SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A/2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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April 25, 2000
Date of Report (Date of earliest event reported)
WOM, INC.
(Exact name of registrant as specified in its charter)
New York 000-28789 14-1818862
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
Incorporation)
1151 Flatbush Road, Kingston, New York 12401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 336-7700
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Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired
This Current Report on Form 8-K/A amends the Current Report on Form 8-K
filed by the registrant on or about May 10, 2000 (the "Initial Report") by
including the financial statements the Initial Report indicated would be filed
by July 10, 2000.
(c) Exhibits
Exhibit No. Title
27.1 Financial Data Schedule
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[LOGO] Urbach Kahn & Werlin PC
Certified Public Accountants
Independent Auditor's Report
To the Board of Directors and Shareholders
WOM, Inc.
We have audited the accompanying balance sheets of WOM, Inc. as of March 31,
2000 and April 25, 2000, and the related statements of operations, changes in
shareholders' equity, and cash flows for the period from inception, December 14,
1999, to March 31, 2000 and April 1, 2000 through April 25, 2000. These
financial statements are the responsibility of the Company'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 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 WOM, Inc. as at March 31, 2000
and April 25, 2000, and the results of its operations and its cash flows for the
periods from inception, December 14, 1999, to March 31, 2000 and April 1, 2000
through April 25, 2000, in conformity with generally accepted accounting
principles.
/s/ URBACH KAHN & WERLIN PC
July 10, 2000
Albany, New York
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WOM, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
<C>
<S> <S>
April 25, 2000 March 31, 2000
ASSETS
Cash $ 54 $ 54
LIABILITIES AND STOCKHOLDER'S EQUITY
Accrued expenses $ 100 $ 100
Total Liabilities 100 100
Shareholders' Equity:
Common stock, $.01 par value, 250,000 shares authorized;
issued 135,886 at April 25, 2000 and 100 at March 31, 2000 1,359 1
Additional paid in capital - 99
Accumulated deficit (1,405) (146)
Total Shareholders' Equity (Deficit) (46) (46)
Total Liabilities and Shareholder's Equity $ 54 $ 54
</TABLE>
See accompanying notes to financial statements.
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WOM, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<C>
<S> <S>
Period April 1, 2000 Period December 14, 1999
through through
April 25, 2000 March 31, 2000
-------------------- ------------------------
Costs and Expenses:
Selling, general and
administrative expenses $ - $ 46
------------- ------------
Total Costs and Expenses - 46
------------- ------------
Loss Before Income Taxes - (46)
Provision for Income Taxes - (100)
------------- ------------
Net Loss $ - $ (146)
============= ============
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
<C>
WOM, INC.
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
For The Period December 14, 1999 (Inception) Through March 31, 2000 and April 1, 2000 Through April 25, 2000
<S> <S> <S> <S>
Additional Retained Earnings
Common Stock Pain-In Capital (Deficit) Total
------------ --------------- ----------------- -----
Initial Capitalization
December 14, 1999 $ 1 $ 99 $ $ 100
Net loss for the year (146) (146)
--------- ---------- ---------------- -------
Balance at March 31, 2000 $ 1 $ 99 $ (146) $ (46)
Issuance of common stock 1,358 (99) (1,259) 0
--------- ---------- ---------------- ------
Balance at April 25, 2000 $ 1,359 $ 0 $ (1,405) $ (46)
========= ========== ================ =======
See accompanying notes to financial statements.
</TABLE>
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WOM, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
<C>
<S> <S>
Period Period
April 1, 2000 December 14, 1999
Through Through
April 25, 2000 March 31, 2000
Operating Activities:
Net loss $ - $ (146)
Adjustments:
Increase in accrued expenses - 100
-------- ---------
Net Cash Used
By Operating Activities - (46)
-------- ---------
Financing Activities:
Initial Capitalization - 100
-------- ---------
Net Cash Provided By Financing Activities - 100
-------- ---------
Increase in Cash - 54
Cash Beginning 54 0
-------- ---------
Cash Ending $ 54 $ 54
Supplemental Cash Flow Information: ======== =========
Interest paid $ 0 $ 0
Income taxes paid 0 0
</TABLE>
See accompanying notes to financial statements.
