<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A-1
Current Report Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
Date of Report: October 30, 1996
VIEW TECH, INC.
(Exact name of the registrant as specified in its charter)
CALIFORNIA 0-25940 77-0312442
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) I.D. Number)
950 FLYNN ROAD, CAMARILLO, CALIFORNIA 93012
(Address of principal executive offices) (Zip Code)
(805) 482-8277
Registrant's telephone number,
including area code
N/A
(Former name or former address, if changed from last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS Page Number
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(a) Historical Financial Statements
Unaudited Balance Sheet as of December 31, 1995 3
Unaudited Statement of Income for the Seven-months
Ended December 31, 1995 4
Unaudited Statement of Cash Flows from May 1, 1995 to
December 31, 1995 5
Notes to Unaudited Financial Statements 6
Unaudited Balance Sheet at June 30, 1996 7
Unaudited Statement of Income for the Six Months
Ended June 30, 1996 8
Unaudited Statement of Cash Flows for the Six Months
Ended June 30, 1996 9
(b) Unaudited Pro Forma Condensed Combined Financial Data
Unaudited Pro Forma Condensed Combined Balance Sheet
at June 30, 1996 10
Unaudited Pro Forma Condensed Combined Statement of
Operations for the year ended June 30, 1996 11
Notes to Unaudited Pro Forma Condensed Combined
Financial Statements 12
2
<PAGE>
GROUPNET, INC.
BALANCE SHEETS
DECEMBER 31, 1995
UNAUDITED
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash................................................................. $ 14,259
Accounts receivable (net of allowance of -0-)........................ 137,761
Inventory............................................................ 43,919
Other current assets................................................. 6,632
--------
Total Current Assets......................................... 202,571
Property and equipment, net.................................................. 54,446
Other assets................................................................. 1,921
--------
$258,938
========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable..................................................... $149,214
Deferred Revenue..................................................... 10,542
Other current liabilities............................................ 11,673
--------
Total Current Liabilities.................................... 171,429
--------
Long Term Liabilities........................................................ 78,097
--------
Common Stock................................................................. 5,000
Retained earnings............................................................ 4,412
--------
Total Stockholder's Equity................................... 9,412
--------
$258,938
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
GROUPNET, INC.
STATEMENT OF INCOME
FROM MAY 1, 1995 (INCEPTION) TO DECEMBER 31, 1995
UNAUDITED
<TABLE>
<S> <C>
Revenues........................................................................... $391,502
Cost of revenues................................................................... 266,903
--------
Gross profit....................................................................... 124,599
--------
Selling, general and administrative expenses....................................... 120,187
--------
Net income......................................................................... $ 4,412
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
GROUPNET, INC.
STATEMENT OF CASH FLOWS
FROM MAY 1, 1995 (INCEPTION) TO DECEMBER 31, 1995
<TABLE>
<S> <C>
Cash flows from operating activities
Net income............................................................................. $ 4,412
Non-cash items included in net income:
Depreciation................................................................... 9,819
Changes in:
Accounts receivable............................................................ (136,316)
Inventory...................................................................... (43,919)
Other current assets........................................................... (9,998)
Accounts payable and accrued expenses.......................................... 171,428
---------
Total Adjustments...................................................... (8,986)
---------
Net cash used in operating activities.................................................. (4,574)
---------
Cash flows from investing activities:
Purchases of property and equipment.................................................... (64,265)
---------
Cash flows from financing activities:
Borrowings from banks and others....................................................... 81,443
Repayments of borrowings............................................................... (3,345)
Proceeds from sale of common stock..................................................... 5,000
---------
Net cash provided by financing activities.............................................. 83,098
---------
Net increase in cash and cash equivalents...................................................... 14,259
Cash and cash equivalents, beginning of period................................................. 0
---------
Cash and cash equivalents, end of period....................................................... $ 14,259
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
GROUPNET, INC.
NOTES TO FINANCIAL STATEMENTS
FROM MAY 1, 1995 (INCEPTION) TO DECEMBER 31, 1995
Unaudited
NOTE 1 - BUSINESS ACTIVITIES:
The Company sells, installs and services video conferencing equipment to
financial markets in the New England area. The Company is organized as an S
Corporation (Small Business Corporation) under the applicable laws of the
Commonwealth of Massachusetts.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
CASH AND CASH EQUIVALENTS: Cash and cash equivalents consist of cash and
short term investments in highly liquid instruments such as certificates of
deposit and time deposits which generally mature within three months.
BASIS OF ACCOUNTING: Assets and liabilities, revenues and expenses, are
recognized on the accrual method of accounting. Product service contract
revenue is recognized over the length of the service contract, commencing in the
month of installation. The remaining revenue is recorded as deferred revenue
until the revenue is recognized.
