SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported):
October 9, 1996
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-4882 84-0581776
(State or other jurisdiction of incorporation) (Commission File No.)
(IRS Employer Identification No.)
1801 California Street, Suite 295, Denver, Colorado
80202
(Address of principal executive offices) (Zip Code)
(303) 292-1111
(Registrant's telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
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Items 1 - 4. Inapplicable.
Item 5. Other Events
Sale of Kinesix Division
On October 9, 1996, Scientific Software-Intercomp, Inc. (SSI) announced
the Closing of its previously announced sale of its Kinesix division to a
group including the former President of the Kinesix division, Mike Teague.
Year-to-date (September) revenues for the Kinesix group were approximately
$1.3 million dollars, with year-to-date losses approximately $400 thousand.
The consideration for the purchase of the assets was $376 thousand plus
assumption of liabilities.
American Arbitration Association Award Against SSI
On October 9, SSI announced that pursuant to Note (3) advised in the
Company's 2nd Quarter (June 30, 1996) 10Q filing concerning the unrelated
English company Kinesix (Europe), the American Arbitration Association has
awarded against Kinesix (SSI) for a sum of $674 thousand. SSI intends to
vigorously appeal the award.
Collection of Previously Written-off Receivables
On October 9, 1996, SSI announced that they have received payment for
receivables which had been previously written off for a net value of $1.8
million. The Company had previously agreed, under the terms of the Letter of
Intent signed on September 10, 1996 with Smedvig asa (Oslo, Norway) for the
acquisition of SSI by Smedvig, that these receivables would be retained for
the benefit of the shareholders of SSI.
Termination of Letter of Intent and Negotiations for the Acquisition of
SSI by Smedvig asa of Oslo, Norway
On October 14, 1996, SSI announced that Smedvig asa (Oslo, Norway) has
terminated negotiations for its purchase of substantially all of the assets of
SSI. On September 10, 1996, SSI and Smedvig signed a non-binding letter of
intent for such purchase.
Item 6 Inapplicable.
Item 7 Financial Statements and Exhibits
(a) Inapplicable.
(b) Inapplicable.
(c) Exhibits
Press Releases dated October 9 and October 14, 1996
Extract from Note (3) of the Registrant's 2nd Quarter (June 30,
1996) 10Q Filing concerning Kinesix, a division of Scientific
Software-Intercomp, Inc.
Item 8. Inapplicable.
Date: October 18, 1996 SCIENTIFIC SOFTWARE-INTERCOMP, INC.
By: /s/ George Steel
George Steel, Chairman and Chief Executive Officer
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PRESS INFORMATION
FOR IMMEDIATE RELEASE: OCTOBER 9, 1996
CONTACT: GEORGE STEEL
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
(303) 292-1111
SCIENTIFIC SOFTWARE-INTERCOMP ANNOUNCES SALE OF KINESIX BUSINESS, RESULTS OF
ARBITRATION HEARING AND COLLECTION OF WRITTEN-OFF RECEIVABLES
Denver, Colorado ... Scientific Software-Intercomp, Inc. (OTC) today announced
the Closing of its previously announced sale of its Kinesix division to a
group including the former President of the Kinesix division, Mike Teague.
Year-to-date (September) revenues for the Kinesix group were approximately
$1.3 million dollars, with year-to-date losses approximately $400 thousand.
SSI also announced that pursuant to Note (3) advised in the Company's 2nd
Quarter (June 30, 1996) 10Q filing concerning the unrelated English company
Kinesix (Europe), the American Arbitration Association has awarded against
Kinesix (SSI) for a sum of $674 thousand. SSI intends to vigorously appeal
the award.
Scientific Software-Intercomp also announced that they have received payment
for receivables which had been previously written off for a net value of $1.8
million. The Company had previously agreed, under the terms of the Letter of
Intent signed on September 10, 1996 with Smedvig asa (Oslo, Norway) for the
acquisition of SSI by Smedvig, that these receivables would be retained for
the benefit of the shareholders of SSI.
