-----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, QaGKaZp/bCUXN2N1nYc7xcw/XIS5Y9CA4g0hq+HUQSHGdXh53U6bQwLFqG9qU5yU 7qm3RpmVG6oH4sFsgOx+WA== /in/edgar/work/20000905/0001004522-00-000025/0001004522-00-000025.txt : 20000922 0001004522-00-000025.hdr.sgml : 20000922 ACCESSION NUMBER: 0001004522-00-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000630 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALANCO ENVIRONMENTAL RESOURCES CORP CENTRAL INDEX KEY: 0000098618 STANDARD INDUSTRIAL CLASSIFICATION: [3564 ] IRS NUMBER: 860220694 STATE OF INCORPORATION: AZ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-09347 FILM NUMBER: 716390 BUSINESS ADDRESS: STREET 1: 15900 N 78TH ST STREET 2: SUITE 101 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 BUSINESS PHONE: 6026071010 MAIL ADDRESS: STREET 1: 15900 N 78TH ST STREET 2: SUITE 101 CITY: SCOTTSDALE STATE: AZ ZIP: 85260 FORMER COMPANY: FORMER CONFORMED NAME: ALANCO RESOURCES CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ALANCO LTD DATE OF NAME CHANGE: 19901004 FORMER COMPANY: FORMER CONFORMED NAME: TOMBSTONE MINERAL RESERVES INC DATE OF NAME CHANGE: 19801106 8-K 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 8-K CURRENT REPORT July 5, 2000 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: June 30, 2000 ALANCO TECHNOLOGIES, INC. ----------------------------------------------------- (Exact name of registrant as specified in its charter) Arizona 86-0220694 --------------------------------------------------------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 15900 North 78th Street, Suite 101, Scottsdale, Arizona 85260 -------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (480) 607-1010 -------------- (Registrant's telephone number, including area code) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Effective June 1, 2000 the Company acquired all of the issued and outstanding capital stock of Excel Computer Corporation, a Texas corporation ("Excel"), from the former shareholders of Excel in exchange for 425,000 restricted shares of common stock of the Company, a $750,000 note and $250,000 in cash. The transaction closed on June 21, 2000. Item 7. FINANCIAL STATEMENTS AND EXHIBITS (a) THE FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. The financial statements of Excel Computer will be filed within 60 days after the date of this report. (b) PRO FORMA FINANCIAL INFORMATION. See (a) above (c) EXHIBITS. 1. Agreement and Plan of Reorganization, dated as of June 21, 2000, by and among the Company, Excel Computer Corporation, and the holders of the capital stock of Excel. (Exhibits and Schedules omitted). DATE: July 5, 2000 ALANCO TECHNOLOGIES, INC ------------------------- (Registrant) /s/ John A. Carlson ---------------------- John A. Carlson Chief Financial Officer EXCEL COMPUTER, LTD. (A Limited Partnership) Financial Statements December 31, 1999 and 1998 (With Independent Auditors' Report Thereon) Independent Auditors' Report To the Partners Excel Computer, Ltd. Carrollton, Texas We have audited the accompanying balance sheet of Excel Computer, Ltd. (a limited partnership) as of December 31, 1999 and 1998, and the related statements of operations, changes in partners' capital, and cash flows for the years then ended. These financial statements are the responsibility of the Partnership'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 Excel Computer, Ltd. as of December 31, 1999 and 1998, the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Payne Falkner Smith & Jones, P.C. March 29, 2000 EXCEL COMPUTER, LTD. (A Limited Partnership) Balance Sheet December 31, 1999 and 1998 1999 1998 ------------ ------------ ASSETS Current assets Cash $ 2,357 $ 14,831 Accounts receivable 658,932 579,852 Inventory 292,073 339,876 Other 1,528 3,769 ------------ ------------ Total current assets 954,890 938,328 ------------ ------------ Property and equipment, net 30,216 39,480 Other 5,591 6,973 ------------ ------------ $ 990,697 $ 984,781 ------------ ------------ LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Trade payables $ 218,594 $ 140,519 Other accrued liabilities 84,776 61,142 Revolving debt 40,000 150,000 Current portion of long term debt 44,691 39,697 Accrued management fee 47,947 48,153 ------------ ------------ Total current liabilities 436,008 439,511 Long term debt, less current portion 85,635 132,560 ------------ ------------ Total liabilities 521,643 572,071 Commitments and contingencies - - Partners' capital 469,054 412,710 ------------ ------------ $ 990,697 $ 984,781 ------------ ------------ See accompanying notes to financial statements.
