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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
CURRENT REPORT
FORM 8-K/A
(Amendment No. 3)
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: September 12, 1994
AMERIQUEST TECHNOLOGIES, INC.
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(Exact name of registrant as specified in charter)
Delaware
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(State of other jurisdiction of incorporation)
1-10397 33-0244136
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(Commission File Number) (IRS Employer Identification No.)
2722 Michelson Drive, Irvine, CA 92715
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(Address of principal executive offices) (Zip Code)
(714) 222-6000
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
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Effective June 6, 1994, AmeriQuest Technologies, Inc. ("AQS") issued
1,130,000 shares of its Common Stock in exchange for 3.3 million shares (51
percent) of Kenfil Inc. ("Kenfil") Common Stock held by certain principal
shareholders of Kenfil in a first-stage exchange pursuant to AmeriQuest's two
phase acquisition of Van Nuys, California-based Kenfil.
On September 12, 1994, the shareholders of Kenfil and AQS approved the
proposed merger of "AmeriQuest/Kenfil Inc.," a wholly-owned subsidiary of AQS,
with and into Kenfil (the "Merger"). The Merger has since become effective, and
AQS is now the sole shareholder of AmeriQuest/Kenfil Inc. In connection with
the Merger, AQS issued 1,046,252 shares of its Common Stock to the Kenfil
minority shareholders, 1,894,360 shares to the holders of Kenfil's subordinated
debt and 2,788,353 shares (of which 388,316 were issued prior to June 30, 1994)
to Kenfil's vendors.
Kenfil is a distributor of microcomputer software. Its key vendors include
Corel, Broderbund, Symantec, Quarterdeck Office Systems and IBM.
---------------------------
Effective September 22, 1994, ("AQS") issued 1,402,805 shares of its Common
Stock in exchange for 50.1 percent of the issued and outstanding shares of
Robec, Inc. ("Robec") Common Stock held by certain principal shareholders of
Robec in a first-stage exchange pursuant to AmeriQuest's two phase acquisition
of Robec.
Subject to AmeriQuest and Robec stockholders' approvals, the remaining
shares of Robec Common Stock will be exchanged in a merger transaction (the
"Merger") at the same conversion ratio of 0.63075 shares of AmeriQuest for each
share of Robec common stock. The Merger is expected to be completed in early
1995.
Robec is a national value-added distributor of microcomputer systems,
peripherals and accessories. Its key vendors include Acer, IBM, MultiTech,
Okidata, Unisys and Wyse.
Item 7. Financial Statements and Exhibits
---------------------------------
(a) The financial statements of Robec required to be filed pursuant to Item
7(a) of Form 8-K are incorporated herein by reference to AQS's Registration
Statement on Form S-4, SEC File No. 33-81726, declared effective on August 11,
1994 on pages F-42 through F-53 of the Prospectus/Joint Proxy Statement included
therein, copies of which were attached to the original Form 8-K as Exhibit 3 and
incorporated herein by this reference. Further, the financial statements of
Robec at June 30, 1994 are incorporated herein by reference to Robec's Quarterly
Report on Form 10-Q for the six months ended June 30, 1994, SEC File No. 0-
18115, a copy of which is attached hereto as Exhibit 5.
(b) The pro forma financial information for Kenfil and Robec required to be
filed pursuant to Item 7(b) of Form 8-K and Rule 601 of Regulation S-K are
attached hereto and incorporated herein by this reference, including:
Pro Forma Condensed Balance Sheet at
June 30, 1994
Pro Forma Condensed Statements of Operations
for the fiscal year ended June 30, 1994.
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<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<C> <S>
2* Amended and Restated Agreement and Plan of Reorganization dated
as of August 11, 1994 by and between AmeriQuest, Robec and
certain principal shareholders of Robec.
3* Financial Statements of Robec as included in AQS's Registration
Statement on Form S-4, SEC File No. 33-81726 at pages F-42
through F-53 of the Prospectus/Joint Proxy Statement included
therein.
5* Robec's Quarterly Report on Form 10-Q for the six months ended
June 30, 1994.
</TABLE>
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* Filed with the original filing.
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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.
