<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): JUNE 24, 1997
ADVANTAGE MARKETING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
OKLAHOMA 33-80629 73-1323256
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2601 NORTHWEST EXPRESSWAY, SUITE 1210W
OKLAHOMA CITY, OKLAHOMA 73112-7293
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405) 842-0131
<PAGE>
ITEM 5. OTHER EVENTS
The Company completed the acquisition of all of the assets of Stay 'N Shape
International, Inc., Solution Products International, Inc., Nation of Winners,
Inc., and Now International, Inc. on April 16, 1997, as reported pursuant to
Form 8-K filed with the Commission on May 1, 1997. The Company has included
within this Report the unaudited consolidated balance sheet of the Company at
April 30, 1997 and unaudited consolidated statement of income for the four
months ended April 30, 1997, and unaudited notes to the consolidated financial
statements which appear at pages F-1 through F-3.
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.
ADVANTAGE MARKETING SYSTEMS, INC.
(Registrant)
By: /s/ ROGER P. BARESEL
------------------------------------
Roger P. Baresel, President
Date: June 24, 1997
2
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ADVANTAGE MARKETING SYSTEMS, INC.
(FORMERLY AMS, INC.) AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
APRIL 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
------
CURRENT ASSETS:
<S> <C>
Cash.............................................................. $ 861,473
Receivables - net of allowance of $25,804......................... 66,988
Receivable from stock transfer agent.............................. 27,888
Receivable from affiliate......................................... 13,304
Commission advances............................................... 26,957
Inventory......................................................... 442,028
Deferred income taxes............................................. 149,791
-----------
Total current assets.......................................... 1,588,429
COMMISSION ADVANCES............................................... 4,341
RECEIVABLES....................................................... 16,918
RECEIVABLE FROM AFFILIATE......................................... 50,286
PROPERTY AND EQUIPMENT, net of accumulated
depreciation of $358,035...................................... 432,961
GOODWILL, Net..................................................... 1,769,952
COVENANTS NOT TO COMPETE, Net..................................... 564,418
DEFERRED INCOME TAXES............................................. 314,810
OTHER ASSETS...................................................... 91,910
-----------
Total Assets.................................................. $ 4,834,025
===========
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
CURRENT LIABILITIES:
Accounts payable.................................................. $ 343,065
Accrued expenses.................................................. 383,815
Accrued promotion expense......................................... 11,065
Notes payable..................................................... 14,589
Capital lease obligations......................................... 81,844
-----------
Total current liabilities..................................... 834,378
LONG-TERM LIABILITIES:
Notes payable..................................................... 17,305
Capital lease obligations......................................... 244,677
-----------
TOTAL LIABILITIES................................................. 261,982
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock - $.0001 par value;
authorized 5,000,000 shares; none issued........................ --
Common stock - $.0001 par value; authorized 495,000,000 shares;
issued and outstanding 2,657,416................................ 266
Paid-in capital................................................... 4,740,343
Accumulated deficit............................................... (1,002,944)
-----------
Total stockholders' equity........................................ 3,737,665
-----------
Total liabilities and stockholders' equity.................... $ 4,834,025
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
F-1
<PAGE>
ADVANTAGE MARKETING SYSTEMS, INC.
(FORMERLY AMS, INC.) AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE FOUR MONTHS ENDED APRIL 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Net sales............................................. $2,794,427
Cost of sales......................................... 1,986,229
----------
Gross profit...................................... 808,198
Marketing, distribution and administrative expenses... 724,115
----------
Income from operations............................ 84,083
Other income (expense):
Interest, net......................................... (2,917)
Other income.......................................... 11,066
----------
Total other income (expense)...................... 8,149
----------
INCOME BEFORE TAXES................................... 92,232
INCOME TAX EXPENSE.................................... 35,011
----------
NET INCOME............................................ $ 57,221
==========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES (thousands)...................... 3,210
NET INCOME PER COMMON SHARE........................... $.02
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
F-2
<PAGE>
ADVANTAGE MARKETING SYSTEMS, INC.