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WOM, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 ORGANIZATION
WOM, Inc. ("WOM") was incorporated in December 1999 by Besicorp Ltd.
("Besicorp"), by the contribution of $100 in exchange for 100 shares of WOM
common stock in order to effectuate a spin-off prior to the merger of Besicorp.
WOM was established in order to permit the named plaintiff in the Bansbach
Litigation to remain eligible to maintain the Bansbach Litigation (see Note 2).
Capitalized terms used without being defined herein shall have the meanings
ascribed to such terms by WOM's Annual Report on Form 10-KSB for the year ended
March 31, 2000 filed with the Securities and Exchange Commission on or about
June 29, 2000.
NOTE 2 BANSBACH LITIGATION
The Bansbach Litigation is a shareholder derivative action that was commenced in
August 1997 by John Bansbach who was seeking to recover certain legal fees and
expenses paid by Besicorp Group Inc. ("Old Besicorp") to or on behalf of certain
officers and directors of Old Besicorp in connection with the Proceeding (as
defined below).
The Proceeding is an action that was brought in the United States District Court
for the Southern District of New York in connection with contributions to the
1992 election campaign of Congressman Maurice Hinchey. In connection with the
Proceeding, in June 1997, Old Besicorp and Michael F. Zinn (then the Chairman of
the Board, President and Chief Executive Officer of Old Besicorp and currently
the Chairman of the Board, President and Chief Executive Officer of Besicorp and
the Chairman of the Board, President and Chief Executive Officer of WOM), each
entered a guilty plea to one count of causing a false statement to be made to
the Federal Election Commission and one count of filing a false tax return. As a
result of such pleas, Old Besicorp was fined $36,400, and Mr. Zinn was fined
$36,673 and sentenced to a six-month term of incarceration (which commenced in
November 1997 and has been completed), and a two-year term (which commenced in
May 1998 and was terminated before the scheduled end of the term) of supervised
release thereafter. He resigned as Chairman of the Board, President and Chief
Executive Officer of Old Besicorp in November 1997 and was reappointed to such
positions in May 1998.
Old Besicorp paid certain legal expenses incurred by certain officers and
directors in connection with the Proceeding. As of March 31, 2000, 1999 and
1998, the amounts paid on behalf of Michael F. Zinn in connection with the
Proceeding equaled $338,517. In addition, Old Besicorp reimbursed him for the
legal fees and expenses (approximately $39,180) which had been incurred by third
parties in connection with the Proceeding and which had been paid by him. In
addition, Old Besicorp paid additional legal fees and disbursements of
approximately $742,576 incurred in connection with the Proceeding by Old
Besicorp, certain directors, officers, and employees and their spouses who were
defendants or actual or potential witnesses in this matter.
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In August 1997, after Old Besicorp and Mr. Zinn had entered their pleas, Mr.
Bansbach commenced the Bansbach Litigation. Old Besicorp was named as a nominal
defendant in this shareholder derivative action and the other named defendants
either were officers and/or directors of Old Besicorp at the time of the alleged
acts (or omissions) for which the plaintiff seeks relief or became officers
and/or directors of Old Besicorp afterwards. The plaintiff sought to hold the
defendants other than Old Besicorp liable to Old Besicorp for: (a) all sums
advanced to or on behalf of Michael F. Zinn in connection with his defense of
the Proceeding; (b) all sums advanced to or on behalf of Michael Daley, who at
the time was the Vice President, Chief Financial Officer and Corporate Secretary
of Old Besicorp (and who is currently a director, Executive Vice President and
Chief Financial Officer of Besicorp) and was subpoenaed for information in
connection with the Proceeding; (c) all legal expenses, costs and fines incurred
by Old Besicorp itself in connection with the Proceeding; (d) all harm to Old
Besicorp's reputation and goodwill resulting from the Proceeding; (e) punitive
damages; and (f) plaintiffs attorneys' fees, costs and expenses. If Bansbach
ultimately prevails on all of his claims, the Bansbach Litigation could result
in the recovery of approximately $1 million, excluding interest and punitive
damages.
