<PAGE>
UNITED STATES
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) September 13, 2000
---------------------
GaSonics International Corporation
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-23372 94-2159729
------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
404 East Plumeria Drive, San Jose, California 95134
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 570-7400
---------------------------
Not Applicable
------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
This Form 8-K/A is being filed to amend the Form 8-K filed on
September 27, 2000 by GaSonics International Corporation (the "Company") to
include the financial statements and pro forma financial information referred to
in item 7 below relating to the Company's acquisition of Gamma Precision
Technology, Inc.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Report of Independent Public Accountants.
Balance Sheets of Gamma Precision Technology, Inc. as of December
31, 1998 and December 31, 1999.
Statements of operations of Gamma Precision Technology, Inc. for
the years ended December 31, 1998 and 1999.
Statements of shareholders' equity of Gamma Precision Technology,
Inc. for the years ended December 31, 1997, 1998 and 1999.
Statements of cash flows of Gamma Precision Technology, Inc. for
the years ended December 31, 1998 and December 31, 1999.
Notes to financial statements.
(b) Pro Forma Financial Information.
Unaudited pro forma condensed balance sheet as of June 30, 2000 and
the accompanying explanatory notes.
Unaudited pro forma condensed income statement for the year ended
September 30, 1999 and the accompanying explanatory notes.
Unaudited pro forma condensed income statement for the nine months
ended June 30, 2000 and the accompanying explanatory notes.
(c) Exhibits
2.1* Merger Agreement, dated as of August 30, 2000, by and among
GaSonics International Corporation, GPT Acquisition Corp. and
Gamma Precision Technology, Inc.
99.1* Press Release dated September 14, 2000.
______________________
* Incorporated by reference to the Company's Form 8-K filed with the Securities
and Exchange Commission on September 27, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
GASONICS INTERNATIONAL CORPORATION
------------------------------------------
(Registrant)
November 28, 2000 /s/ Rammy Rasmussen
--------------------------------- -------------------------------------------
Date Rammy Rasmussen
Secretary
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Gamma Precision Technology, Inc.:
We have audited the accompanying balance sheets of Gamma Precision Technology,
Inc. (a California Corporation) as of December 31, 1999 and 1998, and the
related statements of operations, shareholders' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gamma Precision Technology,
Inc. as of December 31, 1999 and 1998, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.
ARTHUR ANDERSEN LLP
San Jose, California
November 27, 2000
<PAGE>
GAMMA PRECISION TECHNOLOGY, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except share data) December 31,
-------------------------------------------------------------------------------------------------------------------------
ASSETS 1999 1998
--------------- ------------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $1,344 $1,387
Marketable securities 3 639
Inventories 876 678
Prepaid expenses and other current assets 120 164
--------------- ------------------
Total current assets 2,343 2,868
--------------- ------------------
Property and equipment 1,106 371
Less - accumulated depreciation (317) (97)
--------------- ------------------
Net property and equipment 789 274
--------------- ------------------
Total assets $3,132 $3,142
=============== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 130 $ 116
Accrued expenses and other current liabilities 196 44
Customer deposit 500 500
Loan payable - 120
--------------- ------------------
Total current liabilities 826 780
--------------- ------------------
Commitments (Note 7)
Shareholders' equity:
Series A and B preferred stock, no par value:
Authorized shares - 25,000,000 at December 31, 1999 and 1998
Outstanding shares - 12,355,332 and 9,455,915 at December 31, 1999 and
1998 5,766 4,200
Common stock, no par value:
Authorized shares - 75,000,000 at December 31, 1999 and 1998
Outstanding shares - 20,000,000 at December 31, 1999 and 1998 4 4
Subscription receivable (343) (93)
Accumulated deficit (3,121) (1,749)
--------------- ------------------
Total shareholders' equity 2,306 2,362
--------------- ------------------
Total liabilities and shareholders' equity $ 3,132 $ 3,142
=============== ==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GAMMA PRECISION TECHNOLOGY, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(In thousands, except per share data) Years ended December 31,
---------------------------------------------------------------------------------------------------------------
1999 1998
----------------- ------------------
<S> <C> <C>
Net sales $ 569 $ -
Cost of sales 322 -
----------------- ------------------
Gross margin 247 -
----------------- ------------------