EXCEL COMPUTER, LTD. (A Limited Partnership) Statement of Operations and Changes in Partners' Capital For the years ended December 31, 1999 and 1998 1999 1998 ------------- ------------ Sales $5,787,616 $5,540,624 Cost of sales 3,630,739 3,715,872 ------------- ------------ Gross profit 2,156,877 1,824,752 ------------- ------------ Selling, general and administrative expenses Advertising 555,356 550,552 Bad debts 8,970 - Commissions 109,822 60,803 Depreciation and amortization 12,092 12,551 Employee retirement contribution 24,096 23,691 Management fees - related party 388,288 388,288 Postage and shipping 19,580 16,385 Rent 53,189 49,612 Salaries and employee benefits 609,339 544,195 Telephone 37,491 28,322 Utilities 12,370 11,527 Other 118,509 116,988 ------------- ------------ Total selling, general and administrative expenses 1,949,102 1,802,914 ------------- ------------ Operating income 207,775 21,838 ------------- ------------ Other income (expense) Interest expense (33,520) (23,186) Interest income 855 3,242 Other income - 5,649 ------------- ------------ Total other expense (32,665) (14,295) ------------- ------------ Net income 175,110 7,543 Partners' capital at beginning of period 412,710 490,854 Partners' withdrawals (118,766) (85,687) ------------- ------------ Partners' capital at end of period $ 469,054 $ 412,710 ------------- ------------
See accompanying notes to financial statements.
EXCEL COMPUTER, LTD. (A Limited Partnership) Statement of Cash Flows For the years ended December 31, 1999 and 1998 1999 1998 ------------ ------------ Cash flows from operating activities Net income $ 175,110 $ 7,543 Adjustments to reconcile net income to cash provided (used) by operating activities: Depreciation and amortization 12,092 12,549 (Increase) decrease in: Accounts receivable (79,080) (126,105) Inventory 47,803 (29,434) Other assets 2,241 (3,769) Increase (decrease) in: Trade payables 78,075 10,410 Other accrued liabilities 23,634 17,254 Accrued management fee (206) 4,050 ------------ ------------ Net cash provided (used) by operating activities 259,669 (107,502) ------------ ------------ Cash flows from investing activities: Purchases of furniture and equipment (1,446) (13,455) ------------ ------------ Net cash used by investing activities (1,446) (13,455) ------------ ------------ Cash flows from financing activities Net (payments) advances under line-of-credit agreement (110,000) 150,000 Principal payments of bank notes (41,931) (31,737) Distributions to partners (118,766) (85,687) ------------ ------------ Net cash (used) provided by financing activities (270,697) 32,576 ------------ ------------ Net decrease in cash (12,474) (88,381) Cash - beginning of period 14,831 103,212 ------------ ------------ Cash - end of period $ 2,357 $ 14,831 ------------ ------------ Supplemental Information: Interest paid $ 33,520 $ 23,186 ------------ ------------ See accompanying notes to financial statements. EXCEL COMPUTER, LTD. (A Limited Partnership) 1. Organization and Summary of Significant Accounting Policies Excel Computer, Ltd. (the "Partnership") was formed in December 1995 as a Texas Limited Partnership. This partnership was formed by conversion of Excel Computer, a Texas General Partnership formed effective January 1994. The Partnership was formed to operate a business manufacturing and selling computer hardware and supplies, specifically CD ROM networking products. The accounting and reporting policies of the Partnership conform to generally accepted accounting principles. The following is a description of the more significant of those policies. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Accounts Receivable Accounts receivable consist primarily of trade accounts. There is no allowance for doubtful accounts, which would represent a provision for possible losses charged to earnings, included in the accompanying financial statements. Management considers all reported accounts receivable to be collectible. Inventory Inventories are recorded at the lower of cost (first-in first-out) or market and consist primarily of purchased components used to produce finished product. Substantially all inventory is pledged as collateral for bank notes. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Provisions for depreciation are computed on a straight-line basis. The estimated useful lives for each major classification of property and equipment are as follows: Furniture and equipment 7 years Computer equipment and software 5 to 7 years Automobile 5 years (F4) EXCEL COMPUTER, LTD. (A Limited Partnership) Advertising Costs Advertising costs are expensed as incurred. Advertising expense was $555,356 and $550,552 for the years ended December 31, 1999 and 1998, respectively. Statement of Cash Flows For purposes of reporting cash flows, cash and cash equivalents include cash on hand and held in banks, and money market funds. Income Taxes Under the provisions of the Internal Revenue Code, the Partnership is not a taxable entity and, as a result, its net income is included in the income tax returns of the partners. 2. Property and Equipment Property and equipment at December 31, 1999 and 1998 consisted of the following: 1999 1998 --------- --------- Furniture and equipment $ 29,167 $ 27,721 Computer equipment and software 25,843 25,843 Automobile 17,118 17,118 --------- --------- 72,128 70,682 Less accumulated depreciation 41,912 31,202 --------- --------- $ 30,216 $ 39,480 --------- --------- Depreciation expense charged to operations was $10,710 and $11,169 in 1999 and 1998, respectively. 3. Related Party Transactions The Partnership is managed by a corporation that is owned by the two limited partners of the Partnership. The management agreement entitles such corporation to a management fee equal to 100% of the salary and certain benefits paid to the partners. Actual fees incurred in 1999 and 1998 were approximately $388,000 and are included in the accompanying financial statements. The Partnership owed the corporation $47,947 and $48,153 as of December 31, 1999 and 1998, respectively. (F5) EXCEL COMPUTER, LTD. (A Limited Partnership) 4. Revolving Debt The Partnership has a $300,000 revolving line of credit with an unaffiliated bank that is secured by substantially all inventory and accounts receivable. Interest is payable quarterly at prime plus 1% to maturity of May 2000. The Partnership has an additional unsecured line of credit in the amount of $50,000. Interest is payable monthly at 12.5% to maturity of May 2000. Under these agreements, the outstanding balance fluctuates, and, at various times, repayments are made which will bring the amount outstanding below the amount outstanding at the end of the year. Outstanding borrowings under these agreements amounted to $40,000 and $150,000 at December 31, 1999 and 1998, respectively. At December 31, 1999 and 1998 the Partnership had $310,000 and $200,000, respectively, of unused lines of credit with banks to be drawn upon as needed. 5. Long-Term Debt Following is a summary of long-term debt at December 31, 1999 and 1998: 1999 1998 -------- ---------- Note payable to bank in monthly principal and interest installments of $4,635 through September, 2002 collateralized by inventory and accounts receivable. The note bears interest of 11.5%. $130,326 $172,257 Less: Current maturities included in current liabilities 44,691 39,697 -------- ---------- $ 85,635 $132,560 -------- ---------- Following are the maturities of long-term debt for the next three years: 2000 $ 44,691 2001 50,779 2002 34,856 ------------ $130,326 (F6) EXCEL COMPUTER, LTD. (A Limited Partnership) 6. Employee Benefits The Partnership maintains a retirement plan (Plan) which covers employees over the age of 21 who have completed one year of credited services, as defined. The plan provides for "before-tax" employee contribution, through salary reduction contributions under Section 401(k) of the Internal Revenue Code. The Partnership does not contribute to this Plan. The Partnership sponsors a profit sharing plan covering substantially all full- time employees. Contributions are discretionary and decided by Management each year. Contributions accrued at December 31, 1999 and 1998 were $23,691. 