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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
CURRENT REPORT
FORM 8-K/A
AMENDMENT NO. 2
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: June 14, 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)
CMS ENHANCEMENTS, INC.
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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 1.1
million 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.
Subject to AmeriQuest and Kenfil stockholders' approvals, the remaining
shares of Kenfil Common Stock will be exchanged in a merger transaction (the
"Merger") at the same conversion ratio of 0.34 shares of AmeriQuest for each
share of Kenfil common stock. The Merger is expected to be completed in August,
1994.
Simultaneously with the Merger, holders of approximately $7.3 million of
Kenfil subordinated debt are expected to exchange their debt for additional
shares of AmeriQuest Common Stock. The transactions would result in AmeriQuest
issuing a total of approximately 3.1 million shares to the Kenfil stockholders
and debtholders.
Kenfil is a distributor of microcomputer software. Its key vendors include
Corel, Broderbund, Symantec, Quarterdeck Office Systems and IBM.
Item 7. Financial Statements and Exhibits
---------------------------------
(a) The financial statements of Kenfil required to be filed pursuant to
Item 7(a) of Form 8-K are incorporated herein by reference to the following
periodic reports of Kenfil filed by it under the Securities Exchange Act of
1934, as amended, SEC File No. 0-19905:
(i) Annual Report on Form 10-K for the fiscal year ended June 30, 1993
(ii) Quarterly Reports on Form 10-Q for the quarters ended September
30, 1993, December 31, 1993 and March 31, 1994.
(b) The pro forma financial information 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 March 31, 1994
Pro Forma Condensed Statements of Operations for the fiscal year ended
June 30, 1993
Pro Forma Condensed Statements of Operations for the nine months ended
March 31, 1994
Exhibit No. Description of Exhibit
- ----------- ----------------------
2 Agreement and Plan of Reorganization dated March 31, 1994, as
amended, by and between AmeriQuest, Kenfil and certain
principal shareholders of Kenfil.
28 Kenfil's financial statements as contained in its Annual Report
on Form 10-K for the fiscal year ended June 30, 1993 and its
Quarterly Reports on Form 10-Q for the quarters ended September
30, 1993, December 31, 1993 and March 31, 1994.
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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: May 8, 1995
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AMERIQUEST AND KENFIL PRO FORMA FINANCIAL INFORMATION
AMERIQUEST TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed consolidated financial statements
reflect the purchase of a 51% interest in Kenfil, Inc. ("Kenfil") by AmeriQuest
Technologies, Inc. ("AmeriQuest") facilitated by an exchange of 1,110,093 shares
of AmeriQuest Common Stock for 51% of the outstanding shares of Kenfil common
stock. The transaction will be accounted for using the purchase method of
accounting. AmeriQuest is the acquiror for accounting purposes. The pro forma
financial statements also give effect to the issuance of approximately 2 million
shares of AmeriQuest common stock in exchange for the outstanding subordinated
debt of Kenfil with a book value of $7.3 million and a fair value of $3.7
million.
The unaudited pro forma condensed consolidated balance sheet is based upon
AmeriQuest and Kenfil historical balance sheets as of March 31, 1994 and is
presented as if the transaction had been consummated on March 31, 1994.
The unaudited pro forma condensed consolidated statements of operations for the
year ended June 30, 1993 and the nine months ended March 31, 1994 give effect to
the 51% purchase of Kenfil by AmeriQuest as if the transaction had occurred at
the beginning of AmeriQuest's fiscal year ended June 30, 1993. The statements
of operations combine historical results of operations of AmeriQuest and Kenfil
for the year ended June 30, 1993 and for the nine months ended March 31, 1994,
respectively.
The pro forma adjustments are based on available information and upon certain
assumptions which management believes are reasonable. However, the pro forma
condensed consolidated financial statements do no purport to be indicative of
the results which would have been achieved if the transaction had been completed
on the respective dates above or the results which may be achieved in the
future.
