<PAGE> 1
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): August 31, 1996
SIRROM CAPITAL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Tennessee 0-25174 62-1583116
- ------------------------------------------------- ------------------------ -----------------
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
500 Church Street, Suite 200, Nashville, TN 37219
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (615) 256-0701
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 31, 1996, Sirrom Capital Corporation ("Sirrom" or the
"Company") completed its acquisition of Harris Williams & Co., L.P. ("Harris
Williams"). Pursuant to the terms of an Acquisition Agreement (the
"Acquisition Agreement"), Sirrom acquired Harris Williams through the purchase
of the sole limited partnership interest of Harris Williams owned by Sirrom,
Ltd. (the "Purchase") and the merger of Sirrom Capital Acquisition Corporation,
a wholly-owned subsidiary of Sirrom, with Harris Williams & Co. ("HW Corp.")
the sole general partner of Harris Williams (the "Merger"). In the Purchase
and the Merger, Sirrom issued an aggregate 898,454 shares of Sirrom Common
Stock to the holders of the respective Harris Williams partnership interests.
John A. Morris, Jr., M.D., a director and beneficial owner of 19.9% of Sirrom,
is a principal of Sirrom, Ltd. Dr. Morris received 170,706 shares of Sirrom
Common Stock in connection with the Purchase.
The terms and conditions of the acquisition of Harris Williams are
more fully described in the Acquisition Agreement, which is incorporated by
reference herein in its entirety.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Certain of the financial statements and pro forma financial
information required by this Item 7 were previously filed with the Securities
and Exchange Commission in the Company's Registration Statement on Form N-2, as
amended (Commission File No. 333-4023) dated June 11, 1996, and therefore,
pursuant to general instruction B(3), need not be filed herewith.
(a) Financial Statements of Business Acquired:
Unaudited consolidated balance sheets of Harris Williams & Co.
and Subsidiary as of June 30, 1996, and the related consolidated
statements of income, stockholders' equity and cash flows for the
six months ended June 30, 1995 and 1996. All other financial
statements required by this Item 7(a) were previously filed with the
Securities and Exchange Commission in the Company's Registration
Statement Form N-2, as amended (Commission File No. 333-4023) dated
June 11, 1996, and is incorporated by reference herein.
(b) Pro Forma Financial Information:
Introduction to unaudited pro forma condensed combined
financial information; unaudited pro forma condensed combined balance
sheet as of June 30, 1996; unaudited pro forma condensed combined
statement of operations for the six months ended June 30, 1996; and
notes to the unaudited pro forma condensed combined financial
information. All other pro forma financial information required by
Item 7(b) was previously filed with the Securities and Exchange
Commission in the Company's Registration Statement on Form N-2, as
amended (File No. 333-4023) dated June 11, 1996, and is incorporated
by reference herein.
2
<PAGE> 3
(c) Exhibits:
2.1 Acquisition Agreement by and among Sirrom Capital Corporation,
Sirrom Capital Acquisition Corporation, Sirrom, Ltd., and Harris
Williams & Co., dated May 16, 1996 (incorporated by reference to
Exhibit K.9 to the Company's Form N-2, as amended (File No. 333-4023)
dated June 11, 1996).
4.1 Registration Rights Agreement among Sirrom Capital Corporation,
Sirrom Ltd., Hiter Harris, Chris Williams, Dena Moore and Tiffany
Armstrong, dated August 31, 1996.
23.1 Consent of Arthur Andersen, LLP
99.1 Unaudited consolidated balance sheets of Harris Williams & Co. and
Subsidiary as of June 30, 1996 and the related consolidated statements
of income, stockholders' equity and cash flows for the six months
ended June 30, 1995 and 1996.
99.2 Introduction to unaudited pro forma condensed combined financial
information; unaudited pro forma condensed combined balance sheet as of
June 30, 1996; unaudited pro forma condensed combined statement of
operations for the six months ended June 30, 1996; and notes to the
unaudited pro forma condensed combined financial information.
3
<PAGE> 4
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.