Operating expenses:
Research and development 730 549
Selling, general and administrative 923 587
----------------- ------------------
Total operating expenses 1,653 1,136
Operating loss (1,406) (1,136)
Interest and other income, net 34 72
----------------- ------------------
Net loss $ (1,372) $ (1,064)
================= ==================
Net loss per share - basic and diluted $ (0.07) $ (0.05)
================= ==================
Weighted average common shares - basic and diluted 20,000 20,000
================= ==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GAMMA PRECISION TECHNOLOGY, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Preferred Stock Common Stock
---------------------- ------------------ Subscription Accumulated Shareholders'
(In thousands, except share data) Shares Amount Shares Amount Receivable Deficit Equity
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1997 3,715,170 $1,100 20,000,000 $ 4 $ - $ (685) $ 419
Issuance of Series B preferred
stock at $0.54 per share 5,740,745 3,100 - - - - 3,100
Subscription receivable - - - - (93) - (93)
Net loss - - - - - (1,064) (1,064)
------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 9,455,915 4,200 20,000,000 4 (93) (1,749) 2,362
Issuance of Series B preferred
stock at $0.54 per share 2,899,417 1,566 - - - - 1,566
Subscription receivable - - - - (250) - (250)
Net loss - - - - - (1,372) (1,372)
------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 12,355,332 $5,766 20,000,000 $ 4 $(343) $(3,121) $ 2,306
=========== ======= =========== ===== ===== ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GAMMA PRECISION TECHNOLOGY, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(In thousands) Years ended December 31,
-------------------------------------------------------------------------------------------------------------------
1999 1998
------------------ -------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,372) $(1,064)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation 222 80
----------------- -------------------
Changes in assets and liabilities:
Inventories (198) (476)
Prepaid expenses and other current assets 44 272
Accounts payable 15 (374)
Accrued expenses and other current liabilities 152 (93)
----------------- -------------------
Net cash flows from operating activities (1,137) (1,655)
----------------- -------------------
Cash flows from investing activities:
Sale of marketable securities 636 -
Purchase of marketable securities - (376)
Purchase of property and equipment (738) (193)
----------------- -------------------
Net cash flows from investing activities (102) (569)
----------------- -------------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 1,316 3,007
Payment of loan payable (120) -
----------------- -------------------
Net cash flows from financing activities 1,196 3,007
----------------- -------------------
Net (decrease) increase in cash and cash equivalents (43) 783
----------------- -------------------
Cash and cash equivalents at beginning of period 1,387 604
----------------- -------------------
Cash and cash equivalents at end of period $ 1,344 $ 1,387
================= ===================
Supplemental cash flow information:
Cash paid for interest $ 22 $ 0
Cash paid for income taxes $ 1 $ 1
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GAMMA PRECISION TECHNOLOGY, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION AND OPERATIONS OF THE COMPANY:
Gamma Precision Technology, Inc. (the "Company"), a California corporation, is a
global supplier of products and services used in the fabrication of advanced
integrated circuits ("semiconductors" or "ICs") and flat panel displays
("FPDs"). The Company is organized and operates as one operating segment. The
Company markets its products in the Asia Pacific region. The Company is subject
to a number of risks including, but not limited to, volatility in the
semiconductor markets and the related demand for semiconductor equipment and the
risk of inventory obsolescence resulting from new product developments by
competitors.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ materially from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of
90 days or less from the date of purchase to be cash equivalents.
Investments in Marketable Securities
Pursuant to the provisions of Statement of Financial Accounting Standards
("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", the Company's investments are classified as available for sale and
are stated at fair value. Unrealized gains and losses are recorded into income
in the current period. The impact of these unrealized gains and losses on other
comprehensive income is immaterial.
Revenue Recognition
The Company recognizes revenue for sales of systems and parts upon
shipment.
Major Customers
One foreign customer accounted for 100% of net sales in fiscal year 1999.
<PAGE>
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market and
include material, labor and manufacturing costs. Inventory is valued at actual
costs on a first-in, first-out basis. Inventories consisted solely of raw
materials at December 31, 1999 and 1998.
