UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(D) of the Securities Exchange Act of 1934
Date of Report: March 8, 1996
Delta Computec, Inc.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
New York 0-14733 16-1146345
900 Huyler Street Teterboro, New Jersey 07608
Address of principal executive offices Zip Code
Registrant's telephone number, including area code (201) 440-8585
Not Applicable
Former name or former address, if changed since last report
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets.
Delta Computec Inc. (The "Registrant"), announced that on March 8,
1996, its wholly-owned subsidiary, Delta Data Net, Inc. (Data Net"),
terminated its business operations and ceased operations due to
economic conditions in its industry.
Pursuant to a General Security Agreement dated April 1, 1994, Data
Net's secured lender, National Canada Finance Corporation ("NCFC") is
entitled to immediate possession of all of Data Net's collateral. Data
Net's obligations to NCFC under a revolving credit line with NCFC
exceeds $2,600,000.00. In view of the termination of business
operations, Data Net has also voluntarily surrendered Data Net's
collateral to NCFC so that NCFC can liquidate that Data Net collateral
and apply the proceeds to reduce the indebtedness owing from Data Net
to NCFC. Data Net expects that there will still be a deficiency owing
from Data Net to NCFC after the liquidation of all of Data `Net's
collateral, leaving nothing for Data Net's unsecured creditors. The
collateral which was voluntarily surrendered by Data Net included Data
Net's inventory, equipment, patents, field spare parts, trademarks,
general intangibles, and proceeds of the foregoing, and other
collateral as described in the General Security Agreement.
The Registrant's own business operations have not terminated. NCFC has
advised the Registrant that NCFC will continue its lending relationship
with the Registrant without any waiver of NCFC's rights against the
Registrant. The Registrant and NCFC intend to proceed to complete a
definitive restructuring agreement with regard to the continuing loan
by NCFC to the Registrant.
Data Net was formed in 1992 as a wholly-owned subsidiary of the
Registrant to acquire certain of the assets and liabilities of two
wholly-owned existing subsidiaries of Willcox & Gibbs, Inc. At the
time of the acquisition in 1992, and prior to its termination of
business, Data Net was in the business of the sale and distribution of
hardware and test equipment and the sale and assembly of cables used in
data communication applications.
The Registrant provides a wide array of computer systems, data
communications and LAN/WAN technical services and products to a
customer base which encompasses many industries and geographic
locations. Its customer base includes large ticket brokerage houses,
banks, pharmaceutical companies, major hospitals and long distance
carriers, located principally in the Northeastern United States, but
reaching as far as Florida and the West Coast. Technical services
offered include, but are not limited to, design, product procurement,
installation, service, maintenance and on-site technical management and
consulting.
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
Not Applicable
Item 6. Resignations of Registrant's Director
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired:
Not applicable
(b) Pro forma financial information:
The pro forma financial information which would be required pursuant to
Article 11 of Regulation S-X with regard to the disposition of the
assets of Data Net as set forth in Item 2, above, are annexed hereto.
(c) Exhibits
The following Exhibits are furnished with regard to the disposition of
the assets of Data Net as set forth in Item 2, above:
1. Letter between Delta Data Net, Inc. and National Canada Finance Corp.
Dated March 8, 1996.
2. Forbearance Agreement dated as of March 8, 1996, between the
Registrant, Delta Data Net, Inc. And National Canada Finance Corp.
3. Release and Indemnification Agreement dated March 8, 1996, between the
Registrant, Delta Data Net, Inc. and National Canada Finance Corp.
4. Reaffirmation of Guaranty dated March 8, 1996, between SAI/Delta, Inc.
And National Canada Finance Corp.
5. Letter between National Canada Finance Corp. and Delta Data Net, Inc.,
dated March 6, 1996
6. Reaffirmation of Subordination dated March 8, 1996, between Joseph M.
Lobozzo II and National Canada Finance Corp.
The Exhibits denominated by (A) were previously filed as part of, and
are hereby incorporated herein, by reference to the Exhibits to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
October 31, 1994.
The Exhibits denominated by (B) were previously filed as part of, and
are hereby incorporated herein, by reference to the Exhibits to the
Registrant's Annual Report on Form 10-K for the Fiscal year ended
October 31, 1995.
7. Credit Agreement, National Canada Finance Corp. (A)
8. Credit Agreement, National Canada Finance Corp., Amendment No. 1 (A)
9. Credit Agreement, National Canada Finance Corp., Amendment No. 1 (A)
10. Credit Agreement, National Canada Finance Corp., Amendment No. 1 (B)
11. Credit Agreement, National Canada Finance Corp., Amendment No. 1 (B)
12. Credit Agreement, National Canada Finance Corp., Amendment No. 1 (B)
13. Letter agreements dated, respectively, May 1, 1995, May 1, 1995, and
May 4, 1995, with Joseph M. Lobozzo II, a Director, Chairman of the
Board of Directors and controlling person of the Registrant, relative
to providing a commitment to advance up to $400,000 of the Overadvance
Facility provided by National Canada Finance Corp., and granting a
stock option to Joseph M. Lobozzo II. (B)
Item 8. Change in fiscal year
Not Applicable
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.
