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) AUGUST 14, 2000
---------------------------
TekInsight.Com, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-11568 95-4228470
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
18881 Von Karman Avenue, Suite 250, Irvine, California 92612
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (949) 955-0078
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5 HANOVER SQUARE, 24TH Floor, New York, New York 10004
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 2. ACQUISITIONS OR DISPOSITIONS
We previously reported in our Form 8-K dated on August 14, 2000 that we
acquired Data Systems Network Corporation by merging Data Systems with and into
our wholly owned subsidiary, TekInsight Services, Inc. The aggregate
consideration to be paid to Data Systems stockholders consisted of approximately
2,185,755 shares of TekInsight preferred stock based on an aggregate of
5,575,906 shares of common stock of Data Systems outstanding as of the effective
time of the merger and an exchange ratio of 0.392 of a share of TekInsight
preferred stock for each share of Data Systems common stock outstanding. In
addition, we assumed 462,500 options and 50,000 warrants issued by Data Systems
which were converted into the right to acquire 181,300 and 19,600 shares of
TekInsight preferred stock, respectively. Finally, as a result of the merger,
TekInsight Services assumed, and TekInsight agreed to guaranty, Data Systems'
existing credit facility with Foothill Capital Corporation. As of June 30, 2000,
approximately $3,700,000 was outstanding under the credit facility.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
Consolidated audited balance sheets of Data Systems as of December
31, 1999 and 1998 and the related statements of operations, changes
in stockholders' equity and cash flows for the years ended December
31, 1999, 1998 and 1997 are incorporated herein by reference to
TekInsight's Registration Statement, Amendment No. 1, on Form S-4
dated July 13, 2000 (No. 333-36044).
Consolidated unaudited balance sheets of Data Systems as of March
31, 2000 and the related statements of operations, changes in
stockholders' equity and cash flows for the periods ended March 31,
2000 and 1999 are also incorporated herein by reference to
TekInsight's Registration Statement, Amendment No. 1, on Form S-4
dated July 13, 2000 (No. 333-36044).
Consolidated unaudited balance sheets of Data Systems as of June
30, 2000 and the related statements of operations, changes in
stockholders' equity and cash flows for the periods ended June 30,
2000 and 1999 are incorporated herein by reference to Data Systems'
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
(B) PRO FORMA FINANCIAL INFORMATION
Unaudited pro forma consolidated financial information of
TekInsight relating to the Data Systems acquisition is attached
hereto as Exhibit 99.4.
(C) EXHIBITS
See Exhibit Index.
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<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.
Dated: October 27, 2000 TEKINSIGHT.COM, INC.
By:/s/ Arion Kalpaxis
Arion Kalpaxis
Chief Operating Officer
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<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT NAME
------ ------------
23.1 Consent of Grant Thornton LLP. Filed herewith.
23.2 Consent of Plante & Moran, LLP. Filed herewith.
99.1 Consolidated audited balance sheets of Data Systems as of
December 31, 1999 and 1998 and the related statements of
operations, changes in stockholders' equity and cash flows
for the years ended December 31, 1999, 1998 and 1997.
(Incorporated herein by reference to TekInsight's
Registration Statement, Amendment No. 1, on Form S-4 dated
July 13, 2000 (No.333-36044).
99.2 Consolidated audited balance sheets of Data Systems as of
March 31, 2000 and the related statements of operations,
changes in stockholders' equity and cash flows for the
periods ended March 31, 2000 and 1999.(Incorporated herein
by reference to TekInsight's Registration Statement,
Amendment No. 1, on Form S-4 dated July 13, 2000 (No.
333-36044).
99.3 Consolidated unaudited balance sheets of Data Systems as of
June 30, 2000 and the related statements of operations,
changes in stockholders' equity and cash flows for the
periods ended June 30, 2000 and 1999. Incorporated herein by
reference to Data Systems'Quarterly Report on Form 10-Q for
the quarter ended June 30, 2000.
99.4 Unaudited pro forma consolidated financial information of
TekInsight relating to the Data Systems acquisition. Filed
herewith.
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<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Report on Form 8-K
of our report dated February 14, 2000 relating to the financial statements of
Data Systems Network Corporation, which appear in the Joint Proxy
Statement/Prospectus contained in Amendment No. 1 to the Registration Statement
on Form S-4 (registration no. 333-36044) of TekInsight.Com, Inc.
/s/ GRANT THORNTON LLP
October 27, 2000
Southfield, Michigan
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<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Current Report on
Form 8-K of our report dated August 20, 1998 relating to the financial
statements and schedules of Data Systems Network Corporation, which appear in
the Joint Proxy Statement/Prospectus contained in Amendment No. 1 to the
Registration Statement on Form S-4 (registration no. 333-36044) of
TekInsight.Com, Inc.
