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: September 22, 1997)
BCAM INTERNATIONAL,INC.
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(exact name of registrant as specified in its charter)
NEW YORK 0-18109 13-3228375
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State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
1800 WALT WHITMAN ROAD, MELVILLE, NEW YORK 11747
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (516) 752-3550
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(Former name or address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective September 22, 1997, BCAM International, Inc. (the "Company")
acquired all of the outstanding Common Stock of Drew Shoe Corporation ("Drew
Shoe") for approximately $4.6 million plus the assumption of liabilities. The
purchase price was paid by delivery to the two shareholders of Drew Shoe of an
aggregate of $3,882,000, promissory notes in the aggregate principal amount of
$400,000 and by delivery of an aggregate of 375,000 shares of the Company's
Common Stock. The promissory notes bear an interest rate of 8% per annum, are
due on September 19, 1999, and are payable in twenty-four (24) equal monthly
installments aggregating $8,333.34 (plus interest) with a final payment due in
the twenty-fifth (25th) month of $100,000.
In order to fund the acquisition of Drew Shoe, the Company issued
subordinated convertible notes to eight investors in the aggregate amount of
$6,000,000 (the "Convertible Notes"). The Convertible Notes are due on September
19, 2002, unless at any time after September 19, 1998, they are converted, at
$.80 per share, into 7,500,000 shares of Common Stock of the Company. The
Convertible Notes bear an interest rate of 10%, payable semi-annually, but the
Company, at its discretion, may pay interest in the form of its common stock
(valued at $.80 per share), in which case the annual interest rate becomes 13%
annually with semi-annual compounding.
In addition, the Company issued to the noteholders warrants to purchase
2,400,000 shares of common stock, exercisable at $1.75 per share at any time
prior to September 19, 2002.
Simultaneous with the acquisition, Drew Shoe closed a credit facility
consisting of a revolving line of credit and term loan with a commercial bank
providing for total availability of $5.5 million, a portion of which is based
upon agreed upon percentages of accounts receivable and inventory. As of the
acquisition, the Company believes there to be approximately $4.5 million
available under this credit facility. Pursuant to the terms of the revolving
line of credit, Drew Shoe is able to borrow up to $4,500,000. The revolving line
of credit matures on September 30, 1999, and is payable at a rate of prime plus
1.5%. The term loan, in the amount of $1,000,000, also bears an interest rate of
prime plus 1.5% and is due on September 30, 2000. Both the revolving line of
credit and term loan may be used for general working capital purposes and are
guaranteed by the Company.
Drew Shoe is a designer, manufacturer, marketer and distributor of medical
footwear headquartered in Lancaster, Ohio. For its fiscal year ending December
31, 1996, Drew Shoe had revenues of approximately $14.6 million. The Company
intends to continue to operate Drew Shoe as a manufacturer of medical footwear.
<PAGE>
ITEM 5. OTHER EVENTS
On July 22, 1997 BCA Services, Inc. ("BCA"), a subsidiary of BCAM
International, Inc. (the "Company"), commenced an Offering (the "Offering") to
sell up to 150 shares of BCA's Redeemable Convertible Preferred Stock (the
"Preferred Stock") for a total consideration of $1.5 million in a private
offering.
The Preferred Stock is convertible into shares of the Company's Common
Stock ("Common Stock") at a price equal to 70% of the average closing bid price
of the Common Stock over a three day trading period ending on the day preceding
the conversion date (the "Variable Conversion Price"). The Conversion Price may
not be greater than 100% of the Variable Conversion Price on the first closing
date (the "Fixed Conversion Price"). On the first anniversary of the closing
date, all outstanding shares of Preferred Stock must be converted into shares of
Common Stock of the Company.
In addition, for each 50 shares of Preferred Stock sold, each purchaser
received warrants to purchase up to 25,000 shares of Common Stock per $500,000
raised, exercisable at a rate of 110% of the Variable Conversion Price on the
closing date. The warrants have a term of five years and the Common Stock
underlying the warrants contain registration rights.
On September 4, 1997, the Company filed a registration statement with the
Securities and Exchange Commission with respect to the Common Stock issuable in
connection with the conversion of the Preferred Stock.
Pursuant to the terms of the Offering, the Company divided the Offering
into three tranches. The first tranche, to purchase up to 50 shares of Preferred
Stock for $500,000, closed on July 24, 1997; the second tranche to purchase 50
shares of Preferred Stock for $500,000, closed on September 8, 1997. The third
tranche has not yet been drawn down, and the Company has until 60 days after the
effective date of the registration statement to complete this third tranche.
On September 18, 1997, BCA closed a separate offering of its Preferred
Stock plus warrants for $200,000 on similar terms and conditions as the
Offering.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
It is presently impractical to provide the financial statements required to
be presented hereunder at the time of filing this report. Such financial
statement information will be filed by amendment to this Form 8-K as soon as
practicable, but in no event later than sixty (60) days after the date of the
filing of this Form 8-K.
