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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): January 6, 1999
VISIONEER, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 000-27038 94-3156479
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
34800 CAMPUS DRIVE
FREMONT, CALIFORNIA 94555
(Address of principal executive offices) (Zip code)
(510) 608-0300
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 6, 1999 Visioneer, Inc., a Delaware corporation
("Visioneer"), pursuant to an Asset Purchase Agreement dated December 2, 1998
(the "Agreement") with Primax V Acquisition Corp., a California corporation
("Primax"), and Primax Electronics Ltd., a corporation organized under the laws
of Taiwan, and the sole shareholder of Primax ("Primax Parent") transferred all
of its current hardware assets, including its desktop and flatbed scanner
product lines and related intellectual property, and the "Visioneer" brand name
to Primax for an aggregate cash purchase price of $7,045,346.00. Visioneer will
retain full rights to use the name as its corporate name until the earlier of
(i) one week following the effective time of the merger of ScanSoft, Inc., an
indirect wholly owned subsidiary of Xerox Corporation, with and into Visioneer
("the "Merger") or (ii) April 30, 1999. Visioneer expects that the Merger will
be consummated by March 1, 1999. As part of the hardware asset sale, Primax
assumed all of Visioneer's liabilities relating to the hardware assets, and also
assumed Visioneer's obligations under it its building lease in Fremont,
California, where Visioneer's current facilities are located. Visioneer's
hardware business and the "Visioneer" brand name were valued based on
arms-length negotiations between Visioneer and Primax.
Three officers of Visioneer, J. Larry Smart, President and Chief
Executive Officer and a director, Murray Dennis, Vice President of Sales and
Marketing, and Gregory Elder, Controller, have executed employment and
non-compete agreements with Primax. Following the closing of the hardware asset
sale to Primax on January 6, 1999, Messrs. Dennis and Elder became employed by
Primax, and each received a signing bonus paid by Primax equal to six months of
their Visioneer salary as part of their new employment compensation package.
Each of these employees released Visioneer from its obligations under existing
employment agreements with Visioneer. Mr. Smart, however, will not commence
full-time employment with Primax until the earliest to occur of (i) the closing
of the Merger, (ii) the day on which the merger agreement is terminated by
either Visioneer or ScanSoft, or (iii) March 31, 1999. Until such time, Mr.
Smart will continue to serve as President and Chief Executive Officer of
Visioneer and will render services to Primax on a consulting basis pursuant to a
management services agreement between Visioneer, Primax and Mr. Smart. Primax
also acquired Visioneer's hardware marketing, sales, operations and quality
assurance teams.
Visioneer and Primax have also entered into a multi-year software
licensing agreement granting Primax certain rights to "bundle," market and sell
Visioneer PaperPort software products with Primax's hardware products, including
those purchased from Visioneer. Visioneer and Primax also plan to enter into a
services agreement pursuant to which Primax will provide to Visioneer certain
administrative services to be agreed upon between Primax and Visioneer at
Primax's actual cost to enable Visioneer to continue to operate its software
business after the closing of the hardware asset sale and for a maximum period
of six months following the effective time of the Merger in a manner
substantially similar to the manner in which it was operated prior to such
closing, which services include office and conference space at Visioneer's
current facilities; use of the telephone systems, computer systems and other
infrastructure at Visioneer's current facilities; payroll services; accounting
services; and customer and technical support services.
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Primax V Acquisition Corp. is a newly formed wholly-owned subsidiary of
Primax Electronics, Ltd. Primax Electronics, Ltd., headquartered in Taiwan,
specializes in manufacturing and distributing quality imaging input and output,
electronic accessories and home office equipment and is a leading scanner
manufacturer worldwide. It was founded in 1984 and has manufacturing sites in
Taiwan and China, research and development operations in Taiwan and China, sales
and marketing offices in Japan, Europe, US and Hong Kong. Primax Electronics,
Ltd. employs over 4,700 people worldwide and is listed on the Taiwan Stock
Exchange. Visioneer and Primax Electronics, Ltd. were parties to a manufacturing
agreement pursuant to which Primax Electronics, Ltd. became the principal
manufacturer of Visioneer's desktop and flatbed scanner products commencing in
the second fiscal quarter of 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Pro Forma Financial Information.
Introduction to Unaudited Pro Forma Financial Information
The following pro forma financial statements are attached to and filed
with this report:
Unaudited pro forma condensed balance sheet of Visioneer, Inc. as of
September 30, 1998 and unaudited pro forma condensed statements of operations
for the nine months ended September 30, 1998 and the year ended December 31,
1997.
(c) Exhibits.
10.35(1) Asset Purchase Agreement dated December 2, 1998
between the Registrant and Primax V Acquisition Corp.,
and the Waiver of Closing Condition and Amendment to
Asset Purchase Agreement dated December 2, 1998
between the Registrant, Primax V Acquisition Corp. and
Primax Electronics Ltd.