SIRROM CAPITAL CORPORATION
Date: September 13, 1996 By: /s/ Carl W. Stratton
-------------------------------------
Carl W. Stratton
Chief Financial Officer
4
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EXHIBIT INDEX
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NO. EXHIBIT
- --- ------------------------------------------------------------
<S> <C>
2.1 Acquisition Agreement by and among Sirrom Capital
Corporation, Sirrom Capital Acquisition Corporation,
Sirrom, Ltd., and Harris Williams & Co., dated May 16,
1996 (incorporated by reference to Exhibit K.9 to the
Company's Form N-2, as amended (File No. 333-4023)
dated June 11, 1996).
4.1 Registration Rights Agreement among Sirrom Capital
Corporation, Sirrom, Ltd., Hiter Harris, Chris Williams,
Dena Moore and Tiffany Armstrong, dated August 31, 1996.
23.1 Consent of Arthur Andersen, LLP
99.1 Unaudited consolidated balance sheets of Harris Williams &
Co. and Subsidiary as of June 30, 1996 and the related
consolidated statements of income, stockholders' equity and
cash flows for the six months ended June 30, 1995 and
1996.
99.2 Introduction to unaudited pro forma condensed combined
financial information; unaudited pro forma condensed
combined balance sheet as of June 30, 1996; unaudited pro
forma condensed combined statement of operations for the
six months ended June 30, 1996; and notes to the
unaudited pro forma condensed combined financial
information.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
SIRROM CAPITAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of August 31, 1996, by
and among SIRROM CAPITAL CORPORATION, a Tennessee corporation (the "Company"),
Sirrom, Ltd., a Tennessee limited partnership and Hiter Harris, Chris Williams,
Dena Moore and Tiff Armstrong (each individually referred to hereinafter as a
"Shareholder" and collectively as the "Shareholders").
Section 1. Experience; Accredited Investor. Each Shareholder
represents and warrants to the Company (a) that such Shareholder has carefully
reviewed the Company's Registration Statement on Form N-2 dated May 17, 1996
and Company's Form 10-K for the year ended December 31, 1995, Form 10-Q for the
quarter ended March 31, 1996, Proxy Statement for the 1996 Annual Meeting of
Shareholders and Annual Report to Shareholders for the year ended December 31,
1995 and (b) that such Shareholder is either an "accredited investor" within
the meaning of Rule 501(a) of Regulation D of the Securities Act or that each
Shareholder who is not an accredited investor either alone or with his or her
representative has such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits and risks of the
prospective investment.
Each Shareholder further represents and warrants to the Company that
such Shareholder is acquiring the shares of the Company's Common Stock (the
"Shares"), for such Shareholder's own account for the purpose of investment and
not with a view to or for sale in connection with any distribution or other
allocation thereof. Each Shareholder further represents, as to himself or
herself, that such Shareholder understands that (i) the Shares have not been
registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration requirements of the Securities Act,
(ii) the Shares must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration, (iii) the Shares will bear a legend to such effect and (iv) the
Company will make a notation on its transfer books to such effect. Each
Shareholder further understands that the exemption from registration afforded
by Rule 144 under the Securities Act depends on the satisfaction of various
conditions and that, if applicable, Rule 144 affords the exemptions of sales of
the Shares only in limited amounts under certain conditions. Each Shareholder
(i) acknowledges that such Shareholder has had a full opportunity to ask
questions about the Company and to request from the Company and to review and
has received all information which it deems relevant in making a decision to
purchase the Shares being purchased or to be purchased by it or him hereunder
and (ii) will comply with the applicable restrictions on transferability of the
Shares contained in the Acquisition Agreement.