AMERIQUEST TECHNOLOGIES, INC.
/s/ Stephen G. Holmes
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Stephen G. Holmes
Secretary, Treasurer and
Chief Financial Officer
Dated: April 4, 1995
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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements of AQS for the
fiscal year ended June 30, 1994, gives effect to the acquisition of 100 percent
of Kenfil's common stock and 50.1 percent of Robec's common stock. For the
purpose of the unaudited pro forma statement of operations, it is assumed that
these acquisitions were completed on July 1, 1993, and for the purpose of the
unaudited pro forma balance sheet, it is assumed that these acquisitions were
completed on June 30, 1994.
AMERIQUEST TECHNOLOGIES, INC. AND SUBSIDIARIES
PROFORMA CONDENSED BALANCE SHEET
June 30, 1994 (Unaudited)
(Dollars in thousands except share and per share data)
ASSETS
<TABLE>
<CAPTION>
AmeriQuest Proforma Proforma Proforma Proforma
Technologies, Inc.(2) Adjustments(1) Combined Robec, Inc. Adjustments Combined
------------------ -------------- --------- -------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 3,200 $ 3,200 $ 363 $ 3,563
Accounts receivable, net 24,708 24,708 16,188 (4,000)(D)(I) 36,896
Inventories 24,165 24,165 20,371 (5,754)(D)(I) 38,782
Income taxes receivable - - - -
Prepaid expenses and other 1,627 1,627 523 2,150
----------- --------- ------- -------- --------- --------
Total current assets 53,700 0 53,700 37,445 (9,754) 81,391
PROPERTY AND EQUIPMENT, NET 4,078 4,078 1,962 - 6,040
INTANGIBLE ASSETS, NET 6,490 1,970 (B) 8,460 - 1,178 (D) 9,638
OTHER ASSETS 877 877 604 - 1,481
----------- --------- ------- -------- --------- --------
$ 65,145 $ 1,970 $67,115 $ 40,011 $ (8,576) $ 98,550
=========== ========= ======= ======== ========= ========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
AmeriQuest Proforma Proforma Proforma Proforma
Technologies, Inc. Adjustments(1) Combined Robec, Inc. Adjustments Combined
------------------ ------------- --------- -------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 23,408 $(4,200)(C) $ 19,208 $13,923 - $ 33,131
Notes payable 23,059 23,059 12,046 - 35,105
Other 2,361 2,361 1,678 - 4,039
----------- --------- ------- -------- --------- --------
Total current liabilities 48,828 (4,200) 44,628 27,647 0 72,275
----------- --------- ------- -------- --------- --------
LONG-TERM DEBT 3,175 (3,175)(A) - - - -
OTHER NONCURRENT LIABILITIES
DEFERRED INCOME TAXES 267 267 155 - 422
MINORITY INTEREST - - - - 1,178(H) 1,178
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value;
authorized 10,000,000 shares;
no shares issued and outstanding - - - - - -
Common stock, $.01 par value;
authorized 30,000,000 shares;
issued and outstanding 9,857,779
shares 99 53(A,B,C) 152 - 14 (D) 166
Common stock, $.01 par value;
authorized 10,000,000 shares;
issued and outstanding 4,599,180
shares - - - 46 (46)(J) -
2,441 (D)
Additional paid-in capital 27,345 9,292(A,B,C) 36,637 16,695 (16,695)(J) 39,078
Retained deficit (14,569) (14,569) (4,532) 4,532 (J) (14,569)
----------- --------- ------- -------- --------- --------
Total stockholders' equity 12,875 9,345 22,220 12,209 (9,754) 24,675(3)
----------- --------- ------- -------- --------- --------
$65,145 $1,970 $67,115 $40,011 $(8,576) $98,550
=========== ========= ======= ======== ========= ========
OUTSTANDING COMMON SHARES 9,857,779 15,198,430 16,601,235
=========== ========== ==========
</TABLE>
(1) Includes the acquisition of the remaining 49% of Kenfil and the conversion
to Preferred and Common Stock of certain indebtedness.