10.36(1) Consent to Assignment of Standard Sublease dated as of
November 24, 1998 between the Registrant and Primax V
Acquisition Corp.
10.37(1) Consent to Assignment dated November 12, 1998 between
the Registrant and John Arrillaga, Survivor's Trust
and the Richard T. Perry Separate Property Trust.
10.38(1)* Management Services Agreement between the Registrant,
Primax Acquisition Corp., Primax Electronics Ltd. and
J. Larry Smart dated December 2, 1998.
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(1) Incorporated by reference from the Registrant's Registration
Statement on Form S-4 (No. 333-70603) filed with the Commission on
January 14, 1999.
* Management compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
VISIONEER, INC.
(Registrant)
Date: January 21, 1999 By: /s/ Richard M. Brenner
------------------------------------
Richard M. Brenner
Chief Financial Officer
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PRO FORMA FINANCIAL INFORMATION
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma condensed financial statements give
effect to the sale of the hardware assets of Visioneer to Primax, one of
Visioneer's primary manufacturing partners. The sale will be recorded by
Visioneer as the sale of certain assets and liabilities, since the hardware
business does not qualify as a discontinued operation in accordance with APB
Opinion No. 30, "Reporting the Results of Operations." The unaudited pro forma
condensed financial statements are based upon the historical financial
information of Visioneer and an allocation of the hardware business utilizing
the allocation methodology summarized in the Notes to Unaudited Pro Forma
Condensed Financial Statements. The unaudited pro forma condensed balance sheet
assumes that the sale of the hardware business took place on September 30, 1998.
The unaudited pro forma condensed statements of operations for the twelve months
ended December 31, 1997 and the nine months ended September 30, 1998 assume the
sale took place as of January 1, 1997, except that the nonrecurring gain on the
sale has been excluded. The unaudited pro forma condensed financial statements
are based on the estimates and assumptions set forth in the notes to such
statements. The allocations have been made in connection with the development of
the pro forma information for illustrative purposes to comply with the
disclosure requirements of the Securities and Exchange Commission (the
"Commission"). The unaudited pro forma condensed financial statements do not
purport to be indicative of the results of operations for future periods or the
financial position or results that would have been realized had the hardware net
assets been sold at the beginning of these periods or as of September 30, 1998.
These unaudited pro forma condensed financial statements should be read in
conjunction with the historical financial statements of Visioneer and related
notes thereto included in Visioneer's December 31, 1997 Annual Report on Form
10-K and September 30, 1998 Quarterly Report on Form 10-Q previously filed with
the Commission.
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UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
SEPTEMBER 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
VISIONEER
HARDWARE VISIONEER PRO FORMA
VISIONEER BUSINESS ADJUSTED ADJUSTMENTS PRO FORMA
----------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ... $12,823 $ 4,170(a) $16,993 $(7,372)(c) 9,621
Short-term investments ...... 201 -- 201 201
Accounts receivable, net .... 11,559 (9,545) 2,014 2,014
Inventory ................... 6,466 (6,217) 249 249
Prepaid expenses and other
current assets ............ 605 (296) 309 309
------- -------- ------- ------- -------
31,654 (11,888) 19,766 (7,372) 12,394
Property and equipment, net ... 1,191 (1,191) -- --
Other noncurrent assets ....... 65 (65) -- --
------- -------- ------- ------- -------
$32,910 $(13,144) $19,766 $(7,372) $12,394
======= ======== ======= ======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings .. $ 7,372 $ -- $ 7,372 $(7,372)(c) $ --
Accounts payable ............ 11,869 (11,500) 369 -- 369
Other accrued liabilities ... 4,360 (2,653) 1,707 600(b) 2,307
------- -------- ------- ------- -------
23,601 (14,153) 9,448 (6,772) 2,676
------- -------- ------- ------- -------
Long-term liability ........... 91 (91) -- -- --
------- -------- ------- ------- -------
Stockholders' equity .......... 9,218 1,100(a) 10,318 (600)(b) 9,718
------- -------- ------- ------- -------
$32,910 $(13,144) $19,766 (7,372) $12,394
======= ======== ======= ======= =======
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
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UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
VISIONEER
HARDWARE VISIONEER
VISIONEER BUSINESS(3) ADJUSTED
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<S> <C> <C> <C>
Revenues:
Product revenues........................ $ 50,523 $ 41,489 $ 9,034
Royalty and development revenues........ 7,100 - 7,100
-------- -------- --------
Total net revenues.................... 57,623 41,489 16,134
-------- -------- --------
Cost of revenues:
Cost of product revenues................ 49,838 46,711 3,127
Cost of royalty and development revenues 887 - 887
-------- -------- --------
Total cost of revenues................ 50,725 46,711 4,014
-------- -------- --------
Gross profit.............................. 6,898 (5,222) 12,120
-------- -------- --------
Operating expenses:
Research and development................ 8,115 1,988 6,127
Selling, general and administrative..... 22,428 16,773 5,655
Non-recurring items..................... 675 675 -
-------- -------- --------
Total operating expenses.............. 31,218 19,436 11,782
-------- -------- --------
Operating income (loss)................... (24,320) (24,658) 338
Other income, net......................... 984 827 157