Property and Equipment
Property and equipment are stated at cost and are generally depreciated over the
estimated useful lives of the assets (four to ten years) using the straight-line
method. Leasehold improvements are amortized on a straight-line basis over the
shorter of the useful lives of the assets or the remaining lease term. Assets
acquired under capital leases are recorded at the present value of the related
lease obligations and amortized on a straight-line basis over the related lease
term.
Accrued Expenses and Other Current Liabilities
Accrued expenses and current liabilities included the following (in thousands):
<TABLE>
<CAPTION>
December 31,
-----------------------------
1999 1998
------------ -------------
<S> <C> <C>
Loans payable to related parties............................................. $ 157 $ 23
Other accrued liabilities.................................................... 39 21
------------ -------------
$ 196 $ 44
============ =============
</TABLE>
Net Loss Per Share
Net loss per share data has been computed using the weighted average number of
shares of common stock outstanding for the basic net loss per share calculation.
No separate diluted loss per share information has been presented in the
accompanying statements of operations, as there are no incremental shares
issuable based on current market prices.
<TABLE>
<CAPTION>
(in thousands, except per share data)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share
For the twelve months ended December 31, 1999 Loss Shares Amount
------------------------------------------------------------------------------------------------------------------
Net loss $(1,372)
Weighted average shares of common stock outstanding 20,000
Basic and diluted loss per share $(0.07)
------------------------------------------------------------------------------------------------------------------
Per Share
For the twelve months ended December 31, 1998 Loss Shares Amount
------------------------------------------------------------------------------------------------------------------
Net loss $(1,064)
Weighted average shares of common stock outstanding 20,000
Basic and diluted loss per share $(0.05)
------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration
of credit risk consist principally of temporary cash investments.
Stock-Based Compensation
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." This accounting standard permits the use of either a fair value
based method or the method defined in Accounting Principles Board Opinion 25,
"Accounting for Stock Issued to Employees"("APB Opinion 25") to account for
stock-based compensation arrangements. Companies that elect to employ the
valuation method provided by APB Opinion 25 are required to disclose the pro
forma net income (loss) that would have resulted from the use of the fair value
based method. The Company has elected to determine the value of stock-based
compensation arrangements under the provisions of APB Opinion 25, and
accordingly, the pro forma disclosures required under SFAS No. 123 have been
included in Note 8.
Effect of Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which requires
companies to record derivative financial instruments on the balance sheet as
assets or liabilities. It establishes accounting and reporting standards for
derivative instruments including standalone instruments, such as forward
currency exchange contracts and interest rate swaps or embedded derivatives and
requires that these instruments be marked-to-market on an ongoing basis. These
market value adjustments are to be included either in the income statement or
stockholders' equity, depending on the nature of the transaction. SFAS No. 133
is effective for fiscal years beginning after June 15, 2000 and cannot be
applied retroactively. The effect of SFAS No. 133 is not expected to be material
to the Company's financial statements.
In March 2000, the FASB issued Financial Standards Board Interpretation ("FIN")
No. 44, "Accounting for Certain Transactions Involving Stock Compensation-an
Interpretation of APB Opinion No. 25." FIN No. 44 addressed the application of
APB 25 to clarify, among other issues, (a) the definition of employee for
purposes of applying APB 25, (b) the criteria for determining whether a plan
qualifies as a noncompensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. FIN No. 44 is effective July 1, 2000. The Company currently is
evaluating FIN No. 44 and does not expect that it will have a material effect on
its financial position or results of operations.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements." SAB No. 101 provides guidance on applying
generally accepted accounting principles to revenue recognition issues in
financial statements. We will adopt SAB No. 101 as required in the first quarter
of fiscal 2001. When we adopt SAB No. 101, we will recognize revenue when we
substantially complete the terms of the applicable sales arrangement, which
generally occurs upon the customers' acceptance of the product. We do not expect
SAB No. 101 to have a significant effect on our operating results in the first
quarter.
<PAGE>
3. COMPREHENSIVE INCOME:
Effective December 31, 1998 the Company adopted SFAS No. 130, "Reporting
Comprehensive Income," which establishes standards for reporting and display of
comprehensive income and its components (revenue, expenses, gains and losses) in
a full set of general-purpose financial statements. For the twelve months ended
December 31, 1999 and 1998, there were no material items of comprehensive income
(loss), thus comprehensive loss for these periods did not differ materially from
net loss as reported in the accompanying financial statements.