INVENTORY: Inventory consists of materials and parts used in the above
mentioned activities and is valued at the lower of cost (determined by the
first-in, first-out method) or market.
DEPRECIATION: Depreciation is computed using the straight-line method over
the estimated useful life of the asset. The costs of maintenance and repairs is
charged to expenses as incurred, whereas significant improvements are
capitalized.
ACCOUNTS RECEIVABLE: Accounts receivable are recorded at their net
realizable value. No allowance for bad debts has been provided as all accounts
receivable are considered collectible.
NOTE 3 - NOTES PAYABLE:
Notes payable consist of the following:
<TABLE>
<S> <C>
Note Payable - AT & T Capital, $115.98 per month,
interest and principal, secured by equipment $ 2,926
Note Payable - Cape Cod Bank & Trust, $575.94 per
month, interest and principal, secured by
motor vehicle 28,148
Note Payable - SEED Corp, $595.24 principal per
month plus accrued interest, secured by assets
of the stockholder 47,024
-------
TOTAL 78,098
=======
</TABLE>
6
<PAGE>
GROUPNET, INC.
BALANCE SHEETS
JUNE 30, 1996
UNAUDITED
<TABLE>
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents.............................................................. $ 1,182
Accounts receivable (net allowance of $0).............................................. 450,885
Other current assets................................................................... 5,756
--------
Total Current Assets........................................................... 457,823
Property and equipment, net.................................................................... 56,436
Other assets................................................................................... 2,690
--------
$516,949
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable....................................................................... $296,638
Note payable........................................................................... 12,500
Other current liabilities.............................................................. 93,153
--------
Total Current Liabilities...................................................... 402,291
--------
Long-Term Liabilities.......................................................................... 59,715
--------
Stockholders' Equity:
Common Stock; no par value............................................................. 5,000
authorized - 200,000 shares
outstanding - 10,000 shares
Retained earnings...................................................................... 49,943
--------
54,943
--------
$516,949
========
</TABLE>
7
<PAGE>
GROUPNET, INC.
STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1996
UNAUDITED
<TABLE>
<S> <C>
Revenues........................................................................ $743,031
Cost of Revenues................................................................ 518,114
--------
Gross Profit.................................................................... 224,917
--------
Selling, general and administrative expenses.................................... 158,386
--------
Income from Operations.......................................................... 66,531
--------
Net Income...................................................................... $ 66,531
========
</TABLE>
8
<PAGE>
GROUPNET, INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996
UNAUDITED
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income.................................................................. $ 66,531
Adjustments to reconcile net income to
net cash from operating activities
Depreciation and amortization....................................... 5,133
Changes in assets and liabilities:
Accounts receivable................................................. (314,569)
Inventory........................................................... 43,919
Other current assets................................................ 1,552
Accounts payable.................................................... 147,424
Other accrued liabilities........................................... 70,770
---------
Net cash provided by operating activities................... 20,760
---------
Cash flows from investing activity:
Purchase of property and equipment.......................................... (6,954)
---------
Cash flows from financing activities:
Repayment of long-term debt................................................. (5,883)
S Corp distributions........................................................ (21,000)
---------
Net cash used by financing activities............................... (26,883)
Net decrease in cash................................................................ (13,077)
Cash and cash equivalents, beginning of year........................................ 14,259
---------
Cash and cash equivalents, end of period............................................ $ 1,182
=========
Supplemental disclosures:
Operating activities reflect:
Interest paid....................................................... $ 3,826
=========
Income taxes paid................................................... $ 0
=========
</TABLE>
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<PAGE>
VIEW TECH, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
View Tech GroupNet Adjustments Combined
---------- --------- ------------ ----------
<S> <C> <C> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $1,463,199 $ 1,182 $ (110,000) (3) $ 1,354,381
Accounts receivable, net 4,720,262 450,885 -- 5,171,147
Inventory 1,104,577 -- -- 1,104,577
Other current assets 709,671 5,756 -- 715,427
---------- -------- ----------- -----------
Total Current Assets 7,997,709 457,823 (110,000) 8,345,532
Property and equipment, net 820,411 56,436 -- 876,847
Deferred charge - goodwill 1,325,057 (3) 1,325,057
Other assets 31,001 2,690 -- 33,691
---------- -------- ----------- -----------
$8,849,121 $516,949 $ 1,215,057 $10,581,127
========== ======== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $3,254,527 $296,638 $ -- $3,551,165
Notes payable -- 12,500 220,000 (3) 232,500
Other current liabilities 501,406 93,153 -- 594,559
---------- -------- ---------- ----------
Total Current Liabilities 3,755,933 402,291 220,000 4,378,224
---------- -------- ---------- ----------
Long-term liabilities 242,283 59,715 -- 301,998
---------- -------- ---------- ----------
Stockholders' Equity:
Common stock, par value $.01 28,902 5,000 (3,500) (2)(3) 30,402
Paid-in capital 5,253,234 -- 1,048,500 (2)(3) 6,301,734
Shareholder distributions -- (21,000) 21,000 (2) --
Retained earnings, (deficit) (431,231) 70,943 (70,943) (2) (431,231)
---------- -------- ---------- -----------
4,850,905 54,943 995,057 5,900,905
---------- -------- ---------- -----------
$8,849,121 $516,949 $1,215,057 $10,581,127
========== ======== ========== ===========
</TABLE>
See notes to pro forma condensed combined financial statements.