Section 2. Piggyback Registration Rights. During the period
beginning August 31, 1996 through August 31, 2000, whenever the Company
proposes to register any common stock of the Company ("Common Stock") for its
own or another person's account under the Securities Act of 1933, as amended
(the "Securities Act"), for a public offering for cash, other than a
registration of Common Stock relating to employee benefit plans or in
connection with an acquisition, the
<PAGE> 2
Company shall give the Shareholders prompt written notice of its intent to do
so. Upon the written request of any Shareholder given within fifteen (15) days
after receipt of such notice, the Company will, subject to the provisions of
the next sentence, cause to be included in such registration all of the shares
of Common Stock which such Shareholders request. If the Company is advised, in
writing in good faith by the managing underwriter of the securities being
offered pursuant to any registration statement under this Section 1, that the
number of shares to be sold by persons other than the Company is greater than
the number of such shares which can be offered without adversely affecting the
offering, the Company may reduce pro rata (based upon the total number of
shares proposed to be sold by the Company and all other persons entitled to
request registration) the number of shares offered for the accounts of the
Company and such persons to a number deemed satisfactory by such managing
underwriter.
Section 3. Registration Procedures. All expenses incurred in
connection with the registrations under Section 2 (including all registration,
filing, qualification, printer's and accounting fees, but excluding the fees of
counsel for the selling Shareholders and underwriting commissions and discounts
relating to the selling Shareholders' shares) shall be borne by the Company.
In connection with registrations under Section 2 , the Company shall (i) use
its best efforts to prepare and file with the Securities and Exchange
Commission (the "Commission") as soon as reasonably practicable, a registration
statement with respect to the shares to be registered and use its best efforts
to cause such registration to promptly become and remain effective for a period
of at least ninety (90) days (or such shorter period during which selling
shareholders shall have sold all Common Stock which were then requested to be
registered); (ii) use its best efforts to register and qualify the Common Stock
covered by such registration statement under applicable state securities laws
as shall be reasonably appropriate for the distribution of the Common Stock;
and (iii) take such other actions as are reasonable and necessary to comply
with the requirements of the Securities Act and the regulations thereunder, or
the reasonable request of any holder in light of the circumstances of the
particular plan of distribution, with respect to the registration and
distribution of the Common Stock. The Company is not obligated to effect
registration or qualification under Section 2 in any jurisdiction requiring it
to qualify to do business or to execute a general consent to service of
process.
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IN WITNESS WHEREOF, the Company has executed this Agreement as of the
__ day of ________, 1996.
SIRROM CAPITAL CORPORATION
By:
--------------------------
Title:
-----------------------
SHAREHOLDERS
------------------------------
H. Hiter Harris
------------------------------
Christopher H. Williams
------------------------------
Dena Frith Moore
------------------------------
Tiffany Armstrong
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports on Sirrom Capital Corporation and Harris Williams & Co. and Subsidiary
(and to all references to our Firm) included in or made a part of this Form 8-K.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
September 13, 1996
<PAGE> 1
EXHIBIT 99.1
HARRIS WILLIAMS & CO.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(unaudited)
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<CAPTION>
JUNE 30,
1996
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<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... $1,997,642
Accounts receivable......................................... 876,367
Prepaid expenses............................................ 11,237
----------
Total current assets................................ 2,885,246
----------
FURNITURE AND EQUIPMENT, at cost.............................. 141,935
Less accumulated depreciation............................... (49,333)
----------
Net furniture and equipment......................... 92,602
----------
OTHER ASSETS.................................................. 1,780
----------
$2,979,628
==========
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities.................... $ 716,891
----------
Total current liabilities........................... 716,891
----------
MINORITY INTEREST............................................. 735,686
