UNITED STATES
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 4, 1996.
Sklar Corporation
( Exact name of registrant as specified in its charter )
Pennsylvania 1-6107 44-0625447
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
889 South Matlack Street, West Chester, PA 19382
(Address of principal executive offices ) ( Zip Code )
Registrant's telephone number, including area code 610-430-3200
( Former name or former address, if changed since last report )
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Item 2.
Sklar Corporation ("Company") entered into an Asset Purchase Agreement
("Agreement"), effective May 31, 1996, with Surgical Marketing Specialists, Inc.
("SMS") a privately owned company involved in, among other things, the business
of importing and marketing medical surgical instruments and products. The
Agreement provides principally for the Company to acquire certain inventory of
SMS, assume certain liabilities and acquire the right to SMS customers for the
sale of the inventory acquired. SMS will continue to sell non-restricted
products to certain customers in Virginia, Maryland, Delaware, District of
Columbia and areas of Pennsylvania.
In consideration for the inventory and other assets acquired in the Agreement
the Company agreed to pay SMS $1,700,000 at closing, assume $900,000 of trade
accounts payable and pay future sums of $706,405, subject to certain
adjustments. The future sums payable accrue interest at 9%. Principal and
interest of $200,000 are payable six months after closing and the remainder is
due in eighteen equal installments of $33,333 commencing one year after closing.
In conjunction with the acquisition, the Company entered into an amended
financing agreement with its bank which provides for a $3,750,000 line of credit
with interest payable at 1 1/4% above the bank's national commercial lending
rate (NCR). At May 31, 1996 the NCR is 8 1/4%. In addition the Company is
required to meet various financial covenants regarding net worth, net tangible
worth and working capital. Term loans of the Company payable to the bank were
consolidated into the line of credit, except for the term loan guaranteed by the
Small Business Association (SBA). The line of credit is collateralized by all
the assets of the Company, except those assets pledged for the SBA loan. The
availability of the line of credit is limited to 50% of the inventory not
pledged to the SBA and 80% of qualifying accounts receivable. In addition,
Sklar's President has pledged personal real estate and other assets as
additional guarantees in support of this line of credit. The line of credit is
subject to review by the bank at June 30, 1997.
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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, hereunto duly authorized.
SKLAR CORPORATION
(Registrant)
Dated: June 14, 1996 By: /s/ Don Taylor
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President and Director
Dated: June 14, 1996 By: /s/ Charles A.W. Wilson
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Chief Financial Officer
