SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 8-K/A3
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 3, 1995
-----------------
CerProbe Corporation
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in charter)
Delaware 0-11370 86-0312814
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
600 Rockford Drive, Tempe, Arizona 85281
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (602) 967-7885
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<PAGE>
Item 7. As Amended:
Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Registrant.*
Report of Independent Accountants.*
Consolidated Balance Sheets as of December 31, 1994 and
1993.*
Consolidated Statements of Income for Years Ended December
31, 1994, 1993 and 1992.*
Consolidated Statements of Stockholders' Equity for Years
Ended December 31, 1994, 1993 and 1992.*
Consolidated Statement of Cash Flows for Years Ended December
31, 1994, 1993 and 1992.*
Notes to Consolidated Financial Statements.*
(b) Pro Forma Financial Information.
Pro Forma Condensed Combined Statements of Earnings
(unaudited) for Year Ended December 31, 1994.*
Pro Forma Condensed Combined Balance Sheet (unaudited) as of
March 31, 1995.*
Pro Forma Condensed Combined Statement of Earnings
(unaudited) for the Three Months Ended March 31, 1995.*
Notes to Pro Forma Condensed Combined Financial Statements.*
Fresh Test Technology Corporation Financial Statements as of
March 31, 1994 and 1993.*
Fresh Test Technology Corporation Financial Statements as of
March 31, 1995 and 1994.
(c) Exhibits.
2. Agreement of Merger and Plan of Reorganization dated
February 21, 1995, by and among the Registrant, Fresh
Test Acquisition, Inc., Fresh Test Technology
Corporation, and William A. Fresh, Robert K. Bench,
Harold D. Higgins, WAF Investment Company, and Orem
Tek Development Corp., as amended by that certain
Amendment of Agreement of Merger and Plan of
Reorganization dated March 31, 1995.*
- --------------------
* Previously filed.
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.
CERPROBE CORPORATION
Dated as of: October 11, 1995 By: /s/ C. Zane Close
-------------------
C. Zane Close
President
<PAGE>
FRESH TEST TECHNOLOGY CORPORATION
Financial Statements
March 31, 1995 and 1994
(With Independent Auditors' Report Thereon)
<PAGE>
Independent Auditors' Report
The Board of Directors
Fresh Test Technology Corporation:
We have audited the accompanying balance sheets of Fresh Test Technology
Corporation as of March 31, 1995 and 1994, and the related statements of
operations, stockholders' equity and cash flows for the years then ended. 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 the 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 Fresh Test Technology
Corporation as of March 31, 1995 and 1994, and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles.
/s/ KPMG PEAT MARWICK LLP
-------------------------
May 11, 1995
<PAGE>
<TABLE>
FRESH TEST TECHNOLOGY CORPORATION
Balance Sheets
March 31, 1995 and 1994
<CAPTION>
Assets 1995 1994
------ ---- ----
<S> <C> <C>
Current assets:
Cash $ 286,658 266,306
Accounts receivable, net (notes 2 and 8) 794,686 486,637
Inventories (note 3) 150,667 228,702
Prepaid expenses 20,165 17,314
----------- -----------
Total current assets 1,252,176 998,959
Property and equipment, net (notes 4 and 9) 253,684 364,887
Other assets 83,051 13,212
----------- -----------
$ 1,588,911 1,377,058
=========== ===========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Trade accounts payable $ 250,274 281,568
Accrued expenses 128,095 142,696
Current portion of capital lease obligations (note 9) 31,512 17,566
Current portion of notes payable to related parties (note 8) 121,753 92,170
Deferred revenue -- 27,912
----------- -----------
Total current liabilities 531,634 561,912
Capital lease obligations, less current portion (note 9) 81,393 71,853
Notes payable to related parties, less current portion (note 8) 30,555 237,830
Commitments and subsequent events (notes 7, 8, 9 and 11)
Stockholders' equity (notes 5, 8 and 10):
1993 Series redeemable convertible preferred stock, $.01
par value, 1,000,000 shares authorized; 600,000 shares
issued and outstanding (liquidation preference $600,000) 6,000 6,000
Common stock, $.01 par value, 1,700,000 shares authorized;
746,250 and 577,000 shares issued at March 31, 1995
and 1994, respectively 7,462 5,770
Additional paid-in capital 1,246,667 1,204,658
Accumulated deficit (300,549) (710,965)
Treasury stock, 6,334 shares of common stock, at cost (14,251) --
----------- -----------
