SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) June 26, 1997
--------------------------------
Sunrise Technologies International, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-17816 77-0148208
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(State of or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
47265 Fremont Boulevard, Fremont, California 94538
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 623-9001
------------------------------
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(Former name or former address, if changed since last report)
<PAGE>
The Registrant hereby amends Item 7 of its current report on Form 8-K filed
July 10, 1997 in its entirety to read as follows:
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not applicable
(b) Pro Forma Financial Information.
The accompanying unaudited pro forma condensed financial information
gives effect to the sale of the dental operations as if the transaction had
occurred on January 1, 1996 for purposes of the unaudited statements of
operations, and as of March 31, 1997 for purposes of the unaudited balance
sheet. No profit from the sale has been reflected in the unaudited pro forma
condensed statements of operations due to the nonrecurring nature of this
transaction.
Actual gain on the sale of the dental operations will be reported in
Sunrise Technologies International, Inc.'s unaudited condensed financial
statements included in Form 10-Q for the period ended June 30, 1997 to be filed
no later than August 14, 1997.
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<PAGE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements
represent the transaction in which Sunrise Technologies International, Inc. (the
"Company") sold the assets associated with its dental laser, air abrasive and
composite curing systems (the "Dental Assets"), substantially under the terms of
the Asset Purchase Agreement dated March 25, 1997, to Lares Research ("Lares"),
an unaffiliated, privately held California corporation located in Chico,
California. The sale was consummated on June 26, 1997.
Under the terms of the Asset Purchase Agreement, the Company
transferred to Lares all of the Dental Assets except for cash and accounts
receivable. All liabilities of the dental operations were retained by the
Company except for certain obligations relating to royalties and a supply
contract. At closing, Lares paid the Company $4,000,000 in cash and delivered a
promissory note in the principal amount of $1,500,000 (the "Lares Note"), which
bears interest at 8%. Under the Lares Note $1,000,000 is payable on the third
anniversary of the closing, and $500,000 is payable on the fourth anniversary of
the closing. The Lares Note is subordinate in right of payment to Lares'
obligations to its bank (the "Bank"). Lares has agreed that so long as the Lares
Note is outstanding its aggregate obligations to the Bank will not exceed
$4,750,000. Although the Company anticipates collecting interest and principal
on the Lares Note, due to subordination of the Lares Note to Lares' Bank,
collection is not reasonably assured and the Company intends to recognize
proceeds from the sale and interest on the Lares Note as cash is received. On
collection of the Lares Note principal the Company will pay to American Dental
Technologies ("ADT") an additional transfer fee of ten percent of cash collected
on the $1,000,000 first installment of the Lares Note. This liability has not
been recognized in the attached unaudited pro forma condensed financial
statements given that collection of the first installment of the Lares Note is
not reasonably assured.
The Company's revenues were substantially derived fro the sale of its
dental laser and air abrasive products. These sales represented 98% and 85% of
the Company's revenues in 1996 and the first three months of 1997, respectively.
Four million dollars of the purchase price, paid in cash, is being used by the
Company to fund its ophthalmic activities; however, by selling the Dental
Assets, the Company loses a significant source of continued revenue.
The unaudited condensed financial information ("Sunrise Net of Dental
Assets to be Sold") gives effect to the sale of the dental operations as if the
transaction had occurred on January 1, 1996 for purposes of the unaudited
statements of operations, and as of March 31, 1997, for purposes of the
unaudited balance sheet.
The pro forma information is presented for illustrative purposes only
and is not necessarily indicative of the operating results or financial position
that would have occurred if the sale had been consummated as presented in the
accompanying unaudited pro forma condensed financial information nor is it
necessarily indicative of future operating results or financial position.
The unaudited pro forma condensed financial information should be read
in conjunction with the accompanying note and the historical financial
statements, including the notes thereto, of the Company.
