SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- AMENDMENT NO. 1 TO 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) June 5, 1996 Response USA, INC. Exact name of registrant as specified in charter Delaware 0-20770 52-1441922 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 11-K Princess Road, Lawrenceville, NJ 08648 (Adress of principal executive offices) (Zip Code) Registrant's telephone number, including area code (609) 896-4500 (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets. On June 5, 1996 Response USA, Inc. ("the Company"), through its wholly-owned subsidiary, United Security Associates, Inc. ("USA"), completed the acquisition of 571 electronic security monitoring accounts and related agreements, equip- ment, and inventory of Alarm Data, Inc., a Delaware corporation ("ADI"). In consideration of the acquisition, the Company paid ADI $352,462.53 (of which $74,370.8 was held back to secure ADI's performance of the warranties, and representations as set forth in the Asset Purchase Agreement. EXHIBITS Exhibit 1 Asset Purchase Agreement by and among Response USA, Inc., United Security Associates, Inc., and Alarm Data Inc (previously filed). Exhibit 2 Financial Statements UNAUDITED PRO FORMA FINANCIAL STATEMENTS The following unaudited pro forma combined statements of operations for the nine months ended March 31, 1996 and 1995, give effect to the Company's acqui- sitions of Alarm Data, Inc. as of June 5, 1996 (ADI), Shelton Security, Inc. as of March 14, 1996 (SSI), MSG Security Systems, Inc. as of February 26, 1996 (MSG), and Monitoring Acquisition Corp. as of February 29, 1996 (MAC) as if such acquisitions had been completed at July 1, 1994. The historical informa- tion pertaining to ADI, SSI, MSG, MAC is for the period prior to their respec- tive dates of acquisition. The pro forma information is based on the histori- cal financial statements of the Company, ADI, SSI, MSG and MAC, giving effect to the transactions under the purchase method of accounting and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma financial statements. The following unaudited pro forma combined balance sheet gives effect to the Company's acquisition of ADI, SSI, MSG, and MAC as if such acquisitions had been completed at March 31, 1996. In the preparation of the pro forma combined balance sheet, the columns pertaining to ADI, SSI, MSG, and MAC contain information as to the assets and the liabilities acquired as of their respective dates of acquisition. These pro forma statements of operations may not be indicative of the results that actually would have occurred if the acquisitions had occurred on July 1, 1994. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1995 Historical Pro Forma -------------------------------------------------- ------------------------- Response ADI SSI MSG MAC Adjust. Combined -------------------------------------------------- ---------- ------------ OPERATING REVENUES Product sales $3,785,543 $213,951 $282,545 $68,774 $4,350,813 Services 2,412,469 179,105 715,744 110,015 $140,548 3,557,881 Finance and rentals 745,243 7,192 23,625 776,060 -------------------------------------------------- ---------- ------------ 6,943,255 393,056 1,005,481 202,414 140,548 0 8,684,754 -------------------------------------------------- ---------- ------------ COST OF REVENUES Product sales 2,375,608 173,835 189,305 37,003 2,775,751 Services and rentals 626,933 413,984 30,216 22,148 (159,617)(G) 933,664 -------------------------------------------------- ---------- ------------ 3,002,541 173,835 603,289 67,219 22,148 (159,617) 3,709,415 -------------------------------------------------- ---------- ------------ GROSS PROFIT 3,940,714 219,221 402,192 135,195 118,400 159,617 4,975,339 -------------------------------------------------- ---------- ------------ OPERATING EXPENSES Selling, general and administrative 5,110,309 207,411 368,913 118,413 96,594 (34,522)(G) 5,867,118 Depreciation and amortization 834,172 4,578 2,679 1,163 72,775 (72,775)(A) 1,194,836 