Net stockholders' equity 945,329 505,463
----------- -----------
$ 1,588,911 1,377,058
=========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
FRESH TEST TECHNOLOGY CORPORATION
Statements of Operations
Years ended March 31, 1995 and 1994
1995 1994
---- ----
Net sales $ 4,945,298 4,029,992
Cost of goods sold 3,341,019 2,921,855
----------- -----------
Gross profit 1,604,279 1,108,137
Selling, general and administrative expenses 1,223,496 1,399,868
----------- -----------
Income (loss) from operations 380,783 (291,731)
Other income (expenses):
Interest expense (40,850) (21,590)
Other income 70,912 33,706
Loss on disposal of assets (429) (4,358)
------------ -----------
Other income, net 29,633 7,758
------------ -----------
Net income (loss) $ 410,416 (283,973)
============ ===========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
FRESH TEST TECHNOLOGY CORPORATION
Statements of Stockholders' Equity
Years ended March 31, 1995 and 1994
<CAPTION>
Redeemable
Convertible
Preferred Stock Common Stock Additional Net
--------------- ------------ Paid-in Accumulated Treasury Stockholders'
Shares Amount Shares Amount Capital Deficit Stock Equity
------ ------ ------ ------ ------- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1993 $ -- $ -- $541,250 $5,412 $604,817 $(426,992) $ -- $ 183,237
Issuance of common stock for
equipment (note 8) -- -- 17,000 170 6,630 -- -- 6,800
Issuance of common stock upon
exercise of stock options -- -- 18,750 188 7,312 -- -- 7,500
Issuance of 1993 Series
redeemable convertible
preferred stock, net
of issuance costs of
$8,101 (note 10) 600,000 6,000 -- -- 585,899 -- -- 591,899
Net loss -- -- -- -- -- (283,973) -- (283,973)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance, March 31, 1994 600,000 6,000 577,000 5,770 1,204,658 (710,965) -- 505,463
Issuance of common stock for
technology (note 8) -- -- 80,000 800 7,200 -- -- 8,000
Issuance of common stock upon
exercise of stock options -- -- 89,250 892 34,809 -- -- 35,701
Purchase 6,334 shares -- -- -- -- -- -- (14,251) (14,251)
Net income -- -- -- -- -- 410,416 -- 410,416
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Balance, March 31, 1995 $ 600,000 $ 6,000 746,250 $ 7,462 $1,246,667 $ (300,549) $ (14,251) $ 945,329
========== ========== ========== ========== ========== ========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
FRESH TEST TECHNOLOGY CORPORATION
Statements of Cash Flows
Years ended March 31, 1995 and 1994
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 410,416 (283,973)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization expense 199,638 163,922
Loss on disposal of assets 429 4,358
Common stock issued in lieu of bonus 10,250 7,500
Preferred stock issued in lieu of bonus - 10,000
Decrease (increase) in accounts receivable (308,049) 151,846
Decrease (increase) in inventories 78,035 (2,550)
Increase in prepaid expenses (2,851) (17,314)
Increase in other assets (69,839) (1,506)
Increase (decrease) in trade accounts payable and accrued expenses (45,895) 26,893
Increase (decrease) in deferred revenue (27,912) 4,409
-------- --------
Net cash provided by operating activities 244,222 63,585
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (53,597) (193,977)
Proceeds from sale of property and equipment 13,939 -
-------- --------
Net cash used in investing activities (39,658) (193,977)
--------- --------
Cash flows from financing activities:
Net proceeds from issuance of preferred stock - 42,899
Proceeds from issuance of common stock 11,200 -
Proceeds from (repayments of) notes payable to related parties (177,692) 374,000
Repayments of borrowings from affiliate - (23,432)
Principal payments on capital lease obligations (17,720) (6,889)
-------- --------
Net cash provided by (used in) financing activities (184,212) 386,578
-------- --------
Increase in cash 20,352 256,186
Cash at beginning of year 266,306 10,120
-------- --------
Cash at end of year $ 286,658 266,306
======== ========
Supplemental disclosure of cash flow information: Cash payments during the year
for:
Interest $ 37,889 14,690
Supplemental schedule of non-cash investing and financing activities:
Assets received in exchange for common stock $ - 6,800
Assets acquired under capital lease arrangements 41,206 96,308
Conversion of notes payable to related parties to preferred stock - 539,000
Technology received in exchange for common stock and note payable 68,000 -
Exercise of common stock options with common stock 14,251 -
See accompanying notes to financial statements.
