SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Under to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 30, 1995
Commission File Number: 1-10013
Larson Davis Incorporated
(Exact Name of Registrant as Specified in its Charter)
Nevada 87-0429944
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1681 West 820 North, Provo, Utah 84601
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(801) 375-0177
N/A
(Former name, former address, and formal fiscal year, if changed since
last report)
Page 1 of 3 consecutively numbered pages.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Larson Davis Incorporated (the "Company") has reached an agreement in
principle with Harris Miller Miller & Hanson, Inc. ("HMMH"), an
established consulting firm, to license its proprietary Airport Noise
and Operations Monitoring Software ("ANOMS") and to transfer
management of certain airport noise monitoring contracts to HMMH. The
agreement is subject to the negotiation and execution of definitive
documents, and there is no assurance that it will be completed.
The current proposed terms provide for the payment to the Company of a
royalty fee on execution of the final agreement of $125,000, $150,000
in guaranteed annual royalties for a ten-year period (an aggregate of
$1,500,000), and a varying royalty of 2.5% to 4% on the gross revenues
of HMMH from the sale, installation, upgrade, and maintenance of
airport noise monitoring systems. HMMH will use its best efforts to
include the Company's hardware in its future proposals for airport
noise monitoring systems and the Company will agree to provide such
equipment at a 25% discount. HMMH will have the right to purchase all
of the Company's rights to the ANOMS software and under the agreement
at a predetermined price $3,000,000, $2,200,000, $1,700,000, and
$875,000, respectively, on the three, five, seven, and ten year
anniversaries of the agreement and at the end of fifteen years will
have a royalty free license to continue to use the ANOMS software.
The Company does not anticipate that the proposed transaction will
have a material effect on its balance sheet, although it will impact
its results of operations. Installing and maintaining airport noise
monitoring systems provided approximately $1,700,000 in gross revenues
to the Company for the nine months ended March 31, 1995, with
associated expenses of approximately $1,775,000 or a loss of
approximately $75,000. If the proposed transaction had been completed
at the beginning of the nine month period and HMMH had been awarded
and completed the same work as the Company during this period, of
which there can be no assurance, the Company would have had revenues
of approximately $620,000 (excluding the one-time payment of the
$125,000 royalty fee) with associated expenses of approximately
$490,000, for a profit of approximately $130,000.
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HMMH is a consulting firm established in 1981 by experienced
acoustical engineers that has focused its business on interpreting
airport noise regulations and establishing specifications for the
hardware and software airports needed to monitor sound levels and
other environmental occurrences at the airport and in surrounding
communities. HMMH established the specifications for a number of
airports at which the Company's systems are installed and provides
consulting work to the Federal Aviation Administration (the "FAA").
The Company believes that HMMH has a strong marketing advantage in the
airport industry because of its established reputation, experience,
and long association with airport administrators.
The Company acquired the ANOMS Software from Technology Integration
Incorporated ("TII") during the year ended June 30, 1994. Certain
former key employees of TII became employees of the Company, and it is
anticipated that they will become employees of HMMH if the proposed
transaction is completed. The Company operated this division under
the name Larson Davis Systems. The Company currently has
approximately 16 completed or in-process airport contracts that will
be subject to the agreement with HMMH, if the transaction is
consummated.
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange of 1934, as amended, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: July 13, 1995 LARSON DAVIS INCORPORATED
By /s/ Dan J. Johnson
Dan J. Johnson, Vice-President
Secretary/Treasurer
(Principal Financial and
Accounting Officer)
