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) March 11, 1999
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Wireless Telecom Group, Inc.
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(Exact name of Registrant as Specified in Charter)
New Jersey 1-11916 22-2582295
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
East 64 Midland Avenue, Paramus, New Jersey 07652
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 261-8797
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N/A
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On March 11, 1999, Wireless Telecom Group, Inc. (the "Company")
consummated the transaction contemplated by the Asset Purchase Agreement (the
"Agreement"), dated as of January 7, 1999, by and between the Company and
Telecom Analysis Systems, Inc. ("TAS"), a New Jersey corporation and a
wholly-owned subsidiary of Bowthorpe plc, a corporation organized under the laws
of England and Wales, pursuant to which the Company, among other things, sold to
TAS all wireless and satellite test equipment product lines and components
developed or, as of January 7, 1999, under development by the Company (the
"Test Equipment Assets"). Also as of March 11, 1999, certain of the Company's
employees whose employment related to the Test Equipment Assets left the Company
and became employees of TAS.
The purchase price TAS paid for the Test Equipment Assets was
approximately $18.7 million (subject to certain post-closing adjustments). TAS
paid an additional $200,000 to the Company as consideration for the Company
entering into a non-competition agreement with TAS.
An aggregate of $2.0 million was deposited by TAS into an escrow account
to secure payment of certain indemnification obligations and/or purchase price
adjustments the Company may owe to TAS as set forth in the Agreement.
Concurrently with TAS's purchase of the Test Equipment Assets, the
Company purchased from TAS certain of TAS's product lines which relate to
single-function noise generation product lines (the "Noise Assets"). The Company
expects to adopt and/or integrate the Noise Assets into the on-going operations
of the Company. TAS entered into a non-compete agreement with the Company
relating to the Noise Assets (the "TAS Non-Compete Agreement"). In consideration
for, among other things, TAS' sale of the Noise Assets and entering into the TAS
Non-Compete Agreement, the Company paid $2.5 million to TAS.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
Not applicable.
2
(b) Pro Forma Financial Information.
See the attached pro forma financial statements following the signature
page hereto.
(c) List of Exhibits.
Exhibit
Exhibit
Number Description
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2.1 Asset Purchase Agreement, dated as of January 7, 1999, by and
between Wireless Telecom Group, Inc. and Telecom Analysis
Systems, Inc.
2.2 Non-Competition Agreement, dated March 11, 1999, between Wireless
Telecom Group, Inc. and Telecom Analysis Group, Inc. relating
to the Test Equipment Assets.
2.3 Non-Competition Agreement, March 11, 1999, between Wireless
Telecom Group, Inc. and Telcom Analysis Group, Inc. relating to
the Noise Assets.
99.1 Press Release, dated March 11, 1999.
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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.
WIRELESS TELECOM GROUP, INC.
Date: March 26, 1999 By: /s/ Ed Garcia
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Name: Edward Garcia
Title: President
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WIRELESS TELECOM GROUP, INC.
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INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS
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(Unaudited)
The following unaudited pro forma financial statements have been prepared based
upon certain pro forma adjustments to the historical financial statements of
Wireless Telecom Group, Inc., (the Company). The pro forma financial statements
should be read in conjunction with the notes thereto and the historical
financial statements of the Company.
The accompanying pro forma balance sheet has been presented as if the
transactions described below occurred at the Company's balance sheet date,
December 31, 1998. The accompanying pro forma statements of operations have been
prepared as if the transactions occurred at the beginning of the year ended
December 31, 1998.
These pro forma financial statements do not purport to be indicative of the
results which would actually have been obtained had the pro forma transactions
been completed as of the beginning of the year ended December 31, 1998.
The pro forma transactions (see notes to pro forma financial statements) are as
follows:
- the sale of the assets of a product division of the Company
- the purchase of certain assets from the buyer
Page 1.
WIRELESS TELECOM GROUP, INC.
