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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): June 28, 1999
AGATE TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
Delaware 333-5278-NY 94-3334052
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
46783 Lakeview Boulevard
Fremont, California 94538
(Address of principal executive offices)
Registrant's telephone number, including area code (510) 492-5430
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ITEM 1. Changes In Control of Registrant
The transactions described in the Current Report on Form 8-K of ARCA Corp. filed
June 10, 1999 have occurred. As a result, former shareholders of Agate
Technologies, Inc., a California corporation ("Agate-California"), were issued
shares in ARCA Corp., a New Jersey Corporation ("ARCA"), on June 29, 1999. On
June 30, 1999, ARCA was merged into Agate Technologies, Inc., a Delaware
corporation, which was the survivor and is referred to in this Current Report as
Registrant.
On June 17, 1999, ARCA issued 500,000 common shares to Bresner Partners, Ltd. in
exchange for finders and other services rendered in connection with the Agate-
California transaction. These shares were issued in a private placement and
were valued at $250,000 in the aggregate. This gave Bresner Partners, Ltd. a
one-third interest in ARCA as there had previously been 1,000,000 shares
outstanding. The other major shareholders of ARCA were Stephen M. Robinson, an
ARCA director through June 29, 1999, who beneficially owned 319,370 common
shares, and Harry J. Santoro, an ARCA director through June 29, 1999, who
beneficially owned 213,140 common shares.
On June 29, 1999, ARCA issued common and preferred shares to shareholders of
Agate-California, who contributed their Agate-California shares to ARCA. There
were 1,825,000 ARCA Series A Preferred shares, convertible into 2,737,500 ARCA
common shares, issued in exchange for 1,825,000 Agate-California Series A
preferred shares. There were 11,432,008 ARCA common shares issued in exchange
for 7,621,336 common shares of Agate-California. As all Agate-California
shareholders contributed their Agate-California shares of ARCA, Agate-California
became a wholly owned subsidiary of ARCA. In addition, ARCA assumed 1,021,000
options to purchase Agate-California common stock which therefore became options
to purchase 1,531,500 common shares of ARCA.
The table below shows the beneficial ownership in Registrant held by certain
persons who were former shareholders of Agate-California and who acquired stock
ownership in Registrant in the transaction described above:
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Shareholder Name Beneficial Ownership
- ------------------ ---------------------
Number of Shares Percentage (1)
--------------------- --------------
Francis Khoo (5) 1,026,563(2,4) 6.2
Shirley Ooi (6) 746,876(3,4) 4.5
Vincent Ooi (7) 637,500 (4) 3.9
Pacific Rim (8) 6,750,000 40.9
Footnotes:
- ----------
1. These percentages were calculated using a share base of 16,505,443 shares
which includes 835,939 shares issuable upon options which held by the persons
listed in the table which are exercisable within 60 days. The share base also
includes the 2,737,500 common shares issuable upon conversion of Series A
Preferred Stock which is convertible within 60 days. If one were to exclude the
Series A Preferred Stock, which is non-voting, one would multiply the ownership
percentages by approximately 1.2.
2. Includes 501,563 shares purchasable upon exercise of options that are
exercisable within 60 days and excludes 173,437 shares purchasable upon exercise
of options that are not exercisable within 60 days.
3. Includes 334,376 shares purchasable upon exercise of options that are
exercisable within 60 days and excludes 115,624 shares purchasable upon exercise
of options that are not exercisable within 60 days.
4. Excludes any attribution of beneficial ownership of shares of Registrant
owned by Pacific Rim.
5. Mr. Khoo is a member of the board of directors of Registrant and holds the
office of Chairman of the Board and CEO of Registrant.
6. Ms. Ooi is a member of the board of directors of Registrant and holds the
office of Chief Financial Officer of Registrant. Ms. Ooi and Mr. Ooi are sister
and brother.
7. Mr. Ooi is the President and Chief Technical Officer of Registrant. Mr. Ooi
and Ms. Ooi are brother and sister.
8. The only asset of Pacific Rim Trading Co., Ltd., a British Virgin Island
corporation ("Pacific Rim"), is the 6,750,000 common shares of Registrant that
it owns. Pacific Rim shareholders include Mr. Khoo (21.6%), Ms. Ooi (21.6%),
and Mr. Ooi (7.3%). Mr. Khoo and Ms. Ooi currently comprise the board of
directors of Pacific Rim.
To the knowledge of Registrant, there is no agreement, arrangement, or
understanding among any of the persons listed in the table above with respect to
the election of directors or otherwise with respect to their shareholdings in
Registrant.
Item 2. Acquisition or Disposition of Assets
As described in the Current Reports on Forms 8-K filed June 10, 1999, and June
16, 1999, ARCA formed a wholly-owned subsidiary named Apta Holdings, Inc., a
Delaware corporation ("Apta"), into which ARCA transferred all of its assets and
liabilities. ARCA owned all 1,000,000 outstanding shares of Apta. ARCA then
declared a dividend to all shareholders of record on June 28, 1999, of its
shares in Apta. As shareholder Bresner Partners, Ltd. had agreed not to
participate in such dividend as part of its subscription for ARCA's shares,
there were 1,000,000 outstanding ARCA shares on June 28, 1999, so each ARCA
shareholder received one share of Apta for every ARCA share owned. The main
assets of ARCA which were transferred to Apta consisted of (1) the stock in a
corporation whose primary assets consisted of a 4.5% general partner interest
and a 75.5% limited partner interest in a limited partnership which owned an
apartment building in Pennsylvania and (2) the stock in a corporation whose
business was consumer finance and whose assets primarily consisted of cash and
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notes receivable aggregating approximately $100,000.