(2) The AQS historical balance sheet at June 30, 1994, includes the historical
balance sheets of Kenfil, Inc. Effective June 6, 1994, AQS acquired 51
percent of the outstanding common stock of Kenfil. The remaining 49 percent
of the outstanding Kenfil common stock was acquired on September 12,
1994. Kenfil had an equity deficit at the date of acquisition, and
therefore no amount representing minority interest is reflected in the
historical AQS balance sheet.
(3) The Company valued its common stock issued in connection with its Kenfil
and Robec acquisitions at $1.75 per share. This valuation represents
management's best estimate of the fair value of the Company's common stock
and is based upon prices obtained for large blocks of the Company's common
stock in recently completed private equity placement transactions. This
valuation represents a significant discount from quoted market prices due
to the thin public trading volume and small public float of AmeriQuest
common stock.
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AMERIQUEST TECHNOLOGIES, INC.
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
For year ended June 30, 1994
(Unaudited)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
AmeriQuest Pro Forma Pro Forma Pro Forma Pro Forma
Technologies, Inc.(2)(L)(K)Kenfil Inc. Adjustments Combined Robec Inc. Adjustments Combined
------------------ ----------- ----------- ---------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET SALES $ 87,593 $ 138,759 $ 226,352 $ 168,446 $ 394,798
COST OF SALES 75,023 128,843 203,866 155,836 359,702
------------- ----------- --------- --------- ---------- ----------- ---------
Gross profit 12,570 9,916 0 22,486 12,610 0 35,096
OPERATING EXPENSES
Selling, general and
administrative 14,144 24,653 $ 197 (E) 38,994 22,985 118(E) 62,097
Restructuring charge and
earthquake loss (G) 5,700 3,430 9,130 0 9,130
------------- ----------- --------- --------- ---------- ----------- ---------
Loss from operations (7,274) (18,167) (197) (25,638) (10,375) (118) (36,131)
OTHER INCOME
(EXPENSE)
Other income 31 40 71 71
Interest expense (728) (2,626) 380 (F) (2,974) (1,613) (4,587)
------------- ----------- --------- --------- ---------- ----------- ---------
(697) (2,586) 380 (2,903) (1,613) 0 (4,516)
------------- ----------- --------- --------- ---------- ----------- ---------
Minority interest 0 0 0 0 0 1,178(M) 1,178
------------- ----------- --------- --------- ---------- ----------- ---------
Loss before taxes (7,971) (20,753) 183 (28,541) (11,988) 1,060 (39,469)
PROVISION FOR INCOME
TAXES 0 17 17 (814) (797)
------------- ----------- --------- --------- ---------- ----------- ---------
Net loss (G) $ (7,971) $ (20,770) $ 183 $ (28,558) $ (11,174) $ 1,060 $(38,672)(G)
============= =========== ========= ========= ========== =========== =========
Net loss per
common share and
common share equivalent $ (1.33) $ (2.23) $ (2.72)
============= ========= ==========
Common and common
equivalent shares 5,973,511 12,832,808 14,235,613
============= ========== ==========
</TABLE>
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FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS OF AMERIQUEST TECHNOLOGIES, INC., KENFIL INC. AND ROBEC INC.
The following footnotes reflect the assumptions made in the preparation of the
Pro Forma Condensed Consolidated Financial Statements.
(A) In conjunction with the purchase of Kenfil, AmeriQuest will issue
1,894,360 additional shares of AmeriQuest Common Stock in satisfaction of
certain Kenfil subordinated debt with a face amount of $8,203,729 but
which had been valued at $3,175,000 for purposes of the June 30, 1994
financial statements, plus accrued interest to the date of issuance.
(B) In September 1994, AQS issued 1,046,254 shares of its Common Stock to
acquire the remaining 49% of Kenfil Inc. The additional shares were valued
at $1.75 per share and resulted in additional goodwill in the amount of
$1,970,000. The Kenfil goodwill amount results from management's
preliminary estimate of the fair value of Kenfil net assets acquired.
Management is currently in the process of completing its detailed analysis
of the fair value of Kenfil net assets acquired and therefore the related
goodwill amount presented herein may change as a result of the completed
analysis.