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PRO FORMA BALANCE SHEET
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DECEMBER 31, 1998
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- ASSETS -
Historical Transactions and Adjustments Pro Forma
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CURRENT ASSETS:
Cash $ 9,031,724 $18,718,616(1) $2,500,000(3) $25,450,340
200,000(2)
Accounts receivable 2,611,953 2,611,953
Inventories 7,862,143 63,000(3) 6,913,950(1) 1,011,193
Prepaid expenses and other current assets 1,109,495 1,109,495
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TOTAL CURRENT ASSETS 20,615,315 30,182,981
PROPERTY, PLANT AND EQUIPMENT - NET 2,875,426 1,899,657(1) 975,769
COSTS IN EXCESS OF NET ASSETS ACQUIRED 2,437,000(3) 2,437,000
OTHER ASSETS 631,458 631,458
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TOTAL ASSETS $24,122,199 $34,227,208
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- LIABILITIES AND STOCKHOLDERS' EQUITY -
CURRENT LIABILITIES:
Accounts payable $ 780,410 $ 780,410
Accrued expenses and other current liabilities 195,784 19,828(1) 175,956
Deferred income - non-compete covenant - 200,000(2) 200,000
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TOTAL CURRENT LIABILITIES 976,194 1,156,366
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DEFERRED INCOME TAXES 306,610 306,610
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SHAREHOLDERS' EQUITY:
Common stock 177,023 177,023
Additional paid-in capital 6,631,061 6,631,061
Retained earnings 16,299,120 9,924,837(1) 26,223,957
Treasury stock (267,809) (267,809)
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22,839,395 32,764,232
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $24,122,199 $34,227,208
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Page 2.
WIRELESS TELECOM GROUP, INC.
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PRO FORMA STATEMENT OF OPERATIONS
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FOR THE YEAR ENDED DECEMBER 31, 1998
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Historical Transactions and Adjustments Pro Forma
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REVENUES - NET $17,300,663 $10,465,848(1) $ 50,153(3) $6,884,968
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COSTS AND EXPENSES:
Cost of sales 8,133,990 5,381,552(1) 2,752,438
Operating expenses 8,001,651 5,299,975(1) 2,701,676
Interest, dividends and other income (404,347) 66,667(2) (471,014)
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TOTAL COSTS AND EXPENSES 15,731,294 4,983,100
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INCOME BEFORE PROVISION FOR
INCOME TAXES 1,569,369 1,901,868
Provision for income taxes 289,638 39,805(1) 329,443
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NET INCOME $ 1,279,731 $1,572,425
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EARNINGS PER SHARE:
Basic $0.07 $0.09
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Diluted $0.07 $0.09
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Page 3.
WIRELESS TELECOM GROUP, INC.
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NOTES TO PRO FORMA FINANCIAL STATEMENTS
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AS OF DECEMBER 31, 1998
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(Unaudited)
NOTE 1 On March 11, 1999, the Company completed the sale of the
assets, net of certain liabilities, of a product division which
is in the business of designing, developing, assembling,
manufacturing and selling certain wireless and satellite test
equipment, for a price of $18,718,616.
The net assets sold are as follows:
Inventory $ 6,913,950
Fixed assets 1,899,657
Accrued salaries payable (19,828)
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Net assets 8,793,779
Less: sales price 18,718,616
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Gain on sale of assets $ 9,924,837
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NOTE 2 In conjunction with the above sale, the Company also received
$200,000 as consideration for a three year, non-compete agreement.
NOTE 3 Simultaneously with the above described sale, the Company
acquired inventory items related to the noise generation product
line of the purchaser, for a purchase price of $2,500,000. As a
result of this purchase, the Company recognized an intangible
asset aggregating $2,437,000 which will be amortized on a
straight-line basis over 15 years.
Page 4.
EXHIBIT INDEX
Exhibit Page
Number Description Number
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2.1 Asset Purchase Agreement, dated as of January 7,
1999, by and between Wireless Telecom Group, Inc.
and Telecom Analysis Systems, Inc.
2.2 Non-Competition Agreement, dated March 11,
1999, between Wireless Telecom Group, Inc. and
Telecom Analysis Group, Inc. relating to the Test
Equipment Assets.
2.3 Non-Competition Agreement, March 11, 1999,
between Wireless Telecom Group, Inc. and Telcom
Analysis Group, Inc. relating to the Noise Assets.
99.1 Press Release, dated March 11, 1999.
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STATEMENT OF DIFFERENCES
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The section symbol shall be expressed as............................... 'SS'