UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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 30, 2001
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TeraForce Technology Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-11630 76-0471342
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1240 East Campbell Road, Richardson, Texas 75081
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (469) 330-4960
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1
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 30, 2001, TeraForce Technology Corporation (the "Company")
and Singapore Technologies Electronics Limited ("ST Elect") completed a
transaction whereby a newly formed joint venture entity acquired certain assets
of the Company's wholly-owned subsidiary, Intelect Network Technologies Company
("INT").
The accompanying Pro Forma Condensed Balance Sheet as of June 30, 2001
reflects the financial position of the Company as if this transaction had been
completed as of that date. The Pro Forma Condensed Statements of Operations for
the Year ended December 31, 2000 and for the Six Months ended June 30, 2001
reflect the results of operations of the Company as if the transaction had been
completed as of January 1, 2000.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business to Be Acquired: N/A
(b) Pro Forma Financial Information
Pro Forma Condensed Balance Sheet as of June 30, 2001
Pro Forma Condensed Statement of Operations for the
Six Months ended June 30, 2001
Pro Forma Condensed Statement of Operations for the
Year ended December 31, 2000
(c) Exhibits:
None
2
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.
TeraForce Technology Corporation
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(Registrant)
Date: November 6, 2001 By: /s/ Herman M. Frietsch
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(Signature)
Herman M. Frietsch
Chairman of the Board and CEO
3
FINANCIAL STATEMENT INDEX
Page No.
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Basis of Presentation F-2
Pro Forma Condensed Balance Sheet as of June 30, 2001 F-3
Pro Forma Condensed Statement of Operations for the Six Months
ended June 30, 2001 F-4
Pro Forma Condensed Statement of Operations for the Year ended
December 31, 2000 F-5
Pro Forma Adjustments F-6
F-1
BASIS OF PRESENTATION
On August 30, 2001, TeraForce Technology Corporation (the "Company")
and Singapore Technologies Electronics Limited ("ST Elect") completed a
transaction whereby a newly formed joint venture entity acquired certain assets
of the Company's wholly-owned subsidiary, Intelect Network Technologies Company
("INT"). The joint venture entity, Intelect Technologies Inc. ("Intelect
Technologies"), is a Delaware corporation. Intelect Technologies is initially
owned 67% by ST Elect and 33% by the Company, with each company having
proportionate board of director representation.
Intelect Technologies has purchased from INT certain fixed assets,
intangible assets, inventory and intellectual property related to the OmniLynx
product line. Intelect Technologies has also hired certain former employees of
INT and has assumed occupancy and financial responsibility for a facility
previously utilized by INT. At closing, INT received a cash payment and will
receive additional periodic payments based on utilization of the inventory
acquired from INT and on the financial position of Intelect Technologies.
The assets sold pursuant to this arrangement had a net book value as of
June 30, 2001 of approximately $3,100,000. Due to the uncertainty regarding the
amount which the Company will ultimately receive, the Company has not recognized
a gain from the sale of these assets.
The accompanying pro forma financial statements reflect the financial
position of the Company as of June 30, 2001 as if the transaction had been
completed as of that date and the results of operations for the Company for the
year ended December 31, 2000 and for the six months ended June 30, 2001 as if
the transaction had been completed as of January 1, 2000.