4. LOAN PAYABLE:
In December 1995, the Company received $120,000 in cash from a potential third
party investor ("the investor") who originally intended to invest in the common
stock of the Company. The investor subsequently requested to withdraw the
investment and demanded repayment. No shares were issued and the original
amount plus interest was repaid in full during 1999.
5. CUSTOMER DEPOSIT:
In December 1997, the Company received $500,000 in cash as a deposit on
inventory to be sold to Seki Technotron Corporation ("Seki"). Prior to shipment
of the inventory, Seki informed the Company to hold the inventory until economic
factors negatively impacting Seki improve. As of December 31, 1999, the
Company continues to hold the inventory and deposit as negotiations continue
with Seki regarding the future outcome of the initiated transaction.
6. INCOME TAXES:
The Company is a C corporation for tax reporting purposes. Any deferred tax
assets arising from timing differences and net operating losses have been fully
reserved through a valuation allowance. The net operating loss carryforwards
expire at various dates through the year 2019.
7. COMMITMENT:
The Company leases its facilities and certain machinery and equipment under
operating lease agreements that expire at various dates through December 2004.
Minimum commitments under the non-cancelable leases as of December 31, 1999 were
as follows (in thousands):
Fiscal Year
-----------
2000................................................................. $ 234
2001................................................................. 301
2002................................................................. 301
2003................................................................. 150
Thereafter........................................................... -
------
$ 986
======
Rent expense was approximately $108 and $32 for the years ended December 31,
1999 and 1998, respectively.
<PAGE>
8. INCENTIVE STOCK OPTION PLAN:
1998 Stock Option Plan
In fiscal 1998, the Board adopted, and the shareholders subsequently
approved, the 1998 Stock Option Plan and authorized a total of 1,300,000 shares
for issuance under the Plan. In January 1999, the Company's Board of Directors
authorized a 5-to-1 common stock split increasing the shares for issuance under
the Plan to 6,500,000.
Option and stock issuance activity under the 1998 Stock Option Plan was as
follows:
<TABLE>
<CAPTION>
Options Outstanding Weighted
Options Outstanding Shares Average
Available Number of Exercise
For Grant Shares Price
------------------- --------------- ---------------
<S> <C> <C> <C>
Balance at December 31, 1998 - - $ -
Authorized................................................. 6,500,000 - -
Granted.................................................... (898,400) 898,400 0.12
Exercised.................................................. - - -
------------------- --------------- ----------------
Balance at December 31, 1999 5,601,600 898,400 $0.12
</TABLE>
The following table summarizes the options outstanding under the 1998 Stock
Option Plan as of December 31, 1999:
Options Outstanding and Exercisable
---------------------------------------------
Number Weighted
Range of Outstanding verage
Exercise Prices As of Remaining
December 31, 1999 Contractual Life
-------------------------------------------------------------------------------
$ 0.12 898,400 4.42
Stock Based Compensation Expense
In October 1995, the Financial Accounting Standards Board issued SFAS No. 123,
"Accounting for Stock-Based Compensation," which establishes a fair value based
method of accounting for stock-based compensation plans and requires additional
disclosures for those companies who elect not to adopt the new method of
accounting. The Company adopted SFAS No. 123 in fiscal 1997, and in accordance
with the provisions of SFAS No. 123, the Company applies APB Opinion 25 and
related interpretations in accounting for its stock option and stock purchase
plans.
The Company's stock plans, as described above, are accounted for under APB
Opinion No. 25. Had compensation cost for these plans been determined consistent
with Statement No. 123, the Company's net loss and loss per share would not have
materially changed.
<PAGE>
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following assumptions:
------------------------------------------------------------------------------
1999 1998
------------------------------------------------------------------------------
Dividend yield 0.00% 0.00%
Expected life of options from vest date 4 years 4 years
Expected stock volatility 0.00% 0.00%
Risk-free interest rates 6.00% 6.00%
------------------------------------------------------------------------------
The weighted average fair value of option grants using the Black-Scholes option
pricing model was immaterial to the financial statements.