</TABLE>
<PAGE>
FRESH TEST TECHNOLOGY CORPORATION
Notes to Financial Statements
March 31, 1995 and 1994
(1) Organization and Summary of Significant Accounting Policies
-----------------------------------------------------------
(a) Organization
------------
Fresh Test Technology Corporation (the Company) is a
privately-held company that designs and manufactures a wide
variety of hardware, probe interface systems, and test
fixtures used in quality assurance procedures within the
semiconductor industry.
(b) Inventory
---------
Inventories are stated at the lower of cost or market using
the first in, first out method.
(c) Property and Equipment
----------------------
Property and equipment are stated at cost. Major improvements
and betterments are capitalized; maintenance, repairs, and
minor replacements are expensed as incurred. Depreciation
of property and equipment is provided over the estimated
useful lives of the assets ranging from two to seven years
on the straight-line method.
Assets acquired under capital lease arrangements have been
recorded at the present value of the future minimum lease
payments and are being amortized on a straight-line basis
over the estimated useful life of the asset or the lease
term, whichever is shorter. Amortization of this equipment
is included in depreciation and amortization expense.
(d) Income Taxes
------------
Deferred taxes are provided in accordance with Statement of
Financial Accounting Standards (SFAS) No. 109 "Accounting
for Income Taxes." Pursuant to SFAS No. 109, deferred tax
assets and liabilities are recognized for the future tax
consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled.
(e) Revenue Recognition
-------------------
Revenue from non-standard product sales is recognized upon the
later of shipment or customer acceptance. Revenue is
recognized upon shipment for standard products with
provisions made currently for estimated product returns
expected to occur.
(f) Investment in Subsidiary
------------------------
The Company owns 60% of the common shares (18% of the voting
shares) of Fresh Quest Corporation (Fresh Quest). This
investment is accounted for under the equity method as the
Company does not control the voting stock of Fresh Quest.
(2) Accounts Receivable
-------------------
Accounts receivable consist of the following:
1995 1994
---- ----
Trade accounts receivable $ 882,526 461,882
Due from Fresh Quest 39,394 115,633
Other 11,308 15,618
--------- ---------
933,228 593,133
Less allowances for doubtful
accounts and rework (138,542) (106,496)
--------- ---------
$ 794,686 486,637
========= =========
(3) Inventories
-----------
Inventories consist of the following:
1995 1994
---- ----
Raw materials $ 142,599 132,468
Work in process 38,068 66,824
Finished goods - 61,623
---------- ---------
180,667 260,915
Less allowance for lower (30,000) (32,213)
of cost or market ---------- ---------
$ 150,667 228,702
========== =========
(4) Property and Equipment
----------------------
Property and equipment consists of the following:
1995 1994
---- ----
Furniture and fixtures $ 123,700 145,561
Equipment and machinery 481,146 453,476
Leasehold improvements 21,676 21,676
--------- ---------
626,522 620,713
Less accumulated depreciation (372,838) (255,826)
--------- ---------
Net property and equipment $ 253,684 364,887
(5) Stock Options
-------------
The Company adopted Stock Option Plans in 1990 and 1993 under which
150,000 shares of common stock have been reserved. Key employees and
directors of the Company may be given an opportunity to purchase
shares of common stock of the Company either directly or under
options granted pursuant to the Plans. The Plans provide for the
grant of both incentive stock options and non-qualified stock
options. The Board of Directors shall designate those persons to
whom stock options shall be granted under this plan, the number of
shares subject to each option, the market value of the stock at date
of grant and the terms and conditions of such options. Stock options
granted under this plan vest over a five year period and are
exercisable over a term not to exceed 10 years from the date of the
grant. On February 27, 1995, the Board of Directors terminated the
1990 and 1993 stock option plans.
