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) : December 11, 1997
InfoNow Corporation
(Exact Name of Registrant as specified in its charter)
Delaware 0-19813 04-3083360
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification no.)
1875 Lawrence, Suite 1100 Denver, CO 80202
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-293-0212
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
On December 11, 1997, InfoNow Corporation (the "Company") sold all the assets
of its wholly-owned subsidiary, Cimarron International, Inc. ("Cimarron"), to
Cimarron Dog and Pony, Inc. ("Dog and Pony") for a total of $85,000. Dog and
Pony is owned by Don Cohen, a director of the Company and the former owner of
Cimarron prior to its acquisition by the Company in 1995. This sale
transaction included assets of approximately $63,000 consisting of specialized
computer equipment and software, of which the Company recognized a book gain
of approximately $24,000. Also included in the transaction were approximately
$58,500 of accounts receivable which were transferred at full value as
recorded on Cimarron's books with no offset for bad debt. Approximately
$66,000 of intangible assets related to the business tradename, customer
lists, in-process contracts and related unbilled revenues were also included
in the transaction. Mr. Cohen also assumed all recorded liabilities of
Cimarron which amounted to approximately $51,000, consisting of approximately
$13,000 of accounts payable and $37,000 of other accrued liabilities. As part
of the sale transaction, the Company executed an earnout agreement which
provides that Dog and Pony shall pay 25% of all quarterly gross profits in
excess of $116,500 to the Company until the earlier of: (i) March 31, 2001,
or (ii) until payments total $100,000.
The Company also executed a cost sharing agreement with Dog and Pony
which provides that the Company shall provide certain administrative services
for $12,000 per month. This agreement expires in March 31, 1998, and can be
extended by mutual agreement of both parties.
After execution of this transaction, the Company ceased all operations of its
subsidiary Cimarron and liquidated the subsidiary on December 19, 1997.
The following unaudited pro forma consolidated balance sheet gives effect to
the Company's sale of 100% of its interest in its subsidiary Cimarron as if it
had occurred on September 30, 1997.
The following unaudited pro forma consolidated income statements for the year
ended December 31, 1996 and the nine months ended September 30, 1997 give
effect to the disposition of Cimarron as if it had occurred on January 1,
1996. The unaudited pro forma consolidated financial information and notes
thereto do not purport to represent what the Company's results would actually
have been if such transactions had in fact occurred on such date.
The pro forma adjustments are based upon currently available information and
upon certain assumed circumstances. The unaudited pro forma consolidated
financial information and explanatory notes should be read in conjunction with
the consolidated financial information filed by the Company with the
Securities and Exchange Commission.
INFONOW CORPORATION
Proforma Balance Sheet (unaudited)
As of September 30, 1997
(US dollars, in thousands)
<TABLE>
<CAPTION>
As reported on Other
Form 10Q Cimarron Adjustments ProForma
<S> <C> <C> <C> <C>
Assets:
Cash 424 (61) 85 (B) 448
Accounts receivable 138 (73) 65
Other current assets 41 (6) 35
Property and Equipment, net 779 (45) 734
Capitalized SW Development 211 - 211
Investment in Cimarron - - (25) (A) (25)
296 (C) 296
(271) (B) (271)
-
Other assets and deferred charges 9 - - 9
_____ _____ ________ _____
Total Assets 1,602 (185) 85 1,502
_____ _____ ________ _____
_____ _____ ________ _____
Liabilities and Stockholder's Equity
Accounts payable
and accrued liabilities 412 (31) 381
Note payable - current 224 - 224
Intercompany Accounts - 25 (25) (A) -
Deferred Compensation 23 (2) 21
Capital lease obligation - current 5 - 5
Unearned revenue 80 (19) 161
Current income taxes payable - - -
____ ____ _______ ___
Total current liabilities 844 (27) 792
Notes payable - long term 53 - 53
Capital lease obligations -
long term 6 - 6
Total Liabilities 59 - 59
____ ____ ____
Common Stock 5 50 (50) (C) 5
Additional paid in capital 21,908 21,908
Retained Earnings (deficit) (21,214) (108) 246 (C) (21,262)
(186) (B)
_______ _____ _________ ______
Total Stockholders' Equity 699 (58) 651
Total Liabilities and _______ _____ _________ ______
Stockholders' Equity 1,602 (85) (15) 1,502
_______ _____ _________ _____
_______ _____ _________ _____
</TABLE>
(A) Eliminate intercompany balances
(B) Disposal of Cimarron through cash receipt of $85,000
(C) Reverse Cimarron elimination entry
INFONOW CORPORATION
Proforma Income Statement (unaudited)
As of September 30, 1997
(US dollars, in thousands)
<TABLE>
<CAPTION>
As reported on Other
Form 10Q Cimarron Adjustments ProForma
<S> <C> <C> <C> <C>
Revenue 1,442 (753) 689
Cost of sales 1,591 (399) (51) (A) 1,141
Selling general and
administrative 1,430 (155) (160) (C) 1,115
Impairment of Long-lived
asset 499 - (862) (B) (363)
_____ _____ _________ _____
Expenses 3,520 (554) 1,893
Net loss from operations (2,078) (199) (1,204)
OTHER INCOME (EXPENSE)
Interest income (expense), net 14 - 14
_______ ______ _________ _______
NET LOSS (2,064) (199) (1,190)
_______ ______ _________ _______
_______ ______ _________ _______
Net loss per common share (0.38) (0.22)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,434,214 5,434,214
_________ _________
_________ _________
EXPLANATION FOR ADJUSTMENTS
</TABLE>
(A) Reversal of recorded goodwill amortization recorded from January 1, 1997
to September 30, 1997
(B) Reverse write-off of Cimarron Goodwill
(C) Reversal of Cimarron overhead
INFONOW CORPORATION
Proforma Income Statement (unaudited)
As of December 31, 1996
(US dollars, in thousands)
<TABLE>
<CAPTION>
As reported on Other
Form 10K Cimarron Adjustments ProForma
<S> <C> <C> <C> <C>
Revenue 2,206 (1,082) 1,124
Cost of sales 1,104 (433) 671
Selling general and
administrative 2,619 (424) (68) (A) 1,914
(213) (B)
Impairment of Long-
lived asset 1,540 - 1,540
_____ _____ _________ _____
Expenses 5,263 (857) 4,125
Net loss from operations (3,057) (225) (3,001)
OTHER INCOME (EXPENSE)
Loss on disposition
of assets (15) (1) (16)
Interest income (expense),
net (20) - (20)
_______ _____ __________ _______
NET LOSS (3,092) (226) (3,037)
________ _____ __________ _______
________ _____ __________ _______
Net loss per common share (0.86) (0.85)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 3,587,128 3,587,128
_________ _________
_________ _________
</TABLE>
EXPLANATION FOR ADJUSTMENTS
(A) Reversal of recorded goodwill amortization recorded from January 1, 1996
to December 31, 1996
(B) Reversal of Cimarron overhead
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 : February 6, 1998
INFONOW CORPORATION
(Registrant)
/s/ Kevin D. Andrew
Kevin D. Andrew
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