352,244 (B) Termination benefits cost (392,699) (392,699) Interest 703,356 1,082 1,130 1,310 69,838 (72,278)(C) 1,260,912 556,474 (D) -------------------------------------------------- ---------- ------------ 6,255,138 213,071 372,722 120,886 239,207 729,143 7,930,167 -------------------------------------------------- ---------- ------------ INCOME (LOSS) FROM OPERATIONS (2,314,424) 6,150 29,470 14,309 (120,807) (569,526) (2,954,828) INTEREST INCOME 33,082 2,405 630 (18,525)(E) 17,592 -------------------------------------------------- ---------- ------------ NET INCOME (LOSS) BEFORE INCOME TAXES (2,281,342) 6,150 31,875 14,309 (120,177) (588,051) (2,937,236) INCOME TAXES 3,825 3,125 (6,950)(F) 0 -------------------------------------------------- ---------- ------------ NET INCOME (LOSS) ($2,281,342) $6,150 $28,050 $11,184 ($120,177) ($581,101) ($2,937,236) ================================================== ========== ============ LOSS PER COMMON SHARE ($4.00) ($5.03) ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 570,742 12,787 (H) 583,529 ============ ========== ============ NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (A) To eliminate amortization of monitoring contracts and organization costs purchased from MAC. (B) To provide for amortization on the net increase of purchased monitoring contracts. Monitoring contracts purchased from ADI, SSI, MSG, and MAC are amortized using the straight-line method over the ten-year estimated lives. (C) To eliminate interest expense on debt not acquired (D) To record additional interest expense on debt incurred in acquisitions. (E) To reduce the Company's interest income due to the use of funds for the acquisitions. (F) To eliminate the current tax provision for SSI and MSG. (G) To reduce expenses to contracted amounts under a monitoring agreement. (H) In calculating earnings per share, effect has been given to the shares issued in the acquisition of MAC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1996 Historical Pro Forma -------------------------------------------------- --------------------------- Response ADI SSI MSG MAC Adjustments Combined -------------------------------------------------- ------------ ------------ ASSETS CURRENT ASSETS Cash $840,097 $13,543 $95,260 $1,635 (110,438)(A) $840,097 Marketable securities 118,750 118,750 Accounts receivable 1,839,400 6,133 72,398 19,727 $55,920 (182,991)(A) 1,810,587 Note receivable 99,338 99,338 Loan receivable 60,000 (60,000)(A) 0 Inventory 730,315 9,600 13,000 3,500 (17,600)(A) 738,815 Prepaid expenses and other current assets 231,891 995 8,900 525 (10,420)(A) 231,891 -------------------------------------------------- ------------ ------------ Total current assets 3,859,791 30,271 189,558 25,387 115,920 (381,449) 3,839,478 -------------------------------------------------- ------------ ------------ MONITORING CONTRACT COSTS - Net of accumulated amortization 16,944,084 1,228,786 (856,932)(A) 17,315,938 -------------------------------------------------- ------------ ------------ PROPERTY AND EQUIPMENT - Net of accumulated amortization and depreciation 1,222,162 7,219 15,711 5,660 (4,090)(A) 1,246,662 -------------------------------------------------- ------------ ------------ OTHER ASSETS Accounts receivable 341,648 341,648 Note receivable 85,142 85,142 Loan to shareholder 15,057 99,464 (114,521)(A) 0 Deposits 32,535 50,381 (50,381)(A) 32,535 Organization costs 1,268)(A) 1,281,165 Deferred revenue 1,515,254 28,253 16,055 49,821 (74,096)(A) 1,535,287 -------------------------------------------------- ------------ ------------ Total current liabilities 7,524,075 50,653 213,022 75,567 504,530 (745,823) 7,622,024 -------------------------------------------------- ------------ ------------ LONG-TERM LIABILITIES - Net of current portion Long-term debt 12,525,179 905,667 (627,575)(A) 12,803,271 Purchase holdbacks 72,619 72,619 Deferred revenue 10,252 10,252 -------------------------------------------------- ------------ ------------ 12,608,050 0 0 0 905,667 (627,575) 12,886,142 -------------------------------------------------- ------------ ------------ STOCKHOLDERS' EQUITY Common stock 15,516 1,000 2,000 100 500 (3,600)(A) 15,516 Additional paid-in capital 14,513,160 1,268)(A) 1,281,165 Deferred revenue 1,515,254 28,253 16,055 49,821 (74,096)(A) 1,535,287 -------------------------------------------------- ------------ ------------ Total current liabilities 7,524,075 50,653 213,022 75,567 504,530 (745,823) 7,622,024 -------------------------------------------------- ------------ ------------ LONG-TERM LIABILITIES - Net of current portion Long-term debt 12,525,179 905,667 (627,575)(A) 12,803,271 Purchase holdbacks 72,619 72,619 Deferred revenue 10,252 10,252 -------------------------------------------------- ------------ ------------ 12,608,050 0 0 0 905,667 (627,575) 12,886,142 -------------------------------------------------- ------------ ------------ STOCKHOLDERS' EQUITY Common stock 15,516 1,000 2,000 100 500 (3,600)(A) 15,516 Additional paid-in capital 14,513,160 14,513,160 Unrealized holding loss on available- for-sale securities (174,593) (174,593) Accumulated deficit (11,643,980) 51,275 89,711 (44,620) (65,421) (30,945)(A)(11,643,980) -------------------------------------------------- ------------ ------------ 2,710,103 52,275 91,711 (44,520) (64,921) (34,545) 2,710,103 -------------------------------------------------- ------------ ------------ $22,842,228 $102,928 $304,733 $31,047 $1,345,276 ($1,407,943) $23,218,269 ================================================== ============ ============ NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (A) To reflect the acquisitions of ADI,SSI, MSG and MAC as if the acquisi- tions had been completed on March 31, 1996. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 1996 Historical Pro Forma -------------------------------------------------- --------------------------- Response ADI SSI MSG MAC Adjust. Combined -------------------------------------------------- ------------ ------------ OPERATING REVENUES Product sales $1,984,146 $211,038 $149,418 $38,015 $2,382,617 Services 4,689,132 177,203 657,744 113,810 $332,820 5,970,709 Finance and rentals 1,361,762 7,968 19,007 1,388,737 -------------------------------------------------- ------------ ------------ 8,035,040 388,241 815,130 170,832 332,820 0 9,742,063 -------------------------------------------------- ------------ ------------ COST OF REVENUES Product sales 1,409,579 156,581 100,110 22,441 1,688,711 Services and rentals 1,098,089 388,968 25,058 53,900 (130,402)(G) 1,435,613 -------------------------------------------------- ------------ ------------ 2,507,668 156,581 489,078 47,499 53,900 (130,402) 3,124,324 -------------------------------------------------- ------------ ------------ GROSS PROFIT 5,527,372 231,660 326,052 123,333 278,920 130,402 6,617,739 -------------------------------------------------- ------------ ------------ OPERATING EXPENSES Selling, general and administrative 4,329,022 242,343 306,684 116,762 50,068 (50,357)(G) 4,994,522 Depreciation and amortization 1,602,071 2,366 3,065 1,162 100,357 (100,357)(A) 1,924,869 316,205 (B) Interest 2,282,864 576 1,200 1,300 114,116 (116,616)(C) 2,794,934 511,494 (D) -------------------------------------------------- ------------ ------------ 8,213,957 245,285 310,949 119,224 264,541 560,369 9,714,325 -------------------------------------------------- ------------ ------------ INCOME (LOSS) FROM OPERATIONS (2,686,585) (13,625) 15,103 4,109 14,379 (429,967) (3,096,586) INTEREST INCOME 18,512 3,010 (9,839)(E) 11,683 -------------------------------------------------- ------------ ------------ NET INCOME (LOSS) BEFORE INCOME TAXES (2,668,073) (13,625) 18,113 4,109 14,379 (439,806) (3,084,903) INCOME TAXES 2,200 800 (3,000)(F) 0 -------------------------------------------------- ------------ ------------ NET LOSS ($2,668,073)($13,625) $15,913 $3,309 $14,379 ($436,806) ($3,084,903) ================================================== ============ ============ LOSS PER COMMON SHARE ($2.37) ($2.49) ============ ============ WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 1,123,536 112,989 (H) 1,236,525 ============ ============ ============ NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (A) To eliminate amortization of monitoring contracts and organization costs purchased from MAC. (B) To provide for amortization on the net increase of purchased monitoring contracts. Monitoring contracts purchased from ADI, SSI, MSG, and MAC are amortized using the straight-line method over the ten-year estimated lives. (C) To eliminate interest expense on debt not acquired (D) To record additional interest expense on debt incurred in acquisitions. (E) To reduce the Company's interest income due to the use of funds for the acquisitions. (F) To eliminate the current tax provision for SSI and MSG. (G) To reduce expenses to contracted amounts under a monitoring agreement. (H) In calculating earnings per share, effect has been given to the shares issued in the acquisition of MAC. STOCKHOLDER ALARM DATA, INC. OF DELAWARE NEWARK, DELAWARE 	Independent Auditors' Report 	We have audited the accompanying balance sheets of ALARM DATA, INC. OF DELAWARE as of May 31, 1996 and 1995 and the related statements of operations and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsi- bility is to express an opinion on these financial statements based on our audits. 	We conducted our audits 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 audits provide a reasonable basis for our opinion. 	In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ALARM DATA, INC. OF DELAWARE as of May 31, 1996 and 1995 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. by:/s/Simon, Master and Sidlow, P.A. Wilmington, Delaware August 8, 1996 	ALARM DATA, INC. OF DELAWARE ---------------------------- 	BALANCE SHEETS -------------- 	ASSETS ------ May 31, ----------------------- 1996 1995 --------- --------- CURRENT ASSETS 	Cash 		$ 15,079 	$ 5,863 	Inventory 	8,976 	12,719 	Accounts receivable 	4,970 	11,945 	Refundable income taxes 	 995	 995 ---------- --------- 			 	30,020 	31,522 ---------- --------- PROPERTY AND EQUIPMENT - at cost 	Equipment 	29,507 29,507 	Office furniture 	2,478 	2,478 	Transportation equipment 	53,818 	53,818 	Leasehold improvements	 5,297	 5,297 --------- --------- 				91,100 91,100 	Less accumulated depreciation	 84,671	 81,515 --------- --------- 				6,429 	9,585 --------- --------- OTHER ASSETS 	Deposits 	50,381 	40,117 	Loan receivable - Stockholder	 15,057	 15,057 --------- --------- 				 65,438	 55,174 --------- --------- 			$ 101,887	 $ 96,281 ========= ========= 	LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ May 31, ---------------------- 1996 1995 --------- --------- CURRENT LIABILITIES 	Accounts payable 	$ 33,877 	$ 6,933 	Payroll taxes payable 	16,586 	12,796 	Current maturities of long-term debt	 3,690	 6,962 --------- --------- 				54,153 26,691 LONG-TERM DEBT, less current maturities	 	 3,690 --------- --------- 				54,153 	30,381 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDER'S EQUITY 	Common stock, no par value, authorized 100 share issued and outstanding 10 shares stated at 	1,000 	1,000 	Retained earnings	 46,734	 64,900 --------- --------- 				 47,734	 65,900 --------- --------- 				$ 101,887 	$ 96,281 ========= ========= See notes to financial statements. 	ALARM DATA, INC. OF DELAWARE ---------------------------- 	STATEMENTS OF OPERATIONS AND RETAINED EARNINGS ---------------------------------------------- Year ended May 31, ----------------------- 1996 1995 --------- --------- REVENUE	 	$ 517,655 	$ 524,074 --------- --------- COST OF GOODS SOLD 	 Inventory - Beginning of year 	12,719 	20,682 	Purchases	 205,032	 223,817 --------- --------- 				217,751 	244,499 	Inventory - End of year	 8,976	 12,719 --------- --------- 			 	208,775 	231,780 --------- --------- GROSS PROFIT 308,880 292,294 OPERATING EXPENSES	 327,046	 284,095 --------- --------- NET INCOME (LOSS) 	( 18,166) 	8,199 RETAINED EARNINGS 	 Beginning of year	 64,900	 56,701 --------- --------- 	End of year 	$ 46,734 	$ 64,900 ========= ========= See notes to financial statements. 	