/s/ PLANTE & MORAN, LLP
PLANTE & MORAN, LLP
October 27, 2000
Southfield, Michigan
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<PAGE>
EXHIBIT 99.4
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION OF TEKINSIGHT.COM, INC. AND SUBSIDIARIES
The accompanying unaudited pro forma condensed financial statements
have been prepared to show the effects of the August 14, 2000 acquisition of
Data Systems by TekInsight. The pro forma information is based upon the
aggregate merger consideration being $12.5 million.
The merger consideration consisted of the issuance of Series A
preferred stock in exchange for all of the common stock of Data Systems. The
acquisition is accounted for as a purchase.
The following unaudited pro forma consolidated balance sheet presents
the pro forma financial position of TekInsight at June 30, 2000 as if the
acquisition of Data Systems had occurred on such date. Included is an adjustment
to record the elimination of Data Systems' previous shares and the issuance of
TekInsight's shares of Series A preferred stock to former shareholders of Data
Systems.
The unaudited pro forma consolidated statements of operations for the
year ended June 30, 2000, reflect the combined results of TekInsight and Data
Systems as if the acquisition had occurred on July 1, 2000.
The unaudited pro forma consolidated statements of operations do not
necessarily represent actual results that would have been achieved had the
companies been together as of July 1, 2000, nor may they be indicative of future
operations. These unaudited pro forma consolidated financial statements should
be read in conjunction with TekInsight's and Data Systems' historical financial
statements and notes thereto.
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<PAGE>
TekInsight.com, Inc. and Subsidiaries
Unaudited Pro Forma Balance Sheet
as of June 30, 2000
Assets
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------
TekInsight Data Systems Total Debit Credit Pro Forma
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash $3,960,963 $1,370,335 $5,331,298 (1)$250,000 $5,081,298
Accounts receivable, net allowance for
doubtful accounts of $123,500 and
$170,000, respectively 348,835 7,133,298 7,482,133 7,482,133
Inventories - 551,943 551,943 551,943
Prepaid expenses 310,047 - 310,047 310,047
Notes receivable - other - 50,000 50,000 50,000
Refund receivable 70,000 - 70,000 70,000
Other current assets - 1,099,473 1,099,473 1,099,473
--------------- --------------- ------------ -----------
TOTAL CURRENT ASSETS 4,689,845 10,205,049 14,894,894 14,644,894
LONG-TERM NOTES RECEIVABLE 1,800,000 - 1,800,000 1,800,000
INVESTMENTS - Marketable Securities 3,629,418 - 3,629,418 3,629,418
PROPERTY AND EQUIPMENT, net
of accumulated depreciation of
$79,721 and $2,821,949,
respectively 111,635 1,199,846 1,311,481 1,311,481
INTANGIBLE ASSETS, net of
amortization of $12,786 and
$642,688, respectively 1,147,620 2,747,320 3,894,940 (1)11,806,097 15,701,037
CAPITALIZED SOFTWARE, net 1,100,977 - 1,100,977 1,100,977
DEPOSITS AND OTHER ASSETS 45,658 258,929 304,587 304,587
--------------- --------------- ------------- ----------- ---------- --------------
$12,525,153 $14,411,144 $26,936,297 $11,806,097 $250,000 $38,492,394
============== =============== ============= =========== ========== ==============
</TABLE>
See notes to pro forma financial statements
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<PAGE>
TekInsight.com, Inc. and Subsidiaries
Unaudited Pro Forma Balance Sheet
as of June 30, 2000
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------
TEKINSIGHT DATA SYSTEMS TOTAL DEBIT CREDIT PRO FORMA
---------- ------------ ---------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 769,566 $6,549,069 $7,318,635 $7,318,635
Bank line of credit - 3,666,845 3,666,845 3,666,845
Accrued expenses 172,604 1,883,351 2,055,955 2,055,955
Deferred interest 10,710 - 10,710 10,710
State audit reserves 1,722,432 - 1,722,432 1,722,432
Deferred maintenance revenue 1,367,976 1,367,976 1,376,976
Accrued termination costs, short-term 213,633 - 213,633 213,633
--------------- --------------- ------------ ----------------
TOTAL CURRENT LIABILITIES 2,888,945 13,467,241 16,356,186 16,356,186
LONG-TERM NOTES PAYABLE,
net of current portion 17,675 - 17,675 17,675
STOCKHOLDERS' EQUITY
Preferred stock, $.0001 par value,
10,000,000 shares authorized
2,189,721 (pro forma) (1) - - - (1) 219 219
Common stock, $.0001 par value,
100,000,000 shares authorized,
16,293,620 shares issued and outstanding
as of June 30, 2000 1,630 55,589 57,219 (1)55,589 1,630
Additional paid in capital 20,763,576 18,620,722 39,384,298 (1)18,620,722 12,499,781 33,263,357
Unrealized gain on securities 964,063 - 964,063 964,063
Accumulated (deficit) (12,110,736) (17,732,408)(29,843,144) (1)17,732,408 (12,110,736)
-------------- ------------- ------------ ------------ ------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 9,618,533 943,903 10,562,436 18,676,311 30,232,408 22,118,533
============= ============= ============ ============ ============= =================