(b) Pro Forma Financial Statements.
Pro Forma financial statements showing the unaudited balance sheets of the
Company (consolidated), Drew Shoe as well as pro-forma adjustments to reflect
the Company's acquisition of Drew Shoe and the acquisition financing follow. It
is presently impractical to provide the pro forma statements of operations
required to be presented hereunder at the time of filing this report. Such pro
forma financial information will be filed by amendment to this Form 8-K as soon
as practicable, but in no event later than sixty (60) days after the date of the
filing of this Form 8-K.
<TABLE>
<CAPTION>
BCAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
AUGUST 31, 1997
BCAM DREW PRO-FORMA ADJUSTMENTS PRO-FORMA
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dr. cr.
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and equivalents $ 100,000 $ (123,000) $ 600,000 a $ 3,832,000 e $ 2,295,000
5,600,000 c 200,000 e
250,000 i 100,000 j
Accounts receivable, net 75,000 1,710,000 100,000 h 1,685,000
Inventory 25,000 6,307,000 150,000 h 6,182,000
Other current assets 817,000 423,000 50,000 e 702,500
400,000 e
87,500 g
---------------- --------------- --------------- --------------- ----------------
Total current assets 1,017,000 8,317,000 6,450,000 4,919,500 10,864,500
Property and equipment
Land - 100,000 100,000
Buildings & improvements 51,000 811,000 111,000 h 751,000
Furniture & equipment 887,000 2,782,000 1,749,000 h 1,920,000
---------------- --------------- --------------- --------------- ----------------
938,000 3,693,000 - 1,860,000 2,771,000
Less accumulated deprn (710,000) (2,381,000) 2,360,000 h (731,000)
---------------- --------------- --------------- --------------- ----------------
228,000 1,312,000 2,360,000 1,860,000 2,040,000
Patents, trademarks, software, net 385,000 - 385,000
Investment in Drew Shoe 5,332,000 e 5,357,000 k -
25,000 f
Deferred financing costs 300,000 c 713,000
313,000 d
100,000 j
Goodwill 215,000 k 365,000
150,000 h
Other assets 1,000 328,000 150,000 h 179,000
---------------- --------------- --------------- --------------- ----------------
Total assets $ 1,631,000 $ 9,957,000 $ 14,907,000 $ 12,286,500 $ 14,546,500
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable $ 144,000 $ 501,000 $ 645,000
Accrued expenses and other 269,000 3,116,000 $ 250,000 h $ 3,635,000
---------------- --------------- --------------- --------------- ----------------
Total current liabilities 413,000 3,617,000 - 250,000 4,280,000
Seller Notes, 8% due Sept 1999 400,000 e 400,000
Convertible Notes, due Sept 2002 4,500,000 c 4,500,000
Other liabilities 4,000 1,198,000 250,000 i 1,452,000
Minority interest 450,000 600,000 a 1,050,000
Common shareholders' equity:
Common stock, par value $.01 167,000 127,000 127,000 k 167,000
Paid-in surplus 16,001,000 - 100,000 c 360,000 b 24,499,000
104,000 d 5,925,000 c
1,500,000 c
417,000 d
450,000 e
25,000 f
25,000 g
Contra equity - - 5,925,000 c (5,925,000)
Retained earnings (deficit) (14,505,000) 5,015,000 360,000 b (14,977,500)
112,500 g
5,015,000 k
---------------- --------------- --------------- --------------- ----------------
1,663,000 5,142,000 11,743,500 8,702,000 3,763,500
Less 763,182 treasury shares (899,000) - (899,000)
---------------- --------------- --------------- --------------- ----------------
764,000 5,142,000 11,743,500 8,702,000 2,864,500
---------------- --------------- --------------- --------------- ----------------
Total liabilities and equity $ 1,631,000 $ 9,957,000 $ 11,743,500 $ 14,702,000 $ 14,546,500
================ =============== =============== =============== ================
<FN>
(a) To reflect the private placement of BCA Services Inc. Preferred Stock which
is convertible into shares of BCAM International, Inc. ("BCAM") common
stock.
(b) To reflect EITF D-60 for preferred stock issued with 30% in the money
conversion (30% x 1.2 million)
(c) To reflect the acquisition financing ($6,000,000 of notes convertible into
7,500,000 shares of common stock) and related warrants, EITF-D60 & related
costs.
(d) To reflect equity portion of deal compensation
(e) To reflect the purchase of Drew Shoe Corporation.
(f) To reflect equity portion of compensation for Drew Deal
(g) To write off certain costs of proposed financings which were terminated by
the Company.
