<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): JULY 17, 1995
MEGACARDS, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 0-19503 43-1325291
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
organization) Number)
1353 NORTH WARSON
ST. LOUIS, MISSOURI 63132
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 993-3686
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired. The required
-------------------------------------------
financial statements of Windsor and Janco were included in the Company's Form
10-K for the year ended December 31, 1995 as Item 8. Financial Statements and
------
Supplementary Data.
(b) Pro forma financial information. The following pro forma
-------------------------------
consolidated balance sheet as of June 30, 1995 and statements of operations
for the six months ended June 30, 1995 and for the year ended December 31,
1994 give effect to the Business Combination as if it had been effected as of
the beginning of each period.
The pro forma financial statements have been prepared by
management of the Company and may not be indicative of the financial position
or results that actually would have occurred if the Business Combination had
been in effect on the dates indicated or which may be obtained in the future.
- 2 -
<PAGE> 3
<TABLE>
<CAPTION>
MEGACARDS, INC.
PRO FORMA CONSOLIDATED FINANCIAL
BALANCE SHEET AS OF JUNE 30, 1995
Pro Forma
Windsor/Janco Megacards Adjustments Total
------------- --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS:
CURRENT ASSETS
Cash $ (188,407) $ 103,816 $ 0 $ (84,591)
Accounts receivable; net of
allowance for returns and
doubtful accounts 2,209,486 1,456,576 90,000 <F1> 3,738,865
(17,197) <F2>
Inventories 2,915,956 4,806,759 (90,000) <F1> 6,256,058
(1,376,657) <F3>
Other current assets 137,968 155,749 0 293,717
---------- ---------- ----------- -----------
Total current assets 5,075,003 6,522,900 (1,393,854) 10,204,049
PROPERTY AND EQUIPMENT - At cost
less accumulated depreciation
and amortization 240,206 2,510,658 (181,658) <F4> 2,569,206
OTHER LONG-TERM ASSETS 69,104 307,895 (56,500) <F5> 320,499
---------- ---------- ----------- -----------
TOTAL ASSETS $5,384,313 $9,341,453 $(1,632,012) $13,093,754
========== ========== =========== ===========
LIABILITIES & SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES
Notes payable - bank $1,491,713 $2,737,805 $ 0 $ 4,229,518
Notes payable - shareholders 1,022,044 0 0 1,022,044
Accounts payable and accrued
expenses 975,844 848,400 220,000 <F1> 1,869,662
75,418 <F6>
(250,000) <F7>
Other current liabilities 0 81,416 (38,109) <F6> 43,307
Current portion of long-term debt 0 141,596 0 141,596
---------- ---------- ----------- -----------
Total current liabilities 3,489,601 3,809,217 7,309 7,306,127
EXCESS OF ACQUIRED ASSETS
OVER COST 1,111,203 0 0 1,111,203
NOTES PAYABLE - SHAREHOLDERS,
net of current portion 327,956 0 0 327,956
CAPITAL LEASE OBLIGATION
- RELATED PARTY 0 1,761,118 127,156 <F7> 1,888,274
LONG-TERM DEBT, net of
current portion 0 74,302 0 74,302
SHAREHOLDERS' EQUITY
Preferred stock 0 0 0 0
Common stock 5,000 25,041 71,131 <F8> 101,172
Additional paid-in capital - - 6,134,339 (4,229,041) <F9> 1,905,298
Retained earnings (accumulated
deficit) 450,553 (2,462,564) 2,462,564 <F9> 379,422
(71,131) <F8>
---------- ---------- ----------- -----------
Total shareholders' equity 455,553 3,696,816 (1,766,477) 2,385,892
---------- ---------- ----------- -----------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $5,384,313 $9,341,453 $(1,632,012) $13,093,754
========== ========== =========== ===========
- 3 -
<PAGE> 4
MEGACARDS, INC.
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET
<FN>
<F1> Reflects the sale of the inventory related to the Company's retail
store in the St. Louis Galleria and the corresponding reduction of
the retail lease obligation as follows:
Receivable for sale of store $ 90,000
Inventory sold 90,000
Equipment and leasehold improvements sold 182,850
Other assets 4,000
Lease obligation 220,000
<F2> Reflects an increase in the allowance for doubtful accounts.
<F3> Reflects reduction in fair value of inventory resulting primarily from
management's intentions with respect to accelerating the disposal of
certain categories of inventory.
<F4> Reflects an adjustment to reduce property, plant and equipment acquired
to its fair value.
<F5> Reflects an adjustment to reduce other long-term assets to their fair
value.
<F6> Reflects the adjustment for certain administrative and personnel costs.
<F7> Reflects the adjustment in the capital lease obligation resulting from
an amendment in the agreement.
<F8> Reflects the restatement of the components of the equity for Janco and
Windsor as a result of the Business Combination.
<CAPTION>
As of June 30, 1995
-------------------
<S> <C>
Increase in par value resulting
from the issuance of 2,541,000
shares of Megacards' common stock $ 71,131
Corresponding reduction in
retained earnings $ 71,131
<F9> Reflects the adjustment for the fair value of Megacards, Inc.
