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UNITED STATES
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
May 30, 2002
Date of Report (Date of earliest event reported)
Edge Technology Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-20995 13-3778895
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6611 Hillcrest Avenue, #223
Dallas, Texas 75205
(Address of principal executive offices) (Zip Code)
(214) 999-2245
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of Virtually There, Inc.
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On May 30, 2002, we acquired Virtually There, Inc. pursuant
to a merger agreement among Edge Technology Group, Inc., VT
Acquisition Corp., Virtually There, Inc. and the shareholders of
Virtually There, Inc. In exchange for the outstanding shares of
Virtually There, Inc, we paid $120,000 in cash, issued
1,153,846 shares of our restricted common stock to the
shareholders of Virtually There, and assumed approximately
$185,000 of Virtually There's existing liabilities as of the date
of closing, as a result of arms length negotiations between the
parties. The cash portion of the merger consideration was funded
from the proceeds of our April 2002 offering of our Series A
Convertible Preferred Stock.
The terms of the Merger Agreement provided that VT
Acquisition Corp., a newly created and wholly owned subsidiary of
Edge Technology Group, was merged into Virtually There, with
Virtually There as the surviving entity. The acquisition will be
accounted for using the purchase method of accounting. As such,
the assets and liabilities of Virtually There will be recorded at
their estimated fair value and the results of operations will be
included in our consolidated results of operations from the date
of acquisition.
Founded in 1997, Virtually There is an applications service
provider and website hosting company located in Fort Worth, Texas.
Virtually There currently has twelve employees and generated
revenues of approximately $1,000,000 with a net loss of
approximately $79,000 for the year ended December 31, 2001.
Assets Purchased From Universal Data Technology, Inc.
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On May 31, 2002, our newly created and wholly owned
subsidiary, UDT Consulting, Inc., acquired the assets of
Universal Data Technology, Inc., pursuant to an asset purchase
agreement by and among Universal Data Technology, Inc., its
shareholders, Edge Technology Group, Inc. and UDT Consulting,
Inc. Universal Data Technology, Inc. is a professional services
company headquartered in Dallas Texas, with additional operations
in Arkansas and Florida. Our total purchase price for
substantially all of UDT's assets will be the sum of $1,127,750
and the product of multiplying two times UDT Consulting's
earnings before interest, taxes depreciation and amortization for
the twelve months immediately following the closing date of the
acquisition (the "Measurement Period"). The calculation of the
purchase price is subject to certain deductions and offset
provisions all as set forth in the asset purchase agreement. An
initial payment of $227,500 and the forgiveness of a $150,000
promissory note from Universal Data Technology to Edge were
applied toward the purchase price as of the date of the closing.
The remainder of the purchase price will be paid out monthly
pursuant to an earn-out schedule, with any remaining payments to
be delivered after the end of the Measurement Period, pursuant to
the terms and conditions of the asset purchase agreement. The
cash portion of the purchase price paid at closing was funded
from the proceeds of our April 2002 offering of Series A
Convertible Preferred Stock. The purchase price for the acquired
assets was reached as a result of arms length negotiations
between the parties.
The assets of Universal Data Technology will be recorded at
their estimated fair value and the results of operations will be
included in our consolidated results of operations from the date
of acquisition. For the year ended December 31, 2001, Universal
Data Technology generated revenues of approximately $5,600,000
with a net loss of approximately $390,000. As of the date of
this report, UDT Consulting employs 32 consultants and support
staff.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
As permitted by Form 8-K, the historical financial
information required by Regulation S-X will be filed by an
amendment to this Form 8-K no later than August 13, 2002.
(b) Pro forma Financial Information.
As permitted by Form 8-K, the pro forma financial
information required by Regulation S-X will be filed by an
amendment to this Form 8-K no later than August 13, 2002.
(c) Exhibits.
NO. DOCUMENT
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10.1 Agreement and Plan of Merger Among Edge Technology
Group, Inc., VT Acquisition Corp., Virtually There,
Inc. and the Virtually There, Inc. Shareholders dated
May 30, 2002.
10.2 Asset Purchase Agreement Among Edge Technology Group,
Inc., UDT Consulting, Inc., Universal Data
Technology, Inc. and the Universal Data Technology,
Inc. Shareholders dated May 31, 2002.
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.
Edge Technology Group, Inc.
Date: June 14, 2002 By: /s/ DAVID N. PILOTTE
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David N. Pilotte
Executive Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
NO. DOCUMENT
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10.1 Agreement and Plan of Merger Among Edge Technology
Group, Inc., VT Acquisition Corp., Virtually There,
Inc. and the Virtually There, Inc. Shareholders dated
May 30, 2002.
10.2 Asset Purchase Agreement Among Edge Technology Group,
Inc., UDT Consulting, Inc., Universal Data
Technology, Inc. and the Universal Data Technology,
Inc. Shareholders dated May 31, 2002.