The sale, announced in the Letter of Intent, is for the purchase of
substantially all of the assets of SSI by Smedvig for a price of $23.0 million
in cash, and is conditional upon a number of items, including the execution of
a definitive agreement between Smedvig and SSI, satisfactory completion of due
diligence by Smedvig, reaching agreement with the holder of the preferred
stock on its retirement, completion of the class action lawsuit settlement,
and approval of the acquisition by a majority of SSI's voting shares. The due
diligence process is now underway and proceeding satisfactorily. Closing of
the transaction would be expected at year-end.
Scientific Software-Intercomp, Inc. provides high technology software and
solutions for the oil and gas industry. The company has major offices in
Denver, Houston, Calgary and London and smaller offices in Kuala Lumpur and
Beijing.
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PRESS INFORMATION
FOR IMMEDIATE RELEASE: OCTOBER 14, 1996
CONTACT: GEORGE STEEL
SCIENTIFIC SOFTWARE-INTERCOMP, INC.
(303) 292-1111
SMEDVIG ASA TERMINATES LETTER OF INTENT AND NEGOTIATIONS FOR THE ACQUISITION
OF SCIENTIFIC SOFTWARE-INTERCOMP, INC. ASSETS BY SMEDVIG
Denver, Colorado ... Scientific Software-Intercomp, Inc. (OTC) has announced
that Smedvig asa (Oslo, Norway) has terminated negotiations for its purchase
of substantially all of the assets of SSI. On September 10, 1996, SSI and
Smedvig signed a non-binding letter of intent for such purchase.
While Smedvig had not yet completed its due diligence on SSI, on October 14,
1996 Smedvig advised SSI, without further explanation, that it had concluded
that satisfactory completion of its due diligence will not be possible. On
October 10, 1996, SSI received an extensive comments letter from the
Securities and Exchange Commission with respect to its Form 10-K filed for the
year ended December 31, 1995 and Forms 10-Q for the first two calendar
quarters of 1996. The comments include questions on the accounting, and the
timing of the application thereof, which resulted in large losses reported in
those filings including SSI's large write-off of capitalized software and
shortening of estimated lives thereof and its lesser but substantial increases
in its bad debt reserve and in its expense accruals. The Company intends to
respond fully and promptly to the SEC comments.
SSI recently reported an award by the American Arbitration Association against
it in the amount of $674,000 concerning a claim by its prior European
distributor of SSI's Kinesix division. While SSI intends to appeal the award,
such award as well as other possible due diligence issues may also have
adversely affected Smedvig's decision not to proceed with the acquisition.
SSI also previously announced the collection of written off receivables in a
net amount of $1.8 million and the sale of its Kinesix division, both of which
may have had the effect of increasing amounts received from the sale of SSI to
Smedvig.
Scientific Software-Intercomp, Inc. provides high technology software and
solutions for the oil and gas industry. The company has major offices in
Denver, Houston, Calgary and London and smaller offices in Kuala Lumpur and
Beijing.
<PAGE>
Extract from Note (3) of the Registrant's 2nd Quarter (June 30, 1996) 10Q
Filing concerning Kinesix, a division of Scientific Software-Intercomp, Inc.
Arbitration Number 70T 181 0038 96 D; Kinesix, a division of Scientific
Software-Intercomp, Inc. and Kinesix (Europe) Ltd., an English Company -
Houston, Texas. The Company, through Kinesix, a division of the Company,
entered into a Territory Distributor Agreement with Kinesix (Europe) Ltd.
("KEL"), an unaffiliated entity located in London, U.K. The Distributor
Agreement required under most circumstances a decision from the American
Arbitration Association ("AAA") before its termination could be effective. On
March 4, 1996 the Company commenced arbitration seeking declaration of
termination of the Distributor Agreement and money due the Company in excess
of $200,000. Thereafter, KEL in writing advised its customer base that it had
ceased to trade in Kinesix products. As a result of this action by KEL and
pursuant to the Distributor Agreement, the Company has declared the
Distributor Agreement terminated without the requirement of arbitration. In
the interim, on April 1, 1996 KEL filed an answer and counterclaim with the
AAA and asserts damages that exceed $1 million without substantiation. It is
the opinion of the Company and its counsel that KEL's claim is without merit
and the Company is vigorously defending the claim.