(C) In conjunction with the purchase of Kenfil, the Company issued 2,400,037
additional shares (388,316 shares had been previously issued to vendors
prior to June 30, 1994) of AmeriQuest Common Stock in satisfaction of
certain Kenfil trade accounts payable, i.e. to Kenfil's vendors. Initially
certain such shares were issued in part as AmeriQuest Common Stock and in
principal part as Series C Convertible Preferred Stock pending an increase
in the number of shares of Common Stock that AmeriQuest is authorized to
issue. However, inasmuch as the Series C Convertible Preferred Stock
served only as a temporary capital alternative, it is reflected in the
accompanying pro forma financial statements as Common Stock. AmeriQuest
anticipates that up to an additional one million shares of AmeriQuest
Common Stock may be issued to other Kenfil vendors, however, no certainty
as to such possible issuance exists.
(D) To effect the purchase of Robec, AmeriQuest will issue 1,402,805 shares of
AmeriQuest Common Stock in exchange for 50.1% of the issued and
outstanding shares of Robec common stock. The AmeriQuest Common Stock is
assumed to have a market value of $1.75 per share at the time of the
transaction for a total purchase price of $2,455,000 and results in the
recording of approximately $1.2 million of goodwill. The Robec goodwill
amount reflects management's preliminary estimate of the fair value of
AmeriQuest's share of Robec net assets at acquisition. Management is
currently in the process of completing its detailed analysis of the fair
value of Robec net assets acquired and therefore the related goodwill
amount presented herein may change as a result of the completed
analysis.
(E) To record goodwill amortization over the estimated economic life of 10
years.
Management believes that the most significant intangible acquired is that
of the distribution channels. Management has assigned a 10 year economic
life to this intangible asset as that is the period of time that
management expects to derive benefit from the existing vendor
relationships and market position. Management determined that 10 years is
an appropriate economic life based upon the historical length of the
acquiree's vendor relationships and the overall size and quality of the
vendors and their product offerings.
(F) Savings of interest expense on the Kenfil subordinated debt retired
through the issuance of Ameriquest Common Stock in (A) above, interest
ranging from 9.5% to 13.91%.
(G) The restructuring charge of $5,700,000 included in AmeriQuest's historical
statement of operations relates principally to the write-off of certain
former personal computer joint venture operations. The restructuring
charge and earthquake loss of $3,430,000 included in Kenfil's historical
financials included charges of $2,821,000 for losses sustained in the
Southern California earthquake and restructuring charges of $609,000
relating to severance costs and lease termination costs.
Such restructuring charges, although non-recurring in nature, have been
included in the proforma condensed combined statement of operations in
conformity with Article 11 of Regulations S-X of the Securities and
Exchange Commission.
(H) To record minority interest associated with the 49.9 percent of Robec
common stock shares not owned by AmeriQuest. The minority interest balance
is based upon the historical cost of Robec's net assets adjusted for the
receivable and inventory adjustments discussed in note (I).
(I) To adjust Robec receivables and inventory to their estimated net
realizable values based upon AmeriQuest's preliminary analysis of the fair
value of Robec's net assets acquired. (See note D)
(J) To eliminate the historical equity of Robec.
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(K) On July 8, 1994, AmeriQuest reacquired 345,091 shares of its Common Stock
from Mr. James D'Jen, a former officer and director of AmeriQuest, as down
payment on an obligation of Mr. D'Jen to exchange 350,000 shares of
AmeriQuest Common Stock, in exchange for all (100%) of the common stock of
AmeriQuest's Singapore subsidiary, CMS Enhancements (S) PTE Ltd. The
Singapore subsidiary is a distributor of commodity disk drives. Sales for
this Singapore subsidiary approximate $20 million annually, with an
approximate breakeven in operating results. Upon the receipt of the
balance of the shares due from Mr. D'Jen, AmeriQuest will be divested of
its Singapore subsidiary.
(L) Effective December, 1993, AQS acquired certain assets and assumed certain
liabilities of Management Systems Group and acquired the outstanding
common stock of Rhino Sales Company. Assuming these acquisitions were
reflected in the accompanying pro forma statement of operations as being
effective July 1, 1993, the impact would be to increase revenues
approximately $20 million, with no effect on net income.
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