SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) :June 27, 1994
SHARED TECHNOLOGIES INC. .
DELAWARE 0-17366 87-0424558 .
(State of other (Commission (I.R.S. Employer
Jurisdiction of incorporation) File Number Identification No.)
100 Great Meadow Road, Suite 104
Wethersfield, CT 06109 .
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-258-2400
Total number of sequentially numbered paged in this filing, including
exhibits hereto: 7
Item 2. Acquisition or Disposition of Assets.
On June 27, 1994, Shared Technologies Inc., ("STI" or the "Company"), completed
its previously announced acquisition of the partnership interests of Access
Telecommunication Group, L.P. ("Access") for $9,000,000, subject to certain
post-closing adjustments. The $9,000,000 was comprised of $4,000,000, paid at
closing, from the sale of approximately 1,063,000 shares of the Company's Common
Stock, $.004 par value, and the issuance to the sellers of certain shares of
Preferred Stock, as follows:
Series E Preferred Stock. STI issued 400,000 shares of Series E Preferred Stock,
par value $3.75 per share accounting for $1,500,000 of the purchase price, which
shares have the following features:
i) 8% coupon per annum, payable at STI's option
in cash or in STI Common Stock at the
conversion date or at redemption, if earlier.
ii) Redeemable in cash by STI at par on or before
December 31, 1994.
iii) If not redeemed, each share of Series E Preferred Stock
converts on January 1, 1995 to the number of shares of STI
Common Stock derived by dividing $3.75 by the lesser of $3.75
or the average daily closing bid price of the Common Stock for
the 30 trading days immediately preceding January 1, 1995.
Series F Preferred. STI also issued 700,000 shares of Series F Preferred Stock,
par value $5.00 per share accounting for $3,500,000 of the purchase price,
bearing no dividends but having the following features:
i) Redeemable in cash by STI at par through June
30, 1995.
ii) If not redeemed, each share of Series F
Preferred converts on July 1, 1995 to the
number of shares of STI $.004 Common Stock
derived by dividing the number 1 by a
fraction, the denominator of which is $5.00
and the numerator of which is 90% of the
average market price of STI Common Stock for
the 30 trading days prior to July 1, 1995.
Additionally at closing, STI issued Warrants to purchase 225,000 shares of STI
$.004 Common Stock exercisable at $4.25 per share for five years. If STI elects
to permit the Series E Preferred Stock to convert rather than to redeem the
same, then STI shall issue additional Warrants on the same terms and conditions
to purchase an additional 175,000 shares of STI Common Stock. Certain
registration rights are carried by the Series E and Series F Preferred shares
and the Warrants. There were no material relationships between the Company and
Access Telecommunication Group, L.P. as of the date of this agreement.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
(i) Audited consolidated balance sheets of Access
Telecommunication Group, L.P. ("Access") as of December 31,
1992 and 1991, and the related audited consolidated statements
of income and Partners'(Deficit) Equity, and cash flows for
the years ended December 31, 1992 and 1991, including the
notes thereto. Incorporated by reference from Exhibit 10.1 of
the Company's Form 8-K for June 27, 1994 filed on July 8,1994.
(ii) Audited consolidated balance sheets of Access
Telecommunication Group, L.P.("Access") as of December 31,1993
and 1992, and the related audited consolidated statements of
income and Partners'(Deficit) Equity, and cash flows for the
years ended December 31, 1993 and 1992, including the notes
thereto. Incorporated by reference from Exhibit 10.1 of the
Company's Form 8-K for June 27, 1994 filed on July 8,1994.
(iii)Unaudited consolidated balance sheets of Access
Telecommunication Group, L.P. ("Access") as of April 30, 1994
and April 30, 1993 and the related unaudited consolidated
statements of income, and cash flow for the periods ended
April 30,1994 and April 30, 1993.
(b) Pro forma financial information.
The required pro forma financial information will be filed as
soon as practicable and, in any event, within 60 days of the
date of the filing of this Current Report on Form 8-K.
(c) Exhibits.
Exhibit No. Description
10.1 Partnership Interests and
Share Purchase Agreement dated June 27, 1994.
