SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Earliest event reported) June 21, 1996
Cycomm International Inc.
____________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Wyoming 1-11686(12b) 54-1779406
____________________________________________________________
(State or Other (Commission (IRS Employer
Jurisdiction of File No.) Identification
Incorporation No.)
1420 Springhill Road, Suite 420, McLean, VA 22102
____________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, (703) 903-9548
including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets
On June 21, 1996, Cycomm International Inc. (the
"Company") entered into an asset purchase agreement by and
among the Company and 9036-8028 Quebec, Inc. (collectively
the "Buyer") and M3i Technologies Inc. and M3i Systems Inc.
(collectively the "Seller") under which the Buyer acquired
substantially all of the assets of the Seller, for an
aggregate purchase price, subject to earn-out provisions, of
a maximum of $5,000,000 (the "Asset Purchase Agreement").
The Seller is based in Montreal, Quebec and is engaged in
the design, manufacture, sale and support of mobile
computing and communications systems.
On June 3, 1996, the Company incorporated 9036-8028
Quebec, Inc. for the sole purpose of acquiring certain
assets of the Seller. On June 21, 1996, the Buyer acquired
substantially all of the assets of the Seller in exchange
for $1,000,000 cash and Common Stock of the Company valued
at a maximum of $4,000,000, for an aggregate purchase price,
subject to earn-out provisions, of a maximum of $5,000,000.
The amount of the Common Stock payable by the Company to
Seller to is subject to earn-out provisions based on the
achievement of certain unit sales volumes for a five year
period. Any Common Stock issued pursuant to the earn-out
provisions is to be issued at the average current market
price for the quarter of issuance. The earn-out provisions
will be fully satisfied upon the Company recording
approximately $31 million in revenues from the sales of
computer units.
Item 7. Financial Statements and Exhibits
(a) The Company is unable to provide certain audited
information regarding its acquisition of substantially all
the assets of Seller, because such information is not known
or reasonably available to the Company without undue effort
and expense. See Rule 12b-21 of the Securities Exchange Act
of 1934. Pursuant to the terms of the Asset Purchase
Agreement, the Seller represented that audited financial
statements for M3i Technologies Inc.'s ("M3i's") fiscal year
ending March 31, 1996 would be provided to the Company
shortly after the closing of the transaction. In December
1996, after repeated requests by the Company for M3i's
audited financial statements, the Seller informed the
Company that the audit of M3i would not be completed.
Because the Seller has advised the Company that the audit of
M3i for the period preceding the Company's purchase of M3i's
assets would not be completed, and because the information
required to complete an audit of M3i rests peculiarly within
the knowledge of the Seller, which is not affiliated with
the Company, the Company is unable to obtain audited
financial statements for M3i without unreasonable effort or
expense. The Company only has access to unaudited financial
statements for M3i for the year ended March 31, 1996, and
for and the interim period ended May 31, 1996. These
unaudited financial statements were prepared using Canadian
generally accepted accounting principles, which differ in
certain respects from generally accepted accounting
principles in the United States; and were not compiled by
the Company.
<PAGE>
(b) Pro form financial information of Cycomm
International.
(c) Unaudited Financial Statements for the year ended
March 31, 1996 and the two months ended May 31, 1996
of M3i Technologies Inc.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and
Exchange Act of 1934, the registrant has caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized.
Date: January 9, 1997 CYCOMM INTERNATIONAL INC.
By: _________________________
Albert I. Hawk
President and CEO
<PAGE>
<TABLE>
<CAPTION>
M3i TECHNOLOGIES INC.
UNAUDITED BALANCE SHEET
AS AT MARCH 31st, 1996
(IN CANADIAN DOLLARS)
<S> <C> <C> <C>
ASSETS
Current assets
Cash 2,381
Investments
Accounts receivable 850,733
Advances 185,245
Government assistance receivable 787,259
Inventory 3,761,062
Other current assets 5,825
____________
TOTAL $5,592,505
____________
Other Assets
Fixed assets 786,286
Deferred development cost 2,131,585
Investments Lectogram (R&D) Inc. 60,500
Pre-production costs 1,878,338
____________
TOTAL 4,856,709
____________
TOTAL ASSETS $10,449,214
LIABILITIES
Current Liabilities
Bank loan 1,218,447
Accounts payable 535,969
Salaries payables 68,231
Income taxes (900,500)
Unearned income 9,656
____________
TOTAL 931,803
____________
Long term borrowing
Long term debt 950,000
Amount owing to parent company 8,292,588
____________
TOTAL 9,242,588
____________
SHAREHOLDERS' EQUITY
Common stock 249,948
Preferred stock 1,700,000
Retained earnings 1
Earnings for the fiscal year (1,675,126)
____________
TOTAL 274,823
____________
LIABILITIES & SHAREHOLDER'S EQUITY $10,449,214
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
M3i TECHNOLOGIES INC.
