SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) October 13, 1995
Mark Solutions, Inc.
(Exact name of Registrant as Specified in Charter)
Delaware 0-17118 12864481
(State or other jurisdiction (Commission (I.R.S. employer
of incorporation or organizaation) file number) identification no.)
87 Route 17 North, Maywood, New Jersey 07607
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 368-8118
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(Former name or former address, if changed since last report)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On October 13, 1995, Mark Solutions, Inc. (the Registrant") sold its
cosmetics business subsidiaries, Bar-Lor Cosmetics, Ltd., Bar-Lor South, Inc.
and Bar-Lor West, Inc. (collectively "Bar-Lor") to Alison Cosmetics, Inc.
("Alison") for $ 100,000 in cash pursuant to a stock purchase agreement dated
October 9, 1995. In addition Alison has agreed to prepay over two years
$15,000 in advances made by the Registrant to Bar-Lor. The Registrant had
previously announced its intention to dispose of Bar-Lor and the amount of the
purchase price was negotiated based on other third party indications of
interest during such solicitation period. Alan R. Steiner, the president of
each of the Bar-Lor entities, is a director, officer and 50% stockholder of
Alison.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(b) Pro Forma Financial Information.
Pro Forma Balance Sheet at June 30, 1995
Pro Forma Combined Statements of Operations for Year
Ended June 30, 1995
(c) Exhibits.
1. Stock Purchase Agreement dated October 9, 1995 between
Registrant, Alison Cosmetics, Inc. and Alan R. Steiner.
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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.
MARK SOLUTIONS, INC.
October 27, 1995 By: /s/ CARL COPPOLA
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Carl Coppola, President
and Chief Executive
Officer
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MARK SOLUTIONS, INC.
PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements give
effect to the sale of the Registrant's cosmetics business as set forth in Note
(1) and (2) hereof. These unaudited financial statements should be read in
conjunction with the Registrant's consolidated financial statements and notes
thereto. These pro forma financial statements are not necessarily indicative of
the results that would have been reported had such events actually occurred on
the dates specified, nor are they indicative of the Registrant's future results.
Mark Solutions, Inc. and Subsidiaries
Pro Forma Combined Balance Sheet at June 30, 1995
Historical Pro Forma
------------------------- ----------------------
Adjustments
Mark and Disposition for Dispo-
Subsidiaries (1) sition (2) Combined
------------ ----------- ----------- --------
Assets
Cash and Restricted Cash $ 526,534 ($ 50,580) $ 100,000 $ 575,954
Accounts receivable, net 1,256,718 10,485 1,267,203
Inventories 594,383 (363,093) 231,290
Other 152,349 (5,251) 147,098
---------- --------- -----------
Total Current Assets 2,529,984 (408,439) 100,000 2,221,545
---------- --------- --------- -----------
Property and Equipment, net 351,990 ( 33,499) 318,491
---------- --------- -----------
Other Assets:
Cost in excess of net
assets of business
acquired, net 1,295,863 0 1,295,863
Other 55,861 (17,880) 37,981
---------- --------- -----------
Total Other Assets 1,351,724 (17,880) 1,333,844
---------- --------- -----------
Total Assets 4,233,698 (459,818) 100,000 3,873,880
========== ========= ========= ===========
Liabilities and
Stockholders Equity
Current Liabilities:
Accounts payable 1,911,421 (239,199) 1,672,222
Other 513,551 ( 16,116) 497,435
---------- --------- -----------
Total Current Liabilities 2,424,972 (255,315) 2,169,657
---------- --------- -----------
Other Liabilities:
Long-term debt excluding
current maturities 19,665 0 19,665
---------- --------- -----------
Stockholders' Equity:
Common Stock 117,347 0 117,347
Additional paid in capital 18,773,312 0 18,773,312
Retained earnings (deficit) (17,101,598) 0 (104,503) 17,206,101
---------- --------- --------- -----------
Total Stockholders' Equity 1,789,061 0 (104,503) 1,684,558
---------- --------- --------- -----------
Total Liabilities and
Stockholders' Equity $4,233,698 ($255,315) ($104,503) ($3,873,880)
========== ========= ========= ===========
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Mark Solutions, Inc. and Subsidiaries
Pro Forma Combined Statement of Operations for the
Year Ended June 30, 1995
Historical Pro Forma
------------------------- ----------------------
Adjustments
Mark and Disposition for Dispo-
Subsidiaries (1) sition (2) Combined
------------ ----------- ----------- --------
Revenues $ 7,043,507 ($ 917,934) $6,125,573
------------ ----------- ------------
Cost and Expenses:
Cost of sales 6,646,361 (670,388) 5,975,973
Selling, general and
administrative expenses 4,390,475 (518,083) 3,872,392
Adjustment of net assets
of business acquired 1,100,000 (1,100,000) 0
------------ ----------- ------------
Total Costs and Expenses 12,136,836 (2,288,471) 9,848,365
------------ ----------- ------------
Operating (Loss) (5,093,329) 1,370,537 (3,722,792)
Other Income (Expense) ( 96,744) 6,903 (104,503) (194,344)
------------ ----------- ---------- ------------
Net (Loss) ($ 5,190,073) $ 1,377,440 ($ 104,503) ($ 3,917,136)
============ =========== ========== ============
(Loss) per Share ($ 0.48) $ 0.13 ($ 0.01) ($ 0.36)
============ =========== ========== ============
Weighted Average Number
of Shares Outstanding 10,726,204 10,726,204 10,726,204 10,726,204
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(1) The unaudited combined pro forma balance sheet at June 30, 1995 gives effect
to the sale of the Registrant's cosmetic segment on October 13, 1995 as
though such sale occurred on June 30, 1995. The unaudited combined pro forma
statement of operations for the year ended June 30, 1995 gives effect to the
sale as though such sale occurred on July 1, 1994.