Incorporated by reference from Exhibit 10.1
of the Company's Form 8-K for June 27, 1994
filed on July 8, 1994.
10.2 Accounts Security Agreement
dated June 27, 1994.Incorporated by
reference from Exhibit 10.1 of the
Company's Form 8-K for June 27, 1994 filed
on July 8,1994.
10.3 Pledge Agreement dated June
27, 1994. Incorporated by reference from
Exhibit 10.1 of the Company's Form 8-K for
June 27, 1994 filed on July 8,1994.
10.4 Registration Rights Agreement dated June 27,
1994.Incorporated by reference from Exhibit
10.1 of the Company's Form 8-K for June 27,
1994 filed on July 8,1994.
10.5 Form of Warrant dated June 1994. Incorporated
by reference from Exhibit 10.1 of the
Company's Form 8-K for June 27, 1994 filed on
July 8,1994.
10.6 Purchase Agreement between Shared
Technologies Inc. and International Capital
Partners, Inc. and others. Incorporated by
reference from Exhibit 10.11 of the Company's
Form 10K/A Amendment No. 1 for December 31,
1993. Incorporated by reference from Exhibit
10.1 of the Company's Form 8-K for June 27,
1994 filed on July 8, 1994.
10.7 Form of Common Stock Purchase Warrant.
Incorporated by reference from Exhibit 10.2
of the Company's Form 10K/A Amendment No. 1
for December 31, 1993. Incorporated by
reference from Exhibit 10.1 of the Company's
Form 8-K for June 27, 1994 filed on July 8,
1994.
<PAGE>
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.
SHARED TECHNOLOGIES INC.
Date: January 19, 1995 By: /s/ Vincent DiVincenzo
Vincent DiVincenzo
Senior Vice President-Finance
and Administration, Treasurer,
Chief Financial Officer
<PAGE>
<TABLE>
<CAPTION>
Access Communication
Balance Sheets
April 30, 1994 and 1993
(Unaudited)
<S> <C> <C>
April 30, 1994 April 30, 1993
---------------------------------------------
Current Assets:
Cash ($252,880 $43,104
Accounts receivable, less allowance for doubtful
accounts of $154,831 and $68,565 at April 30, 1994
and 1993 2,997,599 2,751,181
Lease receivable 103,562 214,824
Prepaid expense 8,527 3,760
Inventory 28,007 18,981
Other A/R 14,455 (10,000)
Total current assets 2,899,270 3,021,850
Property & Equipment
Property & Equipment 3,538,471 3,005,935
Accumulated depreciation (1,807,470) (1,554,948)
1,731,001 1,450,987
Other assets:
Intangible Assets 49,152 47,034
Lease receivable-long term 248,792 -
Other 2,956 12,890
Total other assets 300,900 59,924
Total assets $4,931,171 $4,532,761
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Access Communication
Balance Sheets
April 30, 1994 and 1993
(Unaudited)
<S> <C> <C>
April 30, 1994 April 30, 1993
----------------------------------------------
Current Liabilities:
Accounts payable $1,629,467 $1,772,317
Phone bills payable 791,822 1,018,220
Taxes payable 412,177 287,308
Current deferred revenue 295,772 340,449
Current capital lease obligations 468,075 277,003
Total current liabilities 3,597,313 3,695,297
Long Term Liabilities
Long term capital lease 883,712 634,149
Long term deferred revenue 97,999 96,710
Notes payable 79,755 78,207
Total long term liabilities 1,061,466 809,066
Equity
Retained earnings 67,538 (62,973)
Current year P&L 204,854 91,371
Total stockholders' equity 272,392 28,398
Total liabilities and stockholders' equit
$4,931,171 $4,532 ,761
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Access Communication
Income Statement
For the Four Months Ended
April 30, 1994 and 1993
(Unauduted)
<S> <C> <C>
April 30, 1994 April 30, 1993
--------------------------------------------
Revenue:
Shared tenant services $2,532,515 $2,079,769
System sales 768,948 1,397,938
Contract services 225,178 110,385
Accessplus 2,305,447 2,519,539
Total revenue 5,832,088 6,107,631
Cost of revenue:
Shared tenant services 1,471,811 1,308,822
System sales 548,919 1,221,931
Contract services 38,089 8,423
Accessplus 1,827,450 2,070,329
Miscellaneous cost of sales 10,795 14,506
Total cost of revenue 3,897,064 4,624,011
Gross margin 1,935,024 1,483,620
Selling, General & Administrative Expenses
Salaries & Related 821,239 693,334
Travel & related 15,801 18,320
General & administrative 643,657 469,215