("Megacards"), which is treated as the acquired company for purposes
hereof, at the effective date of the Business Combination and the
corresponding adjustment to equity of Megacards, as follows:
<CAPTION>
As of June 30, 1995
-------------------
<S> <C>
Value of Megacards stock prior to
the Business Combination $1,930,339
Book value 3,696,816
-----------
Reduction in equity ($1,766,477)
Applied as follows:
Elimination of accumulated deficit $2,462,564
Reduction in paid-in capital 4,229,041
-----------
($1,766,477)
</TABLE>
- 4 -
<PAGE> 5
MEGACARDS, INC.
PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
Pro Forma
Windsor/Janco Megacards Adjustments Total
------------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 7,914,801 $4,668,325 $ (148,032) <F1> $ 12,435,094
Cost of sales 5,890,748 3,485,511 (171,328) <F2> 9,204,931
------------ ---------- ----------- -------------
Gross margin 2,024,053 1,182,814 23,296 3,230,163
Selling, general and
administrative expenses 1,894,349 1,368,429 (88,766) <F3> 3,174,012
------------ ---------- ----------- -------------
Income (loss) from operations 129,704 (185,615) 112,062 56,151
------------ ---------- ----------- -------------
Interest expense 135,047 363,445 (61,208) <F4> 437,284
Other income (225) (79,693) 0 (79,918)
------------ ---------- ----------- -------------
134,822 283,752 (61,208) 357,366
Loss before taxes (5,118) (469,367) 173,270 (301,215)
Income taxes 0 0 0 0
------------ ---------- ----------- -------------
Net loss $ (5,118) $ (469,367) $ 173,270 $ (301,215)
============ ========== =========== =============
Net loss per
common share (0.00) $ (0.09)
============ =============
Weighted average number of
common shares outstanding 2,541,000 3,375,741
</TABLE>
- 5 -
<PAGE> 6
MEGACARDS, INC.
PRO FORMA CONSOLIDATED
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Pro Forma
Windsor/Janco Megacards Adjustments Total
------------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $ 15,589,849 $ 14,222,331 $ (287,235) <F1> $ 29,524,945
Cost of sales 11,536,953 12,072,546 (392,699) <F2> 23,216,800
------------- ------------- ----------- -------------
Gross margin 4,052,896 2,149,785 105,464 6,308,145
Selling, general and
administrative expenses 4,028,842 3,672,514 (189,390) <F3> 7,511,966
------------- ------------- ----------- -------------
Income (loss) from operations 24,054 (1,522,729) 294,854 (1,203,821)
------------- ------------- ----------- -------------
Interest expense 224,146 781,766 (119,195) <F4> 886,717
Other expense (income) (56,056) 29,514 0 (26,542)
------------- ------------- ----------- -------------
168,090 811,280 (119,195) 860,175
Loss before taxes (144,036) (2,334,009) 414,049 (2,063,996)
Income taxes (credit) 0 (117,000) 0 (117,000)
------------- ------------- ----------- -------------
Net Loss $ (144,036) $ (2,217,009) $ 414,049 $ (1,946,996)
============= ============= =========== =============
Net loss per common share $ (0.06) $ (0.58)
============= =============
Weighted average number of
common shares outstanding 2,541,000 3,375,741
- 6 -
<PAGE> 7
<FN>
MEGACARDS, INC.
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
<F1> To eliminate revenues associated with the disposal of the retail store
in the St. Louis Galleria.
<F2> To reflect the disposal of interest in the retail store; and to reflect
depreciation on assets acquired by the Company based on their
adjusted values.
<CAPTION>
Six months ended Year ended
June 30, 1995 December 31, 1994
---------------- -----------------
<S> <C> <C>
Galleria store $ 135,198 $ 385,385
Depreciation reductions 36,130 7,314
---------- ----------
$ 171,328 $ 392,699
========== ==========
<F3> To reflect certain administrative and sales expenses related to
personnel; and to reflect depreciation on assets acquired by the
Company based on adjusted values.
<CAPTION>
Six months ended Year ended
June 30, 1995 December 31, 1994
---------------- -----------------
<S> <C> <C>
Personnel $ 83,367 $ 181,008
Depreciation 5,399 8,382
--------- ----------
$ 88,766 $ 189,390
========= ==========
<F4> To reflect the reduction in interest expense related to the amendments
of the capital lease for the Erie facility which adjusted the payment
and interest terms of such agreement.
</TABLE>
- 7 -
<PAGE> 8
(c) Exhibits. The following exhibit was filed with the
--------
Company's Form 8-K filed July 24, 1995.
<TABLE>
<CAPTION>
Exh. No. Description
-------- -----------
<C> <S>
2.1 Agreement, dated as of July 17, 1995, by and among
Megacards, Inc., Leo M. Rodgers, Richard B. Rothman,
The Abrams Family Trust, The Stacey Kevin and
Meredith Trust dtd 12/1/91 and The Janet L. Salk
Children's Trust and Lloyd R. Abrams as Voting
Trustee under that certain Voting Trust Agreement
dated July 17, 1995 by and among Lloyd R. Abrams as
Voting Trustee and Leo M. Rodgers, Richard B. Rothman
and Lloyd R. Abrams as Trustee of each of The Abrams
Family Trust, The Stacey Kevin and Meredith Trust
dated 12/1/91 and The Janet L. Salk Children's Trust.
</TABLE>
- 8 -
<PAGE> 9
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 thereunto duly authorized.
Dated: April --, 1996
MEGACARDS, INC.
By--------------------------------------
Lloyd R. Abrams, President, Chief
Executive Officer and Chief
Financial Officer
