SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO
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 11, 1997
THE THORSDEN GROUP, LTD.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-24672 33-0611746
(Commission File No.) (IRS Employer
Identification
No.)
4505 South Wasatch Blvd., Suite 340
Salt Lake City, Utah 84124
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (801) 424-0044
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 11, 1997, Thorsden Acquisition Corp. ("TAC"), a Utah
corporation, was merged with and into Arkona, Inc.("Arkona"), a Utah
corporation, pursuant to an Agreement and Plan of Merger, dated October 11,
1997, among TAC, Arkona, and The Thorsden Group, Ltd. ("Thorsden" or the
"Registrant"), such agreement referred to herein as the "Merger Agreement". Upon
consummation of the merger of TAC with Arkona (the "Merger"), TAC ceased to
exist, and Arkona, the surviving corporation, changed its name to Arkona
Software, Inc. Thorsden will change its name to Arkona, Inc.(if such name is
available in Delaware).
This amendment is filed for the purpose of filing the financial statements of
Arkona and pro forma financial information relating to the Merger.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
(b) PRO FORMA FINANCIAL INFORMATION.
(c) EXHIBITS.
2.1 Agreement and Plan of Merger dated October 11, 1997 (Schedules
omitted)*
* Previously filed.
<PAGE>
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 hereunto duly authorized.
THE THORSDEN GROUP, LTD.
Dated: December 22, 1997 By: /s/ Marty Alfred
------------------------
Marty Alfred
Director of Operations
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
ARKONA, LLC
Salt Lake City, Utah
We have audited the accompanying balance sheet of Arkona, LLC (a
development stage company) as of December 31, 1996, and the related statements
of operations and members' equity, and cash flows for the period from September
25, 1996 (inception), to December 31, 1996. 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides 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 Arkona, LLC (a development
stage company) as of December 31, 1996, and the results of its operations and
its cash flows for the period from September 25, 1996 (inception), to December
31, 1996, in conformity with generally accepted accounting principles.
/S/ Pinnock, Robbins, Posey & Richins
September 30, 1997, except
note 2, which is
October 7, 1997
<PAGE>
ARKONA, LLC
(A Development Stage Company)
BALANCE SHEET
December 31, 1996
ASSETS
CURRENT ASSETS:
Cash $ 12,793
-----------
TOTAL CURRENT ASSETS 12,793
-----------
$ 12,793
===========
LIABILITIES AND MEMBERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 3,985
Customer deposits 30,000
Accrued payroll taxes 6,227
Advances from members 3,598
-----------
TOTAL CURRENT LIABILITIES $ 43,810
-----------
MEMBERS' EQUITY:
Members' equity (deficit) (31,017)
-----------
TOTAL MEMBERS' EQUITY (DEFICIT) (31,017)
-----------
$ 12,793
===========
See accompanying notes to financial statements.
<PAGE>
ARKONA, LLC
(A Development Stage Company)
STATEMENT OF OPERATIONS AND MEMBERS' EQUITY
FOR THE PERIOD SEPTEMBER 25, 1996 (INCEPTION)
TO DECEMBER 31, 1996
OPERATING REVENUE $ -
----------
EXPENSES:
Research and development expenses 5,716
Sales and marketing 2,528
Other operating expenses 23,844
----------
32,088
----------
(LOSS) FROM OPERATIONS ( 32,088)
----------
OTHER INCOME (EXPENSES):
Interest income 71
----------
71
----------
NET (LOSS) ( 32,088)
MEMBERS' CAPITAL CONTRIBUTION 1,000
----------
MEMBERS' EQUITY (December 31, 1996) ($ 32,017)
==========
See accompanying notes to financial statements.
<PAGE>
ARKONA, LLC
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period September 25, 1996 (Inception)
to December 31, 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (32,017)
ADJUSTMENTS TO RECONCILE NET (LOSS) TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
Increase in accounts payable 3,985
Increase in accrued payroll taxes 6,227
------------
NET CASH (USED BY) OPERATING ACTIVITIES: (21,805)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Members' contributions 1,000
Advances from members 3,598
Customer deposits 30,000
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 34,598
------------
NET INCREASE IN CASH 12,793
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 12,793
============
See accompanying notes to financial statements.