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<PAGE>
<TABLE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
March 31, 1997
<CAPTION>
(In Thousands)
Sunrise Sunrise
Technologies Sunrise Net of Dental
International, Dental Assets Assets
Inc. to be Sold to be Sold
-------- ---------- ----------
(a) (b) (c)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ....................................... $ 1,618 $ 4,000 $ 5,618
Accounts receivable ............................................. 815 -- 815
Inventories ..................................................... 2,225 (1,760) 465
Prepaid expenses ................................................ 214 -- 214
-------- -------- --------
Total current assets ................................................ 4,872 2,240 7,112
Net property, plant and equipment ................................... 191 (146) 45
-------- -------- --------
Total assets ........................................................ $ 5,063 $ 2,094 $ 7,157
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................ $ 700 $ -- $ 700
Accrued payroll and related expenses ............................ 252 -- 252
Accrued warranty ................................................ 199 -- 199
Other accrued expenses .......................................... 456 425 881
-------- -------- --------
Total current liabilities ........................................... 1,607 425 2,032
Redeemable, convertible notes ....................................... 3,530 -- 3,530
Stockholders' Equity:
Common stock .................................................... 28 -- 28
Additional paid-in capital ...................................... 32,730 -- 32,730
Accumulated deficit ............................................. (32,832) 1,669 (31,163)
-------- -------- --------
Total stockholder' equity (deficit) ................................. (74) 1,669 1,595
-------- -------- --------
Total liabilities and stockholders' equity .......................... $ 5,063 $ 2,094 $ 7,157
======== ======== ========
<FN>
(a) Represents historical Sunrise financial statements, including Dental Assets to be sold.
(b) Represents historical Sunrise Dental Assets to be sold and initial cash consideration received therefrom. Other accrued
expenses consist of an ADT Transfer Fee of $275,000 and estimated transaction costs of $150,000. Additional gain may be
recognized up to $1,400,000 as payment is received on the Lares Note.
(c) Represents historical Sunrise, net of Dental Assets to be sold and initial cash consideration received therefrom.
</FN>
</TABLE>
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<PAGE>
<TABLE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 1996
(In Thousands, Except Per Share Data)
<CAPTION>
Sunrise Less
Technologies Sunrise Sunrise
International, Dental Ophthalmic
Inc. Business Business
-------- -------- --------
(a) (b) (c)
<S> <C> <C> <C>
Net revenues ........................................................ $ 5,654 $ 5,514 $ 140
Cost of revenues .................................................... 4,016 3,900 116
-------- -------- --------
Gross profit ........................................................ 1,638 1,614 24
Other costs and expenses:
Engineering and development ..................................... 1,326 470 856
Sales, marketing and regulatory ................................. 3,632 2,765 867
General and administrative ...................................... 2,700 -- 2,700
-------- -------- --------
Total other costs and expenses ...................................... 7,658 3,235 4,423
-------- -------- --------
Net loss from operations ............................................ (6,020) (1,621) (4,399)
Net interest income ................................................. 52 31 21
-------- -------- --------
Net income loss ..................................................... $ (5,968) $ (1,590) $ (4,378)
======== ======== ========
Net loss per share .................................................. $ (0.23) $ (0.17)
======== ========
Shares used in calculation of net loss per share .................... 26,414 26,414
======== ========
<FN>
(a) Represents historical Sunrise financial statements, including dental business to be sold.
(b) Represents historical Sunrise dental business to be sold, exclusive of any gain realized on the sale.
(c) Represents historical Sunrise, net of dental business to be sold, exclusive of any gain realized on the sale.
