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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
AMENDMENT NO. 1 ON
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 27, 1995
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Alpharel, Inc.
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(Exact name of registrant as specified in charter)
California 0-15935 95-3634089
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(State or other jurisdiction of (Commission file number) (IRS employer
incorporation) identification no.)
9339 Carroll Park Drive, San Diego, California 92121
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (619) 625-3000
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Not applicable
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(Former name or former address, if changed since last report)
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EXPLANATORY NOTE
On December 27, 1995, Alpharel, Inc., a California corporation (the
"Company"), acquired all of the outstanding stock of Trimco Group plc, a United
Kingdom company ("Trimco"). The Company's Current Report on Form 8-K dated
December 27, 1995 (the "Form 8-K") was filed with the Securities and Exchange
Commission on January 10, 1996 to report the completion of such transaction.
This Amendment No. 1 on Form 8-K/A is being filed in order to provide the pro
forma financial information required under Item No. 7 that was unavailable at
the time of the filing of the Form 8-K. Except as specifically amended by this
Form 8-K/A, the Form 8-K shall remain unchanged.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired:
AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF TRIMCO GROUP, PLC:
Consolidated Profit and Loss Account for the years ended June 30, 1994
and 1993 (1)
Consolidated Balance Sheets at June 30, 1994 and 1993 (1)
Consolidated Statement of Total Recognized Gains and Losses for the
years ended June 30, 1994 and 1993 (1)
Consolidated Cash Flow Statement for the years ended June 30, 1994 and
1993 (1)
Notes to the Accounts for the year ended June 30, 1994 (1)
Auditors Report to the Members of Trimco Group, plc (1)
Consolidated Profit and Loss Account for the years ended June 30, 1995
and 1994 (1)
Consolidated Balance Sheets at June 30, 1995 and 1994 (1)
Consolidated Statement of Total Recognized Gains and Losses for the
years ended June 30, 1995 and 1994 (1)
Consolidated Cash Flow Statement for the years ended June 30, 1995 and
1994 (1)
Notes to the Accounts for the year ended June 30, 1995 (1)
Auditors Report to the Members of Trimco Group, plc (1)
Report of the Auditors to the Directors of Trimco Group, plc (2)
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF TRIMCO GROUP, PLC (3):
Consolidated Profit and Loss Account for the three months ended
September 30, 1995
Consolidated Balance Sheet at September 30, 1995
Consolidated Cash Flow Statement for the three months ended
September 30, 1995
Notes to the Accounts for the three months ended September 30, 1995
(b) Unaudited Pro Forma Financial Information (4):
Pro Forma Consolidated Balance Sheet as of September 30, 1995
Pro Forma Consolidated Statement of Operations for the year ended
December 31, 1994
Pro Forma Consolidated Statement of Operations for the nine months
ended September 30, 1995
Notes to Pro Forma Consolidated Financial Statements
2
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(c) EXHIBITS:
2.1 Purchase and Sale Agreement dated December 27, 1995 by and
between the Company, Mr. Tanna and the shareholders of
Trimco Group, plc (filed as Exhibit 2.1 to the Company's
Current Report on Form 8-K dated December 27, 1995 and
incorporated herein by this reference).
2.2 Convertible Loan Note dated December 27, 1995 issued by the
Company (filed as Exhibit 2.2 to the Company's Current
Report on Form 8-K dated December 27, 1995 and incorporated
herein by this reference).
4.1 Certificate of Determination of the Series B Convertible
Preferred Stock (filed as Exhibit 4.1 to the Company's
Current Report on Form 8-K dated December 27, 1995 and
incorporated herein by this reference).
4.2 Convertible Preferred Stock Purchase Agreement dated
December 20, 1995 by and between the Company and Newsun
Limited (filed as Exhibit 4.2 to the Company's Current
Report on Form 8-K dated December 27, 1995 and incorporated
herein by this reference).
4.3 Convertible Preferred Stock Purchase Agreement dated
December 20, 1995 by and between the Company and THC, Inc.
(filed as Exhibit 4.3 to the Company's Current Report on
Form 8-K dated December 27, 1995 and incorporated herein by
this reference).
4.4 Form of Certificate representing the Series B Convertible
Preferred Stock (filed as Exhibit 4.4 to the Company's
Current Report on Form 8-K dated December 27, 1995 and
incorporated herein by this reference).