F-2
TERAFORCE TECHNOLOGY CORPORATION AND SUBSIDIARIES
Consolidated Condensed Pro Forma Balance Sheet
June 30, 2001
Unaudited
(Thousands of dollars, except share data)
Pro Forma
Historical Adjustments Pro Forma
------------ ------------- ------------
Debit(Credit)
Assets
Current assets:
Cash, cash equivalents and $ 380 $ A)2,250 $ 1,380
investments B)(1,250)
Accounts receivable, net 2,194 A)2,158 4,352
Assets held for sale 3,127 A)(3,127) --
Inventories 4,638 -- 4,638
Prepaid expenses 647 A)(457) 190
------------ ------------ ------------
Total current assets 10,986 (436) 10,560
Property and equipment, net 1,354 -- 1,354
Goodwill, net 3,018 -- 3,018
Investment in joint venture -- B)1,250 1,250
Other assets 754 A)(554) 200
------------ ------------ ------------
$ 16,112 $ 270 $ 16,382
============ ============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 2,100 $ -- $ 2,100
Accounts payable 1,811 -- 1,811
Accrued liabilities 1,513 A)(270) 1,783
------------ ------------ ------------
Total current liabilities 5,424 (270) 5,694
Stockholders' equity 10,688 -- 10,688
------------ ------------ ------------
$ 16,112 $ (270) $ 16,382
============ ============ ============
F-3
TERAFORCE TECHNOLOGY CORPORATION AND SUBSIDIARIES
Pro Forma Consolidated Condensed Statements of Operations
Six Months Ended June 30, 2001
Unaudited
(Thousands of dollars, except per share data)
Pro Forma
Historical Adjustments Pro Forma
------------ ------------ ------------
Net revenues $ 7,677 $ B)(2,518) $ 5,159
Cost of revenue 7,748 B)(3,210) 4,538
------------ ------------ ------------
Gross profit (loss) (71) 692 621
------------ ------------ ------------
Expenses:
Engineering and development 2,757 B)(657) 2,100
Selling and administrative 6,089 B)(2,130) 3,959
Amortization of goodwill 336 -- 336
------------ ------------ ------------
9,182 (2,787) 6,395
------------ ------------ ------------
Operating loss (9,253) 3,479 (5,774)
------------ ------------ ------------
Other income (expense):
Equity in earning (loss)
of joint venture -- C)(1,162) (1,162)
Interest expense (19) -- (19)
Interest income and other 22 B)6 28
------------ ------------ ------------
3 (1,156) (1,153)
------------ ------------ ------------
Loss before income taxes (9,250) 2,323 (6,927)
Income tax expense -- -- --
------------ ------------ ------------
Net loss $ (9,250) $ 2,323 $ (6,927)
============ ============ ============
Basic and diluted loss per share:
Net loss per share $ (.11) $ $ (.08)
============ ============
Weighted average number of common
shares outstanding (thousands) 86,014 86,014
============ ============
F-4
TERAFORCE TECHNOLOGY CORPORATION AND SUBSIDIARIES
Pro Forma Consolidated Condensed Statements of Operations
Year Ended December, 2000
Unaudited
(Thousands of dollars, except per share data)
Pro Forma
Historical Adjustments Pro Forma
------------ ------------ ------------
Net revenues $ 18,750 $ B)(8,213) $ 10,537
Cost of revenue 19,658 B)(9,819) 9,839
------------ ------------ ------------
Gross profit (loss) (908) 1,606 698
------------ ------------ ------------
Expenses:
Engineering and development 5,258 B)(3,805) 1,453
Selling and administrative 13,973 B)(8,326) 5,647
Asset writedowns 9,251 A)(9,251) --
Amortization of goodwill 672 -- 672
------------ ------------ ------------
29,154 (21,382) 7,772
------------ ------------ ------------
Operating loss (30,062) 22,988 (7,074)
------------ ------------ ------------
Other income (expense):
Equity in earning (loss)
of joint venture C)(4,282) (4,282)
Interest expense (798) -- (798)
Interest income and other 1,288 B)(890) 398
------------ ------------ ------------
490 (5,172) (4,682)
------------ ------------ ------------
Loss before income taxes (29,572) 17,816 (11,756)
Income tax expense
Net loss $ (29,572) $ 17,816 $ (11,756)
Dividends on preferred stock 966 -- 966
------------ ------------ ------------
Loss allocable to
common stockholders $ (30,538) $ 17,816 $ (12,722)
============ ============ ============
Basic and diluted loss per share:
Net loss per share $ (.37) $ $ (.15)
============ ============
Weighted average number of common shares
outstanding (thousands) 83,229 83,229
============ ============
F-5
Pro Forma Adjustments
The pro forma adjustments in the accompanying pro forma financial
statements are described below.
Balance Sheet:
A) To record sale of OmniLynx related assets.
B) To record contribution related to 33% interest in Intelect Technologies
Inc.
Statements of Operations:
A) To eliminate write-down of assets related to OmniLynx operations which
occurred prior to sale of operations.
B) To eliminate results of operations for OmniLynx operations from the
Company's consolidated financial results.
C) To record the Company's proportionate share of results of operations of
joint venture on the equity method of accounting.
F-6