(FORMERLY AMS, INC.) AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FOUR MONTHS ENDED APRIL 30, 1997
(UNAUDITED)
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted from these statements. The accompanying
financial statements and related notes should be read in conjunction with
the audited consolidated financial statements of the Company, and notes
thereto, for the fiscal year ended December 31, 1996.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the results of the interim periods presented. Operating
results of the interim period are not necessarily indicative of the amounts
that will be reported for the fiscal year ending December 31, 1997.
2. RECENT ACQUISITION
Pursuant to an Asset Purchase Agreement having an effective date of April
16, 1997 (the "Purchase Agreement"), Advantage Marketing Systems, Inc. (the
"Company") acquired all of the assets of Stay 'N Shape International, Inc.,
a Georgia corporation ("SSII"), Solution Products International, Inc., a
Georgia corporation ("SPII"), Nation of Winners, Inc., a Georgia
corporation ("NWI"), Now International, Inc., a Georgia corporation
("NII"), (collectively SSII, SPII, NWI and NII are referred to as the
"Selling Group"), free and clear of any lien, charge, claim, pledge,
security interest or other encumbrance of any type or kind whatsoever,
known or unknown (the "SSII Asset Purchase"). The SSII Asset Purchase was
closed on April 16, 1997. The SSII Asset Purchase has been accounted for
under the purchase method of accounting. Each company in the Selling Group
is a network marketer of various third-party manufactured nutritional
supplements and was under common ownership.
Pursuant to the Asset Purchase Agreement and in connection with the SSII
Asset Purchase, the Company paid cash of $1,174,584 and issued and
delivered 125,984 shares of the Company's common stock at closing and
agreed to either issue and deliver additional shares of the Company's
common stock having an aggregate market value equal to, or make cash
payments of, or at the Company's sole option any combination thereof,
$750,000 and $1,050,000 on or before June 29, 1998, and May 30, 1999,
respectively. The $750,000 aggregate market value of the additional shares
of the Company's common stock and/or cash payment is subject to a reduction
adjustment in the event gross revenues, net of returns and allowances,
during the 12-month period ended April 30, 1998, from (i) sales (other than
Choc-Quilizer)/TM/ of the purchased network marketing organization and
sales to Market America, Inc. (an unrelated network marketing company) and
sales to retail outlet stores, are less than $2,500,000 and/or (ii) the
Company's sales of Choc-Quilizer/TM/ are less than $4,000,000 during such
12-month period. Furthermore, the $1,050,000 aggregate market value of the
additional shares of the Company's common stock and/or cash payment is
subject to a reduction adjustment in the event gross revenues, net of
returns and allowances, during the 12-month period ended March 31, 1999,
from (i) sales (other than Choc-Quilizer)/TM/ of the purchased network
marketing organization and sales to Market America, Inc. (an unrelated
network marketing company) and sales to retail outlet stores, are less than
$5,000,000 and/or (ii) the Company's sales of Choc-Quilizer/TM/ are less
than $8,000,000 during such 12-month period. The value of the Company's
common stock to be issued and delivered will be based upon the average of
the closing prices of the Company's common stock on the last three trading
days of the month preceding the month in which the applicable 12-month
period ends.
F-3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-31-1997
<PERIOD-END> APR-30-1997
<CASH> 861,473
<SECURITIES> 0
<RECEIVABLES> 232,486
<ALLOWANCES> (25,804)
<INVENTORY> 442,028
<CURRENT-ASSETS> 2,890,881
<PP&E> 790,996
<DEPRECIATION> (358,035)
<TOTAL-ASSETS> 4,834,025
<CURRENT-LIABILITIES> 834,378
<BONDS> 261,982
0
0
<COMMON> 266
<OTHER-SE> 3,737,665
<TOTAL-LIABILITY-AND-EQUITY> 4,834,025
<SALES> 2,794,427
<TOTAL-REVENUES> 2,805,493
<CGS> 0
<TOTAL-COSTS> 1,986,229
<OTHER-EXPENSES> 724,115
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,917
<INCOME-PRETAX> 92,232
<INCOME-TAX> 35,011
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,221
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