4.5 Letter Agreement dated January 2, 1996 by and among the
Company, Newsun Limited and THC, Inc. (filed as Exhibit 4.5
to the Company's Current Report on Form 8-K dated December
27, 1995 and incorporated herein by this reference).
23.1 Consent of Independent Accountants.
____________________
(1) Filed as Exhibit 99.1 to the Company's Current Report on
Form 8-K dated November 20, 1995 and incorporated herein by
this reference.
(2) Attached as page F-1 to the Company's Current Report on Form
8-K dated December 27, 1995 and incorporated herein by this
reference.
(3) Attached as pages F-2 through F-5 to the Company's Current
Report on Form 8-K dated December 27, 1995 and incorporated
herein by this reference.
(4) Attached hereto as pages F-1 through F-5.
3
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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.
Date: March 8, 1996
ALPHAREL, INC.
By: /S/ JOHN W. LOW
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John W. Low, Chief Financial
Officer
4
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ALPHAREL AND TRIMCO GROUP PLC
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Unaudited pro forma consolidated balance sheet at September 30, 1995 and pro
forma consolidated statements of operation for the year ended December 31,
1994 and the nine months ended as of September 30, 1995.
F-1
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ALPHAREL, INC. AND TRIMCO GROUP PLC
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1995
(in thousands)
<TABLE>
<CAPTION>
Pro Forma Consolidated
Alpharel Trimco Adjustments Total
-------- ------ ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and short-term investments $ 2,696 $ 168 $ 2,864
Receivables 3,559 2,244 5,803
Inventory 405 117 522
Other current assets 564 55 619
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Total current assets 7,224 2,584 9,808
Property and equipment, net 935 980 1,915
Computer software, net 1,923 $ 1,288 (a) 2,648
(563)(b)
Goodwill, net - - 4,175 (a) 3,132
(1,043)(c)
Other assets 1,026 - 1,026
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Total assets $ 11,108 $3,564 $ 3,857 $ 18,529
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 1,032 $1,160 $ 2,192
Accrued liabilities 858 927 $2,873 (a)(d) 4,658
Payable to Trimco shareholders - - 6,601 (a) 6,601
Payable to former Optigraphics
shareholders 1,634 - 1,634
Deferred revenue 255 419 674
Current portion of note payable 200 - 200
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Total current liabilities 3,979 2,506 15,959
Long-term notes payable 500 - 1,000 (a) 1,500
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Total liabilities 4,479 2,506 17,459
Commitments and contingencies
Shareholders' equity
Capital stock 43,193 586 5,979 (a) 49,758
Retained earnings (deficit) (36,564) 472 (12,596)(a)-(d) (48,688)
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Total shareholders' equity 6,629 1,058 1,070
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Total shareholders' equity and
liabilities $ 11,108 $3,564 $ 3,857 $ 18,529
-------- ------ -------- --------
-------- ------ -------- --------
</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements
F-2
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ALPHAREL, INC. AND TRIMCO GROUP PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(in thousands)
<TABLE>
<CAPTION>
Pro Forma Consolidated
Alpharel Trimco Adjustments Total
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<S> <C> <C> <C> <C>
Revenue $9,629 $7,017 $16,646
Cost of revenue 4,390 1,967 $ 241 (b) 6,598
Operating expenses 4,377 4,771 447 (c) 9,595
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Income from operations 862 279 453
Interest income 101 8 109
Interest expense (82) (23) (52)(d) (157)
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Net income from operations
before taxes 881 264 405
Tax expense - 92 92
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Net income $ 881 $ 172 $ 313
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Net income per share $ .02
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Weighted average shares 16,079
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</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements
F-3
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ALPHAREL, INC. AND TRIMCO GROUP PLC
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1994
(in thousands)
<TABLE>
<CAPTION>
Pro Forma Consolidated
Alpharel Trimco Adjustments Total
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<S> <C> <C> <C> <C>
Revenue $9,547 $6,758 $ 16,305
Cost of revenue 4,822 2,398 322 (b) 7,542
Operating expenses 4,542 4,343 596 (c) 9,481
Charge for purchased R&D - - 10,595 (a) 10,595
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Income (loss) from operations 183 17 (11,313)
Interest income 207 5 212
Interest expense (115) (26) (70)(d) (211)