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AMERIQUEST TECHNOLOGIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED BALANCE SHEET
March 31, 1994 (Unaudited)
(Dollars in thousands except shares)
(Dollars in thousands, except
per share data)
ASSETS
<TABLE>
<CAPTION>
AmeriQuest Pro Forma Pro Forma
Technologies, Inc. Kenfil Inc. Adjustments Combined
------------------ ----------- ------------- ------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 387 $ 720 $ $ 1,107
Accounts receivable, net 13,688 20,777 34,465
Inventories 16,276 19,441 35,717
Income taxes receivable 0 1,258 0 1,258
Prepaid expenses and other 816 1,967 (110)(D) 2,673
---------- ---------- ------------- -----------
Total current assets 31,167 44,163 (110) 75,220
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PROPERTY AND EQUIPMENT, NET 5,250 1,268 6,518
OTHER ASSETS 3,719 356 4,075
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$ 40,136 $ 45,787 $ (110) $ 85,813
========== ========== ============= ===========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
AmeriQuest Pro Forma Pro Forma
Technologies, Inc. Kenfil Inc. Adjustments Combined
----------------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Line of credit $ 0 $ 16,267 $ $ 16,267
Notes payable 16,263 6,056 (6,056)(B) 16,263
Accounts payable 8,727 18,929 957 (A) 28,613
Accrued expenses and other 1,233 1,091 2,324
---------- ---------- ------------- -----------
Total current liabilities 26,223 42,343 (5,099) 63,467
---------- ---------- ------------- -----------
LONG-TERM DEBT 0 1,437 (1,325)(B) 112
DEFERRED INCOME TAXES 267 0 267
MINORITY INTEREST 0 0 2,815 (E) 2,815
STOCKHOLDERS' EQUITY
Common stock, $.01 par value;
authorized 10,000,000 shares;
issued and outstanding
7,865,916 shares 79 0 32 (A,B) 111
Common stock, $.01 par value;
authorized 25,000,000 shares;
issued and outstanding
6,401,918 shares 0 64 (64)(G) 0
5,474 (A,B)
Additional paid-in capital 24,851 21,301 (21,301)(G) 30,325
Retained deficit (11,284) (19,358) 19,358 (G) (11,284)
---------- ---------- ------------- -----------
Total stockholders' equity 13,646 2,007 3,499 19,152
---------- ---------- ------------- -----------
$ 40,136 $ 45,787 $ (110) $ 85,813
========== ========== ============= ===========
</TABLE>
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AMERIQUEST TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For year ended June 30, 1993
(Unaudited)
(Dollars in thousands, except
per share data)
<TABLE>
<CAPTION>
AmeriQuest Pro Forma Pro Forma
Technologies, Inc. Kenfil Inc. Adjustments Combined
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<S> <C> <C> <C> <C>
NET SALES $ 73,082 $ 184,054 $ 0 $ 257,136
COST OF SALES 61,539 160,319 0 221,858
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Gross profit 11,543 23,735 0 35,278
OPERATING EXPENSES
Selling, general and administrative 10,274 18,936 29,210
Research and development 782 0 0 782
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11,056 18,936 0 29,992
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Income from operations 487 4,799 0 5,286
OTHER INCOME (EXPENSE)
Other income 26 0 0 26
Interest expense (277) (3,163) 930 (C) (2,510)
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(251) (3,163) 930 (2,484)
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Income before taxes and
minority interest 236 1,636 930 2,802
PROVISION FOR INCOME TAXES 0 550 0 550
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Income before minority interest 236 1,086 930 2,252
MINORITY INTEREST IN EARNINGS
OF SUBSIDIARY 0 0 (532)(E) (532)
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Net income $ 236 $ 1,086 $ 398 $ 1,720
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Net income (loss) per common share and
common share equivalent $0.08 $0.28
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Common and common equivalent share 3,060,908 6,207,139
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</TABLE>
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AMERIQUEST TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For nine months ended March 31, 1994
(Unaudited)
(Dollars in thousands, except
