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U. S. 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) September 24, 2000
INVESTAMERICA, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 0-28303 87-0400797
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(STATE OR OTHER JURISDICTION OF (COMMISSION (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
1776 Park Avenue, #4, Park City, Utah 84060
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 435-615-8801
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Not Applicable
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(Former name or former address, if changed since last report.)
1
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ITEM 2. ACQUISTION OR DISPOSITON OF ASSETS.
The Company has signed an agreement to acquire through a newly
formed wholly-owned subsidiary all the issued and outstanding shares
of Zed Data Systems Corp., a British Columbia, Canadian corporation
("Zed"), for a cash payment of $5,000,000 promissory note to the
Company, and the issue of shares of the subsidiary exchangeable for
15,000,000 common shares of the Company. Douglas Smith, President of
the Company, is the sole owner and President of Zed. Zed is a value
added reseller of data communications equipment. It sells products
and services for equipment supplied by several manufacturers,
including Cisco Systems and Fore Systems.
Pursuant to the terms of (i) a Share Exchange Agreement
(the "Exchange Agreement") among the Company, Zed and one shareholder
of Zed and (ii) a Share Purchase Agreement (the "Purchase Agreement")
with among the Company, Zed and the remaining shareholders of Zed.
All of the issued and outstanding shares of Zed were owned directly
or indirectly by Douglas Smith, President and a director of the Company.
Mr. Smith is also the President and a founder of Zed.
Under the terms of the Exchange Agreement, Smith Shelf Company
Limited, a corporation solely owned by Mr. Smith, the holder of approximately
23% of the issued and outstanding shares of Zed Common Stock, exchanged its Zed
shares for 50,000 Preferred Shares of Zed. The Zed Preferred Shares are
exchangeable for an aggregate of 50,000 shares of Series B Preferred Stock of
the Company ("Series B Preferred"). Each share of Series B Preferred, upon
issuance, will be convertible into 300 shares of Common Stock of the Company.
Therefore, an aggregate of 15,000,000 shares of Common Stock will be issuable
upon the conversion of all of the Series B Preferred Stock. In addition, each
share of Series B Preferred Stock will have 300 votes (an aggregate of
15,000,000 votes for all of the outstanding Series B Preferred Stock), voting
together with the holders of Common Stock and Series A Preferred Stock of the
Company as a single class. Based upon the 31,168,857 shares of Common Stock
currently issued and outstanding, and giving effect to the conversion of all of
the Company's outstanding Series A Preferred Stock into 83,250,000 shares of
Common Stock, the holders of Series B Preferred Stock would own approximately
11.6% of the Company's outstanding Common Stock upon conversion of the Series B
Preferred Stock (without giving effect to any currently outstanding options and
warrants of the Company).
The Company currently has 50,000,000 shares of Common Stock authorized
for issuance of which 31,168,857 shares are issued and outstanding. Based on
the number of shares of Common Stock that are issuable upon conversion of the
Series A Preferred Stock and Series B Preferred Stock, the Company does not
have a sufficient number of authorized common shares available. The Board of
Directors of the Company has approved an amendment to the Company's Articles of
Incorporation to increase the number of authorized common shares from
50,000,000 to 200,000,000. Such amendment is subject to approval by the
shareholders of the Company. Therefore, the Company intends to call a Special
Meeting of Shareholders to consider and vote upon the amendment.
Under the terms of the Purchase Agreement, the Company acquired all of
the remaining issued and outstanding shares of Zed in consideration for a
$5,000,000 promissory note of the Company. The note bears interest at the rate
of 12% per annum and is payable in 6 equal monthly installments of $715,000
commencing July 31, 2000 followed by one final installment of $710,000 on
January 31, 2001. The note is secured by a pledge of the shares of Zed Common
Stock acquired by the Company and a security interest in all of the assets of
the Company.
The Company intends to use proceeds from a private offering of equity
or debt to pay the note.
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ITEM 7. FINANCIAL STATEMENTS, PRO-FORMS FINANCIAL INFORMATION AND EXHIBITS.
Financial statements are filed herewith.
EXHIBITS
1.1* Share Exchange Agreement, among the Company, Zed and Smith Shelf Company
Limited.
1.2* Share Purchase Agreement, among the Company, Zed and the shareholders of
Zed named therein.
1.3* Form of Promissory Note of the Company.
1.4* Certificate of Designation of Series B Preferred Stock of the Company.
