UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 4, 1999
BELL NATIONAL CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
California 0-935 94-1451828
- ------------------------------- ------------ -------------------
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
900 North Franklin Street, Suite 210, Chicago, Illinois 60610
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(Address of Principal Executive Offices) (Zip Code)
(312) 640-8810
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(Registrant's Telephone Number, Including Area Code)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
1. Report of Independent Auditor
2. Samba Department of Unilog Statement of Assets Acquired
at December 31, 1998
3. Samba Department of Unilog Statement of Revenues and
Direct Operating Expenses for the years ended
December 31, 1998 and 1997
4. Samba Department of Unilog Notes to Financial Statements
(b) Pro forma Financial Information.
1. Pro forma Consolidated Balance Sheet of Bell National
Corporation at December 31, 1998
2. Pro forma Consolidated Statement of Operations of Bell
National Corporation for the period March 16, 1998 through December 31,
1998
3. Notes to Pro forma Consolidated Financial Statements
<PAGE>
SAMBA DEPARTMENT OF UNILOG
STATEMENT OF ASSETS ACQUIRED
AND
STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
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The Samba department of Unilog Regions SA (Unilog) acquired by Samba
Technologies, SARL, a wholly owned subsidiary of Bell National Corporation,
represents a group of twelve persons employed by Unilog, a Paris France
based company with several thousand employees. Unilog designs, develops,
and installs a wide range of commercial software for business. It also
provides businesses with related consulting services. The Samba department
occupies a small amount of space in one of Unilog's regional facilities in
Grenoble France. The department is responsible for the development and sale
of software packages that perform image analysis and tele-medicine
functions, as well as providing LIS/HIS interface and network consulting
services to the users of its software products. Since the Samba department
is such a small part of Unilog, full audited financial statements of Unilog
are not representative of the assets acquired.
It is impractical to prepare full audited financial statements of the Samba
department of Unilog as Unilog maintains a financial control system which
only accounts for the revenues and direct operating expenses of each of its
regional operating departments grouped along product lines and Unilog does
not maintain balance sheet account information by department. In addition,
according to the terms of the purchase agreement, Samba Technologies, SARL,
assumed no liabilities related to the department, nor did it agree to
purchase any assets other than those related to the rights to the
technology, software, trade name, and specifically identified inventory,
and office furniture and equipment.
Therefore, in management's opinion, the Statement of Assets Acquired and
Statement of Revenues and Direct Operating Expenses provide the most
representative financial presentation of the acquisition.
<PAGE>
REPORT OF INDEPENDENT AUDITOR
Board of Directors
Unilog Regions SA
We have audited the accompanying Statement of Revenues and Direct Operating
Expenses of the Samba department of Unilog Regions SA (Unilog) for the
years ended December 31, 1998 and 1997 and the Statement of Assets Acquired
at December 31, 1998. These Statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on them
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the Statement of Revenues and
Direct Operating Expenses and the Statement of Assets Acquired are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the Statements. An audit
also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall Statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying Statement of Revenues and Direct Operating Expenses and
Statement of Assets Acquired were prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission
for inclusion in the Form 8-K/A and are not intended to be a complete
presentation of the department's revenues and expenses, or assets and
liabilities.
In our opinion, the Statement of Revenues and Direct Operating Expense and
the Statement of Assets Acquired referred to above present fairly, in all
material respects, the revenues and direct operating expenses of the
department for the years ended December 31, 1998 and 1997 and the assets
acquired, pursuant to the sales agreement described in Note 1, in
conformity with generally accepted accounting principles.
Ernst & Young, Audit
J.L. Desplat
Lyon, France
March 17, 1999
<PAGE>
SAMBA DEPARTMENT OF UNILOG
STATEMENT OF ASSETS ACQUIRED
AT DECEMBER 31, 1998
(DOLLARS IN THOUSANDS)
Inventory. . . . . . . . . . . . . . . . . . . . . . . $ 18
Office equipment and furniture . . . . . . . . . . . . $ 18
-----
Total assets acquired. . . . . . . . . . . . . . . . . $ 36
=====
The accompanying notes are an integral part
of these financial statements.