ALARM DATA, INC. OF DELAWARE ---------------------------- 	STATEMENTS OF CASH FLOWS ---------------------------- Year ended May 31, ---------------------- 1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES 	Cash received from customers 	$ 524,629 	$ 516,474 	Cash paid to suppliers and employees 	( 497,420)	( 494,645) 	Interest paid 	( 768)	( 1,443) --------- --------- 		Net cash provided by operating activities	 26,441	 20,386 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES 	Cash advances on mortgage 	( 10,263)	( 11,196) --------- --------- 		Net cash used by investing activities 	( 10,263)	( 11,196) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Repayment of debt ( 6,962) ( 6,287) --------- --------- Net cash used by financing activities ( 6,962) ( 6,287) --------- --------- NET INCREASE IN CASH 9,216 2,903 CASH Beginning of year 5,863 2,960 --------- --------- End of year $ 15,079 $ 5,863 ========= ========= RECONCILIATION OF NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net income (loss) ($ 18,166) $ 8,199 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation 3,155 6,104 (Increase) decrease in accounts receivable 6,975 ( 7,600) Decrease in inventory 3,743 7,963 Increase in accounts payable 26,944 2,967 Increase in payroll taxes 3,790 2,753 --------- --------- 44,607 12,187 --------- --------- Net cash provided by operating activities $ 26,441 $ 20,386 ========= ========= See notes to financial statements. ALARM DATA, INC. OF DELAWARE ---------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- YEARS ENDED MAY 31, 1996 AND 1995 --------------------------------- A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Nature of Operations -- The Company is engaged primarily in the retail sales and service of alarm systems in Delaware. 2. Use of 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. 	3. Depreciation -- Depreciation of property and equipment is provided by the 		 	use of the accelerated cost recovery system prior to January 1, 1987. For assets acquired after December 31, 1986 the modified accelerated recovery system (MACRS) of depreciation is used. The write-off period under ACRS and MACRS is shorter than the estimated useful lives for certain assets and, accordingly, the depreciation expense is higher in early years. This additional expense does not materially affect the amount of total depreciation expense reported in the financial state- ments. 	4. Amortization -- Customer leases and organization cost are being amortized 			over a four year and a five year period, respectively, by use of the straight-line method. 	5. Inventory -- Inventory is stated at lower of cost (first-in first-out 			method) or market. 	6. Income Taxes -- Effective June 1, 1987, the Corporation elected S Corpor- ation status under the Internal Revenue Code and will be treated as a partnership, instead of a corporation for income tax purposes. As a result, the stockholder reports the entire corporate taxable income on his individual return. Retained earnings of $46,045 have been accumulated in years prior to the Subchapter S election and would be taxed to the stockholder in the event of subsequent distributions. B. LONG-TERM DEBT 1996 1995 -------- -------- 	Delaware Trust - 9.75% payable in monthly 		installments of $325, which includes 		 interest, until December 1996 	 	collateralized by automobile 	$ 2,135 	$ 5,637 	Delaware Trust - 10.75% payable in monthly 		installments of $319, which includes 	 	interest, until October 1996 	 	collateralized by automobile	 1,555	 5,015 ------- ------- 				3,690 	10,652 	Less current maturities	 3,690	 6,962 ------- ------- 			 $ -0- 	$ 3,690 ======= ======= SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the under- signed thereunto duly authorized. RESPONSE USA, INC. ------------------ (registrant) Dated: August 15, 1996 By:/s/RICHARD M. BROOKS -------------------- Richard M. Brooks, President