UNAUDITED INCOME STATEMENT
FOR PERIOD ENDING MARCH 31st, 1996
(IN CANADIAN DOLLARS)
<S> <C> <C> <C>
SALES
PCMobile 1,694,237
Peripheral 653,941
____________
TOTAL 2,348,178
____________
Cost of goods sold
Materials (1,089,898)
Assembly (16,158)
Peripheral (399,607)
____________
TOTAL (1,505,673)
____________
Royalties (39,503)
Sales commissions (41,025)
____________
TOTAL COST OF GOODS SOLD (1,586,201)
____________
Gross profit margin 761,977
____________
Operating expenses
Salaries & fringe benefits (1,694,073)
Materials, NRE and sub-contracts (164,492)
Equipment rent and maintenance (13,591)
Business promotion fees (64,115)
Transportation fees (7,782)
Printing, documentation (97,366)
and office expenditures
Traveling expenses (166,195)
Facilities expenses (118,438)
Training expenses (2,321)
Professional fees (118,549)
Parent administrative charges (120,000)
Premium (73,812)
Other expenses (418,905)
Other expenses (109,699)
Other maintenance (1,020)
Other revenues 84,175
____________
TOTAL OPERATING EXPENSES (3,086,184)
____________
Depreciation deferred (118,400)
development costs
Depreciation fixed assets (175,049)
TOTAL OPERATING EXPENSES & DEPRECIATIONS(3,379,633)
Financial charges
Interest and bank charges (67,340)
Long term interest charges (57,133)
Other interest expenses (394)
____________
TOTAL (124,867)
____________
INCOME BEFORE TAXES (2,742,523)
____________
Income taxes 900,500
Investment tax credits 166,897
____________
TOTAL TAXES 1,067,397
____________
NET INCOME $(1,675,126)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
M3i TECHNOLOGIES INC.
BALANCE SHEET
AS AT MAY 31st, 1996
(IN CANADIAN DOLLARS)
<S> <C> <C> <C>
5/31/96 4/30/96
ASSETS
Current assets
Cash 2,381 2,381
Investments
Accounts receivable 626,471 191,627
Advances 184,656 183,857
Taxes receivable 209,880 201,670
Government assistance
receivable 800,144 794,076
Inventory 3,996,061 4,001,095
Other current assets 4,622
____________ __________
TOTAL 5,819,593 5,379,328
Other Assets
Fixed assets 760,053 773,048
Deferred development
cost 2,120,061 2,131,142
Investments Lectogram
(R&D) Inc. 60,500 60,500
Deferred income taxes 1,008,000 984,250
__________ __________
TOTAL 5,817,676 5,826,921
TOTAL ASSETS 11,637,269 11,206,249
LIABILITIES
Current Liabilities
Bank loan 1,590,924 1,109,952
Accounts payable 433,037 575,431
Salaries payables 171,862 99,688
Unearned income 9,656 9,656
__________ __________
TOTAL 2,205,479 1,794,727
Long-term borrowing
Long-term debt 950,000 950,000
Amount owing to parent 8,413,916 8,345,178
__________ __________
TOTAL 9,363,916 9,295,178
SHAREHOLDERS EQUITY
Common stock 249,948 249,948
Preferred stock 1,700,000 1,700,000
Retained earnings (1,675,126) (1,675,126)
Earnings for the
fiscal year (206,949) (158,478)
___________ ___________
TOTAL 67,874 116,344
LIABILITIES & EQUITY 11,637,269 11,206,249
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
M3i TECHNOLOGIES INC.
