<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) August 5, 1997
TELIDENT, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 0-20887 41-1533060
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
ONE MAIN STREET, SOUTHEAST
SUITE 85
MINNEAPOLIS, MINNESOTA 55414
(Address of Principal Executive Offices)
(612) 623-0911
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
Reference is made to the Press Release issued to the public by the
Registrant on July 23, 1997, and attached hereto as an exhibit, relating to the
$1.25 million equity investment made in the Company by Family Financial
Strategies, Inc.
In addition, Company released unaudited financial results for the fiscal
year ending June 30, 1997, which show the effect of the debenture conversion
completed in June and the pro forma effect of the new equity investment.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits
99.1 Press Release dated July 23, 1997
99.2 Unaudited Financial Statements as of and for the years ended
June 30, 1997 and 1996, and Pro Forma Balance Sheet as of June
30, 1997.
SIGNATURE
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.
Dated: August 5, 1997 TELIDENT, INC.
/s/ W. Edward McConaghay
-------------------------
W. Edward McConaghay
Chief Executive Office
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
99.1 Press Release dated July 23, 1997
99.2 Unaudited Financial Statements as of and for the years ended
June 30, 1997 and 1996, and Pro Forma Balance Sheet as of
June 30, 1997.
<PAGE>
Item 7. (c) Exhibit 99.1 Press Release
FOR IMMEDIATE RELEASE
Contact: Mark W. Sheffert, (612) 338-4722
TELIDENT COMPLETES $1.25 MILLION EQUITY INVESTMENT
MINNEAPOLIS, MINN., JULY 23, 1997 --- Telident, Inc. (NASDAQ: TLDT) today
announced that it closed on a $1.25 million equity transaction in the form of
convertible preferred stock with Family Financial Strategies, Inc. (FamCo).
FamCo also received warrants to purchase common stock, which if exercised would
contribute an additional $1.76 million in equity. A large portion of the equity
will be used to install a substantial backlog of sales orders which has grown as
a result of Telident's strategic restructuring plan implemented earlier this
year.
The company announced a $2.1 million financial restructuring plan on July
15 in which it had converted approximately $850,000 of subordinated convertible
debentures into common stock on that date and that it had reached a preliminary
agreement with FamCo on the equity investment. When the equity is added to the
converted debentures, it improves Telident's net worth by $2.1 million.
"This new equity provides Telident with $1.25 million in new working
capital which will be used to increase our resources for installing an
ever-increasing backlog of sales orders and to continue to increase our
marketing and sales initiatives," said W. Edward McConaghay, president and chief
executive officer. "Completion of this financial restructuring will give
velocity to our marketing, sales, and profitability efforts."
Based in Minneapolis, Minn., Telident, Inc. (www.telident.com) designs,
manufactures and markets proprietary hardware and software systems for providing
the exact location of a 911 telephone call within a private branch exchange
system to emergency dispatchers, thus improving response times and enhancing
safety. In addition, the company manufactures and markets network hardware that
provides switching, selective routing and data interfacing capabilities to
public and private telephone networks and government agencies, as well as a
variety of emergency information management systems.
<PAGE>
Except for historical financial information, the information contained in
this news release is forward-looking and subject to certain risks as described
in the company's filings with the Securities and Exchange Commission, including
the company's Form 10-KSB for the fiscal year ended June 30, 1996, and Forms
10-QSB for the quarters ended September 30, December 31, and March 31.
# # #
<PAGE>
ITEM 7. (c) EXHIBIT 99.2 FINANCIAL STATEMENTS
TELIDENT, INC.