7. Lease Obligation Effective December of 1995, the Partnership entered into a lease for its office facility located in Carrollton, Texas. In June of 1997, the Partnership assumed an existing lease to expand its current facility. These leases expire January 31, 2001. In April 2000, the Partnership entered into a six month lease for warehouse space. Future minimum lease payments for the remaining noncancelable term of these leases are as follows: Years ending December 31, Amount - ------------- ------------- 2000 $ 57,844 2001 3,962 ------------- $ 61,806 ------------- 8. Subsequent Events On March 22, 2000 the Partnership entered into an asset purchase agreement whereby they purchased inventory from an unrelated entity. The Partnership paid $250,000 in cash at closing and is required under the terms of the agreement to pay an additional $50,000 within ninety days from the dated of closing. In connection with this purchase, the Partnership assumed all liabilities associated with the manufacturing and selling of these networking products, including warranty claims for specifically identified products. Additionally, the Partnership assumed certain obligations under Extended Warranties for specifically identified products. As a result of these assumed warranties, the Partnership will estimate and maintain an allowance for warranty claims based on prior warranty claims as well as the Partnership's experience of the amounts of claims actually made. (F7)
ALANCO TECHNOLOGIES, INC. AND SUBSIDIARIES PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) March 31, 2000 Pro Forma Consolidated Unaudited Financial Information: The following represents a pro forma condensed consolidated balance sheet as of March 31, 2000, assuming the Company's acquisition of Excel Computer Corporation was consumated as of that date. Alanco Excel Pro Forma Pro Forma Technologies, Computer Adjustments Consolidated Inc. Corporation Amounts --------------- ---------------- ----------------- ------------------- Assets Current Assets: Cash $419,829 $161,114 ($250,000) (1) $330,943 Accounts Receivable, Net 387,172 613,253 1,000,425 Notes receivable 139,316 0 139,316 Inventory 2,481,271 502,303 300,000 (1) 3,283,574 Other Current Assets 198,059 1,452 199,511 --------------- ---------------- ----------------- ------------------- Total Current Assets 3,625,647 1,278,122 50,000 4,953,769 Property and Equipment, Net 1,925,790 31,042 1,956,832 Investments at cost 2,465,674 0 2,465,674 Other Assets, Net 39,310 2,500 41,810 Intangible Assets, Net 710,399 3,091 991,429 (1) 1,704,919 --------------- ---------------- ----------------- ------------------- Total Assets $8,766,820 $1,314,755 $1,041,429 $11,123,004 --------------- ---------------- ----------------- ------------------- Liabilities and Stockholders' Equity Current Liabilities: Long-term debt - current portion $0 $45,500 $45,500 Capital Lease obligation, current 134,350 0 134,350 Bank Line 300,000 250,000 550,000 Note Payable 0 750,000 (1) 750,000 Accounts Payable & Accrued Expenses 720,382 446,110 1,166,492 Billings in excess of Costs and Est. Earnings 78,154 0 78,154 --------------- ---------------- ----------------- --------------------- Total Current Liabilities 1,232,886 741,610 750,000 2,724,496 Long-term leases & Notes Payable - Net 0 74,574 74,574 Shareholders' Equity 7,533,934 498,571 (498,571) (1) 8,323,934 790,000 (1) --------------- ---------------- ----------------- --------------------- Total Liabilities & Shareholders Equity $8,766,820 $1,314,755 $1,041,429 $11,123,004 --------------- ---------------- ----------------- --------------------- (1) Pro forma adjustments to reflect the purchase of Excel Computer Corporation for $250,000, a $750,000 note and the issuance of 450,000 shares of Alanco common stock valued at $790,000. 425,000 shares of common stock were issued to shareholders of Excel Computer Corporation and 25,000 shares were issued to a consultant.