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Net income (loss) from operations
before taxes 275 (4) (11,312)
Tax expense - - -
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Net income (loss) $ 275 $ (4) $(11,312)
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Net income (loss) per share $ (.72)
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Weighted average shares 15,698
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</TABLE>
See accompanying notes to unaudited pro forma consolidated financial statements
F-4
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ALPHAREL, INC. AND TRIMCO GROUP PLC
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
(a) Adjustment reflects the purchase of Trimco Group plc pursuant to a Sale
and Purchase Agreement dated as of December 27, 1995 by and among
the Company, Mr. Jay Tanna and the shareholders and optionholders of
Trimco (the "Agreement"). Pursuant to the Agreement, the Company
acquired the Trimco shares for an aggregate purchase price of
$14,165,000 before acquisition costs which was comprised of
$5,550,000 cash, 1,614,189 shares of Alpharel common stock, a
convertible promissory note having a total principal amount of
$1,000,000 due September 27, 1996 and a bonus paid to employees in
connection with the acquisition, comprising cash of $1,047,000 and
100,599 shares of Alpharel common stock. Acquisition costs to be
incurred by Alpharel are estimated to be $630,000. The adjustment,
assumed effective Janaury 1, 1994 for purposes of the pro forma
consolidated financial statements, reflects expensing $10,595,000
of the purchase price as purchased research and development in
accordance with "Accounting and Research and Development Costs,"
Statement of Financial Accounting Standards No. 2.
The Company capitalized $1,288,000 related to existing Trimco software
technology acquired. For purposes of the pro forma financial statements,
the technology was assumed to have a useful estimated life of four
years.
The excess of the purchase price over the fair value of the net assets
acquired after the research and development expense totals $4,175,000
and is recorded as goodwill.
(b) Reflects amortization of Trimco's existing software technology acquired
over its useful life of four years.
(c) Reflects amortization of goodwill over its useful life of seven years.
(d) Reflects interest expense associated with notes issued at 7% annual
interest rate in connection with the acquisition. (See (a) above.)
(e) The pro forma adjustments do not include any charges associated with
the write down of Alpharel's assets to net realizable value.
F-5
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2.1 Purchase and Sale Agreement dated December 27, 1995 by and
between the Company and, Mr. Tanna and the shareholders of Trimco
Group, plc (filed as Exhibit 2.1 to the Company's Current Report
on Form 8-K dated December 27, 1995 and incorporated herein by
this reference).
2.2 Convertible Loan Note dated December 27, 1995 issued by the
Company (filed as Exhibit 2.2 to the Company's Current Report on
Form 8-K dated December 27, 1995 and incorporated herein by this
reference).
4.1 Certificate of Determination of the Series B Convertible
Preferred Stock (filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K dated December 27, 1995 and incorporated
herein by this reference).
4.2 Convertible Preferred Stock Purchase Agreement dated December 20,
1995 by and between the Company and Newsun Limited (filed as
Exhibit 4.2 to the Company's Current Report on Form 8-K dated
December 27, 1995 and incorporated herein by this reference).
4.3 Convertible Preferred Stock Purchase Agreement dated December 20,
1995 by and between the Company and THC, Inc. (filed as
Exhibit 4.3 to the Company's Current Report on Form 8-K dated
December 27, 1995 and incorporated herein by this reference).
4.4 Form of Certificate representing the Series B Convertible
Preferred Stock (filed as Exhibit 4.4 to the Company's Current
Report on Form 8-K dated December 27, 1995 and incorporated
herein by this reference).
4.5 Letter Agreement dated January 2, 1996 by and among the Company,
Newsun Limited and THC, Inc. (filed as Exhibit 4.5 to the
Company's Current Report on Form 8-K dated December 27, 1995 and
incorporated herein by this reference).
23.1 Consent of Independent Accountants.
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CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our reports dated 17 January
1994, 3 January 1995, 17 November 1995 and 22 December 1995 related to the
consolidated financial statements of Trimco Group PLC in the Current Report on
Form 8-K of Alpharel Inc., and the incorporation by reference of such reports
into Alpharel Inc.'s Registration Statement on Form S-3 (Registration No.
33-43223), and into Alpharel Inc.'s Registration Statements on Form S-8
(Registration Nos. 33-43451, 33-77224 and 33-63330).
GANE JACKSON SCOTT
Chartered Accountants
LONDON
8 March 1996
Exhibit 23.1
