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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of Earliest Event Reported): JUNE 30, 2000
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NEMATRON CORPORATION
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(Exact name of registrant as specified in its charter)
MICHIGAN 0-21142 38-2483796
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
5840 INTERFACE DRIVE, ANN ARBOR, MICHIGAN 48103
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(Address of principal executive offices) (Zip Code)
(734) 214-2000
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(Registrant's telephone number)
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ITEM 2 - ACQUISITION OR DISPOSITION OF ASSETS.
On June 30, 2000, Nematron Corporation ("Nematron" or the "Company") completed
the acquisition of 100% of the outstanding stock of A-OK Controls Engineering,
Inc. ("A-OK Controls") pursuant to a Stock Purchase Agreement, dated as of June
30, 2000, by and among the Nematron, Ronald C. Causley, individually, and Ronald
C. Causley, Trustee of the Ronald C. Causley Revocable Trust Dated as of March
14, 1990, as amended (the "Stock Purchase Agreement"). The Stock Purchase
Agreement is incorporated herein by reference to Exhibit 2.1 to this Report.
A-OK is an Auburn Hills, Michigan-based controls system integrator. A-OK
Controls provides system integration services to discrete manufacturing
companies, primarily to those manufacturers in the automotive industry.
Under the terms of the Stock Purchase Agreement, Nematron purchased 100% of the
outstanding shares of A-OK Controls for $4,000,000. The components of the
purchase price included $2,750,000 of cash and $1,250,000 in shares of Nematron
Common Stock. The number of shares of Nematron Common Stock to be issued is
based on the average closing price of Nematron Common Stock for the ten trading
days ending with June 26, 2000. Based on such average, a total of 604,186 shares
of Nematron common Stock were issued to the A-OK Controls' shareholder.
To fund the $2,750,000 cash portion of the purchase price and to repay A-OK
Controls' existing long-term debt and accrued interest thereon at the closing,
such amount totaling $2,435,000, Nematron borrowed $1,500,000 from its senior
lender, LaSalle Business Credit, Inc., under a Special Accommodation Advance.
The terms underlying the Special Accommodation Advance require monthly principal
and interest payments until the loan matures on July 1, 2002. The Company funded
the remaining $3,685,000 from borrowings under existing lines of credit from
LaSalle Business Credit and from cash balances of the Company and A-OK Controls.
The Stock Purchase Agreement was negotiated on an arm's length basis between the
parties. The consideration paid by the Company was based upon a number of
factors, including estimated fair values of net assets acquired; estimated
future revenues, income and cash flows; estimated values of identified
intangible assets, including A-OK Controls' workforce, contracts, customer base,
and locations, and the market price for the Company's Common Stock.
The Company will account for the acquisition of 100% of the stock of A-OK
Controls as a purchase in accordance with the accounting standards promulgated
under Accounting Principles Board No. 16, "Business Combinations" ("APB-16") and
relevant AICPA Interpretations, Accounting Research Bulletins, FASB Statements,
Interpretations and Technical Bulletins which serve as amendments to APB-16.
In connection with the Stock Purchase Agreement, Nematron also entered into a
three-year employment agreement and a five-year agreement not to compete with
A-OK Controls' president who will remain as the president of A-OK Controls after
the acquisition.
A-OK Controls will continue to operate as a wholly-owned subsidiary of Nematron
from A-OK Controls' headquarters in Auburn Hills, Michigan and from its two
Michigan satellite offices.
Prior to the acquisition of A-OK Controls by the Company, there were no
agreements or business relationships between the Company or its affiliates,
directors or officers and A-OK Controls or its affiliates, directors or
officers.
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ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of business acquired.
It is not practicable to provide the required financial statements for the
acquired company at this time. The financial statements required by Item 7(a)
will be filed under cover of Form 8-K/A as soon as practicable, but not later
than 60 days after the date this report is required to be filed.
(c) Exhibits
The following exhibits are filed herewith as a part of this report:
Exhibit 2.1 Stock Purchase Agreement, dated as of
June 30, 2000, by and among Nematron
Corporation, Ronald C. Causley,
individually, and Ronald C. Causley, Trustee
of the Ronald C. Causley Revocable Trust
Dated as of March 14, 1990, as amended
Exhibit 4.1 Registration Rights Agreement, dated as
of June 30, 2000, between Nematron
Corporation and Ronald C. Causley, Trustee
of the Ronald C. Causley Revocable Trust
Dated as of March 14, 1990, as amended
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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 hereto duly authorized.
NEMATRON CORPORATION
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(Registrant)
July 10, 2000 /S/ DAVID P. GIENAPP
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Secretary, Treasurer and Vice
President, Finance and
Administration
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Exhibit Index
Exhibit No. Description
Exhibit 2.1 Stock Purchase Agreement, dated as of
June 30, 2000, by and among Nematron
Corporation, Ronald C. Causley,
individually, and Ronald C. Causley, Trustee
of the Ronald C. Causley Revocable Trust
Dated as of March 14, 1990, as amended
Exhibit 4.1 Registration Rights Agreement, dated as
of June 30, 2000, between Nematron
Corporation and Ronald C. Causley, Trustee
of the Ronald C. Causley Revocable Trust
Dated as of March 14, 1990, as amended