(2) Reflects the estimated proceeds and loss from the sale of Registrant's
cosmetics business.
Exhibit 1
AGREEMENT
AGREEMENT made this 9th day of October, 1995 by and between ALISON
COSMETICS, INC. ("Alison"), a New York Corporation with principal offices
located at 488 Lenox Avenue, New York, New York 10037, New York, New York, and
MARK SOLUTIONS, INC. ("Mark"), a Delaware corporation with principal offices
located at 87 Route 17 North, Maywood, New Jersey 07607.
WHEREAS, Mark is the owner of all of the issued and outstanding common
stock of Bar-Lor Cosmetics, Ltd. ("Bar-Lor"), Bar-Lor South, Inc. ("Bar-Lor
South") and Bar-Lor West, Inc. ("Bar-Lor West"), hereinafter collectively
called the "Bar-Lor Group," which companies operate as wholly owned
subsidiaries of Mark; and
WHEREAS, Mark is desirous of disposing of the Bar-Lor Group; and
WHEREAS, Alison is desirous of acquiring the Bar-Lor Group, including all
of the assets subject to assumption by Alison of all of the outstanding
liabilities.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. Purchase Price. At the Closing, as defined herein, Alison shall pay
to Mark the sum of One Hundred Thousand
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($100,000.00) Dollars in good federal funds in form of a certified check or
cashier's check made payable to Mark, and Mark shall deliver to Alison all of
the outstanding shares of common stock (the "Capital Stock") of each of
Bar-Lor, Bar-Lor South and Bar-Lor West together with duly executed stock
powers and signature guarantees.
2. Delivery of Books and Records. At the Closing, Mark shall deliver
to Alison all of the books and records of the Bar-Lor Group in Mark's
possession together with all resignations of Mark's representatives who
currently serve as officers and/or directors of the Bar-Lor Group.
3. Assumption of Liabilities. Alison agrees to assume all debts and
liabilities of the Bar-Lor Group, presently known or unknown as of the date of
this Agreement, and Alison agrees to pay and discharge all such debts and
liabilities subject to any adjustment as may be agreed upon by Alison and any
creditor. Alison further agrees, to observe, perform and fulfill the terms
and conditions of all lawful executory contracts, licenses, leases,
commitments and undertakings.
4. Indemnification. From and after the Closing Date and in the event
any claims are made upon Mark or any of its directors or officers, employees
or agents, which claims arise (i) from any failure by Alison to pay any
creditor; (ii) from any
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product liability claim in connection with the cosmetics sold and distributed
by the Bar-Lor Group; (iii) from any claim of patent or copyright infringement
by the Bar-Lor Group; (iv) from any claim against the Bar-Lor Group from any
governmental authority, either federal or state, including any taxing
authority arising from or out of the conduct of the Bar-Lor Group's business
prior to the date of Closing, then Alison shall indemnify and save and hold
Mark and any director, officer, employee or agent harmless from and against
all loss, cost, damage (including reasonable attorneys' fees) or other
expenses whatsoever arising out of or in connection with any of the foregoing
claims or in connection with any claims arising from any non-compliance with
any bulk transfer provisions of the relevant Uniform Commercial Code or any
related statutes as the same may be applied to the transfers contemplated by
this Agreement.