Delta Computec Inc.
Registrant
Date: March 20, 1996 By: /s/ Frank J. Donnelly
Frank J. Donnelly, Chief Financial Officer
Pro-Forma Financial Information
Delta Computec Inc. (The Registrant), announced that on March 8, 1996, its
wholly-owned subsidiary Delta Data Net, Inc. (Data Net), terminated its business
operations.
The financial information presented below gives effect to the exclusion of
Data Net's assets, liabilities and shareholder's deficit, as well as its
operating loss, from the Company's unaudited financial statements as at and for
the year ended October 31, 1995.
DELTA COMPUTEC, INC.
Pro-Forma Balance Sheet
As at October 31, 1995
-----------------------------------
10/31/95 Pro-Forma 10/31/95
Unaudited Adjustments Pro-Forma
--------- ----------- ---------
Current Assets:
Cash 30,147 112,650 142,797
Accounts receivable 5,618,217 (2,614,907) 3,003,310
Inventories 1,968,089 (780,686) 1,187,403
Prepaid expenses and other
current assets 244,836 (1,458) 243,378
Deferred income taxes
current 100,000 (76,000) 24,000
---------- ---------- ----------
Total current assets 7,961,289 (3,360,401) 4,600,888
Field Spare Parts:
net of accumulated
amortization 2,381,134 2,381,134
Property And Equipment:
Technical equipment 1,413,162 (111,394) 1,301,768
Office furniture and
equipment 1,422,293 (870,574) 551,719
Vehicles 154,661 (80,047) 74,614
Leasehold improvements 283,121 (221,068) 62,053
Software 112,736 (39,778) 72,958
---------- ---------- ----------
Total Property and
Equipment 3,385,973 (1,322,861) 2,063,112
Less: accumulated
depreciation (2,408,696) 618,702 (1,789,994)
---------- ---------- ----------
Total Fixed Assets 977,277 (704,159) 273,118
Deferred Income Taxes Noncurrent 610,236 (185,937) 424,299
Other Assets:
Goodwill 774,591 (30,787) 743,804
Customer lists 142,401 142,401
Other assets 62,201 136,649 198,850
---------- ---------- ----------
Total Other Assets 979,193 105,862 1,085,055
Total Assets 12,909,129 (4,144,635) 8,764,494
========== ========== =========
Current Liabilities:
Accounts payable 201,841 201,841
Accounts payable 3,411,661 (1,668,331) 1,743,330
Deferred service revenue 1,573,966 1,573,966
Accrued expenses: 0
Payroll and payroll taxes 423,762 (219,431) 204,331
Interest 21,800 21,800
Other 196,249 (16,069) 180,180
---------- ---------- ----------
Total current
liabilities 5,829,278 (1,903,831) 3,925,447
Long-Term Debt - Bank 3,782,956 (2,052,145) 1,730,811
Earnings per Common and Common 602,639 602,639
Equivalent Shares
Net Earnings (Loss) 1,075,001 1,075,001
Stockholders' Investment:
Common stock 68,116 68,116
Additional paid-in capital 4,916,093 (976,235) 3,939,858
Accumulated deficit (3,364,954) 787,576 (2,577,378)
---------- ---------- ----------
Total stockholders'
investment 1,619,255 (188,659) 1,430,596
Total Liabilities
& Equity 12,909,129 (4,144,635) 8,764,494
========== ========== =========
DELTA COMPUTEC, INC.
Pro-Forma Statement of Operations
For The Year Ended October 31, 1995
------------------------------------
10/31/95 Pro-Forma 10/31/95
Unaudited Adjustments Pro-Forma
--------- ----------- ---------
Revenue:
Services 13,494,558 (323,709) 13,170,849
Equipment 17,306,598 (13,284,828) 4,021,770
---------- ----------- ----------
Total Revenue 30,801,156 (13,608,537) 17,192,619
Cost and Expenses
Service Costs 10,969,323 (537,291) 10,432,032
Cost of Equipment 13,689,506 (10,227,018) 3,462,488
---------- ----------- ----------
Total Cost of Sales 24,658,829 (10,764,309) 13,894,520
Gross Margin 6,142,327 (2,844,228) 3,298,099
SG & A Expenses 6,615,896 (2,800,005) 3,815,891
---------- ----------- ----------
Operating Income (Loss) (473,570) (44,223) (517,793)
Other (Income) Expense 435,967 (295,868) 140,099
---------- ----------- ----------
Earnings Before Taxes (909,537) 251,645 (657,892)
Minority Interest Earnings 1,459 1,459
Income Taxes 642,764 (580,433) 62,331
---------- ----------- ----------
Net Earnings (1,550,842) 832,078 (718,764)
========== =========== ==========
Earnings per Common and
Common Equivalent Shares
Net Earnings (Loss) (0.23) (0.11)
Earnings per Common Share
Assuming Full Dilution
Net Earnings (Loss) (0.08) (0.04)
Number of Common and Common
Equivalent Shares 6,811,575 6,811,575
Number of Common Shares
Assuming Full Dilution 19,752,050 19,752,050