UNAUDITED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30,
--------------------------------------------
ASSETS 1996 1997 1997
---- ---- ----
(ACTUAL) (ACTUAL) (PRO FORMA*)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 448,654 $ 22,319 $ 1,272,319
Trade accounts receivable, net of allowance for doubtful
accounts of $40,000 in 1996 and 1997 825,358 432,111 432,111
Inventories 573,086 430,506 430,506
Other 53,143 37,710 37,710
------------ ------------ ------------
Total current assets 1,900,241 922,646 2,172,646
FURNITURE AND OFFICE EQUIPMENT, less accumulated
depreciation of $121,933, $198,355, and $198,355, respectively 253,242 264,051 264,051
INTANGIBLE ASSETS, less accumulated amortization of
$226,008, $108,868, and $108,868, respectively 443,247 99,429 99,429
OTHER ASSETS 175,070 30,855 5,855
------------ ------------ ------------
$ 2,771,800 $ 1,316,981 $ 2,541,981
------------ ------------ ------------
------------ ------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Trade accounts payable $ 258,506 $ 299,684 $ 299,684
Accrued expenses 133,457 113,229 113,229
Deferred revenue 11,000 1,950 1,950
Current portion of capital lease -- 15,913 15,913
Notes payable - bank 130,628 101,716 101,716
Notes payable - others 1,351,258 -- --
Debentures and interest payable - related parties 11,250 -- --
Debentures and interest payable - others 38,400 77,875 77,875
------------ ------------ ------------
Total current liabilities 1,934,499 610,367 610,367
LONG-TERM PORTION OF CAPITAL LEASE -- 20,903 20,903
DEBENTURES PAYABLE - related parties 225,000 -- --
DEBENTURES PAYABLE - others 768,000 87,500 87,500
------------ ------------ ------------
Total liabilities 2,927,499 718,770 718,770
COMMITMENTS
SHAREHOLDERS' EQUITY (DEFICIT):
Preferred stock, $.02 par value, convertible into common stock at
the rate of one common share for each preferred share,
2,500,000 shares authorized, 187,500, 150,000 and 1,261,111
shares outstanding , respectively 3,750 3,000 25,222
Common stock, $.02 par value, 10,000,000 shares authorized,
4,903,110, 6,948,526 and 6,948,526 shares outstanding,
respectively 98,062 138,971 138,971
Additional paid-in capital 9,025,640 13,517,626 14,720,404
Accumulated deficit (9,283,151) (13,061,386) (13,061,386)
------------ ------------ ------------
(155,699) 598,211 1,823,211
------------ ------------ ------------
$ 2,771,800 $ 1,316,981 $ 2,541,981
------------ ------------ ------------
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</TABLE>
*Reflects the receipt of $1.25 million from the issuance of 1,111,111 shares of
convertible preferred shares in July, 1997.
<PAGE>
ITEM 7. (c) EXHIBIT 99.2 FINANCIAL STATEMENTS
TELIDENT, INC.
UNAUDITED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
---------------------------
1996 1997
---- ----
<S> <C> <C>
NET SALES $ 2,454,807 $ 1,754,451
COST OF SALES 791,533 571,062
INVENTORY REVALUATION -- 240,245
----------- -----------
Gross profit 1,663,274 943,144
OPERATING EXPENSES:
Sales and marketing 976,266 1,248,736
Research and development 1,015,321 1,028,464
General and administrative 1,022,418 1,189,581
Restructuring charges -- 391,519
----------- -----------
Total operating expenses 3,014,005 3,858,300
----------- -----------
Loss from operations (1,350,731) (2,915,156)
INTEREST INCOME 10,584 36,377
DEBT CONVERSION EXPENSE** -- (679,797)
INTEREST EXPENSE - related parties ( 46,297) ( 22,500)
INTEREST EXPENSE - others (342,850) (197,159)
----------- -----------
NET LOSS $(1,792,627) $(3,778,235)
PREFERRED STOCK DIVIDENDS, INCLUDING $14,450 OF
CUMULATIVE DIVIDENDS (83,507) (62,640)
----------- -----------
NET LOSS APPLICABLE TO COMMON STOCK $(1,876,134) $(3,840,875)
----------- -----------
----------- -----------
NET LOSS PER COMMON SHARE $ (.43) $ (.64)
----------- -----------
----------- -----------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 4,401,981 6,009,065
----------- -----------
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</TABLE>
**As an incentive to cause the Debentures to convert, the Company reduced the
conversion price during fiscal 1996 and reduced the conversion price and issued
warrants in 1997. The Company recorded
<PAGE>
ITEM 7. (c) EXHIBIT 99.2 FINANCIAL STATEMENTS
TELIDENT, INC.
