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 17, 1995
SOFTNET SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
New York 1-5270 11-1817252
(State or Other (Commission (I.R.S. Employer
Jurisdiction or File Number) Identification No.)
Incorporation)
717 Forest Avenue, Lake Forest, Illinois 60045
(Address of principal executive office)
Registrant's telephone number, including area code: (708) 735.7150
Not Applicable
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On August 17, 1995, SoftNet Systems, Inc. issued a press release announcing
third quarter earnings, certain organizational and accounting changes and the
filing of a joint Proxy Statement and Prospectus, a copy of which is attached
hereto as exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release of the Company dated August 17, 1995.
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.
SOFTNET SYSTEMS, INC.
(Registrant)
Date: August 18, 1995 /S/ Martin A. Koehler
Martin A. Koehler
Vice President - Finance and
Chief Financial Officer
EXHIBIT INDEX
(C) Exhibits
99.1 Press release of the Company dated August 17, 1995.
SOFTNET SYSTEMS REPORTS THIRD QUARTER 1995 RESULTS,
CERTAIN ORGANIZATIONAL AND ACCOUNTING CHANGES AND
FILING OF A JOINT PROXY STATEMENT AND PROSPECTUS
Lake Forest, IL (August 17, 1995) --- SoftNet Systems, Inc. (AMEX:
SOF), today reported revenue for the third quarter ended June 30, 1995 was
$2,293,000 compared to $370,000 for the same period in 1994. The Company
reported a net loss of $1,097,000 (or $.35 per share of common stock) for the
third quarter ended June 30, 1995, compared to a net loss of $332,000 (or $.13
per share) for the same period last year.
The third quarter results include the revenue, operating expenses and
related goodwill amortization of Communicate Direct, Inc. ("CDI"), which SoftNet
acquired in October 1994. The Company also stated that the third quarter
results were affected by certain organizational changes at CDI including the
relocation of CDI's operations to a new facility in Buffalo Grove, Illinois, the
opening of a new facility in Milwaukee, Wisconsin, the restructuring of the
sales and marketing staff, and the elimination of certain general and
administrative costs. SoftNet stated that the changes made in the third quarter
were necessary in order to position the Company for profitable growth in the
future.
For the nine months ended June 30, 1995, revenue was $8,285,000
compared to $697,000 for the same period in 1994. SoftNet had a net loss of
$1,777,000 (or $.61 per share), compared to a net loss of $1,407,000 (or $.57
per share) for the same period the previous year. Fiscal 1994 included a non-
cash charge of $514,000 (or $.21 per share) to write off a senior note discount.
SoftNet announced that its Registration Statement (which includes its
Joint Proxy Statement and Prospectus) filed in connection with the acquisitions
of Micrographic Technology Corporation ("MTC") and Kansas Communications, Inc.
("KCI") was declared effective by the Securities and Exchange Commission on
August 10, 1995. At a special meeting, to be held on September 15, 1995, the
shareholders of SoftNet will be asked to approve both mergers. The Company
noted that a majority of the shareholders of both KCI and MTC have agreed to
vote their shares in favor of their respective merger.
KCI is a privately owned information technology company which provides
communication solutions through the design, implementation, maintenance and
integration of voice, data and video communications equipment and services. The
equipment, which is manufactured by others, includes telephone systems and call
processing systems (including call centers, voice messaging, interactive voice
response and computer telephone integration). Services include maintenance
contracts for its existing customers, installation of local and long distance
network services, cabling and data communications. The KCI transaction will be
accounted for as a pooling-of-interests.
MTC is a designer, developer, manufacturer and integrator of
comprehensive, non-paper based systems and components that enable MTC to deliver
to its customers cost-effective solutions for storage, indexing and/or
distribution of high-volume output data streams. These systems, which include
both hardware and software products, are based on an open system architecture
providing flexibility to connect to a wide variety of information systems. The
hardware manufactured by MTC includes a family of computer output microfilm
printers. MTC software is principally related to the capture of data and
information from a variety of sources, its intelligent indexing and the ultimate
output of that information to a variety of storage media including optical disk,
magnetic disk and tape, CD-ROM, microfilm and microfiche. The MTC transaction
will be accounted for as a purchase.
In connection with the merger with MTC and KCI, the Company stated
that it will incur one-time charges in the fourth quarter of fiscal 1995 of $5.5
million (or $1.26 per share) for the write-off of certain intangible assets of
MTC and certain pooling-of-interests transaction costs.
The Company also announced that in August 1995, it changed the
amortization period for the goodwill that arose from the acquisition of CDI from
forty years to ten years. As a result of the change, SoftNet's results for the
previously reported six months ended March 31, 1995 have been revised to
increase amortization expense by $137,000 (or $.05 per share). The previously
reported net loss for the period of $543,000 (or $.20 per share) has been
increased to $679,000 (or $.25 per share). As a result of the one-time charge
for the write-off of MTC's intangible assets, the change in the amortization
period of goodwill, the write-off of certain pooling-of-interest transaction
costs of KCI, the timing of the receipt of certain large SoftNet customer orders
and the organizational changes made during the third quarter, the Company
expects a loss per share for fiscal 1995 between $1.64 and $1.69. The change in
the amortization period of goodwill is also expected to negatively impact
SoftNet's future earnings results.
On July 20, 1995, IMNET Systems, Inc., a developer, marketer,
installer and servicer of electronic information and document management systems
for the healthcare industry and other document-intensive businesses completed
its initial public offering of common stock at $12 per share. SoftNet owns
377,770 shares of IMNET's common stock. SoftNet's management stated that its
has no immediate plans to sell its IMNET stock. In a related announcement,
SoftNet stated that its chairman, John J. McDonough agreed to join SoftNet's
president and Chief Executive Officer, John I. Jellinek, on IMNET's Board of
Directors.
On July 26, 1995, Ozite Corporation shareholders approved a merger of
Ozite with Pure Tech International, Inc. with Pure Tech International, Inc,
being the surviving corporation. As a condition of the merger, Ozite was
required to secure a general release from SoftNet and to surrender certain
securities in satisfaction of the amount owed to SoftNet. As a result, SoftNet
will receive 311,025 shares of Pure Tech common stock (such shares are currently
listed on NASDAQ), 267,203 shares of Artra Group Incorporated Common Stock (such
shares are currently listed on the New York Stock Exchange, however such shares
being received are not currently freely transferable) and 932 shares of Artra
Preferred Stock (such shares are not listed on any exchange and have no current
trading market). On the date of the merger, the Pure Tech and Artra Common
shares had a per share market price of $5.56 and $5.50, respectively. SoftNet
stated that it expects to receive these securities during August, 1995, and that
it will attempt to sell the Pure Tech securities as market conditions allow.
The Company stated that the receivable from Ozite was previously written off in
its entirety and that it would record the benefit from this settlement as such
securities are sold.
SoftNet develops, markets, installs and services electronic
information and document management systems that allows customers to
electronically request and electronically receive information. The Company's
hardware and software systems allow the electronic capture, index, storage and
retrieval through the integration of telecommunications and the following media:
magnetic disk, optical disk, microfilm, and paper. SoftNet's fully integrated
information storage and retrieval system allow users to re-engineer their
information management processes to access information on a cost-effective basis
and to achieve immediate cost savings through productivity increases.