UNAUDITED INCOME STATEMENT
FOR PERIOD ENDING MAY 31st, 1996
(IN CANADIAN DOLLARS)
<S> <C> <C> <C> <C>
Cumulative
This Month May 31, 1996
SALES
PCMobile 313,212 331,806
Peripheral 122,092 139,762
__________ __________
TOTAL 435,304 471,568
___________ ___________
Cost of goods sold
Materials (151,828) (157,677)
Assembly
Peripheral (73,230) (83,152)
Others (198) (717)
___________ ___________
TOTAL (225,256) (241,546)
___________ ___________
Royalties (6,067) (6,315)
Sales commissions (17,318) (17,976)
___________ ___________
TOTAL COST GOODS SOLD (248,641) (265,837)
___________ ___________
Gross profit margin 186,663 205,731
___________ ___________
Operating expenses
Salaries & fringe benefits (146,708) (291,672)
Materials, NRE and (9,997) (30,245)
sub-contracts
Equipment rent and (4,186) (5,716)
maintenance
Business promotion fees (6,247) (8,599)
Transportation fees 1,933 1,350
Printing, documentation (5,607) (13,379)
and office expenditures
Traveling expenses (13,251) (31,081)
Facilities expenses (9,746) (19,155)
Communications (6,380) (14,153)
Training expenses (1,388) (1,388)
Professional fees (4,638) (16,213)
Parent administrative charges(10,000) (20,000)
Premium
Other expenses (457) (910)
Other maintenance 0 0
Other revenues 0 0
___________ ___________
TOTAL OPERATING (216,672) (451,161)
EXPENSES
___________ ___________
Depreciation deferred (20,000) (20,800)
development costs
Depreciation fixed assets (12,995) (29,767)
TOTAL OPERATING EXPENSES (249,667) (501,728)
& DEPRECIATIONS ___________ ___________
Financial charges
Interest and bank charges (10,380) (20,242)
Long term interest charges (4,779) (9,554)
Other interest expenses 0 0
___________ ___________
TOTAL (15,159) (29,796)
___________ ___________
INCOME BEFORE TAXES (78,163) (325,793)
Income taxes 23,750 107,500
Investments tax credits 6,068 11,344
___________ ___________
TOTAL TAXES 29,818 118,844
___________ ___________
NET INCOME $ (48,345) $ (206,949)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CYCOMM INTERNATIONAL INC.
PRO FORMA FINANCIAL INFORMATION
ACQUISITION OF XL COMPUTING CANADA INC. ("XL CANADA")
BALANCE SHEET
<S> <C> <C> <C>
(A) (B)
Acquisition of XL Canada
Actual M3i Tech. Inc. 6/21/96
5/31/96 Assets Balance Sheet
_______ ______________ _____________
Assets
Current Assets
Cash 2,477,267 (1,000,000) -
Accounts 1,782,982 184,466
Receivable
Inventories 2,691,000 2,968,998
Prepaid Expenses 186,451 0
____________ ___________ ___________
TOTAL 7,137,700 (1,000,000) 3,153,465
____________ ___________ ___________
Other Assets
Notes Receivable 69,182 0
Property&
Equipment-Net 1,593,672 641,474
Long-term
Investments 1,175,859 1,000,000 0
Deferred Costs 473,838 0
Goodwill-Net 1,849,114 0
Patents - Net 22,500 0 0
___________ __________ ___________
TOTAL ASSETS $12,321,865 $ 0 $3,794,939
Liabilities & Shareholders'
Equity
Current Liabilities
Accounts Payable
& Accrued
Liabilities 2,404,934 0
Due to affiliate 60,129 0
Dividends payable
- -preferred stock 46,000 0
Capital Lease
Obligations-current 9,360 0
Notes Payable-
Current Portion 1,032,942 0 0
____________ ___________ ___________
TOTAL 3,553,365 0 0
Long Term Liabilities
Convertible
Debentures 3,309,002 0
Capital Lease
Obligations-long
- -term 8,207 79,004
Deferred Credit 0 0
____________ ___________ __________
Shareholders' Equity
Preferred Stock 1,500,000 0
Common Stock 33,584,302 3,715,935
Accum. Deficit (29,633,010) 0
____________ ___________ ___________
TOTAL 5,451,292 0 3,715,935
____________ ___________ ___________
TOTAL LIABILITIES
& SHAREHOLDERS'
EQUITY $ 12,321,865 $ - $3,794,939
</TABLE>
<PAGE>
<TABLE>
CYCOMM INTERNATIONAL INC.
