 10,000,000 shares, no shares issued - - - Common stock, par value $.0001 per share; authorized 200,000,000 shares, 6,639,403 shares issued and outstanding 9/30/96 1,000 1,375 (1,195) 1,180 Additional paid-in capital 7,775,000 126,101 3,923,719 11,824,820 Accumulated deficit (4,688,000) (720,781) 643,393 (4,765,388) ---------------------------------------------------------------- Total stockholders' equity 3,088,000 (593,305) 4,565,917 7,060,612 ---------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 18,398,000 $ 5,141,252 $ 4,565,917 $ 28,105,169 ================================================================
7 8 TOPRO INC., AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED INCOME STATEMENT PURCHASE OF ACS (UNAUDITED)
YEAR ENDED JUNE 30, 1996 -------------------------------------------------------------------------------------------- TOPRO, INC. VISIONEERING TOPRO, INC. CONSOLIDATED ACT, INC. CORPORATION ACS PRO FORMA CONSOLIDATED 06/30/96 12/31/95 04/30/96 6/30/96 ADJUST PRO FORMA -------------------------------------------------------------------------------------------- REVENUES: Control systems integration $19,726,000 $2,605,129 $8,165,012 $7,939,321 $38,435,462 Distributorship 907,000 907,000 -------------------------------------------------------------------------------------------- 20,633,000 2,605,129 8,165,012 7,939,321 39,342,462 COST OF SALES: Control systems integration 14,025,000 2,228,112 5,370,899 5,262,505 26,886,516 Distributorship 652,000 652,000 -------------------------------------------------------------------------------------------- 14,677,000 2,228,112 5,370,899 5,262,505 27,538,516 -------------------------------------------------------------------------------------------- GROSS PROFIT 5,956,000 377,017 2,794,113 2,676,816 11,803,946 EXPENSES: Sales expense 1,168,000 498,541 1,666,541 General and admin expense 3,921,000 582,220 5,224,510 3,762,273 13,490,003 Distributorship selling & other exp. 871,000 0 0 871,000 -------------------------------------------------------------------------------------------- 5,960,000 1,080,761 5,224,510 3,762,273 16,027,544 -------------------------------------------------------------------------------------------- OTHER INCOME (EXPENSES) Gain (loss) on sales of assets 435,000 10,436 0 445,436 Other (expenses) income 79,000 73 (6,583) 72,490 Interest expense (380,000) (172,057) (116,674) (131,306) 0 (800,037) Goodwill amortization (114,000) (74,165) (188,512) (309,554) (686,231) -------------------------------------------------------------------------------------------- 20,000 (235,713) (311,769) (131,306) (309,554) (968,342) INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INC TAXES 16,000 (939,457) (2,742,166) (1,216,763) (309,554) (5,191,940) INCOME TAX BENEFIT (PROVISION): Current 0 (7,831) 69,315 0 0 61,484 -------------------------------------------------------------------------------------------- Total income tax benefit 0 (7,831) 69,315 0 0 61,484 INCOME (LOSS) FROM CONTINUING OPERATIONS $ 16,000 (947,288) (2,672,850) (1,216,763) (309,554) (5,130,455) ============================================================================================ NET INCOME (LOSS) PER SHARE: Continuing operations $0.00 ($0.61) ---------------- SHARES OUTSTANDING 6/30/96 6,639,403 1,800,000 8,439,403 ============================================================================================ NOT REPORTED AS A WEIGHTED AVERAGE PER GAAP
8 9 TOPRO INC., AND SUBSIDIARIES PRO FORMA CONSOLIDATED CONDENSED INCOME STATEMENT PURCHASE OF ACS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1996 ------------------------------------------------------------------------------- TOPRO, INC. TOPRO, INC. CONSOLIDATED ACS PRO FORMA CONSOLIDATED 9/30/96 09/30/96 ADJUST PRO FORMA ------------------------------------------------------------------------------- REVENUES: Control systems integration $ 7,967,000 $ 3,307,203 $11,274,203 ------------------------------------------------------------------------------- 7,967,000 3,307,203 11,274,203 COST OF SALES: Control systems integration 5,082,000 2,484,543 7,566,543 ------------------------------------------------------------------------------- 5,082,000 2,484,543 7,566,543 ------------------------------------------------------------------------------- GROSS PROFIT 2,885,000 822,660 3,707,660 EXPENSES: Sales expense 598,000 0 598,000 General and administrative expense 1,948,000 475,302 2,423,302 ------------------------------------------------------------------------------- 2,546,000 475,302 3,021,302 INCOME FROM SYSTEMS INTEGRATION 339,000 347,358 686,358 OTHER INCOME (EXPENSE) Gain on sale of assets (3,000) 0 (3,000) Other (expense) income 4,000 0 4,000 Interest expense (172,000) (32,073) (204,073) Goodwill amortization (87,000) 0 (77,388) (164,388) ------------------------------------------------------------------------------- (258,000) (32,073) (77,388) (367,461) INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 81,000 315,285 (77,388) 318,897 INCOME TAX BENEFIT (PROVISION): Current 0 0 0 ------------------------------------------------------------------------------- Total income tax benefit (provision) 0 0 0 INCOME (LOSS) FROM CONTINUING OPERATIONS 81,000 315,285 (77,388) 318,897 =============================================================================== NET INCOME (LOSS) PER SHARE: Continuing operations $0.01 $0.04 SHARES OUTSTANDING 6/30/96 6,639,403 1,800,000 8,439,403 =============================================================================== NOT REPORTED AS A WEIGHTED AVERAGE PER GAAP
9 10 TOPRO INC., AND SUBSIDIARIES ASSUMPTIONS PURCHASE OF ACS (UNAUDITED) INCOME STATEMENT ADJUSTMENTS - 9/30/96 Goodwill amortization 77,388 INCOME STATEMENT ADJUSTMENTS - 06/30/96 Goodwill amortization - yearly 15 Years 309,554 STOCK EXCHANGED & GOODWILL Assets 5,141,252 Liability (5,734,557) ------------ Net assets purchased (593,305) Total Shares 1,800,000 2.25 4,050,000 ------------ Total goodwill 09/30/96 4,643,305 ============ EQUITY Common stock, par value $.0001 per share; ACS common stock 1,375 ACS shares issued 1,800,000 0.0001 (180) ------------- 1,195 ============ ADDITIONAL PAID-IN CAPITAL ACS additional paid in capital (126,101) ACS shares issued 1,800,000 2.25 4,050,000 ACS shares issued 1,800,000 .0001 (180) ------------ 3,923,719 ============ RETAINED EARNINGS RECONCILIATION ACS Common Stock (1,375) ACS additional paid in capital (126,101) ACS retained earnings 720,781 Registrant's common stock 4,050,000 Goodwill Adjustment (77,388) Adjustment to equity 4,565,917 ============
10 11 EXHIBIT INDEX
No. Description ---- ----------- 2.1* Agreement of Merger dated December 31, 1996.
- ---------- * Previously filed. -----END PRIVACY-ENHANCED MESSAGE-----