Stock option activity under these plans was as follows:
Options Outstanding
-------------------
Price
Shares per Share
------ ---------
Outstanding at March 31, 1993 85,000 $ .40
Granted 75,000 .40
Exercised (18,750) -
Cancelled (10,000) .40
-------
Outstanding at March 31, 1994 131,250 .40
Granted 30,000 .40
Exercised (89,250) .40
Cancelled (72,000) .40
-------
Outstanding at March 31, 1995 -
=======
(6) Income Taxes
------------
No income tax expense or benefit has been recorded for the years ended
March 31, 1995 and 1994 due to cumulative net operating losses.
The tax effectsof temporary differences that give rise to significant
portions of the deferred tax asset and deferred tax liability are as
follows:
1995 1994
---- ----
Deferred tax asset:
Net operating loss carryforward $ 34,000 127,000
Additional inventory costs
capitalized for tax purposes 4,000 19,000
Allowances for doubtful accounts 15,000 19,000
Property and equipment, principally
due to depreciation - 4,000
Accrued vacation 17,000 11,000
Deferred revenue - 11,000
Allowances for inventory valuation 52,000 24,000
Other 6,000 -
-------- --------
Total gross deferred tax asset 128,000 215,000
Valuation allowance (104,000) (209,000)
-------- --------
Net deferred tax asset $ 24,000 6,000
========= ========
Deferred tax liability:
Property and equipment,
principally due to depreciation $ 24,000 -
Other - 6,000
--------- ---------
Total gross deferred tax liability $ 24,000 6,000
========= =======
The Company has net operating loss carryforwards for federal income
tax purposes of approximately $85,000 which begin to expire in 2008.
The valuation allowance increased $113,000 for the year ended March
31, 1994 and decreased $105,000 for the year ended March 31, 1995.
The Company has established a valuation allowance for the entire
amount of the net deferred tax asset. Management has not determined
at this time that it is more likely than not that the deferred tax
asset will be realized.
(7) Investment in Affiliate
-----------------------
On January 28, 1993, the Company transferred certain technology valued
at $15,000 to a newly formed company, Fresh Quest Corporation (Fresh
Quest) in exchange for 1,500,000 shares or 75% of Fresh Quest common
stock. On February 26, 1993, Fresh Quest issued 1,133,330 shares of
voting preferred stock for net proceeds of $432,701 thereby diluting
the Company's ownership interest of voting stock to approximately
48%. During the year ended March 31, 1994, Fresh Quest issued an
additional 1,487,500 shares of voting preferred stock for net
proceeds of $1,103,153 thereby diluting the Company's ownership
interest of voting stock to approximately 32%. During the year ended
March 31, 1995, Fresh Quest issued an additional 3,375,000 shares of
voting preferred stock for net proceeds of $1,340,590 thereby
diluting the Company's ownership interest of voting stock to
approximately 18%.
The Company has not guaranteed any of Fresh Quest's obligations nor is
it committed to fund any future obligations, therefore, it has
properly suspended recording its 75% proportionate share of Fresh
Quest's losses once the investment account reached a zero balance.
On March 31, 1995, the Board of Directors of Fresh Quest approved the
dissolution of the Company.
The following presents the condensed financial information for Fresh
Quest as of and for the years ended March 31, 1995 and 1994:
1995 1994
---- ----
Current assets $ 61,048 645,073
Total assets 300,910 1,293,644
Current liabilities 280,835 823,552
Total liabilities 280,835 1,449,741
Total stockholders' equity (deficit) 20,075 (156,097)
License fee revenue 761,903 113,096
Research and development expenses 1,349,596 1,156,410
Net loss 1,349,581 1,540,736
Subsequent to March 31, 1995, the Company signed an agreement related
to the dissolution of Fresh Quest. Pursuant to the agreement, the
Company assumed certain liabilities of Fresh Quest for the
assignment of all of Fresh Quest's assets. Subleases between the
Company and Fresh Quest were terminated and certain technology owned
by Fresh Quest was transferred to the Company. The Company does not
anticipate any loss in conjunction with the dissolution of Fresh
Quest.