PRO FORMA FINANCIAL INFORMATION
ACQUISITION OF XL COMPUTING CANADA INC. ("XL CANADA")
BALANCE SHEET
<CAPTION>
<S> <C> <C>
(C)
Consolidation & Pro Forma
Elimination 5/31/96
Assets
Current Assets
Cash 1,477,267
Accounts 1,967,448
Receivable
Inventories 5,659,998
Prepaid Expenses 186,451
____________ ____________
TOTAL 0 9,291,165
____________ ____________
Other Assets
Notes Receivable 69,182
Property&
Equipment-Net (641,474) 1,593,672
Long-term
Investments (1,000,000) 1,175,859
Deferred Costs 473,838
Goodwill-Net 1,849,114
Patents - Net 0 22,500
____________ ____________
TOTAL ASSETS $(1,641,474) 14,475,330
Liabilities & Shareholders'
Equity
Current Liabilities
Accounts Payable
& Accrued
Liabilities 2,404,934
Due to affiliate 60,129
Dividends payable
- -preferred stock 46,000
Capital Lease
Obligations-current 9,360
Notes Payable-
Current Portion 0 1,032,942
____________ ____________
TOTAL 0 3,553,365
____________ ____________
Long Term Liabilities
Convertible
Debentures 3,309,001
Capital Lease
Obligations-long
- -term 87,211
Deferred Credit 2,074,461 2,074,461
____________ ____________
Shareholders' Equity
Preferred Stock 1,500,000
Common Stock (3,715,935) 33,584,302
Accum. Deficit (29,633,010)
____________ ____________
TOTAL (3,715,935) 5,451,292
____________ ____________
TOTAL LIABILITIES
& SHAREHOLDERS'
EQUITY $(1,641,474) $14,475,330
</TABLE>
Pro Forma Adjustments
(A) On June 21, 1996, Cycomm, through a wholly-owned
subsidiary, acquired certain assets and assumed certain
liabilities of M3i Technologies in exchange for
$1,000,000 cash and an earn-out of a maximum of
$4,000,000 of stock. The subsidiary has been named XL
Computing Canada Inc.
(B) Per the unaudited financial statements of XL Canada.
(C) Pro forma adjustments include (i) the elimination of
the investment in XL Canada, and (ii) the allocation of
the excess fair market value of net assets acquired
over cost to negative goodwill.
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA FINANCIAL INFORMATION
ACQUISITION OF XL COMPUTING CANADA INC. ("XL CANADA")
INCOME STATEMENT
<S> <C> <C>
Actual XL Canada
Twelve Months Twelve Months
Ended Ended
May 31, 1996 May 31, 1996
____________ ____________
Sales 4,985,036 1,966,679
Cost of sales 3,634,254 1,284,196
___________ _____________
Gross profit 1,350,782 682,483
___________ _____________
General &
Administrative 7,719,858 2,436,103
Depreciation&
amortization 1,228,295 237,542
___________ _____________
8,948,153 2,673,645
___________ _____________
Loss from Operations (7,597,371) (1,991,162)
Other Income (Expense)
Interest income 64,345 0
Interest expense (235,190) (111,265)
Gain (loss) on
sale of fixed
assets (22,408) 0
Other income 6,019 797,589
___________ _____________
(187,234) 686,334
___________ _____________
Net Loss $(7,784,605) $(1,304,828)
Loss Per Share
Net loss per share $(1.95)
Weighted average
shares outstanding 4,002,289
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA FINANCIAL INFORMATION
ACQUISITION OF XL COMPUTING CANADA INC. ("XL CANADA")
INCOME STATEMENT
<S> <C> <C>
Pro Forma
(A) Twelve Months
Pro Forma Ended
Adjustments 5/31/96
____________ _____________
Sales 6,951,715
Cost of sales 4,918,450
____________ _____________
Gross profit 0 2,033,265
___________ _____________
General &
Administrative 10,155,961
Depreciation&
amortization (207,446) 1,258,390
___________ _____________
(207,446) 11,414,352
___________ _____________
Loss from Operations 207,446 (9,381,087)
Other Income (Expense)
Interest income 64,345
Interest expense (346,455)
Gain (loss) on
sale of fixed
assets (22,408)
Other income 803,618
___________ _____________
0 499,100
___________ _____________
Net Loss $ 207,446 $(8,881,987)
Loss Per Share
Net loss per share $(2.22)
Weighted average
shares outstanding 4,002,289
Pro Forma Adjustments:
(A) Amortization of deferred credit of $2,074,461 over 10
years.
</TABLE>
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