The trial court dismissed the action, stating that the plaintiff had failed to
make the requisite pre-suit demand upon the Old Besicorp Board and had failed to
demonstrate that such a demand would be futile. The plaintiff appealed this
decision. On February 4, 1999, the Appellate Division reversed the trial court's
dismissal and reinstated the action finding that the bare allegations of the
complaint sufficiently alleged that a pre-suit demand on the Old Besicorp Board
would have been futile. The parties to the Bansbach Litigation are currently
engaged in the discovery process.
By this time, Old Besicorp had entered into an agreement to merge with another
company and to distribute certain of its businesses to Besicorp Ltd. (the "Prior
Plan of Merger") and on March 1, 1999 Old Besicorp distributed proxy materials
for a special meeting of its shareholders to adopt the Prior Plan of Merger. The
meeting was scheduled for March 19, 1999 and it was contemplated that if the
Prior Plan of Merger was approved by Old Besicorp shareholders the Prior Merger
would occur shortly afterwards. Effectuation of the Prior Merger would adversely
affect the Bansbach Litigation and the Lichtenberg Litigation.
On March 5, 1999, James Lichtenberg and Mr. Bansbach commenced litigation (the
"March Litigation") by filing a complaint (the "March Complaint"). The March
Complaint alleged that (i) the proxy statement sent to Old Besicorp's
shareholders in connection with the meeting of Old Besicorp's shareholders to
adopt the Prior Plan of Merger was materially misleading because it failed to
adequately disclose all available material information regarding the effect of
the Prior Merger on the Derivative Litigation, i.e., the Bansbach Litigation and
the Lichtenberg Litigation; (ii) the Prior Merger was intentionally structured
to accomplish the termination of the Derivative Litigation; and (iii) Old
Besicorp and its directors breached their fiduciary duty by (a) intentionally
structuring the Prior Merger so as to cause the termination of the Derivative
Litigation, (b) failing to retain independent counsel to act on behalf of Old
Besicorp's minority shareholders, (c) failing to retain an independent
investment banker to opine on the fairness of the Prior Merger to Old Besicorp's
minority shareholders, (d) failing to form an independent committee to ensure
that the Prior Merger
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was fair to and in the best interests of Old Besicorp's minority shareholders,
and (e) providing for a $1 million bonus to Mr. Zinn and a $500,000 bonus to Mr.
Daley, which the March Complaint deemed to be excessive and/or unwarranted
compensation.
The March Complaint sought injunctive relief directing full disclosure of the
financial impact on Old Besicorp's shareholders of the termination of the
Derivative Litigation and full disclosure of the alleged intentional structuring
of the Prior Merger to cause the termination of the Derivative Litigation. The
March Complaint also sought an order directing that the Derivative Litigation be
transferred to Besicorp, that the Prior Merger Consideration payable to Mr. Zinn
and two former directors and executive officers of Old Besicorp, Martin E.
Enowitz and Steven I. Eisenberg, for their shares of Old Besicorp's common stock
(which are subject to the Lichtenberg Litigation) be held in escrow, and that
certain amounts at issue in the Bansbach Litigation be held in escrow pending
final adjudication of the respective actions. The March Complaint also sought
unspecified money damages.