5. Claims. In the event a claim is made or a suit, action or
proceeding is commenced against Mark or its directors, officers, employees or
agents, and such claim or action, suit or proceeding is based on or arises out
of one of the enumerated claims contained in paragraph 4 above, then Mark
shall give prompt notice in writing to Alison of such claim or the institution
of any action, suit or proceeding before the earlier of (i) the thirtieth
(30th) day after receipt of such notice or the third (3rd) day before the date
of answer or similar response to an initiation of judicial proceedings is due.
If Alison fails to defend any such
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claim or action, suit or proceeding, then Mark upon written notice to Alison
shall have the right to undertake at Alison's expense the defense compromise
or settlement of such claim subject to the right of Alison to assume the
defense of such claim at any time prior to settlement compromise or final
determination thereof. In the event Mark is required to defend the action
suit of proceedings, Mark shall not compromise or settle the action, suit or
proceedings without Alison's prior written consent. Alison shall not be
liable for any indemnification of any settlement or compromise of any such
action or proceeding effected without its written consent but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action or proceeding, Alison shall indemnify and hold harmless Mark, its
officers, directors, agents and employees for such loss or liability by reason
of such settlement or judgment including reasonable attorneys' fees.
6. Assets. Alison acknowledges that its purchase of all of the issued
and outstanding Capital Stock of the Bar-Lor Group confers to Alison control
of all of the assets of the Bar-Lor Group. Alison further acknowledges that
it has examined and has had full opportunity to examine all of the books,
records, files, financial statements, physical inventions, fixed assets and
other assets of the Bar-Lor Group and is fully familiar therewith and is not
relying on any written or oral representations, promises or warranties of Mark
with respect to any of the foregoing. Mark disclaims any and all
representations promises or warranties
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reflecting the financial condition, assets, liabilities or any other
circumstances respecting the Bar-Lor Group.
7. Closing. The closing of this Agreement including the delivery of
the Capital Stock, payment by Mark, the assumption of the Bar-Lor liabilities
by Alison and delivery of corporate books and records and resignations shall
be held at the offices of McLaughlin & Stern, LLP, 380 Lexington Avenue, New
York, New York at 1:00 o'clock on October 10, 1995.
8. Representations of Mark. Mark represents and warrants to Alison as
follows, (with regards to (a) (b) and (c) below such warranties are based on
the representations contained in section 10 hereof):
(a) Mark owns all of the issued and outstanding capital stock of
Bar-Lor, Bar-Lor South and Bar-Lor West.
(b) The capital stock of Bar-Lor, Bar-Lor South and Bar-Lor West owned
by Mark represents all of the issued and outstanding shares of the respective
entities and there exists no encumbrance or other restriction prohibiting any
transfer by Mark.
(c) Each of the entities comprising the Bar-Lor Group are corporations
duly organized, validly existing and in good standing under the laws of their
respective states of incorporation and are entitled to carry on their
respective businesses and to own or lease their properties and in the places
where such businesses are now conducted and such properties are now owned,
leased or
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operated. Each of the entities are duly qualified to do business in
each state in which the nature of their respective assets and the conduct of
their respective businesses require them to be qualified to do business.
(d) Mark has obtained requisite authority from Mark's Board of Directors
and its stockholders to authorize, adopt and approve this Agreement and the
transactions contemplated hereby.
(e) Neither the execution and delivery of this Agreement and delivery of
the Capital Stock will require the consent or approval of other action by way
of governmental agency or body or any other entity or person nor will such
execution and delivery and consummation of this Agreement violate any
provision of any state or local ordinance or conflict with or result in any
breach of any of the terms, conditions or provisions of, or constitute a
default under or result in the creation of any lien, charge or encumbrance
upon any of the properties or assets of the Bar-Lor Group pursuant to Mark's
corporate charter or by laws or any indenture, lease, mortgage, deed of trust,
loan agreement or any other instrument to which Mark is a party or may be
otherwise bound or effected.
(f) This Agreement and any other documents to be executed and delivered
by Mark in accordance herewith will constitute valid and binding obligations
of Mark enforceable in accordance with their terms.
9. Representations of Alison. Alison represents and warrants to Mark:
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(a) Alison is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Alison has received requisite authorization for the adoption and
approval of this Agreement and the transactions contemplated hereby.
(c) Alison is not relying on any representations or provisions of any
kind whatsoever by Mark to enter into this Agreement or to purchase the
Capital Stock of the Bar-Lor Group.
(d) This Agreement and any other instruments to be executed and
delivered by Alison in accordance herewith will constitute valid and binding
obligations of Alison enforceable in accordance with their terms.