9. SHAREHOLDERS' EQUITY
Preferred Stock
In 1997, a total of 3,715,170 shares of Series A preferred stock were issued at
$0.296 per share (as adjusted for the January 1999 5-to-1 stock split). In
1998 and 1999, a total of 5,740,745 and 2,899,417 shares, respectively, of
Series B preferred stock were issued at $0.54 per share (as adjusted for the
January 1999 5-to-1 stock split). Direct issuance costs related to the Series A
and B preferred stock placements were offset against the proceeds and are
immaterial to the financial statements.
The rights, restrictions and preferences of the Series A and B preferred stock
are as follows:
Dividends
Holders of Series A and B preferred stock are entitled to receive
noncumulative dividends, when and as declared by the Board of Directors. To
date, no dividends have been declared.
Liquidation Preference
Holders of Series A and B preferred stock will be entitled to receive $0.296
and $0.54 per share, respectively, plus all declared and unpaid dividends per
share in equal preference to the holders of all classes of capital stock of
the Company in the event of liquidation, sale, merger, consolidation or
winding-up of the Company. If, upon liquidation, the assets of the Company
are not sufficient to permit distribution of the per share liquidation
amounts, the assets of the Company shall be distributed ratably among the
holders of the shares of preferred stock. After payment is made to the
holders of shares of the preferred stock of the full liquidation amount, any
remaining assets of the Company would be distributed to its holders of shares
of common stock on a pro rata basis.
Voting Rights
Holders of Series A and B preferred stock are entitled to the number of votes
equal to the number of shares of common stock into which such shares of
preferred stock could be converted.
Conversion Rights
Each share of Series A and B preferred stock is convertible into one share of
common stock, at the option of the holder thereof, at any time after the date
of issuance. The conversion rate is subject to adjustment for dilution,
including, but not limited to, stock splits, stock dividends and stock
combinations.
Each share of Series A and B preferred stock automatically converts into
shares of common stock immediately upon the closing of an initial public
offering with an aggregate offering price to the public of not less than
$2,000,000 at a per share offering price of not less than the initial sales
prices of the Series A and B preferred stock.
Common Stock
Common stock was issued to the founders of the Company in 1997 at $0.0002 per
share. No common stock was issued during the years ended December 31, 1999 and
1998.
10. EMPLOYEE BENEFIT PLANS
The Company maintains a 401(k) benefit plan covering all employees meeting
certain requirements. The plan includes deferred compensation arrangements
permitting elective contributions to be made by the participants. Company
contributions are made at the discretion of the Board of Directors and were
immaterial to the financial statements in fiscal 1999 and 1998.
<PAGE>
11. SUBSEQUENT EVENT
In July 2000, the Company entered into an agreement to be acquired by GaSonics
International Corporation ("GaSonics") effective September 13, 2000. Under the
terms of the agreement, each share of the Company's common stock and preferred
stock will be converted into .0196107 shares of GaSonics common stock plus cash
in the amount of $0.6459393 per share of the Company's common stock. The
transaction will be accounted for by GaSonics using the purchase method.
Subsequent to the acquisition, the Company will cease business operations on a
stand-alone basis.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Effective September 13, 2000, Gasonics International Corporation
("Gasonics" or the "Company") acquired 100 percent of the outstanding stock and
assumed all outstanding stock options of Gamma Precision Technology, Inc.
("Gamma Precision Technology"), in exchange for 655,577 shares of Gasonics
common stock and approximately $21.5 million in cash. The total cost of the
acquisition, including transaction costs, was approximately $34.9 million. The
acquisition was accounted for as a purchase business combination.
Attached are the unaudited pro forma condensed consolidated financial
statements, which include the unaudited pro forma condensed consolidated balance
sheet as of June 30, 2000 and the unaudited pro forma condensed consolidated
statement of operations of the Company and Gamma Precision Technology for the
nine months ended June 30, 2000 and of the Company for the year ended September
30, 1999, and Gamma Precision Technology for the year ended December 31, 1999.