UNAUDITED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
NUMBER AMOUNT OF AMOUNT OF ADDITIONAL
OF SHARES PREFERRED COMMON PAID-IN ACCUMULATED
ISSUED STOCK STOCK CAPITAL DEFICIT
---------- ---------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C>
BALANCE, June 30, 1995 4,050,950 $ 4,750 $ 76,269 $ 5,804,629 $ (7,490,524)
Common stock issued to directors for services 6,774 -- 135 36,115 --
Common stock issued for services 5,000 -- 100 13,900 --
Exercise of warrants (including conversion of $50,000 of
related party debt to exercise warrants for 12,500 shares of
common stock) net of expenses of $45,139 385,794 -- 7,716 1,389,532 --
Common stock issued in connection with notes payable 9,875 -- 198 28,052 --
Common stock issued from conversion of debt, net of
expenses of $49,144 375,734 -- 7,515 1,190,674 --
Common stock issued in private placement 207,243 -- 4,145 618,533 --
Exercise of options (including conversion of $22,500 of related
party debt to exercise options for 22,500 shares of stock) 99,268 -- 1,985 226,826 --
Stock redeemed due to fractional shares from reverse split (28) -- (1) (114) --
Preferred stock redemptions (50,000) (1,000) -- (199,000) --
Preferred stock dividends -- -- -- (83,507) --
Net loss -- -- -- -- (1,792,627)
--------- ------- -------- --------- ----------
BALANCE, June 30, 1996 5,090,610 3,750 98,062 9,025,640 (9,283,151)
Common stock issued to directors for services 7,560 -- 152 20,848 --
Common stock issued in public offering net of offering
expenses of $532,077 1,150,000 -- 23,000 2,894,923 --
Common stock issued for conversion of debentures and
related interest 779,800 -- 15,596 1,541,476 --
Common stock issued for conversion of bridge financing 95,556 -- 1,911 227,429 --
Exercise of options 12,500 -- 250 4,750 --
Preferred stock redemptions (37,500) (750) -- (149,250) --
Preferred stock dividends -- -- -- (48,190) --
Net loss -- -- -- -- (3,778,235)
--------- ------- -------- --------- ----------
BALANCE, June 30, 1997 7,098,526 $ 3,000 $ 138,971 $13,517,626 $ (13,061,386)
--------- ------- -------- --------- ----------
--------- ------- -------- --------- ----------
</TABLE>
<PAGE>
ITEM 7. (c) EXHIBIT 99.2 FINANCIAL STATEMENTS
TELIDENT, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
------------------------------
1996 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,792,627) $ (3,778,235)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization expense 202,617 249,622
Common stock issued for services 50,250 21,000
Common stock issued for interest 91,583 41,775
Inventory reserve and revaluation -- 315,245
Noncash restructuring charges -- 307,676
Debt conversion expense 63,333 679,797
Changes in assets and liabilities:
Trade accounts receivable 384,943 393,247
Inventories (126,610) (172,665)
Other assets (177,774) 12,903
Trade accounts payable (343,919) 41,178
Accrued expenses and deferred revenue (221,186) (137,049)
------------ ------------
Net cash used in operating activities (1,869,390) (2,025,506)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments of patent and capitalized software costs (73,606) (41,674)
Purchases of furniture and office equipment (190,912) (49,112)
------------ ------------
Net cash used in investing activities ( 264,518) ( 90,786)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of related party borrowing (29,166) --
Borrowings from others 1,263,460 --
Payments of borrowings from others (155,440) (1,096,825)
Payments of debentures (50,000) --
Net payments on bank line of credit ( 521,507) (28,912)
Preferred stock redemption (200,000) (150,000)
Preferred stock dividends (83,507) (48,190)
Proceeds from issuance of common stock 2,176,978 3,013,884
------------ ------------
Net cash provided by financing activities 2,400,818 1,689,957
------------ ------------
Net (decrease) increase in cash for the year 266,910 (426,335)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 181,744 448,654
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 448,654 $ 22,319
------------ ------------
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Interest paid $ 440,031 $ 183,282
------------ ------------
------------ ------------
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Capital lease obligations incurred for office equipment $ -- $ 38,119
Conversion of notes payable to common stock 1,225,583 1,064,840
Conversion of notes payable to common stock through warrants 50,000 --
Conversion of notes payable to common stock through option 22,500 --
</TABLE>