(8) Related Party Transactions
--------------------------
The Company licensed the rights to certain technology from a
stockholder in exchange for common stock valued at $15,000 and a
commitment to pay royalties based on a percent of revenues derived
from the technology. This technology was subsequently sublicensed to
Fresh Quest in exchange for common stock similarly valued at
$15,000. Under the sublicense agreement, Fresh Quest paid royalties
to the Company in amounts equal to the royalty commitments due to
the licensor.
During the year ended March 31, 1994, unsecured notes payable to
stockholders and other related party notes totalling $539,000 were
converted into 539,000 shares of 1993 Series redeemable, convertible
preferred stock.
During the year ended March 31, 1994, the Company issued 17,000 shares
of common stock to its principal stockholder in exchange for
property and equipment valued at $6,800.
During the year ended March 31, 1995, the Company issued 80,000 shares
of common stock to a stockholder and a $60,000 note in exchange for
technology valued at $68,000. At March 31, 1995, $30,000 of the note
was outstanding. The note is secured by technology and due in
monthly payments of $2,500 through March 1996.
As of March 31, 1995, the Company has outstanding unsecured notes
payable to the principal stockholder totalling $122,308. These notes
bear interest at 11% and are due in varying monthly principal and
interest payments through October 1, 1996.
The aggregate annual maturities of these notes as of March 31, 1995
are as follows:
Years ending
March 31, Amount
------------ ------
1996 $ 91,753
1997 30,555
---------
$ 122,308
=========
The Company shares office space, equipment, and employees with Fresh
Quest. During the years ended March 31, 1995 and 1994, the Company
allocated approximately $1,075,000 and $995,000, respectively, of
such costs to Fresh Quest. $39,394 and $115,633 was due from Fresh
Quest at March 31, 1995 and 1994, respectively.
(9) Lease Commitments
-----------------
The Company leases office space and equipment under capital and
operating leases which expire at various dates through November
1998. The future minimum lease commitments under these leases are
payable as follows:
Years ending Capital Operating
March 31, leases leases
------------ ------- ---------
1996 $ 42,715 151,280
1997 41,795 128,780
1998 34,395 123,588
1999 13,608 86,136
--------- --------
Total minimum lease payments 132,513 489,784
=========
Less amounts representing interest
(at rates ranging from 10% to 13.5%) 19,608
---------
Present value of net minimum
lease payments 112,905
Less current portion 31,512
-------
Capital lease obligations $ 81,393
========
Rental expense under operating leases totalled $85,308 and $134,480
for the years ended March 31, 1995 and 1994, respectively.
Property and equipment capitalized under capital lease agreements as
of March 31, 1995 and 1994 is as follows:
1995 1994
---- ----
Furniture and fixtures $ 80,038 80,038
Equipment and machinery 71,970 16,270
-------- --------
152,008 96,308
Less accumulated amortization (41,769) (10,738)
-------- --------
$ 110,239 85,570
========= ========
(10) Preferred Stock
---------------
On May 31, 1993, the Company issued 600,000 shares of 1993 Series
redeemable convertible preferred stock in exchange for cash proceeds
of $51,000, forgiveness of indebtedness totaling $539,000 and in
lieu of a bonus of $10,000.
The preferred stock issued has the same voting rights as the common
stock, carries a liquidation preference equal to the issue price of
$1.00 per share plus any declared but unpaid dividends and is
redeemable at the option of the Company, any time after May 15, 1995
for $2.00 per share. Subject to certain antidilution provisions, the
preferred stock is convertible into an equal number of shares of
common stock at the election of the holder or automatically in the
event of a qualifying public offering (as defined) or upon a
business combination with another entity.
(11) Subsequent Event/Merger
-----------------------
Subsequent to March 31, 1995, the Company and its principal
stockholders entered into a definitive agreement of merger and plan
of reorganization with Cerprobe Corporation. Cerprobe Corporation, a
public company, develops, manufactures and markets high performance
probing and interface products for use in the testing of integrated
and hybrid circuits.
Upon completion of the merger on April 3, 1995, stockholders of the
Company received 712,500 shares of Cerprobe Corporation common
stock. Pursuant to the reorganization, the Company became a
wholly-owned subsidiary of Cerprobe Corporation.
