U. S. 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): April 2, 2004
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INFOCROSSING, INC.
(Exact name of issuer as specified in its charter)
Delaware 0-20824 13-3252333
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(State or other jurisdiction of Commission (IRS Employer
incorporation or organization) File Number Identification No.)
2 Christie Heights Street Leonia, New Jersey 07605
(Address of principal executive offices)
(201) 840-4700
(Issuer's telephone number)
N/A (Former name or former address, if changed
since last report.)
This report, in addition to the Company's recent historical results and
condition, contains statements concerning certain trends and other
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. These statements, in some cases, can otherwise
be identified by terminology such as "may," "will," "should," "expect,"
"anticipate," "intend," "plan," "believe," "estimate," "potential," or
"continue," the negative of these terms or other comparable terminology. These
statements involve a number of risks and uncertainties including, but not
limited to: incomplete or preliminary information; changes in government
regulations and policies; continued acceptance of the Company's products and
services in the marketplace; competitive factors; new products; technological
changes; the Company's dependence on third party suppliers; intellectual
property rights; difficulties with the integration of SMS; and other risks. For
any of these statements, the Company claims the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995, Public Law 104-67, as amended.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Report and are based on
information currently and reasonably known. The Company undertakes no obligation
to release any revisions to or update these forward-looking statements to
reflect events or circumstances that occur after the date of this Report or to
reflect the occurrence or effect of anticipated or unanticipated events.
ITEM 2. AQUISITION OR DISPOSITION OF ASSETS
On April 2, 2004, Infocrossing, Inc. (the "Company") announced that it had
acquired all of the outstanding capital stock of ITO Acquisition Corporation, a
California corporation doing business as Systems Management Specialists ("SMS"),
from ITO Holdings, LLC ("Holdings") for approximately $35 million in cash and
135,892 shares of common stock of the Company (the "Acquisition"). The
Acquisition was effected pursuant to a Stock Purchase Agreement, dated as of
March 3, 2004 (the "Stock Purchase Agreement"), between Holdings and the
Company. The Company issued a press release announcing consummation of the
Acquisition.
SMS, headquartered in Orange County, California, provides computing operations,
business process outsourcing and managed application services to clients
primarily located in the western United States. SMS's principal assets consist
of rights under contracts, leases and licenses of the equipment, real estate and
intellectual property used in performing its business. From and after the
Acquisition, the Company anticipates that SMS will continue to operate its
business as a wholly owned subsidiary of the Company.
On April 2, 2004, the Company amended and restated its term loan agreement,
dated as of October 21, 2003 (the "Term Loan Agreement"), among the Company,
CapitalSource Finance LLC ("CapitalSource"), as agent and lender, and the other
lenders that are party thereto to provide funding for the Acquisition. As
amended, the Term Loan Agreement provides for a Tranche A facility and a Tranche
B facility. The Company contributed $15 million in proceeds from the Tranche B
facility to Holdings to consummate the Acquisition. The Term Loan Agreement is
subject to certain restrictive covenants and is guaranteed by all of the
Company's subsidiaries, including SMS, which entered into a guarantee and
security agreement with CapitalSource (the "Guaranty and Security Agreement") to
support the Term Loan Agreement. The Term Loan Agreement is also secured by a
pledge of substantially all of the assets of the Company and all of its
subsidiaries, including SMS, pursuant an amended and restated stock pledge
agreement (the "Stock Pledge Agreement").
As disclosed on Form 8-K filed on April 1, 2004, the Company consummated a $30.6
million private placement of 2,917,000 shares of its common stock, the net
proceeds of which were used in part to provide funding for the Acquisition.
Immediately following the Acquisition, the Company appointed Patrick A. Dolan as
President and Chief Operating Officer of the Company. Mr. Dolan, who previously
served as a manager of Holdings and the Chairman and Chief Executive Officer of
SMS, was also appointed to serve as the President of SMS. In addition, Robert B.
Wallach, the former President of the Company, was promoted to the position of
Vice-Chairman of the Board.
The Stock Purchase Agreement, the Term Loan Agreement, the Guaranty and Security
Agreement, the Stock Pledge Agreement, and Mr. Dolan's Employment Agreement are
incorporated by reference herein and are attached hereto as exhibits, and the
above descriptions of those documents and the transactions contemplated thereby
are qualified in their entirety by reference to those exhibits. Reference is
hereby made to the Company's press release dated April 5, 2004 relating to the
Acquisition, which press release is attached hereto as Exhibits 99.1 and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
The financial statements required by this Item are not included herein
but will be filed by amendment not later than 60 days after the date
that this report must be filed.
(b) Pro Forma Financial Information
The financial statements required by this Item are not included herein
but will be filed by amendment not later than 60 days after the date
that this report must be filed.
(c) Exhibits:
2.1 Stock Purchase Agreement, dated as of March 3, 2004, between the
Company and Holdings.
10.1 Amended and Restated Term Loan Agreement, dated as of April 2,
2004, among the Company, the lenders party thereto and
CapitalSource.
10.2 Guaranty and Security Agreement, dated as of April 2, between SMS
and CapitalSource.
10.3 Amended and Restated Stock Pledge Agreement, dated as of April 2,
2004, among the Company, Amquest, Inc. and CapitalSource.
10.4 Employment Agreement, dated as of April 2, 2004 by and between
the Company and Patrick A. Dolan.
10.5 Employment Agreement, dated as of April 2, 2004 by and between
the Company and Jim Cortens.
99.1 Press Release dated April 5, 2004.
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.
INFOCROSSING, INC.
Date: April 7, 2004 /s/ WILLIAM J. McHALE
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William J. McHale
Senior Vice President of Finance