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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
SEPTEMBER 30, 1996
MVSI, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-26614 54-1707718
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
8133 LEESBURG PIKE, SUITE 750 VIENNA, VIRGINIA 22182
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 356-5353
Former name or former address, if changed since last report:
N/A
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MVSI, INC.
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant.
None.
Item 2. Acquisition or Disposition of Assets.
On September 30, 1996, the Registrant (MVSI, Inc./Nasdaq: "MVSI")
completed the acquisition of Socrates, Inc. ("Socrates"), as a
wholly-owned subsidiary. Socrates is a Washington area based
integrator and marketer of proprietary and generic computer system
products and services for advanced computer systems integration,
telecommunications integration, internet connectivity, and wide and
local area networking. MVSI exchanged, on a proposed tax-free basis,
350,000 shares of its common stock for all the shares of common stock
held by Socrates' stockholder. The newly issued MVSI shares in the
acquisition are restricted and may not be sold for a 24 month period
ending September 1998.
MVSI believes that the acquisition of Socrates will enhance its
capability to provide software and hardware support to its
wholly-owned subsidiaries, including MVS Modular Vision Systems, Inc.,
whose product line includes computer oriented proprietary laser
vision-based robotic and sensor products and systems.
Item 3. Bankruptcy or Receivership.
None.
Item 4. Changes in Registrant's Certifying Accountant.
None.
Item 5. Other Events.
None.
Item 6. Resignation of Registrant's Directors.
None.
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Item 7. Financial Statements, PRO FORMA Financial Information and Exhibits.
In accordance with Regulation S-B, Item 310(c), the Registrant has
determined that its acquisition of Socrates, Inc. is considered to be
a significant business combination. As none of conditions in
the definitions of a significant subsidiary exceed the percentage
which would require the Registrant to provide audited financial
statements, and that such audited statements are not readily
available, the Registrant has not provided audit financial statements
herein. Notwithstanding, the Registrant has provided unaudited
financial statements, excluding disclosures, and PRO FORMA financial
information attached hereto and made a part hereof.
Item 8. Change in Fiscal Year.
None.
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MVSI, Inc.
Date October 11, 1996 By: /s/ EDWARD RATKOVICH
---------------------------- -------------------------------
Edward Ratkovich
Chairman of the Board and
Chief Executive Officer
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SOCRATES, INC.
BALANCE SHEETS
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(Unaudited) (Unaudited)
ASSETS
CURRENT ASSETS
Cash $ (8,496) $ (52,500)
Accounts receivable, net of allowance
for doubtful accounts 2,544,770 2,491,230
Inventory 75,000 60,000
Prepaid expenses and other current assets 34,274 5,691
---------- ----------
Total current assets 2,645,548 2,504,421
PROPERTY AND EQUIPMENT, NET 50,640 54,926
OTHER ASSETS 10,913 10,913
------------ ------------
Total assets $ 2,707,101 $ 2,570,260
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 238,988 $ 342,064
Accounts payable -- trade 1,775,562 2,013,730
Accrued liabilities 733,883 98,916
------------ ------------
Total liabilities 2,748,433 2,454,710
STOCKHOLDERS' EQUITY
Common stock, 4,000 shares authorized,
no par value, 4,000 shares issued and
outstanding 25,000 25,000
Retained earnings (deficit) (66,332) 90,550
------------ ------------
Total stockholders' equity (41,332) 115,550
------------ ------------
Total liabilities and
stockholders' equity $ 2,707,101 $ 2,570,260
------------ ------------
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SOCRATES, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
(Unaudited) (Unaudited)
Sales $ 6,414,368 $ 12,398,889
Cost of Sales 5,464,971 10,780,283
------------ -------------
Gross profit 949,397 1,618,606
Expenses
Selling and Administrative 1,098,779 1,544,285
Depreciation and amortization 7,500 31,939
------------ -------------
1,106,279 1,576,224
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Earnings (loss) from operations (156,882) 42,382
Interest income 0 2,804
Interest and financing expense 0 0
------------ -------------
Earnings (loss) before taxes (156,882) 45,186
Income tax provision
Current 0 42,416
Deferred 0 --
------------ -------------
0 42,416
------------ -------------
NET EARNINGS (LOSS) $ (156,882) $ 2,770
------------ -------------
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MVSI, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(UNAUDITED)
ASSETS MVSI, INC. PRO FORMA
HISTORICAL ADJUSTMENTS(1) AS ADJUSTED
----------- ------------ -----------
CURRENT ASSETS
Cash $ 579,927 $ (8,496) $ 571,431
Cash equivalents 7,500,762 -- 7,500,762
Accounts receivable, net of
allowance for doubtful accounts 2,778,098 2,544,770 5,322,868
Inventory 1,434,580 75,000 1,509,580
Tax credits and income tax
receivable 274,609 -- 274,609
Prepaid expenses 192,473 34,274 226,747
---------- ---------- ----------
Total current assets 12,760,449 2,645,548 15,405,997
PROPERTY AND EQUIPMENT, NET 194,889 50,640 245,529
CAPITALIZED SOFTWARE 1,034,753 -- 1,034,753
GOODWILL 423,650 2,430,083 2,853,733
DEFERRED TAX ASSET 224,265 -- 224,265
OTHER ASSETS 92,313 10,913 103,226
---------- ---------- ----------
Total assets $14,730,319 $ 5,137,184 $19,867,503
---------- ---------- ----------
---------- ---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $ 382,353 $ -- $ 382,353
Current portion of
long-term debt 9,818 238,988 248,806
Shareholder loans 200,556 -- 200,556
Advance deposits 6,000 -- 6,000
Accounts payable and accrued
liabilities 1,069,434 2,509,446 3,578,880
---------- ---------- ----------
Total liabilities 1,668,161 2,748,434 4,416,595
STOCKHOLDERS' EQUITY
Common stock, 50,000,000 shares
authorized, $.01 par value,
10,390,000 shares issued and
outstanding, historical,
10,740,000 shares, pro forma 103,900 3,500 107,400
Stock subscription receivable (150,000) -- (150,000)
Additional paid in capital 18,185,343 2,385,250 20,570,593
Accumulated deficit (5,103,540) -- (5,103,540)
Unrealized loss on investments
available for sale (59,824) -- (59,824)
Cumulative translation adjustment 86,279 -- 86,279
---------- ---------- ----------
Total stockholders'
equity 13,062,158 2,388,750 15,450,908
---------- ---------- ----------
Total liabilities
and stockholders'
equity $14,730,319 $ 5,137,184 $19,867,503
---------- ---------- ----------
---------- ---------- ----------
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(1) The pro forma consolidated balance sheet reflects the
acquisition of Socrates, Inc. as if it had occurred on June 30, 1996. The
acquisition of Socrates is accounted for as a purchase business
combination. The cost in excess of the fair value of net assets acquired
(goodwill) of approximately $2,430,000 will be amortized using an estimated
life of ten years. The pro forma information should be read in conjunction
with the Company's historical financial statements. In addition, the pro
forma data presented is not necessarily indicative of the effect of the
transaction had it occurred on June 30, 1996.