----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, 5,000 shares authorized, 100 shares
issued and outstanding................................... 60,783
Retained earnings........................................... 1,466,268
----------
1,527,051
----------
$2,979,628
==========
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HARRIS WILLIAMS & CO.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
-------------------------
1995 1996
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<S> <C> <C>
REVENUES:
Fee income........................... $ 826,480 $ 2,453,831
Expense reimbursements............... 216,260 193,022
---------- -----------
1,042,740 2,646,853
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EXPENSES:
Salaries and benefits................ 635,344 1,023,981
Operating expenses................... 228,818 234,762
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864,162 1,258,743
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Operating income............. 178,578 1,388,110
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INTEREST INCOME AND OTHER.............. 22,778 34,517
---------- -----------
INCOME BEFORE MINORITY INTEREST........ 201,356 1,422,627
MINORITY INTEREST...................... (40,271) (284,525)
---------- -----------
NET INCOME............................. $ 161,085 $ 1,138,102
========== ===========
</TABLE>
<PAGE> 3
HARRIS WILLIAMS & CO.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK
---------------- RETAINED
SHARES AMOUNT EARNINGS TOTAL
------ ------- --------- ----------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1994............................. 100 60,783 284,918 345,701
Net income........................................... -- -- 649,249 649,249
Distributions to stockholders........................ -- -- (606,001) (606,001)
------ ------- --------- ----------
BALANCE, DECEMBER 31, 1995............................. 100 60,783 328,166 388,949
Net income........................................... -- -- 1,138,102 1,138,102
------ ------- --------- ----------
BALANCE, JUNE 30, 1996................................. 100 $60,783 1,466,268 $1,527,051
===== ======= ========= ==========
</TABLE>
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HARRIS WILLIAMS & CO.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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<CAPTION>
FOR THE SIX
MONTHS ENDED
JUNE 30,
-------------------------
1995 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income....................... $ 161,085 $1,138,102
Adjustments to reconcile consolidated net
income to net cash provided (used) by
operating activities:
Depreciation................................ 9,966 13,117
Minority interest in net income of
consolidated subsidiary................... 40,271 284,525
Increase in accounts receivable............. (87,235) (815,344)
Decrease in prepaid expenses................ 1,792 50
Decrease in other assets.................... -- 335
Increase in accounts payable and
accrued liabilities....................... 397,546 672,473
----------- -----------
Net cash provided by operating
activities........................... 523,425 1,293,258
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment........... (11,352) (33,298)
----------- -----------
Net cash used by investing
activities........................... (11,352) (33,298)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................... 512,073 1,259,960
CASH AND CASH EQUIVALENTS, at beginning of
year.......................................... 738,851 737,682
----------- -----------
CASH AND CASH EQUIVALENTS, at end of year....... $1,250,924 $1,997,642
=========== ===========
</TABLE>
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EXHIBIT 99.2
PRO FORMA FINANCIAL INFORMATION
Harris Williams & Co. - Virginia Corporation ("HW Corp") was formed in 1991 and
Harris Williams was later formed in August 1994, upon investment of Sirrom Ltd.
(the "Minority Interest"). At that time, HW Corp began conducting all of its
operations through Harris Williams. HW Corp's operations after August 1994
consist solely of its investment in Harris Williams.
The pro forma balance sheet data at June 30, 1996 and statement of operations
data for the three months ended June 1996, has been prepared based on unaudited
statements of operations of each of the respective companies. The minority
interest deduction included in the HW Corp financial statements is eliminated
in the pro forma presentation because the Company is acquiring the Minority
Interest. The pro forma financial information reflects the Company's
investment in HW Corp. as being accounted for under the equity method because a
non-investment company is not permitted to be consolidated with an investment
company under the Investment Company Act of 1940. The pro forma statement of
operations data may not be indicative of future results of operations or of the
actual results of operations had the acquisition described above been effective
on January 1 of each respective year.