On June 29, 1999, ARCA then acquired all of the outstanding stock in Agate-
California through the issuance of 1,825,000 ARCA Series A Preferred shares and
11,432,008 ARCA common shares. Information regarding Agate-California's
business and selected financial information concerning Agate-California,
including its unaudited balance sheet as of March 31, 1999, is contained in the
Information Statement which was filed as Exhibit I to Exhibit 10.19 to ARCA's
Current Report on Form 8-K filed on June 10, 1999, which is hereby incorporated
by reference. The persons described in Item 1 above owned the majority of
Agate-California's stock. Agate-California is a technology company focused on
the design, development, and marketing of its proprietary integrated software
technology and other products promoting ease of use, data availability,
mobility, and security in home and corporate personal computer environments.
Agate-California's major asset is this ongoing business. Agate-California's
unaudited March 31, 1999, balance sheet showed approximately $3.0 million of
assets, approximately $2.2 million of which were cash, cash equivalents, and
restricted cash.
It is anticipated that for financial accounting purposes the transaction between
ARCA and Agate-California will be considered to be an acquisition of ARCA by
Agate-California (i.e. a reverse acquisition) and will be accounted for using
the purchase method of accounting.
Item 4. Changes in Registrant's Certifying Accountant
Registrant has chosen to have the independent accountant of Agate-California
(Ernst & Young) rather than the independent accountant of ARCA (Haefele,
Flanagan & Co., P.C.) continue as Registrant's accountant since Registrant's
business in the future will consist of the business of Agate-California and not
ARCA. Registrant's board of directors approved this decision on June 30, 1999.
The audit reports of Agate-California for the 1996 and 1997 fiscal years were
unqualified but had a development stage enterprise footnote. The audit report
of Agate-California for the 1998 fiscal year is not yet available. The audit
reports of ARCA for fiscal 1997 and 1998 were unqualified.
During their last two fiscal years, neither Agate-California, nor to the best of
Registrant's knowledge ARCA, have had any disagreement with their accountant on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement(s), if not
resolved to the satisfaction of their accountants, would have caused such
accountant to make reference to the subject matter of the disagreement in
connection with its report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
As of the date of filing this Report on Form 8-K, it is impracticable for the
Registrant to provide the financial statements required by this item 7(a). The
financial statements required by this item 7(a), shall be filed by amendment to
this Form 8-K not later than seventy-five (75) days after June 4, 1999, which is
the date of the transaction triggering the initial current report on Form 8-K
filed on June 10, 1999, describing the transaction in question.
(b) Pro Forma Financial Information
As of the date of filing this Report on Form 8-K, Registrant believes
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that it is not required to provide the pro forma financial information required
by this item 7(b). In the event that the Company determines that it is required
to provide the financial statements required by this item 7(b), such financial
statements shall be filed by amendment to this Form 8-K not later than seventy-
five (75) days after June 4, 1999, which is the date of the transaction
triggering the initial current report on Form 8-K filed on June 10, 1999,
describing the transaction in question.
(c) Exhibits
16. Letter re Change in Certifying Accountant: Letter from Haefele,
Flanagan & Co., P.C., dated June 29, 1999, is attached as Exhibit 16 to this
Current Report on Form 8-K.
ITEM 8. CHANGE IN FISCAL YEAR
On June 17, 1999, Registrant elected to have an April 1-March 31 fiscal year
which differs from the calendar year fiscal years used by both Agate-California
and ARCA.
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.
AGATE TECHNOLOGIES, INC.
/s/ Francis CS Khoo
DATED: July 8, 1999
By: Francis CS Khoo
Chairman of the Board and CEO
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Exhibit 16 to
Current Report on Form 8-K of Agate Technologies, Inc.
June 29, 1999
ARCA Corp.
215 West Main Street
Maple Shade, NJ 08052
RE: ARCA Corp.
Gentlemen:
We understand that management of ARCA desires to replace Haefele,
Flanagan & Co, p.c. with a national accounting firm to audit the Company's
financial statements. Such change in the certifying accountant was not due to
any disagreement between the Company and this firm or the declination of this
firm to stand for re-election.
Our report on the financial statements for either of the past two
years did not contain an adverse opinion or a disclaimer of opinion, nor was it
qualified as to uncertainty, audit scope, or accounting principles.
During ARCA's two most recent fiscal years and the subsequent interim
period preceding the change of accountants, there were no disagreements with
this firm on any manner of accounting principles or practices, financial
statement disclosure or auditing scope of procedure, which disagreement if not
resolved to our satisfaction would have caused us to make reference to the
matter of disagreement in their report.
Very truly yours,
HAEFELE, FLANAGAN & CO., P.C.
