<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) December 8, 1995
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SECTOR ASSOCIATES, LTD.
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(Exact name of registrant as specified in its charter)
Delaware 017827 11-2788282
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
2343 West 76th Street, Hialeah, Florida 33016
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (305) 823-0269
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(b) Pro forma Financial Information required under Item 2.
Acquisition or Disposition of Assets.
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ITEM 7. (b)
On September 20, 1995, the Company entered into an Agreement and Plan of
Reorganization ("Agreement") pursuant to which the Company agreed to acquire
100% of the issued and outstanding stock of Viragen (Scotland) Limited, a
Scottish private limited company ("VSL"), in exchange for the distribution to
Viragen, Inc. ("Viragen"), the sole stockholder of VSL, of newly-issued shares
of convertible preferred stock that upon conversion will represent 78,400,000
shares of Common Stock of the Company representing 94% of the outstanding
capital stock interest of the Company.
On November 8, 1995, the Company, VSL, and Viragen entered into an
Amendment to Agreement and Plan of Reorganization (the "Amendment") to extend
the Closing Date to December 8, 1995. Additionally, the Amendment provided for
an interim loan of $500,000 to VSL which is to be deemed satisfied at the
Closing. The Amendment also provided for an additional cash contribution of
$300,000 by the Company, to be contributed prior to the closing.
On December 8, 1995, the transactions contemplated by the Agreement and
Amendment occurred with all consideration being paid by the parties. As the
shareholders of VSL gained voting control of Sector in this transaction, VSL
became the acquiring entity. Accordingly, the acquisition of VSL was accounted
for as a reverse acquisition. The Statement of Operations for the six months
ended December 31, 1995 reflects the activities of VSL for those periods as
well as the operations of Sector from the acquisition date to December 31,
1995.
The following pro forma financial statements reflect (i) the issuance of
2,000,000 shares of Series B Convertible Preferred Stock which upon conversion
will represent 78,400,000 shares of Common Stock of the Company representing
approximately 94% of the then outstanding equity in the Company (ii) the
cancellation of the Secured Promissory Note for $500,000 described above; and
(iii) an additional $300,000 contribution to capital.
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SECTOR ASSOCIATES, LTD.
PRO FORMA CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SECTOR VIRAGEN
ASSOCIATES (SCOTLAND) ADJUSTMENTS/
LTD. LTD. ELIMINATIONS CONSOLIDATED
---------- ---------- ------------ ------------
ASSETS
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 74,229 $817,707 $891,936
Due from affiliates 5,100 5,100
Advance to Viragen
(Scotland) Ltd. 800,000 (800,000) -
-------- -------- --------- --------
TOTAL CURRENT ASSETS 879,329 817,707 (800,000) 897,036
OTHER ASSETS
Deferred Expenses - 6,936 6,936
-------- -------- --------- --------
TOTAL ASSETS $879,329 $824,643 $(800,000) $903,972
======== ======== ========= ========
</TABLE>
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SECTOR ASSOCIATES, LTD.
