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UNITED STATES
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): February 5, 1999
SCM MICROSYSTEMS, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
000-22689 77-0444317
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(Commission (IRS Employer
File Number) Identification No.)
160 Knowles Drive, Los Gatos, CA 95032
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(Address of principal executive offices) (Zip Code)
(408) 370-4888
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(Registrant's telephone number, including area code)
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5: OTHER EVENTS
In the second quarter of 1998, the Company acquired all of the outstanding
capital stock of Intermart Systems K.K. ("Intermart"). Total consideration paid
was $8 million, consisting of $4.9 million in cash and 46,551 shares of common
stock, plus up to an additional $4 million in common stock if certain
performance criteria are met during the year ended April 30, 1999. During the
second quarter of 1998, the Company also acquired all of the outstanding capital
stock of Intellicard Systems Pte. Ltd. ("ICS") for total consideration of $18.4
million, consisting of $14.9 million in cash and 61,185 shares of common stock.
In connection with these acquisitions, the Company originally allocated
approximately $5.9 million to in-process research and development projects.
The Company has taken the initiative to conform its accounting for these
acquisition-related in-process research and development charges in response to
recent Securities and Exchange Commission interpretative guidelines.
Accordingly, the Company has reduced this charge to $3.1 million from the $5.9
million charge it recorded in the second quarter of 1998 to reflect the
acquisitions of Intermart and ICS. The $2.8 million reduction in the value of
the in-process technology, will be capitalized as goodwill and amortized over
its estimated useful life of six years.
The effect of the restatement on the Company's historical unaudited interim
consolidated statements of operations previously reported is as follows (in
thousands, except per share data):
<TABLE>
<CAPTION>
Three months Six months Three months Nine months
ended ended ended ended
June 30, 1998 June 30, 1998 September 30, 1998 September 30, 1998
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Income (loss) before income taxes:
As previously reported $(4,138) $(3,099) $3,937 $ 838
Reduction in in-process
research and development 2,840 2,840 -- 2,840
Additional goodwill amortization (36) (36) (108) (144)
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As restated $(1,334) $ (295) $3,829 $ 3,534
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Net income (loss):
As previously reported $(4,758) $(3,969) $2,787 $(1,182)
Reduction in in-process
research and development 2,840 2,840 -- 2,840
Additional goodwill amortization (36) (36) (108) (144)
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As restated $(1,954) $(1,165) $2,679 $ 1,514
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Earnings (loss) per share - basic:
As previously reported $ (0.38) $ (0.34) $ 0.22 $ (0.10)
Reduction in in-process
research and development 0.22 0.24 -- 0.23
Additional goodwill amortization -- -- (0.01) (0.01)
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As restated $ (0.16) $ (0.10) $ 0.21 $ 0.12
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Earnings (loss) per share - diluted:
As previously reported (0.38) (0.34) 0.21 $ (0.10)
Reduction in in-process
research and development 0.22 0.24 -- 0.23
Additional goodwill amortization -- -- (0.01) (0.01)
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As restated (0.16) (0.10) 0.20 $ 0.12
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCM MICROSYSTEMS, INC.
A Delaware Corporation
Dated: February 5, 1999 By: /s/ JOHN G. NIEDERMAIER
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Title: Vice President-Finance,
Chief Financial Officer