<PAGE>
SAMBA DEPARTMENT OF UNILOG
STATEMENT OF REVENUES
AND
DIRECT OPERATING EXPENSES
YEARS ENDED DECEMBER 31, 1998 AND 1997
(DOLLARS IN THOUSANDS)
1998 1997
------- -------
Revenue. . . . . . . . . . . . . . . . . . . . . $1,249 1,267
Direct Operating Expenses:
Cost of sales. . . . . . . . . . . . . . . . . 649 650
Sales and marketing. . . . . . . . . . . . . . 204 201
Research and development . . . . . . . . . . . 163 128
General and administrative . . . . . . . . . . 227 248
------- -------
Total direct operating expenses . . . . . 1,243 1,227
------- -------
Operating income . . . . . . . . . . . . . . . . $ 6 40
======= =======
The accompanying notes are an integral part
of these financial statements.
<PAGE>
SAMBA DEPARTMENT OF UNILOG
NOTES OF FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.1 - NATURE OF BUSINESS:
The Samba department of Unilog Regions SA (Unilog) is engaged in
medical image analysis and telemedicine computer systems and its main
businesses are IT services, implementation, and related computer equipment
sales.
1.2 - BASIS OF PRESENTATION:
The Statement of Revenues and Direct Operating Expenses and the
Statement of Assets Acquired have been prepared pursuant to the sales
agreement dated December 31, 1998 which closed on January 4, 1999 between
Samba Technologies, SARL (Samba Technologies), a French limited liability
company wholly owned by Bell National Corporation, and Unilog for the sale
of certain assets to Samba Technologies. The statements are not intended
to be a complete presentation of the Samba department's revenues and
expenses or assets and liabilities and exclude accounts which would be
necessary to present complete financial statements such as corporate
overhead and interest expense for the Statement of Revenues and Direct
Operating Expenses and operating assets, liabilities and capital stock for
the Statement of Assets Acquired.
1.3 - REVENUE RECOGNITION:
Revenues from product sales are recognized upon delivery. Service
revenue is recognized on a basis consistent with the performance
requirements of the contract. The division has no experience of losses on
its major contracts, and accordingly, no provisions are made with respect
to potential losses on contracts in progress.
1.4 - PROPERTY AND EQUIPMENT:
Property and equipment is stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of 2 years.
At December 31, 1998 the historical costs of the assets acquired by Samba
Technologies was as follows:
1998
----
Gross property and equipment . . . . . . . . . . $ 66
Accumulated depreciation . . . . . . . . . . . . $ 48
----
Net property and equipment . . . . . . . . . . . $ 18
====
1.5 - INVENTORIES:
Inventories are stated at the lower of cost or market determined on a
first-in, first-out basis.
<PAGE>
SAMBA DEPARTMENT OF UNILOG
NOTES OF FINANCIAL STATEMENTS - CONTINUED
1.6 - RESEARCH AND DEVELOPMENT COSTS:
Research and development expenditures are charged to operations as
incurred.
1.7 - SOCIAL COSTS:
The department is required to make payments for certain social costs
such as illness, unemployment and pensions for personnel in France in
accordance with French law by contributing based on salaries to the
relevant government agencies. Social costs in 1998 and 1997 were $214 and
$231 respectively.
<PAGE>
BELL NATIONAL CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------------
The following unaudited pro forma consolidated financial statements of Bell
National Corporation (the "Company") as of December 31, 1998 and for the
period from March 16, 1998 through December 31, 1998 give effect to the
acquisition of the Samba department of Unilog Regions SA as if it occurred
on March 16, 1998.
On December 4, 1998 the Company merged with InPath, LLC (InPath), a
development-stage company. Based upon the terms of the merger agreement,
for financial reporting and accounting purposes the merger has been
accounted for as a reverse acquisition whereby InPath is deemed to have
acquired the Company. However, the Company is the continuing legal entity
and registrant for both Securities and Exchange Commission filing purposes
and income-tax reporting purposes. Since the Company was a non-operating
public shell company, the merger was recorded as the issuance of stock for
the net monetary assets of the Company accompanied by a recapitalization,
and no goodwill or other intangible assets were recorded. Accordingly, the
Company's consolidated financial statements reflect the results of
operations of InPath from March 16, 1998 (date of inception of InPath) and
the acquisition of the Company on December 4, 1998.
The pro forma consolidated financial statements for the acquisition of the
Samba department of Unilog are presented in conformity with the Company's
new financial reporting period. Therefore, the results of the Samba
department of Unilog are included from March 16, 1998
The adjustments included in the unaudited pro forma consolidated financial
statements represent the Company's preliminary determination of those
adjustments based on available information. There can be no assurances that
the actual adjustments will not differ significantly from the pro forma
adjustments reflected in the pro forma consolidated financial information.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of either future operations or results of operations
that might have been achieved if the acquisition had been consummated on
March 16, 1998.
