UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
To Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 2014
AETRIUM incORPORATED
(Exact name of registrant as specified in its charter)
| Minnesota | 0-22166 | 41-1439182 | ||
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
| of Incorporation) | File Number) | Identification Number) |
| 2350 Helen Street | ||
| North St. Paul, Minnesota | 55109 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(651) 770-2000
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note
On April 25, 2014, Aetrium Incorporated (“Aetrium”) filed with the Securities and Exchange Commission a Current Report on Form 8-K (the “Initial Form 8-K”) reporting under Item 2.01 that Aetrium had completed a transaction in which it transferred its assets related to its business of designing, manufacturing, marketing and servicing a variety of equipment used in the handling of integrated circuits (the “Transferred Business”) to Boston Semi Automation LLC (“BSA”), a wholly owned subsidiary of Boston Semi Equipment LLC (“BSE”) pursuant to an agreement dated April 22, 2014 (the “Agreement”). The Agreement was included as an exhibit to the Initial Form 8-K. The Initial Form 8-K is hereby amended to include the pro forma financial information required by Item 9.01(b) relating to Aetrium’s transfer of the business.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information.
Aetrium Incorporated
Report Regarding Pro Forma
Condensed Financial Statements
(Unaudited)
The Agreement executed on April 22, 2014 provided for the following:
| ● | BSA will pay to Aetrium a royalty on all revenue related to the Transferred Business over five years (April 22, 2014 through December 31, 2018) that will start at 15% and decline over time to 3%, subject to certain qualifications and adjustments. | |
| ● | Aetrium transferred all inventories, certain equipment, intellectual property, and certain other assets associated with the Transferred Business to BSA. | |
| ● | BSA assumed certain liabilities related to the Transferred Business, including certain accounts payable, accrued expenses and product support and warranty obligations. | |
| ● | BSA and Aetrium executed a sublease and transition services agreement providing for BSA to continue to operate the Transferred Business in approximately 15,000 square feet within Aetrium’s leased facility in North St. Paul, MN and for each party to provide certain administrative services to the other. The sublease provides for initial monthly rental payments of $19,930 and the term extends through August 31, 2015. | |
| ● | Sixteen of Aetrium’s employees that were associated with the Transferred Business were hired by BSA. |
The accompanying unaudited pro forma condensed balance sheet gives effect to the business disposition as if it had occurred on December 31, 2013, including recognition of the estimated fair value of the royalty stream and the transfer of assets and liabilities related to the Transferred Business to BSA. The unaudited pro forma condensed statement of operations for the year ended December 31, 2013 presents results of operations as if the business disposition had occurred on January 1, 2013. The pro forma condensed statement of operations does not include an estimated gain on the sale of the net assets of the Transferred Business. We expect to recognize such gain in our quarter ended June 30, 2014.
Pro forma adjustments include the following:
| 1. | The pro forma condensed balance sheet as of December 31, 2013 includes adjustments reflecting the recognition of the fair value of the royalty stream, the transfer of assets to and the assumption of liabilities by BSA as of December 31, 2013 pursuant to the Agreement and an estimated gain of $0.3 million associated with the transfer of such net assets. | |
| 2. | The pro forma statement of operations includes adjustments which reflect the elimination of revenues and costs and the execution of a sublease associated with the Transferred Business. |
The pro forma adjustments are based upon historical information and certain assumptions that management deems appropriate. The unaudited pro forma condensed financial data presented herein are not necessarily indicative of the results Aetrium would have obtained had such events occurred at the dates indicated above or of our future results. In addition, the pro forma balance sheet and statement of operations presented herein do not include Aetrium’s business that manufactures, sells, and distributes modular housing units for residential and commercial use, which it acquired on April 2, 2014 as reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2014, which report is incorporated herein by reference.
Aetrium Incorporated
Pro Forma Condensed Balance Sheet
December 31, 2013
(Unaudited)
(in thousands)
| As Historically Reported | Pro Forma Adjustments (Note 1) | Pro Forma | |||||||||||||
| ASSETS | |||||||||||||||
| Current Assets: | |||||||||||||||
| Cash and cash equivalents | $ | 1,260 | $ | - | $ | 1,260 | |||||||||
| Accounts receivable | 296 | - | 296 | ||||||||||||
| Inventories | 2,075 | (2,075 | ) | (1 | A) | - | |||||||||
| Fair value of earn-out receivables - current | 625 | 700 | (1 | B) | 1,325 | ||||||||||
| Other current assets | 38 | - | 38 | ||||||||||||
| Total current assets | 4,294 | (1,375 | ) | 2,919 | |||||||||||
| Property and equipment, net | 81 | (25 | ) | (1 | A) | 56 | |||||||||
| Fair value of earn-out receivables - noncurrent | 200 | 1,300 | (1 | B) | 1,500 | ||||||||||
| Other assets | 47 | - | 47 | ||||||||||||
| Total assets | $ | 4,622 | $ | (100 | ) | $ | 4,522 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Capitalized lease obligation, current portion | $ | 32 | $ | - | $ | 32 | |||||||||
| Trade accounts payable | 350 | (259 | ) | (1 | C) | 92 | |||||||||
| Accrued compensation | 126 | (108 | ) | (1 | C) | 18 | |||||||||
| Other accrued liabilities | 260 | (20 | ) | (1 | C) | 239 | |||||||||
| Total current liabilities | 768 | (387 | ) | 381 | |||||||||||
| Capitalized lease obligation | 3 | - | 3 | ||||||||||||
| Shareholders’ equity: | |||||||||||||||
| Common stock | 1 | - | 1 | ||||||||||||
| Additional paid-in capital | 65,830 | - | 65,830 | ||||||||||||
| Accumulated deficit | (61,980 | ) | 287 | (1 | D) | (61,693 | ) | ||||||||
| Total shareholders’ equity | 3,851 | 287 | 4,138 | ||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,622 | $ | (100 | ) | $ | 4,522 | ||||||||
See accompanying notes to pro forma condensed financial statements.