On March 18, 1999, the District Court entered an order (the "Prior Merger
Order") which required Old Besicorp to assign the contingent assets and/or
liabilities comprising Old Besicorp's interests in the Derivative Litigation to
Besicorp before the Prior Merger. The Prior Contribution Agreement effected Old
Besicorp's assignment of the contingent assets and/or liabilities comprising Old
Besicorp's interests in the Derivative Litigation to Besicorp. The Prior Merger
Order also required (i) defendants Messrs. Zinn, Eisenberg and Enowitz to take
no action to place the Prior Merger Consideration they would receive in the
Prior Merger beyond the reach of the United States courts so as to render the
defendants unable to satisfy any judgment which may be rendered in the
Lichtenberg Action; and (ii) the plaintiffs to post a bond in the amount of
$100,000 within seven days of the date of the order, which bond was posted.
Besicorp filed a motion for reconsideration of the Prior Merger Order and the
District Court in June 1999 denied this motion (the "June Order"). Besicorp
appealed the Prior Merger Order and the June Order to the United States Court of
Appeals for the Second Circuit. Lichtenberg and Bansbach moved to dismiss the
appeal, in part or in whole, based on non-substantive issues concerning the
timeliness of the appeal with respect to the Prior Merger Order and the June
Order. On February 17, 2000, the Second Circuit issued a decision consisting of
a majority opinion and a dissenting opinion. The majority opinion granted the
motion to dismiss the appeal as to the Prior Merger Order but not as to the June
Order. The dissenting opinion found that the appeal was timely as to the Prior
Merger Order. Besicorp has moved for rehearing en banc of the decision granting,
in part, the motion to dismiss the appeal.
The Prior Merger Order did not provide for the occurrence following the Prior
Merger of a transaction such as the proposed merger of Besicorp Ltd. and Besi
Acquisition Corp. (the "Merger"). The effectuation of the Merger ordinarily
would adversely affect the named plaintiffs ability to maintain the Bansbach
Litigation in a manner similar to that which the Prior Merger Order had
attempted to prevent. If Besicorp did not effectuate the Spin-Off, consummation
of the Merger would cause the plaintiff in the Bansbach litigation to lose his
status as a shareholder of Besicorp, and therefore would cause him to lose his
right to prosecute the Bansbach Litigation. Besicorp believed that in order to
adhere to the intent of the Prior Merger Order, Besicorp should assign to WOM
the
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interests in the Bansbach Litigation that Besicorp had received from Old
Besicorp; by assigning to WOM pursuant to the Spin-Off the interests in the
Bansbach Litigation Besicorp had received from Old Besicorp pursuant to the
Prior Merger Order (subject to WOM's agreement to return such interests upon the
occurrence of a Prior Merger Order Reversal), the plaintiff should retain
standing to maintain the Bansbach Litigation. The Lichtenberg Litigation is not
being assigned to WOM because the complaint in the Lichtenberg Litigation has
been dismissed.
WOM has been assigned the contingent assets comprising Old Besicorp's interests
in the Bansbach Litigation that Besicorp received from Old Besicorp as a result
of the Prior Merger Order. WOM's management believes that these contingent
assets generally consist of any recovery to which Old Besicorp would be entitled
as a result of the resolution of the Bansbach Litigation. However, WOM is under
no obligation to prosecute the action or to assist the plaintiff, financially or
otherwise, in his prosecution of the Bansbach Litigation and WOM has no
intention of providing any assistance to the plaintiff. WOM does, however,
intend to defend itself from liability to the extent WOM deem appropriate.
WOM has also assumed the contingent liabilities comprising Old Besicorp's
interests in the Bansbach Litigation that Besicorp received from Old Besicorp as
a result of the Prior Merger Order. WOM's management believes that these
contingent liabilities generally consist of any damages for which Old Besicorp
would be liable as a result of the resolution of the Bansbach Litigation.