<PAGE> 2
SIRROM CAPITAL CORPORATION
PRO FORMA BALANCE SHEET DATA
<TABLE>
<CAPTION>
JUNE 30, 1996
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SIRROM
CAPITAL MINORITY
CORPORATION HW CORP INTEREST ADJUSTMENTS PRO FORMA
----------- ---------- ---------- ------------- -----------
ASSETS
<S> <C> <C> <C> <C>
Investments, at fair value:
Loans $187,556,418 $ - $ - $ - $ 187,556,418
Equity interests 25,488,907 - - - 25,488,907
Warrants 13,748,118 - - - 13,748,118
------------ ---------- ----------- ----------- -------------
Total investments 226,793,443 - - - 226,793,443
Investment in unconsolidated
subsidiary 2,262,737 (1) 2,262,737
Cash and cash equivalents 39,818,682 1,997,642 - (1,997,642) (1) 39,818,682
Interest receivable 2,704,360 - - - 2,704,360
Accounts receivable - 876,367 - (876,367) (1) -
Debenture costs, net 2,257,887 - - - 2,257,887
Furniture and equipment, net 220,067 92,602 - (92,602) (1) 220,067
Other assets 615,362 13,017 - (13,017) (1) 615,362
------------ ---------- ----------- ----------- -------------
Total assets $272,409,801 $2,979,628 $ - $ (716,891) $ 274,672,538
============ ========== =========== =========== =============
LIABILITIES
Debentures payable to SBA $ 83,260,000 $ - $ - $ - $ 83,260,000
Revolving credit facility 35,887,766 - - - 35,887,766
Interest payable 1,266,976 - - - 1,266,976
Accrued taxes payable 2,353,368 - - - 2,353,368
Accounts payable and accrued
expenses 1,072,754 716,891 - (716,891) (1) 1,072,754
------------ ---------- ----------- ----------- -------------
Total liabilities 123,840,864 716,891 - (716,891) 123,840,864
------------ ---------- ----------- ----------- -------------
Minority interest
Shareholders' equity: 735,686 (735,692) -
Common stock 124,512,161 60,783 500,000 - 125,072,944
Notes receivable from
employees (1,539,858) - - - (1,539,858)
Undistributed net realized
earnings 11,287,906 1,466,268 235,692 - 12,989,860
Unrealized appreciation of
investments 14,308,728 - - - 14,308,728
------------ ---------- ----------- ----------- -------------
Total shareholders' equity 148,568,937 2,262,736 - - 150,831,674
------------ ---------- ----------- ---------- -------------
Total liabilities, and
shareholders' equity $272,409,801 $2,979,628 $ - $ (716,891) $ 274,672,538
============ ========== =========== ========== =============
</TABLE>
(1) Adjustment to present Harris Williams under the equity method.
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SIRROM CAPITAL CORPORATION
PRO FORMA STATEMENT OF OPERATIONS DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1996
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SIRROM
CAPITAL MINORITY
CORPORATION HW CORP INTEREST ADJUSTMENTS PRO FORMA
----------- ----------- ----------- ---------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING INCOME:
Interest on investments $ 10,448,319 $ $ - $ - $ 10,448,319
Advisory fees - 2,453,831 - (2,453,831)(2) -
Loan processing fees 1,573,050 - - 1,573,050
Other income 62,055 227,539 - (227,539)(2) 62,055
----------- ---------- ------------ ----------- -------------
Total operating income 12,083,424 2,681,370 - (2,681,370) 12,083,424
Equity in earnings of
unconsolidated subsidiary,
before income taxes - - - 1,422,627 (2) 1,422,627
OPERATING EXPENSES:
Interest expense 3,841,275 - - - 3,841,275
Salaries and benefits 1,407,678 1,023,981 - (1,023,981)(2) 1,407,678
Other operating expenses 980,163 234,762 - (234,762)(2) 980,163
Amortization expense 277,643 - - - 277,643
----------- ---------- ------------ ----------- -------------
Total operating expenses 6,506,759 1,258,743 - (1,258,743) 6,506,759
----------- ---------- ------------ ----------- -------------
Net operating income 5,576,665 1,422,627 - 6,999,292
Realized gain on investments 5,956,489 - - - 5,956,489
Change in unrealized
appreciation of investments 4,495,427 - - - 4,495,427
Provision for income taxes (2,204,960) - - (497,919)(1) (2,702,879)
Minority interest - (284,525) 284,525 - -
----------- ---------- ------------ ----------- -------------
Net increase in
shareholders' equity resulting
from operations $13,823,621 $1,138,102 $ 284,525 $ (497,919) $ 14,748,329
=========== ========== ============ =========== =============
Per share:
Pretax operating income $ .58 $ .66
Net increase resulting from
operations 1.43 1.39
Fully diluted weighted average
shares oustanding 9,691,981 898,454(3) 10,590,435(3)
</TABLE>
(1) Reflects the provision for federal income taxes on operations of HW Corp
and Minority Interest at statutory rates so that the pro forma data maybe
indicative of ongoing operations of the Company. However, the Company's
actual financial statements for the period above will have no federal
income tax provision.
(2) Adjustment to present Harris Williams under the equity method.
(3) Reflects the impact of the shares issued in connection with the proposed
acquisition.