Interest expense.......................... (44) (37) (7)
-------- -------- --------
Net loss.................................. $(23,380) $(23,868) $ 488
======== ======== =========
Net income (loss) per share:
Basic................................... $(1.20) $(1.23) $0.03
Diluted................................. $(1.20) $(1.23) $0.02
Weighted average common and common
equivalent shares outstanding:
Basic................................... 19,450 19,450 19,450
Diluted................................. 19,450 19,450 19,651
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
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UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
VISIONEER
HARDWARE VISIONEER
VISIONEER BUSINESS ADJUSTED
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Product revenues........................ $56,089 $49,150 $ 6,939
Royalty and development revenues........ 3,390 - 3,390
------- ------- -------
Total net revenues.................... 59,479 49,150 10,329
------- ------- -------
Cost of revenues:
Cost of product revenues................ 43,634 41,337 2,297
Cost of royalty and development revenues 498 - 498
------- ------- -------
Total cost of revenues................ 44,132 41,337 2,795
------- ------- -------
Gross profit.............................. 15,347 7,813 7,534
------- ------- -------
Operating expenses:
Research and development................ 3,486 580 2,906
Selling, general and administrative..... 14,209 11,684 2,525
------- ------- -------
Total operating expenses.............. 17,695 12,264 5,431
------- ------- -------
Operating income (loss)................... (2,348) (4,451) 2,103
Other income (expense), net............... 565 475 90
Interest expense.......................... (328) (276) (52)
------- ------- -------
Net income (loss)......................... $(2,111) $(4,252) $2,141
======= ======= ======
Net income (loss) per share:
Basic................................... $(0.11) $(0.22) $0.11
Diluted................................. $(0.11) $(0.22) $0.11
Weighted average common and common
equivalent shares outstanding:
Basic................................... 19,689 19,689 19,689
Diluted................................. 19,689 19,689 19,818
</TABLE>
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
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NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
1. THE TRANSACTION
The pro forma condensed financial statements reflect the sale of the
hardware assets of Visioneer to Primax, one of Visioneer's primary manufacturing
partners, for the net book value of these assets plus approximately $1.1
million.
2. UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
The following adjustments were applied to the historical balance sheet of
Visioneer at September 30, 1998 to arrive at the pro forma condensed balance
sheet:
(a) To reflect the cash received from the sale of the hardware business,
which is equal to the book value of the hardware business net assets
plus $1.1 million.
(b) To record the estimated transaction costs related to the sale. Estimated
costs include all costs directly incurred as a result of the sale
agreement including, but not limited to, accountants and attorney fees
and other related costs.
(c) To record payment of outstanding short-term bank borrowings.
3. UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Management of Visioneer has allocated the financial activity of Visioneer in
the Unaudited Pro Forma Condensed Statement of Operations for 1997 and the nine
months ended September 30, 1998 between the hardware and software components of
its business. These allocations have been made by Visioneer management based
upon actual revenues or costs incurred to the extent practical, and reasonable
estimations made by Visioneer management when actual identification was not
possible. The allocation of net revenues and cost of revenues has been based
primarily on specific identification of hardware and software revenues and
related costs incurred and on specific identification of royalty and development
revenues. Employees performing research and development activities are dedicated
primarily to either hardware or software development and therefore such costs
have been allocated primarily based on the number of individuals involved in
hardware or software development. Sales and marketing costs have been allocated
based primarily on the number of individuals involved in hardware or software
related activities. General and administrative costs have been allocated based
by management on the relative revenues of the hardware and software components
of the business.
The one time gain on the sale of the hardware assets has been excluded from
the unaudited pro forma condensed statement of operations because of its
nonrecurring nature.
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
10.35(1) Asset Purchase Agreement dated December 2, 1998
between the Registrant and Primax V Acquisition Corp.,
and the Waiver of Closing Condition and Amendment to
Asset Purchase Agreement dated December 2, 1998
between the Registrant, Primax V Acquisition Corp.,
and Primax Electronics Ltd.
10.36(1) Consent to Assignment of Standard Sublease dated as of
November 24, 1998 between the Registrant and Primax V
Acquisition Corp.
10.37(1) Consent to Assignment dated November 12, 1998 between
the Registrant and John Arrillaga, Survivor's Trust
and the Richard T. Perry Separate Property Trust.
10.38(1)* Management Services Agreement between the Registrant,
Primax Acquisition Corp., Primax Electronics Ltd. and
J. Larry Smart dated December 2, 1998.
</TABLE>
----------------
(1) Incorporated by reference from the Registrant's Registration
Statement on Form S-4 (No. 333-70603) filed with the Commission on
January 14, 1999.
* Management compensatory plan or arrangement.
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