<PAGE> 1
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) November 13, 1996
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APPLIED CELLULAR TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Missouri 33-79678 43-1641533
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Highway 160 & CC, Suite 5, Nixa, Missouri 65714
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: 417-725-9888
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Item 1. Changes in Control of Registrant
Item 2. Acquisition or Disposition of Assets.
On November 13, 1996, the Company entered into an agreement to
purchase 80% of the outstanding shares of Universal Commodities
Corp., from one shareholder, Marc Sherman, in exchange for $4,000,000
in the form of Applied Cellular Technology, Inc. restricted common
shares. The Seller received $3,200,000 worth of the restricted
common shares on November 13, 1996, by the Company issuing 581,818
shares of its restricted common stock at $5.50 per share. The Seller
will receive the remaining $800,000 (145,455 shares at $5.50) worth
of restricted common shares at November 13, 1997, if Universal
Commodities Corp. obtains an EBIT of $800,000. If an EBIT of $800,000
is not reached, the Seller forfeits the remaining $800,000 purchase
price due.
Item 3. Bankruptcy or Receivership. None.
Item 4. Changes in Registrant's Certifying Accountant. No.
Item 5. Other Events. None.
Item 6. Resignation of Registrant's Directors. None.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired. Not required -
per attached calculation.
(b) Pro forma financial information. Not required - per attached
calculation.
(c) Exhibits. Agreement of Sale.
Previously filed.
Item 8. Change in Fiscal Year. None.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
APPLIED CELLULAR TECHNOLOGY, INC.
(Registrant)
Date: January 15, 1997 /s/ Garrett Sullivan
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President
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<TABLE>
APPLIED CELLULAR TECHNOLOGY, INC. AND SUBSIDIARIES
TEST OF SIGNIFICANCE FOR THE 80% PURCHASE OF UNIVERSAL COMMODITIES CORPORATION
FOR THE 8-K FILING
<CAPTION>
100%- 80% of the UCC amount
divided by the proforma amount
<S> <C> <C> <C>
UNIVERSAL COMMODITIES CORPORATION
INVESTMENT IN BY ACT $800,000 3.00%
UNIVERSAL'S TOTAL ASSETS AT 12/31/95 $536,883 1.61%
UNIVERSAL'S NET INCOME BEFORE TAX FOR THE YEAR ENDED 12/31/95 $118,210 15.75%
<CAPTION>
ALL %'S ARE BELOW 20%, THEREFORE NO FINANCIAL STATEMENTS
OR PROFORMA STATEMENTS ARE REQUIRED.
<S> <C>
APPLIED CELLULAR TECHNOLOGY, INC. AND SUBSIDIARIES
PER THE MOST RECENT PROFORMA INFORMATION FILED WITH AN 8-K:
APPLIED CELLULAR TECHNOLOGY, INC. AND SUBSIDIARIES
TOTAL ASSETS AT 12/31/95 $26,643,096 (see attached)
NET INCOME BEFORE TAX FOR THE YEAR ENDED 12/31/95 $600,302 (see attached)
</TABLE>
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AS PREVIOUSLY FILED
The following pro forma consolidated statement of operations of
Applied Cellular Technology, Inc. and Subsidiaries for
the year ended December 31, 1995 and for the nine months ended September
30, 1996 gives effect to the acquisition of Advanced Telecom Holdings, Inc.
as if it were effective January 1, 1995. The statements give effect to the
Acquisition under the purchase method of accounting and the assumptions in
the accompanying notes to the pro forma financial statements.
In September 1996, the Company entered into an agreement
to purchase 100% of Advanced Telecom Holdings, Inc. in exchange for
1,618,180 shares of Applied Cellular Technology, Inc's common stock,
100,000 shares of 8% redeemable preferred stock at $100 per share of
Applied Cellular Technology, Inc. and warrants evidencing the right to
purchase 1,000,000 shares of Applied Cellular Technology, Inc.'s common
stock. The shares of common stock issued were valued at 75% of the then
current market trading value of $5.00, due to the limited market of the
shares and the restricted nature of the shares. No value was attributed to
the warrants because the exercise price exceeded the fair value of the
underlying common shares. Each warrant can be exercised, at any time, and
from time to time, beginning in October 1996 until October 2001, at a price
of one warrant plus $5.31 per common share. The total value of the
investment based on the above facts was recorded at $12,022,725 plus
acquisition costs of $326,863, for a total investment of $12,349,588. The
agreement dated October 1996, called for the effective date of
the acquisition to be September 1, 1996 due to the significant control of
the Company by ACT Communications, Inc. since September 1, 1996 and the
agreement called for the profit and loss to be allocated to ACT
Communications beginning September 1,1996. The 8% preferred dividend
begins accruing on October 1,1996.
The pro forma statements may not be indicative of the results that
would have occurred if the Acquisitions had been effective on the dates
indicated or of the results that may be obtained in the future. The pro
forma statements should be read in conjunction with the financial
statements and notes thereto of the Company.
