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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 23, 1998
MENLEY & JAMES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-19788 23-2621602
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
125 Strafford Avenue, Suite 300, Wayne, Pennsylvania 19087
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(Address of principal executive offices)
(610) 975-4540
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
On November 23, 1998, Menley & James, Inc., a Delaware
corporation ("Company"), and Menley & James Laboratories, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Company ("Subsidiary"),
consummated the sale of substantially all of the Subsidiary's assets and certain
assets of the Company (collectively referred to as "Assets") to Numark
Laboratories, Inc., a New Jersey corporation ("Numark"). The sale was effected
pursuant to an Asset Purchase Agreement dated as of August 21, 1998, as amended
by Amendment No. 1 dated October 13, 1998, and Amendment No. 2 dated November
11, 1998 (as amended, the "Agreement"), between the parties. The Agreement was
approved by the Company's stockholders at a special meeting held on November 23,
1998.
The only assets which the Company and the Subsidiary retained were its
office lease for the property known as Commonwealth Corporate Center, 100
Tournament Drive, Horsham, Pennsylvania (the "Office Lease"), its officers and
directors liability insurance policies, its product liability insurance
policies, certain automobile leases and an office equipment lease, the corporate
names "Menley & James, Inc." and "Menley & James Laboratories, Inc." and
approximately $2.0 million in cash which the Company will use to pay its costs
and expenses associated with the sale, including employee severance obligations.
As consideration for the Assets, Numark paid $13.43 million in cash and
assumed substantially all of the Subsidiary's and the Company's liabilities.
As a result of this transaction, after the transaction costs are paid,
Menley & James will have the following: approximately $13.4 million in cash; no
debt; an estimated $6 million net operating loss carry-forwards for income tax
purposes; $24.5 million of capital loss carry-forwards; and 6,163,520
outstanding shares of common stock. Menley & James remains a public company and
does not expect to liquidate or make a distribution to stockholders as a result
of this transaction.
The foregoing description of the Agreement is qualified in its entirety
by the full text of the Agreement which is incorporated by reference into this
Form 8-K as set forth under it in Exhibits 2.1, 2.2, and 2.3.
Item 5. Other Events.
On November 24, 1998, the Company moved its executive offices to 125
Strafford Avenue, Suite 300, Wayne, Pennsylvania 19087.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) Unaudited Pro Forma Financial Information
The following unaudited pro forma condensed consolidated balance sheet
reflects the sale of substantially all of the assets and the assignment of
substantially all of the liabilities of the Company in exchange for $13,430,000
of cash as if the transaction had been consummated on September 30, 1998. This
pro forma balance sheet does not purport to be indicative of the Company's
financial position in future periods. A pro forma income statement for the nine
month period ended September 30, 1998 or year ended December 31, 1997 would
reflect no income from operations as all of the Company's operations were sold
in the transaction.
Menley & James, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
September 30, 1998
(In thousands)
<TABLE>
<CAPTION>
Pro forma
Historical Adjustments Pro forma
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<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,376 $ 10,054(1) $ 13,430
Accounts receivable, net 2,748 (2,748)(1) 0
Inventory 3,059 (3,059)(1) 0
Other current assets 328 (328)(1) 0
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Total current assets 9,511 3,919 13,430
Other long-term assets 1,392 (1,392)(1) 0
Product lines, trade names and packaging designs, net 5,709 (5,709)(1) 0
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Total assets $ 16,612 (3,182) $ 13,430
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 762 ($ 762)(1) 0
Accrued expenses and other 2,408 (2,408)(1) 0
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Total current liabilities 3,170 (3,170) 0
Stockholders' equity 13,442 (12)(1) 13,430
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Total liabilities and stockholders' equity $ 16,612 ($ 3,182) $ 13,430
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</TABLE>
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(1) Adjusted to record the sale of substantially all of the assets and
assignment of substantially all of the liabilities of the Company in
exchange for $13.43 million. These adjustments assume that the
transaction-related liabilities of approximately $2.0 million will be paid
from the $2.0 million of cash retained by the Company.
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(c) Exhibits.
Number Description
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2.1 Asset Purchase Agreement dated as of August 21, 1998 by
and among the Company, Menley & James Laboratories,
Inc. and Numark Laboratories, Inc. (Incorporated by
reference to Exhibit 2.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1998)
2.2 Amendment No. 1 to Asset Purchase Agreement dated as of
October 13, 1998 by and among the Company, Menley &
James Laboratories, Inc. and Numark Laboratories, Inc.
(Incorporated by reference to Exhibit 2.2 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998)
2.3 Amendment No. 2 to Asset Purchase Agreement dated as of
November 11, 1998 by and among the Company, Menley &
James Laboratories, Inc. and Numark Laboratories.
(Incorporated by reference to Exhibit 2.3 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998)
10.22 Severance Agreement dated as of September 24, 1998
between the Company and Greg L. Kearl (Incorporated by
reference to Exhibit 10.22A to the Company's Quarterly
Report on Form 10-Q for the quarter ended September 30,
1998)
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Signature
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.
MENLEY & JAMES, INC.
Date: December 3, 1998 By: /s/ LAWRENCE D. WHITE
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Lawrence D. White
President
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