10. Representations of Alan R. Steiner. Alan R. Steiner ("Steiner")
represents and warrants to Mark and to Alison:
(a) Steiner is the President of the Bar-Lor Group and is the former
President of the Bar-Lor Group's parent Corporation "Showcase Cosmetics, Inc."
through November 10, 1993, the effective date of the reorganization of Mark
and the Bar-Lor Group.
(b) Immediately preceding the consummation of the reorganization,
Showcase Cosmetics, Inc. owned all of the outstanding stock of Bar-Lor,
Bar-Lor South and Bar-Lor West.
(c) Steiner is a shareholder and officer of Alison and is fully aware of
all operations and actions of the Bar-Lor Group both before and since the
reorganization.
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(d) Bar-Lor, Bar-Lor West and Bar-Lor South are corporations duly
organized and validly existing and in good standing under the laws of their
respective states of incorporation.
11. Conditions to Closing as to Alison. The obligations of Alison to
purchase all of the Capital Stock of the Bar-Lor Group and to assume all
liabilities of the Bar-Lor Group is subject to the following conditions:
(a) Mark will have delivered to Alison on the date of the Closing an
opinion of counsel to the effect that (i) Mark is in good standing under the
laws of the State of Delaware; (ii) Mark has all requisite authority from its
Board of Directors and its stockholders to enter into this Agreement and the
transaction contemplated hereby; (iii) that their exists no encumbrance or
other restrictions prohibiting the transfer of the Capital Stock and (iv) that
since the reorganization on November 10, 1993 no Capital Stock of the Bar-Lor
Group has been issued.
(b) Mark will have delivered to Alison copies of all corporate
resolutions or other corporate action of Mark's Board of Directors and its
stockholders authorizing approval of this Agreement and the transactions
contemplated hereby, certified by Mark's Secretary as duly adopted and in full
force and effect.
12. Conditions of Closing as to Mark. The obligations of Mark to sell
to Alison all of the capital stock of the Bar-Lor Group is subject to the
following conditions:
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(a) Alison will have delivered to counsel for Mark on the date of the
Closing an opinion of counsel to the effect that (I) Alison is in good
standing under the laws of the State of New York; and (ii) that Alison has all
requisite authority from its Board of Directors to enter into this Agreement
and the transactions contemplated hereby.
(b) Alison will have delivered to Mark copies of all corporate
resolutions authorizing approval of this Agreement and the transactions
contemplated hereby, certified by Alison's Secretary as duly adopted and in
full force and effect.
13. Availability of Equitable Remedies. Since a breach of the
provisions of this Agreement could not fully and adequately be compensated by
money damages, any party shall be entitled, either before or after the
Closing, in addition to any other right or remedy available to it, to an
injunction restraining the breach or threatened breach and to specific
performance of any provision of this Agreement, and, in either case, no bond
or other security shall be required in connection therewith.
14. Survival. The covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement by each party shall
survive the Closing for 12 months.
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15. Entire Agreement; Modification. This Agreement sets forth the
entire understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements among them concerning the subject matter,
and may be modified only by a written instrument duly executed by each party.
16. Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed given when mailed
by certified mail, return receipt requested, or personally delivered to the
party to whom it is to be given, at the following addresses:
In the case of Alison to:
Izak Meger
488 Lenox Ave.
New York, NY 10037
Richard J. Blumberg, Esq.
McLaughlin & Stern, LLP
Counsel to Alison Cosmetics, Inc.
380 Lexington Ave.
New York, NY 10168
In the case of Mark to:
Carl Coppola
Mark Solutions, Inc.
87 Route 17 North
Maywood, NJ 07607
Timothy McCartney, Esq.
Counsel to Mark Solutions, Inc.
11 Ardsley Court
Newtown, PA 18940
17. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
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18. Counterparts; Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to conflict of laws.
19. Attorneys' Fees. In the event any action is commenced to enforce
the terms hereof, the prevailing party shall be entitled to an award of
reasonable attorney's fees and costs incurred, which shall include those
attorneys fees and costs incurred in any appeal and/or collection of judgment.
Each party shall bear its own costs and expenses, including attorney's fees,
in connection with this Agreement, if the transaction contemplated hereby is
not consummated.
IN WITNESS WHEREOF, the parties have caused their respective officers
thereunto duly authorized to execute this Agreement as of the day and year
first above written.
MARK SOLUTIONS, INC.
By: /s/ Carl Coppola
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Carl Coppola, President
ALISON COSMETICS, INC.
By: /s/ Izak Meger
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Izak Meger, President
By: /s/ Alan R. Steiner
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Alan R. Steiner
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