<PAGE>
<TABLE>
<CAPTION>
BELL NATIONAL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET
AT DECEMBER 31, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
Bell Samba
National Department Pro forma
Corporation of Unilog Adjustments Total
----------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents. . . . . . . . $ 700 (479) 2 221
Inventory. . . . . . . . . . . . . . . . 18 18
Prepaid expenses . . . . . . . . . . . . 7 7
Deposits . . . . . . . . . . . . . . . . 149 (100) 1 49
------- ------- ------- -------
Total current assets. . . . . . . . 856 18 (579) 295
Fixed assets, net. . . . . . . . . . . . . 88 18 106
Other assets:
License, patents, and technology, net. . 746 561 3 1,307
------- ------- ------- -------
Total assets. . . . . . . . . . . . $ 1,690 36 (18) 1,708
======= ======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . $ 588 18 606
Accrued expenses . . . . . . . . . . . . 132 132
Notes payable. . . . . . . . . . . . . . 95 95
------- ------- ------- -------
Total current liabilities . . . . . 815 18 833
Notes payable, long-term . . . . . . . . . 156 156
Stockholders' equity
Common stock . . . . . . . . . . . . . . 1,508 1,508
Department equity. . . . . . . . . . . . --
Accumulated deficit. . . . . . . . . . . (789) (789)
------- ------- ------- -------
Total stockholders' equity. . . . . 719 719
------- ------- ------- -------
Total liabilities and
stockholders' equity. . . . . . . $ 1,690 1,708
======= ======= ======= =======
<FN>
The accompanying notes are an integral part of these pro forma consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BELL NATIONAL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FROM MARCH 16, 1998 THROUGH DECEMBER 31, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<CAPTION>
Bell Samba
National Department Pro forma
Corporation of Unilog Adjustments Total
----------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . $ 1,249 (245) 5 1,004
Costs and expenses
Cost of goods sold . . . . . . . . . . . 649 (132) 5 517
Research and development . . . . . . . . $ 181 163 (29) 5 315
Selling, general, and administrative . . 602 431 (94) 5 1,046
63 7
44 6
------- ------- ------- -------
783 1,243 (148) 1,878
------- ------- ------- -------
Operating income (loss). . . . . . . . . . (783) 6 (97) (874)
Other (expense), net . . . . . . . . . . . (6) -- -- (6)
------- ------- ------- -------
Income (loss) before taxes . . . . . . . . (789) 6 (97) (880)
Income taxes . . . . . . . . . . . . . . . -- -- -- --
------- ------- ------- -------
Net income (loss). . . . . . . . . . . . . $ (789) 6 (97) (880)
======= ======= ======= =======
Basic and diluted net loss
per common share . . . . . . . . . . . . $ (0.07) (0.07)
======= =======
Weighted average number
of common shares
outstanding. . . . . . . . . . . . . . . 12,000,000 12,000,000
========== ==========
<FN>
The accompanying notes are an integral part of these pro forma consolidated financial statements.
</TABLE>
<PAGE>
BELL NATIONAL CORPORATION
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Note 1: To reflect conversion of the deposit made to Unilog on
December 15, 1998 into a partial payment of purchase price. The deposit was
made to secure performance of the transaction.
Note 2: To reflect payment of the remainder of the purchase price to
Unilog. This payment was made on January 4, 1999.
Note 3: Represents the value of the Samba trade name, intellectual
property rights and the operating rights to the Samba software package, the
Samba trademark and technical and commercial documentation. The Company
intends to amortize these assets over ten years.
Note 4: To record account payable for inventory on hand at December 31,
1998 purchased in 1999 after closing of the Asset Purchase Agreement.
Note 5: To adjust revenue and expenses to reflect the exclusion of the
results of operations of the Samba department for January, February and the
first fifteen days of March 1998.
Note 6: To record amortization of purchased technology as if the
transaction was completed on March 16, 1998.
Note 7: To record internal corporate overhead which would have been
allocated to the Samba department by Unilog corporate headquarters during
the period March 16, 1998 through December 31, 1998.
<PAGE>
SIGNATURE
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.
BELL NATIONAL CORPORATION
(Registrant)
/s/ Leonard R. Prange
-----------------------------------------------
(President and Chief Financial Officer)
Date: March 22, 1999
