SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K/A
Amendment No. 2
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 30, 1997
Date of Report (date of earliest event reported)
BOATRACS, INC.
(Exact Name of Registrant as Specified in its Charter)
California 0-11038 33-0644381
(State or Other (Commission (IRS Employer Iden-
Jurisdiction of File Number) tification Number)
Incorporation)
6440 Lusk Boulevard, Suite D201
San Diego, California 92121
(Address of Principal Executive Offices
Including Zip Code)
(619) 587-1981
(Registrant's Telephone Number,
Including Area Code)
(Former Name or Former Address if Changed
Since Last Report)
The undersigned Registrant hereby amends its Current Report on
Form 8-K by the addition of financial statements and exhibits as
follows:
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
(DELOITTE & TOUCHE LLP LETTERHEAD)
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Stockholders of MED Associates, Inc.:
We have audited the accompanying balance sheet of MED Associates,
Inc. (the "Company") as of October 31, 1997, and the related
statements of operations, stockholders' equity and cash flows for
the ten month period then ended. These financial statements are
the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company at
October 31, 1997, and the results of its operations and cash
flows for the ten month period ended October 31, 1997 in
conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
San Diego, CA
February 22, 1998
MED ASSOCIATES, INC.
BALANCE SHEET
OCTOBER 31, 1997
ASSETS
CURRENT ASSETS:
Cash $ 5,958
Accounts receivable - net 184,211
_______
Total current assets 190,169
PROPERTY, net of depreciation 54,522
_______
TOTAL $ 244,691
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 138,802
Capital lease payable 4,442
_______
Total current liabilities 143,244
_______
Total liabilities 143,244
_______
STOCKHOLDERS' EQUITY:
Common stock, no par value; 5,000 authorized; 5,000
shares issued and outstanding 5,000
Retained earnings 96,447
_______
Total stockholders' equity 101,447
_______
TOTAL $ 244,691
=======
See notes to financial statements.
MED ASSOCIATES, INC.
STATEMENT OF OPERATIONS
TEN MONTH PERIOD ENDED OCTOBER 31, 1997
REVENUES:
Contract revenues $ 713,893
Reimbursement revenues 163,416
_______
Total revenues
877,309
_______
COSTS AND EXPENSES:
Contractor services 537,549
Payroll expenses 144,496
Computer hardware and software 49,125
Occupancy, office and administrative expenses 34,984
Depreciation 9,051
Travel 8,429
Supplies 8,157
Advertising and selling expenses 4,022
Other 2,556
Total costs and expenses 798,369
_______
NET INCOME FROM OPERATIONS $ 78,940
=======
See notes to financial statements.
MED ASSOCIATES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
TEN MONTH PERIOD ENDED OCTOBER 31, 1997
Retained
Shares Amount Earnings Total
BALANCE, JANUARY 1, 1997 5,000 $5,000 $95,551 $100,551
Net income from operations 78,940 78,940
Dividends paid (78,044) (78,044)
_____ _____ ______ ______
BALANCE, OCTOBER 31, 1997 5,000 $5,000 $96,447 $101,447
See notes to financial statements.
MED ASSOCIATES, INC.
STATEMENT OF CASH FLOWS
TEN MONTH PERIOD ENDED OCTOBER 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 78,940
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 9,051
Provision for losses on accounts receivable 1,037
Change in assets and liabilities:
Increase in accounts receivable (126,636)
Increase in accounts payable 111,782
_______
Net cash provided by operating activities 74,174
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (34,220)
_______
Cash used in investing activities (34,220)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (78,044)
_______
Cash used in financing activities (78,044)
NET DECREASE IN CASH 38,090
_______
CASH AT JANUARY 1, 1997 44,048
_______
CASH AT OCTOBER 31, 1997 $ 5,958
=======
See notes to financial statements.
MED ASSOCIATES, INC.
NOTES TO FINANCIAL STATEMENTS
TEN MONTH PERIOD ENDED OCTOBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations - MED Associates, Inc. (the "Company")
was incorporated as an S-Corp. in the State of Mississippi on
April 5, 1996. The Company designs, builds, installs and
services onboard information systems to the marine industry.
The Company's methods and proprietary development tools
enable the Company to use off-the-shelf databases to custom
design computer software applications for use in
communications through satellites to and from onboard marine-
based computer systems.
Sale of Assets to Boatracs, Inc. - On November 1, 1997, the
Company sold all of its physical assets along with certain
accounts receivable and current liabilities totalling $75,000
to Boatracs, Inc. of San Diego, California. The assets were
sold for an amount in excess of their net book value.
Boatracs, Inc. is a customer of the Company who provides
messaging and data services to the marine industry. The sale
was made for $500,000 cash, and restricted common stock of
Boatracs, Inc. valued at $420,000 at date of purchase. The
stock is subject to a repurchase option which expires
November 1, 2000.
Property - Property is stated at cost and consists primarily
of computer equipment. Depreciation is provided under a
straight-line over the estimated useful lives of the assets
(generally 3-5 years).
Revenue Recognition - Revenue from the design and
installation of systems is recognized at the time the system
is installed and accepted by the customer. Reimbursed
revenues represent computer parts purchased and resold to
customers at no markup, and are recognized at the time of
shipment or installation.
Significant Customers - Major customers individually
accounted for approximately 50%, 13% and 13% of sales for the
ten month period. Accounts receivable from these customers
aggregated $170,207 at October 31, 1997. The Company has not
historically experienced losses on its accounts receivable.
Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
2. BALANCE SHEET DETAILS
Accounts receivable $185,248
Less allowance for doubtful accounts 1,037
_______
$184,211
========
Property- at cost: $ 67,352
Computers and equipment 12,830
______
$54,522
=======
Depreciation expense was $9,051 for the ten month period
ended October 31, 1997.
Retained earnings $174,491
Less dividends paid to stockholders 78,044
______
$96,447
=======
3. LEASES
Facility Leases - The Company leases its facility under a non-
cancelable operating lease which expires December 31, 1997.
Rent expense was approximately $6,000 for the ten month
period ended October 31, 1997.
Capital Lease - Included in property at October 31, 1997 is
computer equipment acquired under a capital lease totalling
$8,550. The lease expires May 20, 1998, at which time title
to the computer equipment transfers to the Company.
4. INCOME TAXES
The Company has elected S corporation status for Federal
income tax purposes. As such, taxable income or loss through
October 31, 1997 was attributed to the two stockholders of
the Company.
* * * * * *
(b) Pro Forma Financial Information.
See Form 10-KSB to be filed with the Securities
and Exchange Commission on March 31, 1998
(c) Exhibits.
2.2 First Amendment to Asset Purchase Agreement dated
as of November 1, 1997 by and among Boatracs, Inc., MED
Associates, Inc., Charles J. Drobny, Jr. and Pamela M.
Drobny.
2.3 Employment Agreement between Boatracs, Inc. and Charles
Drobny effective November 1, 1997, and Option Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this amendment to be
signed on its behalf by the undersigned hereunto duly authorized.
Dated: March 30, 1998 Boatracs, Inc.
By: /s/ Jon Gilbert
Jon Gilbert
President and Chief
Executive Officer