1.5** InvestAmerica, Inc. and Zed Data Systems Corp. ProForma combined
Financial Statements.
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*filed by Form 8-K on July 24, 2000
**filed herewith
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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 thereunto duly authorized.
INVESTAMERICA, INC.
By: /s/ Douglas Smith
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Douglas Smith, President
Dated: September 24, 2000
By: /s/ Brian Kitts
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Brian Kitts, Secretary
Date: September 24, 2000
Exhibit 1.5
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements are
presented assuming the merger will be accounted for as a pooling of interests.
Under this method of accounting, the companies are treated as if they had
always been combined for accounting and financial reporting purposes. These
unaudited pro forma financial statements and accompanying notes of
InvestAmerica, Inc. and Zed Data Systems Corp. have been incorporated by
reference into this document.
The unaudited pro forma combined financial information is presented for
illustration purposes only and is not necessarily indicative of the operating
results or financial position that would have occurred if the merger had been
completed at the dates indicated. The information does not necessarily
indicate the future operating results or financial position of the combined
company.
The unaudited pro forma financial data was prepared by adding or combining
the historical amounts of each company and adjusting the combined amounts for
significant differences in accounting methods used by each company. These
adjustments are described in the accompanying notes to the financial
statements. The unaudited pro forma combined balance sheet was prepared by
combining the balance sheets of InvestAmerica, Inc. and Zed Data Systems at
June 30, 2000, giving effect to the merger as if it had occurred as of June 30,
2000. The unaudited pro forma combined statements of income give effect to the
merger as if it had occurred at the beginning of the earliest period presented,
combining the results of InvestAmerica, Inc. for the year ended September 30,
1999, with that of Zed Data Systems for the year ended August 31, 1999 and
results of InvestAmerica, Inc. for the nine months ended June 30, 2000, with
that of Zed Data Systems for the nine months ended May 31, 2000. The terms of
the merger specify all of the outstanding shares of Zed Data Systems will be
exchanged for 50,000 shares of InvestAmerica, Inc. preferred stock. These
shares have a conversion right into 15,000,000 shares of InvestAmerica, Inc.
common stock. This exchange ratio (15,000,000 shares of common stock) was used
in computing certain of the pro forma adjustments and in computing share and
per share amounts in the accompanying unaudited pro forma financial
information.
The pro forma adjustments do not reflect any operating efficiencies and
cost savings that may be achievable with respect to the combined companies.
The pro forma adjustments do not include any adjustments to historical sales
for any future price changes nor any adjustments to selling or marketing
expenses for any future operating changes.
The pro forma amounts pertaining to the Zed Data Systems entity in the
unaudited pro forma combined financial statements are expressed in U.S. dollars
and translated at the noon buying rate on June 30, 2000 which was $1.00 US to
$1.4806 Canadian for the June 30, 2000 balance sheet and a mix of average
historical rates for the statements of income for the respective periods.
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INVESTAMERICA, INC. and ZED DATA SYSTEMS CORP.
Pro Forma Combined Balance Sheet
<TABLE>
<CAPTION>
Historical for the
Nine Months Ended
---------------------------- Pro Forma
Zed Data Adjustment Pro Forma
InvestAmerica Systems Note 3(a) Combined
<S> <C> <C> <C> <C>
ASSETS
Current Cash
Cash $ 318,121 $ 41,031 $ $ 359,152
Accounts
Receivable - Net - 734,706 734,706
Inventory - 705,783 705,783
Inventory
Stock Subscription
Receivable 600,000 - 600,000
------------- ----------- -----------
Total Current Assets 918,121 1,481,520 2,399,641
Property and
Equipment - Net 36,421 124,902 161,323
Investment in
Unconsolidated
Business 4,000,000 - 4,000,000
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Total Assets $ 4,954,542 $ 1,606,422 $ 6,560,964
============= =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Debt Maturing Within
One Year $ 21,020 $ 43,901 5,000,000 $ 5,064,921
Account Payable
and Accrued
Expenses 27,874 1,441,612 1,469,486
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Total Current
Liabilities 48,894 1,485,513 6,534,407
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Long-term Debt 1,981,621 - 1,981,621
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Shareholders' Equity
Preferred Shares 450 - 50 500
Common Shares 31,118 2,883 2,883 31,118
Additional Paid-In
Capital 14,503,905 - 4,997,167 9,506,738
Retained Earnings
(Accumulated Deficit) (11,611,446) 118,026 (11,493,420)
------------- ----------- ------------
Total shareholders'
Equity 2,924,207 120,909 - (1,955,064)
Total Liabilities and
Shareholders' Equity $ 4,954,542 $ 1,606,422 $ 6,560,964
============ =========== ============
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
combined financial statements
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INVESTAMERICA, INC. and ZED DATA SYSTEMS CORP.
