<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
July 17, 2000
DIRECTCOM, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
02-22475 22-2942013
(Commission File No.) (IRS Employer Identification No.)
20 Maple Avenue
Armonk, New York 10504
(Address of principal executive office)
(zip code)
(914) 273-8620
(Registrant's telephone number, including area code)
Item 2. Disposition of Assets.
(a) Effective as of June 30, 2000, Registrant sold two hundred thirty two
and one-third (232 and 1/3) shares of Common Stock (the "Shares") of its
subsidiary Color Graphics, Inc. ("Color Graphics") to its affiliate, North
American Communications, Inc. ("NAC") for $800,000 in cash (the "Color Graphics
Purchase Price"). $200,000 was paid in cash at the closing of the transaction,
and the remainder of the Color Graphics Purchase Price will be paid in three
annual installments of $200,000 (plus simple interest at the rate of 8% per
annum). The Shares were all the shares of capital stock of Color Graphics that
Registrant owned and the Shares represented 82% of the outstanding capital stock
of Color Graphics.
<PAGE>
Effective as of July 1, 2000, Registrant sold its Directline
Productions division ("Directline") to NAC for $50,000 in cash (the "Directline
Purchase Price," and, together with the Color Graphics Purchase Price, the
"Purchase Price").
Color Graphics is a high volume manufacturer of direct marketing
promotional materials. Color Graphics currently operates its productions
facilities from a 66,100 square foot building on approximately four acres of
land in Mount Laurel New Jersey.
Directline provides its clients with agency creative services
associated with the design and development of direct marketing promotion
materials. Directline also provides production management services whereby it
supervises and oversees the entire creative and direct mail production process
on behalf of its clients. These services include campaign planning, vendor
selection and coordination, production quality assurance and program results
analysis.
In the aggregate, the sale of Color Graphics and Directline to NAC
constitutes the sale of substantially all of the assets of the Registrant.
NAC is an affiliate of Registrant. Robert W. Paltrow, the Secretary
and Treasurer and a director of Registrant, served as President of NAC from 1981
through 1996 and is currently the Chief Executive Officer and a director of NAC.
Mr. Paltrow is also the general partner of Aspetong Partners, L.P., which owns
50% of the issued and outstanding stock of NAC. Robert E. Herman, a director of
Registrant, serves as the President of NAC. Mr. Herman's father is the general
partner of Wye Investments, a limited partnership that owns the other 50% of
NAC, and Mr. Herman himself owns a 1% limited partnership interest in Wye
Investments. Both Wye Investments and Aspetong Partners, L.P. own 22% of the
issued and outstanding shares of Registrant. Furthermore, Nicholas Robinson,
the President, Chief Executive Officer and Chairman of the Board of Directors of
Registrant, is the son-in-law of Mr. Paltrow.
Registrant received an offer from NAC to purchase the Shares from
Registrant for the Color Graphics Purchase Price. The board of directors
reviewed the recent and past performance of Color Graphics, current conditions
in the printing industry, the value of Color Graphics and the magnitude of the
Color Graphics Purchase Price. The board of directors, based upon these
factors, decided that the Color Graphics Purchase Price represented a bona fide
and fair market value offer for the Shares and approved the sale of the Shares
to NAC for the Color Graphics Purchase Price.
Registrant received a separate offer from NAC to purchase Directline
from Registrant for the Directline Purchase Price. The board of directors
reviewed the recent and past performance of Directline, current conditions in
the direct marketing industry, the value of Directline and the magnitude of the
Directline Purchase Price. The board of directors, based upon these factors,
decided that the Directline Purchase Price represented a bona fide and fair
market value offer for Directline and approved the sale of Directline to NAC for
the Directline Purchase Price.
Registrant's board of directors determined that the sale of
substantially all of Registrant's assets to NAC for the aggregate Purchase Price
was expedient and in the best interest of the Registrant.
Registrant intends to use the proceeds from the sale of Color Graphics
and Directline to make acquisitions in the direct marketing industry.
-2-
<PAGE>
Item 7. Financial Statements and Exhibits.
Registrant's pro forma financial information and financial
statements for the transactions with NAC will follow.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
DIRECTCOM, INC.
By: /s/ Nicholas Robinson, President
----------------------------------
Nicholas Robinson, President, Chief Executive Officer and
Chairman of the Board
-3-