(h) To make a preliminary allocation, based upon incomplete information and
analysis, as an estimate of the assets and liabilities acquired in the
acquisition of Drew Shoe.
(i) To reflect the approximate net increase in borrowings at Drew Shoe under
the new Term Loan and Working Capital agreement with a bank.
(j) To reflect costs of the Bank One refinance
(k) To eliminate the investment in Drew Shoe.
</FN>
</TABLE>
(c) Exhibits.
(2) First Addendum to Stock Purchase Agreement
Forward Looking Statements
This Form 8-K contains forward-looking statements which involve risks and
uncertainties. When used herein, the words "anticipate", "believe", "estimate"
and "expect" and similar expressions as they relate to the Company or its
management are intended to identify such forward-looking statements. These
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The Company's actual
results, performance or achievements could differ materially from the results
expressed in or implied by these forward-looking statements. Factors that could
cause or contribute to such differences are detailed from time to time in the
Company's Securities and Exchange Commission reports. Historical results are not
necessarily indicative of trends in operating results for any future period.
<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.
BCAM INTERNATIONAL, INC.
By:/s/Michael Strauss
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Michael Strauss, President,
Chairman of the Board and
Chief Executive Officer
Date: September 30, 1997
FIRST ADDENDUM TO STOCK PURCHASE AGREEMENT
AGREEMENT, made as of the 19th day of September, 1997, by and among
BCAM INTERNATIONAL, INC., a New York corporation with its principal place of
business at 1800 Walt Whitman Road, Melville, New York 11746 ("Purchaser"),
Charles Schuyler, residing at 129 W. Broadway, Granville, Ohio 43028
("Schuyler") and Frank Shyjka, residing at 112 N. Ardmore Road, Baxley, Ohio
43209 ("Shyjka" and together with Schuyler, the "Shareholders"). Purchaser and
Shareholders are sometimes collectively referred to herein as the "Parties."
WHEREAS, the Parties have previously executed a Stock Purchase
Agreement dated as of March 20, 1997 (the "Stock Purchase Agreement"); and
WHEREAS, the Parties wish to amend certain provisions contained in the
Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises hereinafter contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. Article 2.1 of the Stock Purchase Agreement is hereby deleted and
replaced in its entirety with the following new Article 2.1:
"2.1 Purchase Price. The purchase price ("Purchase Price") is
$4,582,000 of which Purchaser has heretofore delivered $50,000
to the Sellers as a down payment pursuant to two letter
agreements dated July 23, 1997, copies of which are annexed
hereto as Exhibit A. In consideration of the sale, assignment,
transfer and delivery of the Sellers Shares by the
Shareholders and all right, title and interest therein to
Purchaser, and in reliance upon the representations,
warranties, covenants and agreements made herein by the
Shareholders to Purchaser, Purchaser agrees to pay to
Shareholders at Closing the balance of the purchase price of
Four Million Five-Hundred Thirty-Two Thousand ($4,532,000)
Dollars, as follows:
(a) to deliver to Shareholders the sum of Three Million Eight
Hundred Thirty-Two Thousand ($3,832,,000) Dollars ("Cash
Purchase Price") by wire transfer;
(b) to deliver to Schuyler the additional sum of Three-Hundred
Thousand ($300,000) Dollars in the form of Three Hundred
Seventy-Five Thousand (375,000) shares of common stock, $.01
per share par value ("Schuyler Common Shares") of the
Purchaser;
(c) to deliver to each of the Shareholders a promissory note
(collectively, the Notes") in the face amount of Two Hundred
Thousand ($200,000) Dollars (total Four Hundred Thousand
($400,000) Dollars) in the form annexed hereto as Exhibit B."
2. Article 2.2 of the Stock Purchase Agreement is hereby deleted in its
entirety.
3. Article 3 of the Stock Purchase Agreement is hereby amended by
replacing "March 28, 1997" with "September 19, 1997."
4. Article 4.1 of the Stock Purchase Agreement is hereby amended
to add subparagraph "(1)" as follows:
"(1) the agreement described in Section 7.3 hereof."
