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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): September 7, 1997
Cylink Corporation
(Exact name of Registrant as Specified in its Charter)
California 0-27742 95-3891600
(State or Other Jurisdiction (Commission File No.) (IRS Employer Identification No.)
of Incorporation)
910 Hermosa Court, Sunnyvale, California 94086
(Address of Principal Executive Offices) (Zip Code)
(408)735-5800
(Registrant's Telephone Number, Including Area Code)
Page 1 of 4 Pages
Exhibit Index Located on Page 4
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INFORMATION TO BE INCLUDED IN REPORT
Item 2. Acquisition or Disposition of Assets.
On September 8, 1997, Registrant acquired all of the
outstanding shares of Algorithmic Research, Ltd., a limited liability company
organized under the laws of the State of Israel ("ALR") and Algart Holdings
Ltd., a limited liability company organized under the laws of the State of
Israel ("Holdings") pursuant to that certain Stock Purchase Agreement, dated
September 7, 1997 (the "Purchase Agreement") among Registrant, ALR and A.R. Data
Security Ltd., a limited liability company organized under the laws of the State
of Israel ("Parent"). Parent owned all of the outstanding shares of Holdings,
which had no material assets other than certain shares of ALR, and Holdings, in
combination with Parent, owned all of the outstanding shares of ALR. The
consideration for this stock purchase was $40,686,972 in cash and 2,593,169
shares of Registrant's capital stock. As additional consideration, holders of
options to purchase shares of Parent received $2,500,226 in cash and 409,641
options to purchase shares of Registrant's capital stock. In addition,
Registrant agreed to pay up to $1,901,230 in investment banking fees, legal and
other professional advisory fees incurred by Parent and ALR in connection with
the transaction. The amount and type of consideration was determined on the
basis of negotiations between Registrant and Parent and their management and
professional advisors. The source of the funds used for the cash portion of the
purchase price was Registrant's cash reserves.
As part of the stock purchase, Registrant entered into a
Seller's Agreement, dated September 8, 1997 (the "Seller's Agreement") with
Parent and the shareholders of Parent ("Parent Shareholders"), which provides
for certain restrictions on the sale of Registrant's Common Stock by Parent and
Parent Shareholders, which in part were imposed in order to effect compliance
with Regulation S of the Commission with respect to the shares of Registrant's
Common Stock issued in this stock purchase, and certain conditional registration
rights in favor of Parent and the Parent Stockholders. Registrant and the Parent
Shareholders further entered into that certain Parent Shareholders Indemnity
Agreement, dated as of September 8, 1997, pursuant to which the Parent
Shareholders agreed to indemnify Registrant as to certain matters pertaining to
ALR.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired. The audited
financial statements of ALR and Holdings are not yet completed. The required
audited financial statements will be filed with the Securities and Exchange
Commission within 60 days after the filing of this report on Form 8-K.
(b) Pro Forma Financial Information. The unaudited pro forma
financial information of Cylink Corporation and ALR and Holdings are not yet
completed. The required unaudited pro forma information will be filed with the
Securities and Exchange Commission within 60 days after the filing of this
report on Form 8-K.
(c) Exhibits. The Exhibit Index appearing on page 5 hereof is
hereby incorporated herein by reference.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
The 2,593,169 shares of Registrant's Common Stock issued and
sold in connection with the transaction described in Item 2 above were issued in
a nonunderwritten sale pursuant to Regulation S under the Securities Act of
1933, as amended. With respect to the information required pursuant to Item 701
of Regulation S-K, the description of the transaction set forth in Item 2 above
is hereby incorporated herein by reference.
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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.
CYLINK CORPORATION
By /s/ John H. Daws
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John H. Daws
Vice President and Chief Financial Officer
Date: September 17, 1997
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EXHIBIT INDEX
Sequentially
Exhibit Description Numbered Page
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2.2 Stock Purchase Agreement, dated as of September 7, 1997, 5
between Registrant, A.R. Data Security Ltd. and Algorithmic
Research Ltd.
2.3 Seller's Agreement, dated as of September 8, 1997, among
Registrant, A.R. Data Security Ltd., Algorithmic Research Ltd.,
Amos Fiat, Yossi Cohen, Yossi Tulpan, Koor Capital Markets and
Telrad Holdings Ltd.
2.4 Parent Shareholders Indemnity Agreement, dated as of
September 8, 1997 among Registrant, A.R. Data Security Ltd.,
Amos Fiat, Yossi Cohen, Yossi Tulpan, Koor Capital Markets and
Telrad Holdings Ltd.
4