Therefore WOM intends to defend itself from liability to the extent it deems
appropriate. Reimbursements for the costs of defending itself will be sought
from the Escrow Fund. In addition, if WOM is required to pay damages, WOM
expects to seek the money to pay such damages from the Escrow Fund unless the
judgment prohibited such reimbursement; if any of the other defendants in the
Bansbach Litigation, are required to pay damages WOM anticipates that it will
indemnify them and seek the money for such indemnification from the Escrow Fund
unless either (i) the judgment prohibited such indemnification or (ii)
indemnification is impermissible under the NYBCL. However, there can be no
assurance that such amounts will be available from the Escrow Fund or that WOM
will be entitled to receive any such monies from the Escrow Fund.
Since the Bansbach Litigation is a shareholder derivative action, if damages are
paid by WOM or any other defendant, WOM should be the recipient. However, monies
may be deducted for the fees and expenses of the plaintiff's attorneys. It is
likely that if WOM receives any amounts, these amounts will be distributed to
the holders of WOM Common Stock (except to the extent a court otherwise orders)
shortly afterward and that WOM will then be liquidated. In addition, if at any
time the Bansbach Litigation is decided in favor of the defendants, or if the
Prior Merger Order is reversed, WOM will then be liquidated.
NOTE 3 OPERATIONS
On account of WOM's very limited activities, WOM has no full-time employees and
no offices. WOM is not compensating its officers and directors, each of whom is
also an officer or director of Besicorp, for the services they render on WOM's
behalf. Besicorp has agreed in the Contribution
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Agreement to provide WOM with the services of its employees and to allow WOM to
use its offices free of charge to the extent that WOM determines is reasonably
necessary and for as long as WOM shall seek such services and the use of such
offices. It is not anticipated that the value of these services will be
material. Should the value become significant, then appropriate charges will be
made. WOM has no suppliers, no customers, and, except for WOM's interest in the
Bansbach Litigation, WOM is party to no litigation. WOM has no foreign
operations and WOM's operations are not subject to any U.S., state, foreign or
local laws or regulations (other than those generally applicable to public
corporations).
NOTE 4 COMMON STOCK
Prior to the completion of the Besicorp Ltd. merger, WOM issued to Besicorp Ltd.
in addition to the 100 shares of WOM Common Stock held by Besicorp Ltd., 135,786
shares of WOM Common Stock, which Besicorp Ltd. distributed on a one share for
one share basis to the shareholders of Besicorp Ltd. based on the 135,886 shares
of Besicorp Ltd. common stock outstanding on April 25, 2000, the date of the
Merger.
NOTE 5 ESCROW FUND (UNAUDITED)
In connection with the Prior Merger, Old Besicorp deposited $6.5 million into
the Escrow Fund pursuant to the Escrow Agreement. The Escrow Fund initially
served to fund claims for BGI Monitoring Costs, BGI Indemnity Claims and
Litigation Costs, which included the Bansbach Litigation. Therefore, in order to
provide that the Bansbach Litigation is still covered by the Escrow Fund after
the Spin-Off, the Escrow Agreement was amended by the Escrow Agreement Amendment
(effective as of the Spin-Off): (i) to provide, by funding claims for WOM Costs,
that WOM shall be provided from the Escrow Fund with its reasonable expenses (up
to $35,000 per annum) in connection with maintaining WOM's existence, complying
with the Exchange Act and the rules and regulations promulgated thereunder, and
such other matters as may be reasonably necessary to permit the Bansbach
Litigation to continue and (ii) to provide that the Bansbach Litigation will
still be covered by the Escrow Agreement following the Spin-Off. In addition,
BGI Parent remains entitled to reimbursements for BGI Monitoring Costs and BGI
Indemnity Claims and Besicorp remains entitled to reimbursement for Litigation
Costs. As of June 27, 2000, the Escrow Fund contained approximately $5.5
million.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to its current report on
Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
BESICORP LTD.
/s/James E. Curtin
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James E. Curtin
Treasurer
(Principal Financial and Accounting Officer)
Dated: July 11, 2000
Kingston, New York
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