per share data)
<TABLE>
<CAPTION>
AmeriQuest Pro Forma Pro Forma
Technologies, Inc. Kenfil Inc. Adjustments Combined
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<S> <C> <C> <C> <C>
NET SALES $ 62,976 $ 124,171 $ 0 $ 187,147
COST OF SALES 53,344 115,685 0 169,029
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Gross profit 9,632 8,486 0 18,118
OPERATING EXPENSES
Selling, general and administrative 8,981 14,311 0 23,292
Earthquake loss 0 2,821(F) 0 2,821
Research and development 5,000 484 0 5,484
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13,981 17,616 0 31,597
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Income (loss) from operations (4,349) (9,130) 0 (13,479)
OTHER INCOME (EXPENSE)
Other income 45 0 0 45
Interest expense (382) (2,097) 700 (C) (1,779)
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(337) (2,097) 700 (1,734)
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Income before taxes and
minority interest (4,686) (11,227) 700 (15,213)
INCOME TAX BENEFIT 0 88 0 88
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Income (loss) before minority interest (4,686) (11,139) 700 (15,125)
MINORITY INTEREST IN LOSS
OF SUBSIDIARY 0 0 2,815 (E) 2,815
------------- ------------- ----------- ------------
Net income (loss) $ (4,686) $ (11,139) $ 3,515 $ (12,310)
============= ============= =========== ============
Net income (loss) per common share and
common share equivalent $(0.90) $(1.47)
============= ============
Common and common equivalent share 5,226,471 8,372,702
============= ============
</TABLE>
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FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS OF AMERIQUEST TECHNOLOGIES, INC. AND KENFIL, INC.
(A) To effect the purchase of a 51% interest in Kenfil, AmeriQuest issued
1,110,093 shares of Common Stock in exchange for 3,264,978 shares of Kenfil
common stock. The common stock consideration reflects a per share valuation
of $1.75, representing a discounted quoted market price, based upon
discounts received on recently completed private equity cash transactions.
At the time of the transaction, the Company incurred approximately
$957,000 in direct acquisition costs for a total purchase price of
$2,899,663. The Kenfil purchase price allocation is based upon management's
preliminary estimate of the fair value of Kenfil net assets. Management is
currently in process of completing its detailed analysis of the fair value
of Kenfil net assets acquired and therefore the related purchase price
allocation presented herein may materially change as a result of the
completed analysis. For each $1 million of goodwill recorded due to future
purchase price allocation adjustments, the pro forma net income for the
year ended June 30, 1993 would decrease by $100,000.
(B) In conjunction with the purchase of the 51% interest in Kenfil, AmeriQuest
will issue 2,036,138 additional shares of Common Stock in satisfaction of
certain Kenfil subordinated debt with a book value of $7,381,000. The
number of AmeriQuest Common Stock Shares issuable to Kenfil debtholders is
based upon the Quoted Market Price of AmeriQuest Common Stock at the date
of exchange. The AmeriQuest common stock issued to Kenfil debtholders is
valued at $1.75 per share, representing a discounted quoted market price,
based on the valuation method discussed in Note (A).
(C) Savings of interest expense on notes payable and long-term debt retired
through the issuance of AmeriQuest Common Stock in (B) above, interest
ranging from 9.5% to 13.91%.
(D) To record the expiration of $110,000 in commitment fees paid in connection
with obtaining the subordinated debt. See (B) above.
(E) To record 49% minority interest in earnings of subsidiary. The minority
interest included in the pro forma balance sheet is based upon Kenfil's
historical net assets adjusted for the fair value of the subordinated debt
retired as part of the acquisition.
(F) The earthquake loss included in Kenfil's historical financials included
charges of $2,821,000 for losses sustained in the Southern California
earthquake.
(G) To eliminate the historical equity of Kenfil.
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