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): August 25, 1997
RADIUS INC.
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(Exact name of registrant as specified in its charter)
California
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(State or other jurisdiction of incorporation)
0-18690 68-0101300
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(Commission (IRS Employer
File Number) Identification No.)
215 Moffett Park Drive, Sunnyvale, CA 94089
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (408) 541-6100
ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS.
On August 25, 1997 and August 29, 1997, Radius Inc. (the "Company") sold
an aggregate of 875,000 and 121,875 shares, respectively, of the 1,741,127
shares of Splash Technology Holdings, Inc. ("Splash") Common Stock owned by the
Company. These shares were sold pursuant to an underwritten public offering
of an aggregate of 3,250,000 shares of Common Stock of Splash by Splash and
certain other stockholders of Splash.
The shares of Splash Common Stock were sold to the underwriters at a
price of $30.875 per share (including underwriting discount) for aggregate
net proceeds to the Company of $30.8 million. The Company used $21.9 million
of such proceeds to repay all outstanding indebtedness of the Company under
its term loan agreement with IBM Credit Corp. ("IBM Credit"), used $3.4
million of such proceeds to redeem all of the Company's outstanding Series A
Preferred Stock (all of which shares were held by IBM Credit) and used $5.5
million of such proceeds to repay principal outstanding of $6.8 million on
the working capital line of credit with IBM Credit.
After the completion of the sale of these shares of Splash Common Stock,
the Company continues to own 744,252 shares of Splash Common Stock.
ITEM 5: OTHER EVENTS
In connection with the repayment of its term loan agreement and the
redemption of the Company's Series A Preferred Stock with the proceeds of the
sale of the Splash Common Stock described above, the Company entered into an
amended working capital line of credit for $5.0 million that is secured by
the remaining shares of Splash Common Stock held by the Company.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
Set forth below is the Company's Unaudited Pro Forma Consolidated Balance
Sheet at June 30, 1996 reflecting the sale of the Splash Stock.
The Unaudited Pro Forma Balance Sheet as of June 30, 1997 reflects (i)
the sale of 996,875 shares of Common Stock of Splash Technology Holdings,
Inc. at a sales price of $30.875 per share, which includes underwriting
discount (for total proceeds to the Company of $30.8 million), (ii) the
application of the proceeds from such sale to repay all of the outstanding
$21.9 million indebtedness to IBM Credit under a term loan agreement, (iii)
application of $3.4 million in proceeds to redeem all of the outstanding
shares of Series A Preferred Stock of the Company held by IBM Credit pursuant
to the terms of such Series A Preferred Stock, (iv) application of $4.9
million in proceeds to the principal outstanding on the working capital line
of credit with IBM Credit, and (v) the remaining $0.6 million of proceeds to
cash for working capital purposes.
The pro forma financial information does not purport to be indicative of
the results of operations that would actually have been reported had the
transactions underlying the pro forma adjustments actually been consummated
on such dates or of the results of operations that may be reported by the
Company in the future.
(c) EXHIBITS
10.01 Underwriting Agreement dated as of August 19, 1997 among Splash
Technology Holdings, Inc., Selling Stockholders named therein and
Alex. Brown & Sons Incorporated, Montgomery Securities and Piper
Jaffray Inc.
RADIUS INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
(in thousands)
JUNE 30, PRO FORMA TOTAL
1997 ADJUSTMENTS AS ADJUSTED
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ASSETS:
Current Assets:
Cash $ 766 575 (A) $ 1,341
Accounts receivable, net 8,284 8,284
Inventories 3,642 3,642
Investment in Splash Technology Holdings, Inc. -
current portion 30,163 (11,206)(B) 18,957
Prepaid expenses and other current assets 366 366
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Total current assets 43,221 (10,631) 32,590
Investment in Splash Technology Holdings, Inc. -
noncurrent portion 21,940 (21,940)(B) -
Property and equipment, net 335 335
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$ 65,496 $(32,571) $32,925
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LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 6,675 $ 6,675
Accrued payroll and related expenses 1,384 1,384
Accrued warranty costs 346 346
Other accrued liabilities 1,775 1,775
Accrued income taxes 2,115 2,115
Accrued restructuring and other charges 31 31
Short-term borrowings 4,841 (4,841)(A) -
Obligation under capital leases 472 472
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Total current liabilities 17,639 (4,841) 12,798
Long term borrowings 21,940 (21,940)(A) -
Commitments and contingencies
Convertible preferred stock 3,000 (3,000)(A) -
Shareholders' equity
Common stock 169,019 (225)(A) 168,794
Unrealized gain on available-for-sale securities 52,103 (33,146)(B) 18,957
Accumulated deficit (198,245) 30,581 (C) (167,664)
Accumulated translation adjustment 40 40
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Total shareholders' equity 22,917 (2,790) 20,127
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$ 65,496 (32,571) $ 32,925
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NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED BALANCE SHEET
(in thousands)
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(A) The application of the gain on the sale of shares of
Common Stock of Splash Technology Holdings, Inc.
is as follows:
Gain on the sale (see C below) $ 30,581
Redemption of convertible preferred stock (3,000)
Repayment of long term borrowings (21,940)
Repayment of short term borrowings (working capital
line of credit) (4,841)
Dividend paid in Common Stock (225)
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Cash remaining for working capital purposes $ 575
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(B) Reflects the value of 570,139 shares of Splash
Common Stock or $19.0 million (based on a closing
price of $33.25 per share as of June 30, 1997 and
net of 174,113 shares subject to an option granted
to IBM Credit) owned by the Company after the
completion of the sale of an aggregate of
996,875 shares of Common Stock of Splash Technology
Holdings, Inc., on August 25 and August 29, 1997.
(C) Represents the gain on the sale of shares of Common Stock
of Splash Technology Holdings, Inc.
Cash paid to Radius Inc. $ 30,779
Series A Preferred Stock redemption fees and
accrued dividend (198)
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$ 30,581
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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 thereunto duly authorized.
Date: September 5, 1997
RADIUS INC.
By: /s/ Henry V. Morgan
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Henry V. Morgan
Chief Financial Officer