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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 reported) September 20, 2000
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Teltone Corporation
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(Exact name of registrant as specified in its chapter)
Washington 0-11275 91-0839067
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
22121 - 20th Avenue SE
Bothell, WA 98021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (425) 487-1515
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N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 7, 2000, Teltone Corporation, a Washington corporation (the
"Registrant"), entered into and executed an Asset Purchase Agreement (the
"Purchase Agreement") between the Registrant and C.P. Clare Corporation, a
Massachusetts corporation ("C.P. Clare"), pursuant to which C.P. Clare purchased
certain assets of the Registrant's Application Specific Integrated Circuits
("ASIC") segment, including, without limitation, certain intellectual property,
test equipment and inventory (the "Assets").
Pursuant to the terms of the Purchase Agreement, Registrant received
approximately $1,975,000, in cash and in exchange, C.P. Clare received the
Assets. The purchase price and terms were negotiated on an arms length basis
with C.P. Clare. No principal of C.P. Clare had a relationship with the
Registrant prior to the transaction.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information
<TABLE>
<CAPTION>
TELTONE CORPORATION
BALANCE SHEET
June 30, ASIC Assets Pro Forma
2000 Sold Adjustments Pro Forma
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash $ 504 $1,975(1) $2,479
Trade AR 1,967 - 1,967
Inventories 1,126 (175) 951
Other current 56 56
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Total current 3,653 (175) 1,975 5,453
Property 534 534
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TOTAL $4,187 (175) $1,975 $5,987
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LIABILITIES
Current liabilities
Accounts payable $ 536 $ 536
Accrued liabilities 924 - 80(2) 1,004
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Total current 1,460 - 80 1,540
Note payable - long-term
portion 5 5
Stockholders' equity
Preferred stock 1,723 1,723
Common stock 3,584 3,584
Accumulated deficit (2,585) (175) 1,895 (865)
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Total stockholders' equity 2,722 (175) 1,895 4,442
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TOTAL $4,187 $ (175) $1,975 $5,987
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</TABLE>
The accompanying notes are an integral part of the pro forma financial
statements.
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TELTONE CORPORATION
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
June 30 ASIC Pro Forma
2000 Segment Adjustments Pro Forma
<S> <C> <C> <C> <C>
Net sales
Remote Voice 2,582 2,582
Telecom Equipment 6,612 6,612
ASIC 2,833 2,833 -- --
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Total sales $ 12,027 $ 2,833 -- $ 9,194
Cost of goods sold
Remote Voice 1,072 1,072
Telecom Equipment 2,863 2,863
ASIC 1,638 1,638 -- --
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Total cost of goods sold 5,573 1,638 -- 3,935
Gross margin 6,454 1,195 5,259
Operating expenses:
Selling, general & administrative 5,010 637 441(3) 4,814
Engineering and development 1,329 23 -- 1,306
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Total operating expenses 6,339 660 441 6,120
Income (loss) from operations 115 535 (441) (861)
Interest expense (1) (1)
Other income 5 5
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Income before income (loss)
tax provision 119 535 (441) (857)
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Income tax provision
Net income (loss) $ 119 $ 535 $ (441) $ (857)
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Basic net income (loss) per
weighted average share outstanding $ 0.02 $ (0.12)
Weighted average common shares 7,166,766 7,166,766
(including preferred) outstanding
Diluted net income (loss) per
weighted average common and
potential common shares
outstanding $ 0.01 $ (0.12)
Weighted average common and
potential common shares
outstanding 8,077,029 (910,263)(4) 7,166,766
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statements.
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Notes to Unaudited Condensed Pro Forma Financial Information
Note 1 - Basis of Presentation
The unaudited condensed pro forma Balance Sheet and Statement of Operations give
effect to the disposition by the Registrant of certain assets of its ASIC
segment on a pro forma basis. These unaudited pro forma financial statements
have been prepared from the historical consolidated financial statements of the
Registrant and should be read in conjunction therewith.
The unaudited condensed pro forma Balance Sheet presents the financial position
of Registrant as of June 30, 2000 as if certain ASIC segment assets were
disposed of on that date. Accounts receivable of the ASIC segment were not sold
and accounts payable and other liabilities were not assumed and therefore are
not adjusted into the pro forma Balance Sheet. The unaudited pro forma Statement
of Operations for the year ended June 30, 2000 have been prepared to reflect the
disposition of certain ASIC segment assets as if the dispositions had occurred
on July 1, 1999.
The proceeds from the disposal of certain assets of the ASIC segment is
approximately $1, 975,000.
The unaudited condensed pro forma financial information is provided for
illustrative purposes only and is not necessarily indicative of the results that
would have been achieved had the divestitures been consummated at the dates
indicated. This information is not necessarily indicative of the future
operating results or the financial condition of the Registrant.
Note 2. - Pro Forma Adjustments
The following adjustments have been made to reflect the pro forma information:
Adjustment 1: Reflects the increase in the Registrant's cash related to the
receipt of cash proceeds from the sale of certain assets of the ASIC segment of
approximately $1,975,000.
Adjustment 2: Reflects costs associated with the Purchase Agreement
Adjustment 3: Reflects reinstatement of corporate overhead costs that were
previously allocated to the ASIC segment.
Adjustment 4: Remove antidilutive securities for computation of pro forma loss
per share.
The gain from sale of the assets of approximately $1,620,000 based on closing
inventory values is excluded from the pro forma Statement of Operations
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<TABLE>
<CAPTION>
Exhibit
Number
<S> <C>
2.1 Asset Purchase Agreement dated August 10, 2000 between Registrant and CP
Clare.
99.1 Press Release.
</TABLE>
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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.
TELTONE CORPORATION
Date: September 20, 2000 By: /s/ Debra L. Griffith
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Debra L. Griffith
President & CEO
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