<PAGE>
ARKONA, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
1. Organization and Summary of Significant Accounting Polices
The Company was formed on September 25, 1996 as a Utah Limited Liability
Company and is engaged in the development of computer software for future
sale to initial target markets of engineering firms, legal firms and certain
medical fields. Activities of the Company to this point have been directed
toward the development of such proprietary software and marketing, financing
and other resources necessary to complete a successful introduction of the
product to the marketplace. As such, significant operating activities have
not commenced at this time the Company is considered to be in the
development stage. The ultimate success of the Company will be dependent on
its ability to obtain financing to adequately fund the development and
marketing of the product, as well as, successfully completing the technical
requirements to prepare the product for market and obtaining a market for
distribution.
a. Cash and Cash Equivalents
For purposes of the statement of cash flows, Arkona, LLC considers all
unrestricted investments with original maturities of three months or
less at time of purchase to be cash equivalents.
b. Income Taxes
The Company has elected to be taxed as a partnership under the
provisions of subsection 301.7701-2 of the Internal Revenue Code.
Under these provisions, Arkona, LLC generally does not pay federal or
state income taxes on its taxable income. The members are liable for
individual income taxes on their respective shares of the Company's
taxable income.
c. Substantial Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
2. SUBSEQUENT EVENTS
Subsequent to December 31, 1996, the Company agreed to merge with a newly
formed corporation, Arkona Corporation (a Utah corporation). This merger
will be effected through the contribution of all of the members' stock in
Arkona LLC in exchange for stock in Arkona Corporation. The relative
membership interest in Arkona Corporation will be effectively the same as
that held in Arkona LLC prior to merger.
<PAGE>
ARKONA, LLC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On October 7, 1997, the Company also entered into an agreement which provides
for the merger of Thorsden Acquisition Corporation, an unrelated company,
into Arkona Corporation. Subsequent to this merger and as a part of the
agreement, the shareholders of Arkona Corporation will exchange all of their
common stock (100% interest) for a combined 70% interest (14,000,000 shares)
in The Thorsden Group LTD., the former parent company to Thorsden Acquisition
Corporation.
The result of the agreement will be a change in ownership making Arkona
Corporation a wholly owned subsidiary of The Thorsden Group LTD. Subsequent
to the merger and ownership change, the Corporation name will be changed from
Arkona Corporation to Arkona Software, Inc., and The Thorsden Group LTD.'s
name will be changed to Arkona, Inc.
3. EMPLOYEE AGREEMENTS
The Company has entered into Employee Confidentiality, Work Product and Non-
Competition Agreements with each of the key members of management. The
agreements provide that during the term of employment, the employee will not
disclose confidential trademark or corporate information to other parties and
clarifies that all work product developed by each employee is owned by the
Company. Additionally, for the term of employment and one year after
termination, the employee agrees not to solicit or divert business from any
client of Arkona nor to participate in a competing business.
4. CUSTOMER CONTRACT AND CONCENTRATION OF REVENUE
The Company has entered into a contract to develop a software application
using the Company's proprietary system. This contract and sale was made to
the Company's only customer to date. The contract provides for installment
payments at specific dates. As of December 31, 1996, a deposit of $30,000
was advanced on the contract. The total contract amount is $125,000 and was
earned and paid in its entirety in 1997.
As an additional provision of the contract, the Company has agreed to pay the
customer royalties of two percent of net revenues up to the contract amount
($125,000) and 1% of net revenues thereafter, from subsequent sales or
licensing to third parties of the product developed for the customer.
<PAGE>
Thorsden Group Ltd.
including the accounts of its wholly-owned subsidiary
Arkona, Inc.
(A Development Stage Company)
Pro Forma Financial Statements
September 30, 1997
<PAGE>
Independent Accountants' Report
To the Directors and Shareholders
Thorsden Group Ltd.
The accompanying pro forma balance sheet of Thorsden Group Ltd., including the
accounts of its wholly-owned subsidiary, Arkona, Inc., as of September 30,
1997, and the related pro forma statements of income for the period then ended
were not audited by us and accordingly, we do not express an opinion on them.
December 19, 1997 /S/ Mantyla, McReynolds and Associates
<PAGE>
Thorsden Group Ltd.
including the accounts of its wholly-owned subsidiary
Arkona, Inc.