Miscellaneous 319,801 273,975
Total Field S/G & A Expenses 1,800,498 1,454,844
Operating Income 134,526 27,776
Non-operating revenue $70,328 $62,595
Net Income $204,854 $91,371
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Access Communication
Statement of Cash Flows
For the Four Months Ended
April 30, 1994 and 1993
(unaudited)
<S> <C> <C>
April 30, 1994 April 30, 1993
-------------------------------------
Cash Flows from Operating Activities
Net Income $204,854 $91,371
Adjustments:
Depreciation & amortization 216,917 187,638
Provision for doubtful accounts 40,000 32,000
Change in Assets and Liabilities:
(Increase) decrease in accounts receivable 141,036 147,670
(Increase) decrease in prepaid expenses and inventories
(7,311) 923,430
Increase (decrease) in accounts payable and
accrued liabilities (729,682) (973,232)
Increase (decrease) in deferred revenue (51,095) 267,868
Net cash provided by operating activities (185,281) 676,745
Cash Flows from Investing Activities
Proceeds from disposals of equipment 174,623 116,250
Capital expenditures (199,139) (395,008)
Capitalization of organization costs 121 -
------------------------------------
Net cash used in investing activities (24,395) (278,758)
Cash Flows From Financing Activities
Payments received on sales-type leases 33,674 21,069
Payments received on note receivable 47,874
Payments on notes payable (387,441)
Payments on capital lease obligations (152,883) (180,548)
Net cash provided by (used in) financing activities
(119,209) (499,046)
Net decrease in cash (328,885) (101,059)
Cash, Beginning of Period 76,005 144,163
Cash, End of Period ($252,880) $43,104
</TABLE>
<PAGE>
Access Telecommunication Group, L.P.
Notes to Financial Statements
April 30, 1994 and 1993
(Unaudited)
1. Significant Accounting Policies
Organization and Basis of Presentation
Access Telecommunication Group, L.P. (Access Communication) was formed January
1, 1990, as a Texas limited partnership. The Partnership primarily provides
telecommunication services to tenants of office buildings. Telecommunication
services include provision of long distance, sales of telecommunication systems
and equipment, and management of telecommunication facilities and equipment. The
Partnership transacts a significant volume of business with entities that are
owned by the Trammell Crow Company, a related party.
Inventory
Inventory is carried at the lower of cost or market using the first-in,
first-out (FIFO) method.
Furniture and Equipment
Furniture and equipment include equipment leased under capital lease agreements
and are recorded at cost. Depreciation and amortization are computed using the
straight-line method over the lesser of the estimated useful lives of the assets
or the terms of the leases, generally from three to five years.
Revenue
Telecommunication revenues are recognized when customers use telecommunication
services. Sales of telecommunication equipment are recognized upon delivery to
the customer.
Income Taxes
The results of operations of Access are included in the income tax returns of
the respective partners; accordingly, no provision for income taxes is recorded
in the accompanying financial statements.
The Partnership's income tax returns are subject to examination by federal and
state taxing authorities. If such examinations result in changes to the
Partnership's income, the taxable income of the partners will be changed
accordingly.
<PAGE>
Access Telecommunication Group, L.P.
Notes to Financial Statements (continued)
2. Notes Payable
Notes payable consist of notes to two of the limited partners. These notes bear
interest at 7% per annum and are due in full, with accrued interest, on July 1,
1994.
3. Related Party Transactions
The Partnership provides telecommunications services to certain related parties,
including entities that are owned by the Trammell Crow Company.
4. Commitments
Under the terms of the Partnership's agreements with certain of its primary long
distance usage providers, Access is committed to purchase certain minimum usage
amounts each year from 1994 through 1997.
