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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): October 7, 1999
NEOWARE SYSTEMS INC.
(Exact name of registrant as specified in its charter)
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Delaware 000-21240 232705700
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation)
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400 Feheley Drive, King of Prussia, Pennsylvania
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19406 (Address of principal executive offices/Zip Code)
Registrant's telephone number, including area code: (610) 277-8300
Former name, former address, and former fiscal year, if changed since
last report: N/A
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Item 5. Other Events.
On October 7, 1999, Neoware Systems, Inc. (the "Company") issued a
press release, the text of which is attached hereto as Exhibit 99.1 and
incorporated herein in its entirety, announcing the signing of a Definitive
Agreement to acquire certain assets, assume certain liabilities and acquire the
business of MTX, Inc. of Raleigh, North Carolina. In exchange, the Company will
issue approximately 25,143,000 shares of its common stock resulting in MTX's
shareholders owning 80% of the combined entity upon consummation of the
transaction.
Subject to approval by Neoware shareholders, the companies expect to
complete the transaction by year-end or shortly thereafter.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following exhibit is filed herewith:
Exhibit Number Description
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99.1 Registrant's press release,
dated May 14, 1999
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.
NEOWARE SYSTEMS INC.
Date: October 19, 1999 By:
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Edward C. Callahan, Jr.
President and
Chief Executive Officer
Date: October 19, 1999 By:
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Vincent T. Dolan
Vice President and
Chief Financial Officer
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AT THE COMPANY
Edward C. Callahan, Jr. Vincent T. Dolan
President and CEO VP and CFO
610-277-8300 610-227-8300
October 7, 1999
NEOWARE SYSTEMS, INC. SIGNS DEFINITIVE AGREEMENT
TO ACQUIRE ASSETS OF MTX, INC.
King of Prussia, PA, (October 7, 1999) -- Neoware Systems, Inc.
(Nasdaq: NWRE) manufacturer of the award winning NeoStation(TM) line of
Windows-based thin clients, today announced that it has signed a Definitive
Agreement to acquire certain assets, assume certain liabilities and acquire the
business of MTX, Inc. of Raleigh, North Carolina. In exchange, Neoware will
issue approximately 25,143,000 shares of its common stock resulting in MTX's
shareholders owning 80% of the combined entity upon consummation of the
transaction. Subject to Neoware shareholder approval, the companies expect to
complete the transaction by year-end or shortly thereafter.
"Neoware is building on its technical leadership in the market for
Windows-based terminals, which is projected to double in each of the next
several years and become a billion dollar market," stated Edward C. Callahan,
President and CEO of Neoware Systems, Inc. "Combining with MTX should provide
the sales and marketing resources and the customer and prospect base for Neoware
to gain a leading market position far more quickly than it could on its own."
In calendar year 1998 MTX, which was formed in 1996 through the
purchase of certain assets and the business of Memorex-Telex USA, generated
revenues of approximately $60 million dollars. Neoware recently reported
revenues of approximately $10.7 million dollars for its fiscal year ended June
30, 1999.
"In addition to creating a company with a significant revenue stream,
combining MTX's installed base of more than 1.5 million Memorex-Telex green
screen terminals with Neoware's award-winning thin client technology should
create a real force in our market," Callahan continued. "Neoware and MTX's
product lines are very synergistic. Combining our strengths should make us a
major contender for what is widely acknowledged to be the largest initial market
for thin clients - the installed base of more than 39 million deployed green
screen terminals."
MTX, Inc., a subsidiary of The MATCO Group, Inc., a privately held
company headquartered in Binghamton, New York, designs, manufactures and sells a
broad array of computer related products, including fixed function displays,
printers, Communications Servers and Windows-based and Network Computer
Terminals. These products offer 3270-mainframe and 5250-midrange compatibility
and have been designed to address the needs of MTX's extensive customer base and
their migration from legacy based native coaxial, twinaxial, and token ring
connectivity. MTX strengths include unique desktop solutions offering support of
technologies in the IBM green screen market, including terminal emulation
software and a patent on the "Coax-to-Ethernet Bridge". MTX sells its products
under the MTX and Memorex-Telex brand names.
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"MTX has a sales organization of approximately 55 professionals
deployed throughout the U.S., which will significantly augment Neoware's inside
sales team, its Internet-based eStore and its channel partners," commented James
T. Matthews, President of MTX, Inc. "We believe that MTX's products in the
Mainframe and Midrange marketplace, our strong customer relationships, and
extensive organization, coupled with Neoware's award-winning technology, should
result in a new company that is strongly positioned to migrate companies into
the emerging thin client paradigm over the next several years."
The combined company will operate out of two principal locations, in
King of Prussia, PA and Raleigh, N.C. Edward C. Callahan, Jr. will be the
Chairman and CEO, based in King of Prussia. James T. Matthews will be the
President and Chief Operating Officer, based in Raleigh.
About Neoware Systems Inc.
Neoware Systems is a leading provider of thin clients, designed to
allow corporations to access their existing applications from a new class of
computing device. Neoware's NeoStations are thin client Windows-based terminals
designed to allow access to Windows-based applications running on multi-user
Windows NT servers. They are designed as alternatives to dumb terminals or
personal computers, offering lower up-front and administrative costs. Neoware's
products are designed primarily to run Windows applications via a server such as
Microsoft Windows NT Server Terminal Server Edition or Citrix MetaFrame, plus
connect to mainframes, minicomputers and the Internet. More information about
Neoware can be found on the Web at http://www.neoware.com or via email at
[email protected]. Neoware is based in King of Prussia, PA.
About MTX, Inc.
MTX, Inc., headquartered near the Research Triangle Park in Raleigh,
NC, is a privately held company providing Mainframe and Midrange Products,
Network Integration, and Advanced Services. With more than 25 years of SNA/3270
and Midrange/5250 experience and an installed base of over 1.5 million desktop
devices, MTX is a leading designer and manufacturer of inter-network solutions
and its products are produced under the MTX and Memorex-Telex brand names. For
more information about MTX, visit www.mtx.com.
For Neoware Investors
The statements in this press release relating to matters that are not
historical are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 that involve risks and uncertainties
that could cause actual results to differ materially from those anticipated,
including but not limited to, market acceptance of the synergies of the combined
company, risks of integrating the combined company, customer acceptance of
Neoware and MTX's line of thin client computers and other product lines, pricing
pressures, the growth of the thin client computer marketplace, rapid
technological changes in the industry and increased competition. These risks and
uncertainties are described in reports and other documents, such as the
company's Form 10-K, for the year ended June 30, 1999, and filed by Neoware with
the Securities And Exchange Commission.
# # #
Neoware and NeoStation are trademarks of Neoware Systems, Inc. Windows
is a registered trademark of Microsoft Corporation, MetaFrame is a trademark of
Citrix Systems, Inc. All other brand names mentioned are trademarks or
registered trademarks of their respective holders.