The unaudited pro forma condensed consolidated balance sheet assumes the
acquisition took place on June 30, 2000. The unaudited pro forma condensed
consolidated statement of operations assume the acquisition had been consummated
on October 1, 1998. The unaudited pro forma condensed consolidated financial
information reflects the allocation of purchase price of Gamma Precision
Technology based upon current estimates of fair values of assets acquired and
liabilities assumed. The final allocation of the purchase price may vary as
additional information is obtained and, accordingly, the ultimate allocation may
differ from that used in the unaudited pro forma condensed consolidated
financial information.
The unaudited pro forma condensed consolidated financial statements are based on
the historical financial statements of the Company and Gamma Precision
Technology. They are not necessarily indicative of the combined entity's
operations had the acquisition actually occurred on the dates indicated, nor are
they necessarily indicative of future operations. The pro forma adjustments and
the assumptions on which they are based are described in the accompanying notes
to these statements.
The unaudited pro forma condensed consolidated financial statements are based on
and should be read in conjunction with the historical consolidated financial
statements and related notes thereto of the Company for the year ended September
30, 1999 and the nine months ended June 30, 2000 and the accompanying historical
financial statements and the notes thereto of Gamma Precision Technology for the
year ended December 31, 1999.
<PAGE>
GASONICS INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(In thousands)
<TABLE>
<CAPTION>
Gamma
Precision
Gasonics Technology Adjustments Pro Forma
ASSETS Historical Historical (Note 2) Consolidated
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 66,755 $ 1,496 $(21,594) a 46,657
Marketable securities 17,738 9 17,747
Trade accounts receivable, net 32,108 3,211 35,319
Inventories 25,698 1,716 27,414
Net deferred tax asset 5,697 - 5,697
Prepaid expenses and other current assets 4,386 130 4,516
--------------- ------------ ------------ ---------
Total current assets 152,382 6,562 (21,594) 137,350
--------------- ------------ ------------ ---------
Property and equipment, net 10,359 828 11,187
Deposits and other assets 555 27 582
Intangibles - - 30,421 b 30,421
(6,000) b (6,000)
--------------- ------------ ------------ ---------
Total assets $163,296 $ 7,417 $ 2,827 $173,540
=============== ============ ============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under credit facility $ 5,382 $ - 5,382
Accounts payable 15,068 1,246 16,314
Income taxes payable 4,859 - 4,859
Accrued expenses 14,514 170 600 a 15,284
Customer deposits - 500 500
--------------- ------------ ------------ ---------
Total current liabilities 39,823 1,916 600 42,339
Long-term liabilities: - 1,050 1,050
Stockholders' equity:
Preferred stock - 5,822 (5,822) c -
Common stock 91,066 4 (4) c 91,066
12,678 a 12,678
Treasury stock (2,639) - (2,639)
Subscription receivable (10) - (10)
Unrealized gain/loss on investments (109) - (109)
Retained earnings 35,165 (1,375) 1,375 c 35,165
(6,000) b (6,000)
--------------- ------------ ------------ ---------
Total stockholders' equity 123,473 4,451 2,227 130,151
--------------- ------------ ------------ ---------
Total liabilities and stockholders' equity $163,296 $ 7,417 $ 2,827 $173,540
=============== ============ ============ =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GASONICS INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
Gasonics Technology
Historical Historical Pro Forma
(Year ended (Year ended Adjustments Pro Forma
September 30, 1999) December 31, 1999 (Note 3) Consolidated
------------------- ----------------- ------------- ------------------
<S> <C> <C> <C> <C>
Net Sales $ 64,279 $ 569 $ $ 64,848
Cost of Sales 39,894 322 40,216
----------- ------------- ------------- ------------------
Gross Margin 24,385 247 24,632
----------- ------------- ------------- ------------------
Operating Expenses:
Costs associated with reduction in force 407 - 407
Research and development 17,696 730 18,426
Selling, general, and administrative 21,639 923 22,562
Amortization of intangibles - - 3,499 d 3,499
----------- ------------- ------------- ------------------
Total operating expenses 39,742 1,653 3,499 44,894
----------- ------------- ------------- ------------------
Operating loss (15,357) (1,406) (3,499) (20,262)
Other income and expense, net: 1,275 34 1,309
----------- ------------- ------------- ------------------
Net loss $(14,082) $ (1,372) $(3,499) $(18,953)
=========== ============= ============= ==================
Net loss per share-basic and diluted $(0.98) $(1.27)