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MVSI, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
MVSI, INC. PRO FORMA
HISTORICAL ADJUSTMENTS (1) PRO FORMA
---------- --------------- ---------
Sales $ 9,858,955 $ 9,514,091 $19,373,046
Cost of Sales 6,826,698 8,161,730 14,988,428
---------- ---------- ----------
Gross profit 3,032,257 1,352,361 4,384,618
Expenses
Selling 353,265 122,626 475,891
Administrative 1,569,709 748,120 2,317,829
Research and development,
net of tax credits 190,758 -- 190,758
Depreciation and amortization 73,294 15,560 88,854
Goodwill amortization -- 182,256 182,256
---------- ---------- ----------
2,187,026 1,068,562 3,255,588
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Earnings (loss) from operations 845,231 283,799 1,129,030
Interest income 354,656 -- 354,656
Interest and financing charges (39,326) -- (39,326)
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Earnings (loss) before taxes 1,160,561 283,799 1,444,360
Income tax provision (benefit)
Current -- -- 0
Deferred (224,265) -- (224,265)
---------- ---------- ----------
(224,265) -- (224,265)
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NET EARNINGS (LOSS) $ 1,384,826 $ 283,799 $ 1,668,625
---------- ---------- ----------
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Earnings (loss) per share $0.13 $0.02 $0.15
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(1) The pro forma consolidated income statement for the nine months ended
June 30, 1996, reflects the acquisition of Socrates, Inc. as if it
were consummated on October 1, 1995, accounted for as a purchase business
combination. The cost in excess of the fair value of net assets acquired
(goodwill) of approximately $2,430,000 will be amortized using an estimated
life of ten years and amortization applicable to the above is reflected
in the above statement. The pro forma information above excludes as
non-recurring $600,000 bonus payment to a stockholder. The pro forma
information is not necessarily indictative of the results of operations
which would have resulted had the acquisition occurred on October 1, 1995.
The pro forma information should be read in conjunction with the Company's
historical financial statements.
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MVSI, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
(UNAUDITED)
MVSI, INC. PRO FORMA
HISTORICAL ADJUSTMENTS (1) PRO FORMA
---------- -------------- -----------
Sales $ 2,337,797 $ 11,498,533 $13,836,330
Cost of Sales 1,506,508 10,155,211 11,662,119
---------- ---------- ----------
Gross profit 830,889 1,343,322 2,174,211
Expenses
Selling 485,995 314,601 800,596
Administrative 1,186,052 953,805 2,139,857
Research and development,
net of tax credits 1,115,295 -- 1,115,295
Depreciation and amortization 20,838 26,541 47,379
Goodwill amortization -- 243,008 243,008
---------- ---------- ----------
2,808,180 1,537,955 4,346,135
---------- ---------- ----------
Earnings (loss) from operations (1,977,291) (194,633) (2,171,924)
Interest income 51,120 -- 51,120
Interest and financing charges (55,282) -- (55,282)
Interest expense--private placement (3,500,000) -- (3,500,000)
---------- ---------- ----------
Earnings (loss) before taxes (5,481,453) (194,633) (5,676,086)
Income tax provision (benefit)
Current -- -- --
Deferred -- -- --
---------- ---------- ----------
-- -- --
---------- ---------- ----------
NET EARNINGS (LOSS) $(5,481,453) $ (194,633) $(5,676,086)
---------- ---------- ----------
---------- ---------- ----------
Earnings (loss) per share $1.10 $0.04 $ (1.06)
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(1) The pro forma consolidated income statement for the year ended
September 30, 1995, reflects the acquisition of Socrates, Inc. as if it
were consummated on October 1, 1994, accounted for as a purchase business
combination. The cost in excess of the fair value of net assets acquired
(goodwill) of approximately $2,430,000 will be amortized using an estimated
life of ten years and amortization applicable to the above is reflected
in the above statement. The pro forma information is not necessarily
indicative of the finanicial position which would have resulted had the
acquisition occurred on October 1, 1994. The pro forma adjustments reflect
Socrates activity for the 12 month period ended December 31, 1995. The pro
forma information should be read in conjunction with the Company's
historical financial statements.
