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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 1, 1998
Integrated Security Systems, Inc.
(Exact name of registrant as specified in its charter)
DE 1-11900 75-2422983
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
8200 Springwood Drive, Suite 230, Irving, TX 75063
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (972) 444-8280
(Former name or former address, if changed since last report.)
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Item 2. Disposition of Assets
Effective October 1, 1998, Integrated Security Systems, Inc. (the "Company")
disposed of the MPA portion ("MPA") of its subsidiary, Golston Company, Inc. The
asset sale disposed of $1.7 million of fixed assets as well as approximately
$200,000 of prepaid contracts and deposits. The Company sold MPA for $2.8
million consisting of $680,000 notes receivable and the remainder in cash. In
conjunction with this transaction, the Company also retired debt of
approximately $1.7 million. MPA was sold to MPA Systems, Inc., a corporation
partially owned by James W. Casey, a former employee and former director of the
Company.
Item 5. Other Events.
On October 9, 1998, the Company's Board of Directors approved a resolution to
extend the expiration date of its currently outstanding Common Stock Purchase
Warrants (the "Warrants") by one year, to April 20, 2000. Prior to the
extension, the Warrants would have expired on April 20, 1999. Each Warrant
entitles the registered holder to purchase 2.65 shares of the Company's Common
Stock at a price of $2.55 per share. All other terms and conditions as set forth
in the underlying Warrant Agreement dated as of February 26, 1998, remain
unchanged.
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Item 7. Financial Statements
INTEGRATED SECURITY SYSTEMS, INC.
PRO FORMA BALANCE SHEET
JUNE 30, 1998
($ in thousands)
<TABLE>
<CAPTION>
Actual
Historical Adjustments Results
---------- ----------- -------
<S> <C> <C> <C>
ASSETS
Cash $ 311 $ 183 (a) $ 494
Accounts receivable 2,204 2,204
Notes receivable 29 (b) 29
Other 1,226 (25) (c) 1,201
--------- -------- --------
Total current assets 3,741 187 3,928
Property, plant and equipment 5,611 (1,702) (d) 3,909
Intangible assets, net 2,055 (563) (e) 1,492
Notes receivable 651 (f) 651
Other 543 543
Total assets $ 11,950 $ (1,427) $ 10,523
========= ======== ========
LIABILITIES
Accounts payable $ 1,002 (35) (g) $ 967
Other 835 (187) (h) 648
Current portion 1,565 (299) (i) 1,266
--------- -------- --------
Total current liabilities 3,402 (521) 2,881
Long-term debt 7,491 (1,323) (j) 6,168
STOCKHOLDERS' EQUITY
Preferred stock -- --
Common stock 85 85
Additional paid-in capital 10,823 10,823
Accumulated deficit (9,732) 417 (k) (9,315)
Treasury stock (119) (119)
--------- -------- --------
Total stockholders' equity 1,057 417 1,474
Total liabilities and
stockholders' equity $ 11,950 $ (1,427) $ 10,523
========= ======== =========
</TABLE>
(a) Net cash
(b) Note receivable - current portion (term notes receivable of $300K and
$380K; accruing interest quarterly beginning December 31, 1998 through
December 31, 2000; due in quarterly principal and interest installments
of $6,225 and $8,300, respectively beginning March 31, 2001 continuing
through June 30, 2004 with the remaining balance due September 30,
2004; interest is at 10% and 12%, respectively)
(c) Prepaid expenses, $(25K)
(d) Fixed assets, net of accumulated depreciation
(e) Goodwill, $458K; Covenant not to Compete, $105K; Net of accumulated
amortization
(f) Note receivable - long-term portion (terms: see (b))
(g) Legal expense, prior to diverstiture
(h) Deposit premiums, $35K; deferred revenue, $140K; interest, $18K; legal
post divestiture, $(6K)
(i) Retirement of debt
(j) Retirement and payment of debt
(k) Gain on sale, $417K
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INTEGRATED SECURITY SYSTEMS, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED JUNE 30, 1998
($ in thousands)
<TABLE>
<CAPTION>
Actual
Historical Adjustments Results
---------- ----------- ---------
<S> <C> <C> <C>
Sales $ 11,092 $ (1,012) (a) $ 10,080
Cost of sales 6,765 227 (a) 6,538
--------- -------- ---------
Gross margin 4,327 (785) 3,542
Operating expenses:
Selling, general 6,407 400 (a) 6,007
and administrative
Research and product development 246 246
--------- -------- ---------
Income (loss) from operations (2,326) (385) (2,711)
Other income (expense) (862) 633 (b) (229)
(Provision) benefit (7) (7)
for income taxes
--------- -------- ---------
Net income (loss) $ (3,195) $ 248 $ (2,947)
========= ======== =========
Weighted average common
shares outstanding 8,197,392 8,197,392
--------- ---------
Basic and diluted net loss per share $ (0.39) $ (0.36)
========= =========
</TABLE>
(a) MPA operating results for the twelve months ended June 30, 1998
(b) Interest expense reduction $148K; interest income, $68K; gain on sale,
$417K
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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.
INTEGRATED SECURITY SYSTEMS, INC.
----------------------------------------
(Registrant)
October 23, 1998 /s/ GERALD K. BECKMANN
- ---------------- ----------------------------------------
(Date) Gerald K. Beckmann
Chairman, President and CEO