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $12,525,153 $14,411,144 $26,936,297 $18,676,311 $30,232,408 $38,492,394
============= ============= ============ ============ ============= =================
</TABLE>
See notes to pro forma financial statements
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<PAGE>
TekInsight.com, Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended June 30, 2000
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
----------------------
TEKINSIGHT DATA SYSTEMS TOTAL DEBIT CREDIT PRO FORMA
---------- ------------ ---------- -------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES $1,962,405 $51,462,874 $53,425,279 $ $ $53,425,279
COST OF GOODS SOLD 1,373,351 43,037,907 44,411,258 44,411,258
---------- ------------ ---------- -------- --------- -------------
GROSS PROFIT 589,054 8,424,967 9,014,021 9,014,021
---------- ------------ ---------- -------- --------- -------------
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Selling, general and administrative 3,528,376 9,743,947 13,272,323 13,272,323
Research and development 275,805 275,805 275,805
Depreciation and amortization 43,362 886,261 929,623 (1) 545,670 1,475,293
---------- ------------ ---------- -------- --------- -------------
TOTAL OPERATING EXPENSES 3,847,543 10,630,208 14,477,751 545,670 15,023,421
---------- ------------ ---------- -------- --------- -------------
OPERATING LOSS (3,258,489) (2,205,241) (5,463,730) 545,670 (6,009,400)
LOSS ON MARKETABLE SECURITIES (1,191,213) - (1,191,213) (1,191,213)
RESERVE FOR UNCOLLECTABLE
NOTE RECEIVABLE (476,000) - (476,000) (476,000)
OTHER INCOME (EXPENSE)
Interest income (expense) 432,983 (511,908) (78,925) (78,925)
Other income (expense) - 649,532 649,532 649,532
---------- ------------ ---------- -------- --------- -------------
LOSS FROM CONTINUING OPERATION
BEFORE INCOME TAXES (4,492,719) (2,067,617) (6,560,336) 545,670 (7,106,006)
INCOME TAX BENEFIT 545,480 - 545,480 545,480
---------- ------------ ---------- -------- --------- -------------
LOSS CONTINUING OPERATIONS (3,947,239) (2,067,617) (6,014,856) 545,670 (6,560,526)
DISCONTINUED OPERATIONS
Loss from discontinued operations
net of applicable income taxes (28,671) - (28,671) (28,671)
---------- ------------ ---------- -------- --------- -------------
TOTAL LOSS FROM
DISCONTINUED OPERATIONS (28,671) - (28,671) (28,671)
---------- ------------ ---------- -------- --------- -------------
NET LOSS $(3,975,910) $ (2,067,617)$(6,043,527) $545,670 $ (6,589,197)
========== ============ =========== ======== ========= =============
NET LOSS PER SHARE
Continued $ (0.25) $ (0.37) $ - $ (.31)
========= =========== ============ =============
Discontinued $ (0.00) $ - $ - $ -
========= =========== ============ ============
NET LOSS PER SHARE
-basic and diluted $ (0.25) $ (0.37) $ - $ (0.31)
========= =========== ============ ===========
WEIGHTED AVERAGE NUMBER OF
SHARES USED IN COMPUTATION 15,878,749 5,523,506 5,447,700 21,326,449
========== =========== ============ ===========
NET LOSS $(3,975,910) $ (2,067,617)$(6,043,527) $(6,589,197)
OTHER COMPREHENSIVE LOSS, NET OF TAX
Unrealized loss on available
for sale securities (1,482,446) - (1,482,446) (1,482,446)
COMPREHENSIVE LOSS $(5,458,356) $(2,067,617)$(7,525,973) $(545,670) $(8,071,643)
=========== =========== ============ ========= ========= ===========
See notes to pro forma financial statements
</TABLE>
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<PAGE>
TekInsight.Com, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
A. The following unaudited pro forma adjustments are included in the
accompanying unaudited pro forma consolidated balance sheet at June 30, 2000:
(1) To record the acquisition of all of the issued stock of
Data Systems based upon the average market value of TekInsight common stock as
quoted on the Nasdaq SmallCap Market for the 10 days immediately prior to the
August 14, 2000 closing date of the merger was below $5.00 per share resulting
in a purchase price of $12.5 million. Based upon the merger agreement exchange
ratio taken in conjunction with the Series A preferred conversion ratio, the
effective conversion ratio of the Series A preferred stock is .392 to one. The
acquisition is accounted for as a purchase. Costs incurred as a result of the
acquisition are approximately $250,000.
B. The following pro forma adjustment is included in the accompanying
unaudited pro forma consolidated statements of operations for the years ended
June 30, 2000:
(1) To record the amount of amortized goodwill recognized in
the one-year period. The impact of goodwill on a yearly basis is approximately
$545,670. The goodwill is amortized over a twenty-year period.
C. The weighted average number of shares used in the pro forma
computation of net loss per share assumes the conversion of all of the Series A
preferred shares issued to the shareholders of Data Systems into common stock of
TekInsight.
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