UNITED STATES
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) April 8, 1998
STRATEGIC SOLUTIONS GROUP, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-12536 11-2964894
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
326 First Street, Suite 100, Annapolis, Maryland 21403
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (410) 263-7761
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) Effective April 8, 1998, the Registrant ("Company") entered into an
agreement and a plan of merger by and among the Company and U.S. Technologies,
Inc. ("UST") and SSGI-UST Acquisition Corporation ("SUAC"). SUAC was merged with
and into UST (the "Merger"); following the Merger, UST continued as the
surviving corporation and the corporate existence of SUAC ceased. Articles of
Merger were filed with the Department of State of the State of Florida on April
8, 1998, being the effective date of the Merger. As a result of the Merger, the
Company's ownership in UST was reduced from 100% to 14%.
In consideration for the Merger, the Company received the following:
(1) 100,000 shares of common stock of UST valued at $500,000 or
$5.00 per share. These shares are subject to a registration
rights agreement giving the Company the right to a demand
registration or a piggy back registration of UST's shares;
(2) A promissory note from UST in the principal amount of $600,000
with 6% interest due the earlier of the closing of the
$2,000,000 private placement of UST or 60 days from the
closing of the Merger. The promissory note is secured by all
the assets of UST and the pledge of all of the outstanding
stock of UST; and
(3) A 6% subordinated convertible debenture in the principal
amount of $927,000 (to be increased for any funding provided
by the Company to UST after February 6, 1998, the date the
Merger was agreed to). The debenture is due the earlier of a
public offering of UST's securities or 18 months from the date
of the merger. In addition, the Company has the option to
convert the debenture into shares of UST's common stock at a
20% discount to market value conversion ratio at the time of
conversion.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS:
(b) PRO FORMA FINANCIAL INFORMATION
INTRODUCTION TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The Securities and Exchange Commission requires the pro forma
restatement of certain previously released financial statements. The following
Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1997 gives
effect to the Merger as if it occurred on that date and Unaudited Pro Forma
Consolidated Statement of Operations for the year ended December 31, 1997 gives
effect to the Merger as if it occurred as of January 1, 1997. The pro forma
adjustments included in the following pro forma financial statements reflect the
Company's investment in UST as of the date of the respective financial
statements. Such amounts, therefore, differ from the amounts at April 8, 1998
when the transaction was consummated.
STRATEGIC SOLUTIONS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Historical Assets Disposed: Disposition Pro Forma
Consolidated U.S. Technologies Adjustments Consolidated
------------ ----------------- ----------- ------------
<S><C>
Cash and cash equivalents $ 1,149,372 $ (57,687) $ -- $ 1,091,685
Accounts receivable, net 666,841 (366,518) -- 300,323
Prepaid expenses and other current assets 137,618 (28,997) -- 108,621
Net property and equipment 356,923 (215,205) -- 141,718
Other assets 1,446,066 (41,709) 2,027,000 (1) 3,431,357
------------- ----------- ------------- -------------
$ 3,756,820 $ (710,116) $ 2,027,000 $ 5,073,704
============= =========== ============= =============
Accounts payable and accrued expenses $ 1,027,935 $ (750,633) $ -- $ 277,302
Deferred revenue 66,558 (63,526) -- 3,032
Note payable to bank 40,334 (40,334) -- 0
Other current liabilities 168,700 (120,579) -- 48,121
Long-term liabilities 1,487,864 -- 2,291,956 (2) 3,779,820
Total stockholders' equity 965,429 -- -- 965,429
------------- ----------- ------------- -------------
$ 3,756,820 $ (975,072) $ 2,291,956 $ 5,073,704
============= =========== ============= =============
</TABLE>
Notes to Pro Forma Condensed Consolidated Balance Sheet (Unaudited):
(1) Consideration received by the Company included (i) 100,000 shares of
common stock of UST valued at $500,000 or $5.00 per share; (ii) a
promissory note from UST in the principal amount of $600,000 with 6%
interest due the earlier of the closing of a private placement or 60
days from the closing of the Merger; and (iii) a 6% subordinated
convertible debenture in the principal amount of $927,000 due the
earlier of a public offering of UST's stock or 18 months from the date
of the Merger. Valuation of the common stock and collectibility of the
promissory note and the convertible debenture are dependent upon UST's
ability to obtain financing. For pro forma purposes, no valuation
allowance has been assessed for these assets.
(2) Represents the deferral of the gain on disposition calculated as the
excess of UST's total liabilities over its total assets plus
consideration received. Due to the consideration being dependent upon
UST's ability to obtain financing, the Company has deferred the gain on
disposition.
<PAGE>
STRATEGIC SOLUTIONS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Historical Disposition Pro Forma
Consolidated Disposition Adjustments Consolidated
------------ ----------- ----------- ------------
<S><C>
Revenues $ 4,791,823 $ (3,897,861) $ -- $ 893,962
---------------- --------------- ---------- ------------
Operating expenses
Cost of revenues 3,527,089 (2,903,210) -- 623,879
Research and development 323,002 (281,395) -- 41,607
Selling, general and administrative 3,492,154 (2,054,113) -- 1,438,041
---------------- --------------- ---------- ------------
Total operating expenses 7,342,245 (5,238,718) -- 2,103,527
---------------- --------------- ---------- ------------
Loss from operations (2,550,422) 1,340,857 -- (1,209,565)
Other income (expense) (349,934) 23,666 62,250 (1) (264,018)
---------------- --------------- ---------- ------------
Net loss $ (2,900,356) $ 1,364,523 $ 62,250 $ (1,473,583)
================ =============== ========== ============
Net loss per common share - basic and diluted ($1.70) ($0.86)
========= =========
Weighted average number of common shares outstanding 1,705,228 1,705,228
========= =========
</TABLE>
Notes to Pro Forma Condensed Consolidated Statement of Operation (Unaudited):
(1) Represents interest income from the promissory note and the convertible
debenture.
<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.
STRATEGIC SOLUTIONS GROUP, INC.
Date: April 23, 1998 By: /s/ Suzanne C. Brown
_________________________
Suzanne C. Brown, CFO