AS PREVIOUSLY FILED
<TABLE>
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
As Reported Pro forma adjustments Pro Forma
For the year ended ----------------------------------- For the year ended
December 31, Advanced December 31,
1995 Telecom 1995
Holdings, Inc.
<F1> (UNAUDITED)
<S> <C> <C> <C> <C>
Net Revenues $2,335,999 $32,792,474 $35,128,473
Direct Costs $1,186,213 $14,908,104 $16,094,317
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Gross Profit $1,149,786 $17,884,370 $19,034,156
Operating Expenses $981,212 $15,624,091 $643,250<F2> $17,248,553
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Operating Income (Loss) $168,574 $2,260,279 ($643,250) $1,785,603
Interest Income $74,899 $0 $74,899
Interest Expense ($15,150) ($396,087) ($411,237)
Minority Interest ($48,963) $0 ($48,963)
Provision for income tax $0 $0 ($439,539)<F3> ($439,539)
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Net Income (Loss) $179,360 $1,864,192 ($1,082,789) $960,763
Dividends ($800,000)<F4> ($800,000)
Net income (loss) applicable to
common shareholders $179,360 $1,864,192 ($1,882,789) $160,763
==========================================================================================
Net Income (Loss) Per Common Share $0.10 $0.05
Weighted Average Number Of
Common Shares Outstanding 1,792,939 3,129,474
<FN>
Computational Note:
The Net Income before tax used in the attached calculation
is calculated as follows:
$160,763 Net income applicable to common shareholders
$439,539 Tax provision
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$600,302 Net income before tax
========
The related pro forma 12/31/95 balance sheet (not required to be filed with
this 8-K) - resulted in total assets of $26,643,096.
Note : The Pro Forma Consolidated Statement of Operations gives effect to the
following pro forma adjustments:
<F1> Represents the Statement of Operations of Advanced Telecom Holdings, Inc. for the year ended December 31, 1995
that would have been consolidated with the Company if the acquisition would have taken place on January 1, 1995.
<F2> Represents the amortization expense for goodwill on the Advanced Telecom Holdings, Inc. acquistition, in the
amount of $643,250 ($12,865,009 divided by 20 years)
<F3> Represents an increase in the tax provision as reported at December 31, 1995, due to the proformed increase in book
income from (F1)-(F2).
<F4> Represents the twelve months expense for the dividends that will be paid on the 8% preferred stock issued in the
Advanced Telecom Holdings, Inc. acquistion (100,000 x $100 x 8%)
</TABLE>
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AS PREVIOUSLY FILED
<TABLE>
PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
Pro Forma
As Reported Pro forma adjustments For the nine
For the nine months ended ----------------------------------- months ended
September 30, Advanced September 30,
1996 Telecom 1996
Holdings, Inc.
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<F1>
<S> <C> <C> <C> <C>
Net Revenues $7,602,707 $19,363,543 $26,966,250
Direct Costs $4,163,160 $7,470,031 $11,633,191
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Gross Profit $3,439,547 $11,893,512 $15,333,059
Operating Expenses $2,911,541 $11,185,016 $435,148<F2> $14,531,705
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Operating Income (Loss) $528,006 $708,496 ($435,148) $801,354
Interest Income $67,628 $0 $67,628
Interest Expense ($75,151) ($336,823) ($411,974)
Minority Interest ($80,013) $0 ($80,013)
Provision for income tax ($133,702) $0 ($22,851)<F3> ($110,851)
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Net Income (Loss) $306,768 $371,673 ($412,297) $266,194
Dividends ($600,000)<F4> ($600,000)
Net income (loss) applicable to
common shareholders $306,768 $371,673 ($1,012,297) ($333,856)
==========================================================================================
Net Income (Loss) Per Common Share $0.11 ($0.08)
Weighted Average Number Of
Common Shares Outstanding 2,706,254 4,140,685
<FN>
Note : The Pro Forma Consolidated Statement of Operations gives effect to the
following pro forma adjustments:
<F1> Represents the Statement of Operations of Advanced Telecom Holdings, Inc. for the eight months ended
August 31, 1996 (the month to date for September 30, 1996 is already included in the as reported column)
that would have been consolidated with the Company if the acquisition would have taken place
on January 1, 1995.
<F2> Represents the amortization expense for goodwill on the Advanced Telecom Holdings, Inc. acquisition, in
the amount of $482,438 ($12,865,009 divided by 20 years x 9/12) less the $47,290 that is already
reflected in the as reported column.
<F3> Represents a decrease in the tax provision as reported at September 30, 1996, due to the proformed
decrease in book income from (F1)-(F2).
<F4> Represents the nine months expense for the dividends that will be paid on the 8% preferred stock issued
in the Advanced Telecom Holdings, Inc. acquistion (100,000 x $100 x 8% x 9/12)
</TABLE>