(F-9)
ALANCO TECHNOLOGIES, INC. AND SUBSIDIARIES PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Year Ended June 30, 1999 The following represents an unaudited pro forma condensed consolidated statement of operations for the year ended June 30, 1999, assuming the Company's acquisition of Excel Computer Corporation was consumated on July 1, 1998 Alanco Excel Pro Forma Pro Forma Technologies, Computer Adjustments Consolidated Inc. Corporation Amounts --------------- ---------------- ----------------- ------------------- Sales $7,084,400 $5,380,953 $12,465,353 --------------- ---------------- Cost of Sales and Depr & Amort 4,223,700 3,404,136 7,627,836 Selling General and Adm. 2,741,600 1,856,025 4,597,625 --------------- ---------------- ------------------- Total Operating expense 6,965,300 5,260,161 12,225,461 --------------- ---------------- ------------------- Operating Income 119,100 120,792 239,892 Other Income (Expense) Interest Expense (157,700) (32,385) (75,000) (1) (265,085) Interest Income 57,800 1,767 59,567 Other (Expense) Income 102,100 5,649 107,749 --------------- ---------------- --------------- ------------------- Total Income (Expense) 2,200 (24,969) (75,000) (97,769) --------------- ---------------- --------------- ------------------- Net Income (loss) $121,300 $95,823 (2) ($75,000) $142,123 --------------- ---------------- --------------- ------------------- NET INCOME PER SHARE - BASIC $0.02 $0.03 =============== ================ =============== =================== NET INCOME PER SHARE - DILUTED $0.02 $0.02 =============== ================ =============== =================== SHARES OUTSTANDING WEIGHTED AVERAGE - BASIC 5,016,085 450,000 (1) 5,466,085 =============== ================ =============== =================== WEIGHTED AVERAGE - DILUTED 5,575,895 450,000 (1) 6,025,895 =============== ================ =============== =================== (1) Pro forma interest expense and shares outstanding adjustments to reflect the purchase of Excel Computer Corporation by Alanco Technologies, Inc. (2) No pro forma income tax adjustment is provided due to the assumption that income tax liability can be offset by utilizing Alanco's tax loss carryforwards.
(F-10)
ALANCO TECHNOLOGIES, INC. AND SUBSIDIARIES PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Nine Months Ended March 31, 2000 The following represents an unaudited pro forma condensed consolidated statement of operations for the nine months ended March 31, 2000, assuming the Company's acquisition of Excel Computer Corporation was consumated on July 1, 1999. Alanco Excel Pro Forma Pro Forma Technologies, Computer Adjustments Consolidated Inc. Corporation Amounts --------------- ---------------- --------------- ------------------- Sales $5,278,687 $4,817,989 $10,096,676 --------------- ---------------- Cost of Sales and Depr & Amort 3,492,114 3,068,155 6,560,269 Selling General and Adm. 2,654,843 1,590,445 4,245,288 --------------- ---------------- ------------------- Total Operating expense 6,146,957 4,658,600 10,805,557 --------------- ---------------- ------------------- Operating Income (868,270) 159,389 (708,881) Other Income (Expense) (11,276) (18,198) (56,250) (1) (85,724) --------------- ---------------- --------------- ------------------- Net Income (loss) ($879,546) $141,191 (2) ($56,250) ($794,605) =============== ================ =============== =================== NET INCOME PER SHARE BASIC AND DILUTED ($0.15) ($0.13) =============== =================== SHARES OUTSTANDING WEIGHTED AVERAGE - BASIC 5,864,611 450,000 (1) 6,314,611 =============== =================== WEIGHTED AVERAGE - DILUTED 5,864,611 450,000 (1) 6,314,611 =============== =================== (1) Pro forma interest expense and shares outstanding adjustment to reflect the purchase of Excel Computer Corporation by Alanco Technologies, Inc. (2) No pro forma income tax adjustment is provided due to the assumption that income tax liability can be eliminated by utilizing Alanco's tax loss carryforwards.
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