5. Articles 4.2(a), (b), (c) and (j) of the Stock Purchase Agreement
are hereby deleted and replaced in their entirety with the following new
Articles: 4.2(a), (b) and (c):
"4.2 Obligations of Purchaser at Closing. At Closing,
Purchaser shall deliver, or cause to be delivered, to
Shareholders, the following:
(a) the sum of One Million Nine Hundred Sixteen
Thousand ($1,916,000) Dollars to Schuyler by wire transfer
[subject to Inventory Adjustment and Income Tax Adjustment;]
(b) the sum of One Million Nine Hundred Sixteen
Thousand ($1,916,000) Dollars to Shyjka by wire transfer
[subject to Inventory Adjustment and Income Tax Adjustment;]
(c) the Notes each in the face amount of Two Hundred Thousand
($200,000) Dollars;"
(j) a certificate, dated the Closing Date, of the Secretary of
Drew certifying as true and correct, the resolutions adopted
by the Board of Directors of Drew approving the execution and
delivery of the Schuyler Employment Agreement, the Shyjka
Employment Agreement, the Martin Employment Agreement, the
Recchi Employment, (the latter two of said agreements are
described in subsection 8.1(j) hereof; and"
6. Article 5.8(a) of the Stock Purchase Agreement is hereby deleted and
replaced in its entirety as follows:
"5.8 Financial Statements,
(a) The Shareholders have previously delivered to Purchaser
copies of the following financial statements of Drew
(collectively, the "Financial Statements"): (I) balance sheets
dated as at December 31, 1993, December 31, 1994, December 31,
1995 and December 31, 1996 and the related statements of
income and cash flow for the respective twelve (12) months
then ended, all of which have been audited by Deloitte &
Touche LLP, Drew's independent auditors, and (ii) unaudited
balance sheet ("Unaudited Balance sheet") as at July 31, 1997
(the "Balance Sheet Date") and unaudited statements of income
for the seven (7) months then ended. Each of the said balance
sheets is hereafter called "Balance Sheet." The Financial
Statements correctly and completely in all material respects
reflect Drew's books and records, fairly present the financial
position and results of operations of Drew as of the dates and
for the periods indicated and have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied
on a consistent basis."
7. Article 5.20(a) of the Stock Purchase Agreement is hereby amended by
deleting and replacing the first sentence of Subparagraph (a) as follows:
"(a) Shareholders have heretofore delivered to Purchaser true,
complete and correct copies of all Federal, state and local
tax returns filed by Drew for each of the four (4) immediately
preceding taxable years of Drew ended December 31, 1996, any
statement of audit adjustments applicable thereto and all
Federal, state and local returns or estimated taxes filed
during 1996 and 1997."
8. Article 5.20(b) of the Stock Purchase Agreement is amended to
delete "1995" and replace with "1996."
9. Article 7.1(d) of the Stock Purchase Agreement is amended to include
the following sentence:
"The Selling Shareholders acknowledge and agree that Drew has
not made and is not obligated to make a distribution under
Section 7.1(d) of the Agreement."
10. Article 7.1(j) of the Stock Purchase Agreement is amended by
deleting the duplicate language "state, local, foreign" and is further amended
to replace "extension or time" with "extension of time."
11. Article 7.1(p) of the Stock Purchase Agreement is amended by
replacing the date "March 28, 1997" with "September 19, 1997."
12. Article 7.3 of the Stock Purchase Agreement is hereby amended by
replacing "five (5) years' with "three (3) years."
Article 7.3 of the Stock Purchase Agreement is further amended by
deleting the last sentence and replacing with:
"All vested benefits to Harry Prince have been paid in full."
13. Article 8.1(c) of the Stock Purchase Agreement is amended by
replace "Drew" with "Purchaser."
14. Article 8.1(i) of the Stock Purchase Agreement is hereby deleted in
its entirety.
15. Article 8(j) of the Stock Purchase Agreement is hereby deleted and
replaced in its entirety as follows:
"(j) Drew shall have entered into employment
agreements in form and substance satisfactory to
Purchaser with Larry R. Martin and Mark Recchi, who are
currently employed by Drew."
16. Article 8.2(f) is hereby deleted in its entirety.
17. Article 8.2(h) of the Stock Purchase Agreement is amended
by replacing $911,712" with "$845,055."
18. Article 10.1 of the Stock Purchase Agreement is hereby amended to
add the following sentence:
"Any fees in excess of the aforesaid amounts shall not fall
under the limitation of liability set forth in Article 9.3
hereof."
19. At the Closing, documentation shall be executed by Purchaser
evidencing that Schuyler and Shyjka shall become the beneficiaries of certain
life insurance policies held in the name of certain debenture holders referenced
in Article 8.2(h) of the Stock Purchase Agreement to the extent of amounts due
and payable to each of Schuyler and Shyjka under the Notes.
20. Capitalized terms contained herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Stock Purchase Agreement.
21. All terms and conditions contained in the Stock Purchase Agreement
and not otherwise modified herein shall continue to remain in full force and
effect in each and every respect.
22. This Addendum shall be governed by and construed in accordance with
the laws of Ohio, without giving effect to choice of law principles.
IN WITNESS WHEREOF, the undersigned have executed this
Addendum as of the date first written above herein.
BCAM INTERNATIONAL, INC.
By: \s\ Michael Strauss
-------------------
Michael Strauss, President
\s\ Charles Schuyler
--------------------
Charles Schuyler
\s\ Frank Shyjka
----------------
Frank Shyjka