Aetrium Incorporated
Pro Forma Condensed Statement of Operations
Year Ended December 31, 2013
(Unaudited)
(in thousands, except per share data)
| As Historically Reported | Pro Forma Adjustments (Note 2) | Pro Forma | |||||||||||||
| Net sales | $ | 2,653 | $ | (2,653 | ) | (2 | A) | $ | - | ||||||
| Cost of goods sold | 2,726 | (2,726 | ) | (2 | A) | - | |||||||||
| Gross profit (loss) | (73 | ) | 73 | - | |||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative | 3,474 | (833 | ) | (2 | A) | 2,461 | |||||||||
| Research and development | 488 | (488 | ) | (2 | A) | - | |||||||||
| Total operating expenses | 3,962 | (1,321 | ) | 2,461 | |||||||||||
| Operating loss | (4,035 | ) | 1,394 | (2,641 | ) | ||||||||||
| Change in fair value of contingent earn-out | 325 | - | 325 | ||||||||||||
| Interest income | 2 | - | 2 | ||||||||||||
| Interest expense | (5 | ) | - | (5 | ) | ||||||||||
| Other income | - | 239 | (2 | B) | 239 | ||||||||||
| Loss from continuing operations before income taxes | (3,713 | ) | 1,633 | (2,080 | ) | ||||||||||
| Income tax benefit | - | - | - | ||||||||||||
| Loss from continuing operations | $ | (3,713 | ) | $ | 1,633 | $ | (2,080 | ) | |||||||
| Loss per share – basic and diluted | $ | (3.44 | ) | $ | (1.93 | ) | |||||||||
| Weighted average common shares outstanding | 1,078 | 1,078 | |||||||||||||
See accompanying notes to pro forma condensed financial statements.
Aetrium Incorporated
Notes to Pro Forma Condensed Financial Statements
(Unaudited)
(in thousands)
NOTE 1 - PRO FORMA CONDENSED BALANCE SHEET ADJUSTMENTS
The following adjustments reflect the recognition of the fair value of the royalty stream and the transfer of assets to and the assumption of liabilities by BSA as of December 31, 2013 pursuant to the Agreement:
| (A) | Assets transferred to BSA pursuant to the Agreement: |
| Inventories | $ | (2,075 | ) | |
| Property and equipment | (25 | ) | ||
| Total | $ | (2,100 | ) |
| (B) | Fair value of royalty stream: |
| Fair value of contingent earn-out - current | $ | 700 | |||
| Fair value of contingent earn-out - noncurrent | 1,300 | ||||
| Total | $ | 2,000 |
| (C) | Liabilities assumed by BSA pursuant to the Agreement: |
| Trade accounts payable | $ | (259 | ) | |
| Accrued compensation | (108 | ) | ||
| Other accrued liabilities | (20 | ) | ||
| Total | $ | (387 | ) |
| (D) | Adjustments to shareholders’ equity: |
| Estimated gain on the transfer of net assets reflected in Notes 1(A), 1(B), and 1(C) above | $ | 287 |
NOTE 2 - PRO FORMA CONDENSED STATEMENT OF OPERATIONS ADJUSTMENTS
The pro forma condensed statement of operations for the year ended December 31, 2013 assumes that the transfer of the Transferred Business occurred on January 1, 2013. The pro forma adjustments reflect the elimination of revenues and costs and sublease income associated with the Transferred Business.
| (A) | Elimination of revenues and costs associated with the Transferred Business: |
| Net revenues | $ | 2,653 | ||
| Cost of goods sold | (2,726 | ) | ||
| Selling, general and administrative | (833 | ) | ||
| Research and development | (488 | ) | ||
| Total | $ | (1,394 | ) |
| (B) | Sublease income associated with the Transferred Business: |
| Other income | $ | 239 |
Supplementary Information:
The estimated pro forma gain on the sale of net assets of $0.3 million is not reflected in the pro forma condensed statement of operations. Such gain will be recorded in the quarter ended June 30, 2014.
SIGNATURE
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.
| AETRIUM INCORPORATED | ||
| By: | /s/ Paul H. Askegaard | |
| Paul H. Askegaard | ||
| Chief Financial Officer | ||
| Dated: April 28, 2014 | ||