</FN>
</TABLE>
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<PAGE>
<TABLE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Three Months Ended March 31, 1997
(In Thousands, Except Per Share Data)
<CAPTION>
Sunrise Less
Technologies Sunrise Sunrise
International, Dental Ophthalmic
Inc. Business Business
-------- -------- --------
(a) (b) (c)
<S> <C> <C> <C>
Net revenues ........................................................ $ 1,009 $ 864 $ 145
Cost of revenues .................................................... 958 920 38
-------- -------- --------
Gross profit ........................................................ 51 (56) 107
Other costs an expenses:
Engineering ..................................................... 273 139 134
Sales, marketing and regulatory ................................. 659 416 243
General and administrative ...................................... 706 -- 706
-------- -------- --------
Total other costs and expenses ...................................... 1,638 555 1,083
-------- -------- --------
Net loss from operations ............................................ (1,587) (611) (976)
Interest income ..................................................... 11 3 8
Interest expense .................................................... (812) -- (812)
-------- -------- --------
Net loss ............................................................ $ (2,388) $ (608) $ (1,780)
======== ======== ========
Net loss per share .................................................. $ (0.09) $ (0.06)
======== ========
Shares used in calculation of net loss per share .................... 27,871 27,871
======== ========
<FN>
(a) Represents historical Sunrise financial statements, including dental business to be sold.
(b) Represents historical Sunrise dental business to be sold, exclusive of any gain realized on the sale.
(c) Represents historical Sunrise, net of dental business to be sold, exclusive of any gain realized on the sale.
</FN>
</TABLE>
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<PAGE>
NOTE TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
Year Ended December 31, 1996 and Three Months Ended March 31, 1997
The pro forma condensed financial statements give effect to the following
pro forma adjustments:
On June 26, 1997, Sunrise Technologies International, Inc. (the "Company")
sold the assets associated with its dental laser, air abrasive and composite
curing systems (the "Dental Assets"), substantially under the terms of the Asset
Purchase Agreement dated March 25, 1997, to Lares Research ("Lares"), an
unaffiliated, privately held California corporation located in Chico,
California. The sale was consummated on June 26, 1997.
Under the terms of the Asset Purchase Agreement, the Company transferred to
Lares all of the Dental Assets except for cash and accounts receivable. All
liabilities of the dental operations were retained by the Company except for
certain obligations relating to royalties and a supply contract. At closing,
Lares paid the Company $4,000,000 in cash and delivered a promissory note in the
principal amount of $1,500,000 (the "Lares Note"), which bears interest at 8%.
Under the Lares Note $1,000,000 is payable on the third anniversary of the
closing, and $500,000 is payable on the fourth anniversary of the closing. The
Lares Note is subordinate in right of payment to Lares' obligations to its bank
(the "Bank"). Lares has agreed that so long as the Lares Note is outstanding its
aggregate obligations to the Bank will not exceed $4,750,000. Although the
Company anticipates collecting interest and principal on the Lares Note, due to
subordination of the Lares Note to Lares' Bank, collection is not reasonably
assured and the Company intends to recognize proceeds from the sale and interest
on the Lares Note as cash is received.
After completing the sale of the Dental Assets the Company paid to ADT a
transfer fee of $275,000. In addition, on collection of the Lares Note principal
the Company will pay to ADT an additional transfer fee of ten percent of cash
collected on the $1,000,000 first installment of the Lares Note. This liability
has not been recognized in the attached unaudited pro forma condensed financial
statements given that collection of the first installment of the Lares Note is
not reasonably assured.
The Company's revenues were substantially derived from the sale of its
dental laser and air abrasive products. These sales represented 98% and 85% of
the Company's revenues in 1996 and the first three months of 1997, respectively.
Four million dollars of the purchase price, paid in cash, is being used by the
Company to fund its ophthalmic activities; however, by selling the Dental
Assets, the Company loses a significant source of continued revenue.
The unaudited pro forma condensed balance sheet column "Sunrise Net of
Dental Assets to be Sold" reflects the initial cash proceeds of the sale. No
profit from the sale has been reflected in the unaudited pro forma condensed
statements of operations due to the nonrecurring nature of this transaction.
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<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, thereunto duly authorized.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
(Registrant)
DATE: August 13, 1997 By: /s/ Timothy A. Marcotte
-----------------------
Name: Timothy A. Marcotte
Title: Vice President, Finance and
Chief Financial Officer
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