Pro Forma Combined Statement of Income
<TABLE>
<CAPTION>
Historical for the
Nine Months Ended
----------------------------
June 30, 2000 May 31, 2000
------------- ------------ Pro Forma
Zed Data Adjustment Pro Forma
InvestAmerica Systems Note 3(b) Combined
<S> <C> <C> <C> <C>
Operating Revenues $ - $ 5,846,243 $ $ 5,846,243
Operating Expenses 2,239,091 5,778,217 8,017,308
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Operating Income
(Loss) (2,239,091) 68,026 (2,171,065)
Other Income
(Expense) - Net 810,206 30,039 840,245
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Net Income (Loss) $ (1,428,885) $ 98,065 $ - $ (1,330,820)
============= ============ =============
Basic Earning Per
Common Shares
Net Income (Loss)
Per Share $ (0.07) $ $ (0.01)
============= =============
Weighted Average
Shares Outstanding 20,469,073 20,469,073 20,469,073
============= ============ =============
Diluted Earning Per
Common Share
Net Income (Loss)
Per Share $ (0.01) $ - $ (0.01)
============ =============
Weighted Average
Shares Outstanding 103,719,073 103,719,073 15,000,000 118,719,073
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
combined financial statements
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<PAGE>
INVESTAMERICA, INC. and ZED DATA SYSTEMS CORP.
Pro Forma Combined Statement of Income
<TABLE>
<CAPTION>
Historical for the
Nine Months Ended
----------------------------
Sept 30, 1999 Aug 31, 1999
------------- ------------ Pro Forma
Zed Data Adjustment Pro Forma
InvestAmerica Systems Note 3(b) Combined
<S> <C> <C> <C> <C>
Operating Revenues $ - $ 1,888,956 $ $ 1,888,956
Operating Expenses 256,865 2,156,810 2,413,675
------------ ------------ ------------
Operating Income
(Loss) (256,865) (267,854) (524,719)
Other Income
(Expense) - Net (6,991,348) 50,658 (6,940,690)
------------- ------------ ------------
Net (Loss) $ (7,248,213) $ (217,196) $ - $ (7,465,409)
============= ============= =============
Basic Earning Per
Common Shares
Net Income (Loss)
Per Share $ (0.74) $ (0.02) $ (0.76)
============= ============= =============
Weighted Average
Shares Outstanding 9,790,443 9,790,443 9,790,443
============= ============= =============
Diluted Earning Per
Common Share
Net Income (Loss)
Per Share $ (0.74) $ (0.02) $ (0.30)
============ ============== =============
Weighted Average
Shares Outstanding 9,790,443 9,790,443 15,000,000 24,790,443
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
combined financial statements
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENT
Note 1 - Reclassifications
Reclassifications have been made to the historical financial statements
to conform to the presentation expected to be used by the combined company.
Note 2 - Exchange Ratio
The terms of the merger agreement specify all of the outstanding shares
of Zed Data Systems Corp. will be converted into 50,000 preferred shares of
combined company stock. These preferred shares are convertible into
15,000,000 common shares of the combined company's common stock. This
exchange ratio was used in computing share and per share amounts in the
accompanying pro forma financial information.
Note 3 - Pro Forma Adjustments
(a) A pro forma adjustment had been made to reflect the issuance of 50,000
shares of combined company preferred stock in exchange for all of the shares
of Zed Data Systems as per the exchange ratio in Note 2 above. The
adjustment also reflects the issuance of a $5,000,000, 12% annual interest
promissory note payable in six monthly installments of $715,000 commencing
July 31, 2000 plus a final installment of $715,000 on January 31, 2001.
Interest to be paid separately.
(b) Pro forma adjustments have been made in all periods presented to the
number of weighted average shares outstanding used in the calculation of
basic and diluted earnings per share. The number of weighted average
shares outstanding reflects the conversion of shares and share equivalents
of Zed Data Systems common into combined company common stock after giving
effect to conversion from preferred stock to common stock in accordance
with the merger agreement.
(c) There are no significant inter-company transactions between
InvestAmerica, Inc. and Zed Data Systems.
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