=========== ==================
Weighted average common shares-basic and diluted 14,316 14,972
=========== ==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
GASONICS INTERNATIONAL CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2000
(In thousands, except per share data)
<TABLE>
<CAPTION>
Gamma
Precision Pro Forma
Gasonics Technology Adjustments Pro Forma
Historical Historial (Note 3) Consolidated
--------------- ----------- ------------- ---------------------
<S> <C> <C> <C> <C>
Net Sales $103,171 $5,327 $ $108,498
Cost of Sales 56,584 1,403 57,987
--------------- ----------- ------------- ------------------
Gross Margin 46,587 3,924 50,511
--------------- ----------- ------------- ------------------
Operating Expenses:
Research and development 14,357 591 14,948
Selling, general, and administrative 21,358 1,708 23,066
Amortization of intangibles - - 2,624 d 2,624
--------------- ----------- ------------- ------------------
Total operating expenses 35,715 2,299 2,624 40,638
--------------- ----------- ------------- ------------------
Operating income (loss) 10,872 1,625 (2,624) 9,873
Other income and expenses, net 1,395 12 1,407
--------------- ----------- ------------- ------------------
Income (loss) before income taxes 12,267 1,637 (2,624) 11,280
Provision for income taxes 753 - 1,010 1,763
--------------- ----------- ------------- ------------------
Net income (loss) $ 11,514 1,637 $(3,634) $ 9,517
=============== =========== ============= ==================
Net income (loss) per share-basic $ 0.78 $ 0.61
=============== ==================
Net income (loss) per share-diluted $ 0.72 $ 0.57
=============== ==================
Weighted average common shares-basic 14,824 15,480
=============== ==================
Weighted average common shares-diluted 15,924 16,580
=============== ==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANICAL STATEMENTS
1. GENERAL
The Company will account for the acquisition as a purchase business combination.
The accompanying unaudited pro forma condensed consolidated financial statements
reflect an estimated aggregate purchase price of approximately $34.9 million,
consisting of the fair value of common stock and cash issued ($34.1million), as
well as transaction costs.
2. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The accompanying unaudited pro forma condensed consolidated balance sheet has
been prepared as if the acquisition was consummated on June 30, 2000. Pro Forma
adjustments were made:
(a) To record consideration given in acquisition of Gamma Precision Technology
Cash paid to Gamma Precision Technology stockholders $21,594
Stock issued to Gamma Precision Technology stockholders 11,718
Stock options assumed 960
Transaction costs 600
-------
Total purchase price $34,872
(b) To record allocation of purchase price to assets of Gamma Precision
Technology:
In-process research and development $ 6,000
Acquired technology, workforce intangible and goodwill 24,421
Net fair value of tangible assets acquired and liabilities assumed 4,451
-------
Net assets acquired $34,872
The allocation of the purchase price to in-process research and development,
acquired technology and workforce was based upon independent valuation.
(c) To record elimination of Gamma Precision Technology's shareholders' equity.
3. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
The accompanying unaudited pro forma condensed consolidated statement of
operations have been prepared as if the acquisition was consummated as of
October 1, 1998. Pro forma adjustments were made to reflect the:
(d) Amortization of acquired intangibles, with amortization periods of seven
years for amounts allocated to acquired technology, workforce and the
excess of cost over fair value of net assets acquired.
The accompanying unaudited pro forma condensed consolidated statement of
operations do not reflect the one-time impact of the charge for purchased in-
process research and development of $6.0 million recorded by the Company in
connection with the acquisition.
The unaudited pro forma condensed consolidated statement of operations for the
year ended September 30, 1999 was combined with the results of Gamma Precision
Technology for the year ended December 31, 1999. Accordingly, the presentation
excluded the results of Gamma Precision Technology for the quarter ended
December 31, 1998.
<PAGE>
EXHIBIT INDEX
Exhibit Description
2.1* Merger Agreement, dated as of August 30, 2000, by and among
GaSonics International Corporation, GPT Acquisition Corp. and
Gamma Precision Technology, Inc.
99.1* Press Release dated September 14, 2000.
______________________
* Incorporated by reference to the Company's Form 8-K filed with the Securities
and Exchange Commission on September 27, 2000.