PRO FORMA CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SECTOR VIRAGEN
ASSOCIATES (SCOTLAND) ADJUSTMENTS/
LTD. LTD. ELIMINATIONS CONSOLIDATED
---------- ---------- ------------ ------------
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C> <C> <C>
Accounts payable and
accrued expenses $ 15,091 $ 3,559 $ $ 18,649
Due to affiliates 35,076 48,386 83,462
Due to Sector
Associates, Ltd. 800,000 (800,000) -
---------- -------- ------------ --------
Total Liabilities 50,167 851,945 (800,000) 102,111
STOCKHOLDERS' EQUITY
Common Stock, par value
$.10 per share, 50,000
shares authorized
5,037,617 shares issued
and outstanding 903,413 161 (399,803) 503,762
Convertible Preferred
Series B, par value
$.01 per share,
2,000,000 shares issued
and outstanding 20,000 20,000
Additional paid-in
capital 13,234,061 1,853 (12,890,460) 345,454
Accumulated earnings
(loss) (13,308,312) (29,316) 13,270,273 (67,355)
------------ -------- ------------ --------
Total Stockholders
Equity 829,162 (27,302) - 801,861
------------ -------- ------------ --------
Total Liabilities and
Stockholders' Equity $ 879,329 $824,634 $ (800,000) $903,972
============ ======== ============ ========
</TABLE>
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SECTOR ASSOCIATES, LTD.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE PERIOD JULY 1 THROUGH DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SECTOR VIRAGEN
ASSOCIATES (SCOTLAND) PROFORMA PRO-
LTD. LTD. ADJUSTMENTS FORMA
---------- ---------- ----------- -----
<S> <C> <C> <C> <C>
INTEREST INCOME $ 36 $ 2,249 $ $ 2,285
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TOTAL INCOME 36 2,249 - 2,285
OPERATING EXPENSES 38,075 32,191 - 70,266
-------- -------- ------- -----------
NET (LOSS) INCOME $(38,039) $(29,942) $ - $ (67,981)
======== ======== ======= ===========
LOSS PER COMMON SHARE
AND COMMON EQUIVALENT
SHARE $ -
===========
WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 84,437,617
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</TABLE>
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SECTOR ASSOCIATES, LTD.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FROM INCEPTION (MARCH 8, 1995) THROUGH JUNE 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SECTOR VIRAGEN
ASSOCIATES (SCOTLAND) PROFORMA PRO-
LTD. LTD. ADJUSTMENTS FORMA
---------- ---------- ----------- -----
<S> <C> <C> <C> <C>
INTEREST INCOME $ 1,637 $626 $ - $ 2,263
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TOTAL INCOME 1,637 626 - 2,263
OPERATING EXPENSES 139,781 - - 139,781
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NET (LOSS) INCOME $(138,143) $626 - $ (137,517)
========= ==== ===========
LOSS PER COMMON SHARE
AND COMMON EQUIVALENT
SHARE $ -
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WEIGHTED AVERAGE
COMMON AND COMMON
EQUIVALENT SHARES
OUTSTANDING 84,437,617
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</TABLE>
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SECTOR ASSOCIATES, LTD. AND SUBSIDIARY
NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - ACQUISITION - BASIS OF PRESENTATION
On September 20, 1995, Sector Associates, Ltd. ("Sector") entered into
an agreement and Plan of Reorganization (the "Agreement") with Viragen, Inc., a
Delaware corporation. Under the terms of the Agreement, Sector was to acquire
a 100% interest in Viragen (Scotland) Ltd. ("VSL"), in consideration for a 94%
interest in Sector.
On November 8, 1995, the Agreement was amended to provide for an
interim loan of $500,000 by Sector to VSL, the filing of certain financial
reports by Sector prior to closing, a capital contribution of $300,000 into
Sector within thirty days, and the modification of a related investment banking
agreement. The $500,000 loan was funded November 9, 1995, bearing interest at
4% per annum, secured by a 3.77% equity interest in VSL, and was guaranteed by
Viragen, Inc. Upon the closing of the Agreement on December 8, 1995, the
principal amount of the note was deemed contributed capital to Sector.
On December 8, 1995, Sector finalized the Agreement and acquired 100%
of the stock of VSL in exchange for 2,000,000 voting shares of Series B
Convertible Preferred Stock, convertible into 78,400,000 shares of common stock
or approximately 94% of the then issued and outstanding shares, as well as 94%
of the voting privileges, of Sector. As the Parent Company of VSL gained voting
control of Sector in this transaction, VSL became the acquiring entity and
accounting survivor. Accordingly, the acquisition was accounted for as a
reverse acquisition.
The proforma financial statements presented up to December 8, 1995
included herein reflect the financial position of the Company, as if the
reverse acquisition had been completed on July 1, 1995. Since at the time of
the acquisition the legal acquirer, Sector was a shell corporation with no
operations, the accumulated deficit of the conformed entity was recapitalized
into the additional paid-in capital account to reflect the capital structure of
the surviving legal entity, Sector, and the accumulated deficit of VSL.
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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.
SECTOR ASSOCIATES, LTD.
By:/s/Dennis W. Healey
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Executive Vice President
Chief Financial Officer
DATED: October 21, 1996