10
<PAGE>
VIEW TECH, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Year Ended June 30, 1996(1)
---------------------------------------
Pro Forma
View Tech GroupNet Adjustments Combined
--------- -------- ----------- --------
<S> <C> <C> <C> <C>
Revenues $13,346,103 $1,134,533 $ -- $14,480,636
Cost of Revenues 9,042,922 783,707 -- 9,826,629
----------- ---------- -----------
Gross Profit 4,303,181 350,826 -- 4,654,007
----------- ---------- ----------- -----------
Operating Expenses:
Selling expenses 1,706,626 167,770 88,337 (3) 1,874,396
General and administrative expenses 3,491,509 106,955 -- 3,686,801
----------- ---------- ----------- -----------
Income (Loss) from Operations (894,954) 76,101 88,337 (907,190)
Other Income (153,222) -- -- (153,222)
----------- ---------- ----------- -----------
Income (Loss) Before Income Taxes (1,048,176) 76,101 88,337 1,060,412
Provision for Income Taxes (5) 352,116 (30,440) 35,335 (3) 357,010
----------- ---------- ----------- -----------
Net Income (Loss) $ (696,060) $ 45,661 53,002 $ (703,402)
=========== ========== =========== ===========
Earnings (Loss) Per Share $ (0.24) $ (0.23)
=========== ===========
Weighted Average
Shares Outstanding (4) 2,870,242 3,020,242
=========== ===========
</TABLE>
See notes to pro forma condensed combined financial statements.
11
<PAGE>
VIEW TECH, INC.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1. FISCAL PERIODS
The pro forma data presented herein is derived from the audited balance
sheet and statement of operations of View Tech as of June 30, 1996 and for the
year then ended, and the unaudited balance sheet and statement of operations of
GroupNet, Inc. ("GroupNet") as of June 30, 1996 and for the recasted twelve
months ended June 30, 1996 to conform to View Tech's year end. GroupNet's actual
year end is December 31. View Tech acquired GroupNet, effective August 30, 1996
and completed the transaction on September 27, 1996. The acquisition was
accounted for by View Tech utilizing purchase accounting.
2. STOCKHOLDERS' EQUITY
The proforma adjustments to common stock, paid in capital and shareholder
distributions as of June 30, 1996 reflect the elimination of equity accounts for
GroupNet as a result of applying purchase accounting and issuance of 150,000
shares of View Tech common stock valued at $7.00 in connection with the
acquisition.
3. ACQUSITION PRICE AND GOODWILL
The pro forma adjustments shown in the accompanying balance sheet and
statement of operations as of June 30, 1996 and for the year then ended include
the effects of the following: (a) the issuance of 150,000 shares of View Tech
common stock valued at $7.00 per share, or $1,050,000, payment of $110,000 in
cash and the issuance of a promissory note for $220,000 for the net assets of
GroupNet, (b) the recording of goodwill of $1,325,057 and (c) the amortization
of goodwill of $88,337 and the tax effect of such amortization for the year
ended June 30, 1996. The total goodwill recognized of $1,325,057 resulting from
the acquisition of GroupNet will be amortized on a straight line basis over 15
years.
4. WEIGHTED AVERAGE SHARES OUTSTANDING
The weighted average number of shares shown in the statement of operations
for the fiscal year ended June 30, 1996 includes the actual weighted average
shares outstanding for View Tech as of June 30, 1996 and the 150,000 shares of
View Tech common stock issued in connection with the acquisition of GroupNet.
5. INCOME TAXES
GroupNet was an S Corporation and as such GroupNet was generally not
subject to federal income taxes. Instead the sole stockholder was taxed on his
respective share of GroupNet income at the stockholders individual federal and
state income tax rates. Accordingly, there was no provision for federal income
taxes recorded by GroupNet for the twelve months ended June 30, 1996. The
operating results for the twelve months ended June 30, 1996 includes a pro forma
provision for income taxes to reflect income taxes as if GroupNet has been taxed
as a C corporation during such period, assuming an effective combined rate of
40%.
12
<PAGE>
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 duly authorized.
VIEW TECH, INC.
BY: /s/ William M. McKay
------------------------------------------
William M. McKay
Chief Financial Officer
13