(A Development Stage Company)
Pro Forma Balance Sheet
(Unaudited)
ASSETS
Pro Forma Giving
Effect to Private
Placement Memo.
September 30, 1997 September 30, 1997
------------------ ------------------
Current Assets
Cash $ 5,845 $ 1,152,081
Subscriptions receivable - 11,500
Marketable securities - 837,781
------------- --------------
Total Current Assets 5,845 2,001,362
Equipment, net 781 781
Other Assets 9,374 9,374
------------- --------------
TOTAL ASSETS $ 16,000 $ 2,011,517
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 9,374 $ 69,717
Accrued payroll taxes 13 13
------------- --------------
Total Current Liabilities 9,387 69,730
Stockholders' Equity
Common stock 16,000 20,000
Additional paid in
capital/(deficit) (15,000) 1,916,174
Retained Earnings 5,613 5,613
------------- --------------
Total Stockholders' Equity 6,613 1,941,787
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 16,000 $ 2,011,517
============= ==============
See accompanying notes and Independent Accountants' report
<PAGE>
Thorsden Group Ltd.
including the accounts of its wholly-owned subsidiary
Arkona, Inc.
(A Development Stage Company)
Pro Forma Income Statement
(Unaudited)
<TABLE>
<CAPTION>
From Inception From Inception
For the Six September 25, 1996 September 25, 1996
Months Ended through through
September 30, 1997 September 30, 1996 September 30, 1997
------------------ ------------------ ------------------
<S> <C> <C> <C>
Revenues $ 125,000 $ - $ 125,000
-------------- ------------- -------------
Expenses:
Sales, general and
administrative expense 33,305 - 77,569
Research and development 18,201 - 24,276
-------------- ------------- -------------
Total Expenses 51,506 - 101,845
-------------- ------------- -------------
Income From Operations 73,494 - 23,155
Other Income (Interest) 169 - 210
-------------- ------------- -------------
Net Income $ 73,663 $ - $ 23,365
============== ============= =============
Net Income per Share $ 0.01 $ - $ 0.01
============== ============= =============
Weighted Average Number
of Shares Outstanding 16,000,000 424,500 8,212,250
============== ============= =============
</TABLE>
See accompanying notes and Independent Accountants' report
<PAGE>
Thorsden Group Ltd.
including the accounts of its wholly-owned subsidiary
Arkona, Inc.
(A Development Stage Company)
Notes to Pro Forma Financial Statements
September 30, 1997
Note 1 ORGANIZATION AND MERGER
The Thorsden Group, Ltd. ("Thorsden"), a Delaware corporation, was
incorporated June 11, 1992. Thorsden's activities since inception have been
limited to organizational matters. For the purpose of merging with Arkona,
Inc., a private Utah corporation, in an agreement dated October 7, 1997,
Thorsden formed a wholly owned subsidiary titled Thorsden Acquisition Corp.
An Agreement and Plan of Merger was executed on October 7, 1997, resulting
in a reverse triangular merger, accounted for herein as a purchase. The
merger resulted in Thorsden Acquisition Corp. ceasing to exist with the
resulting entity operating as a wholly-owned subsidiary of Thorsden Group,
Ltd. under the name Arkona, Inc.
Arkona, Inc., was incorporated from a Limited Liability Company ("LLC") on
or about September 30, 1997. All of the assets and liabilities of the LLC
were transferred into the corporation, and the LLC ceased to exist.
The Agreement and Plan of Merger set forth that Thorsden would issue
14,000,000 shares to Arkona, Inc.'s shareholders. At the time of said
issuance, Thorsden had 424,500 shares outstanding and issued an additional
1,575,500 shares to Thorsden's shareholders. Immediately after this
issuance Arkona Inc.'s shareholders owned 14,000,000 of the total
outstanding of 16,000,000 shares, or 87.5 %.
Also, on October 7, 1997, a Private Placement Memorandum was completed for
the combined entity, wherein the Company received cash and marketable
securities of approximately $2,000,000, after the costs of the offering.
A total of 4,000,000 additional shares were issued in conjunction with the
Private Placement Memorandum. The total current outstanding shares is
20,000,000.
