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): November 20, 2002
Avatech Solutions, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-7372 84-1035353
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
11403 Cronhill Drive, Suite A, Owings Mills, Maryland 21117
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code: (410) 902-6900
Item 2. Acquisition or Disposition of Assets.
As of May 1, 2002, PlanetCAD Inc., a Delaware Corporation, and Avatech
Solutions, Inc., a Delaware Corporation, entered into a plan of merger whereby,
subject to shareholder approval, the shareholders of Avatech would receive
approximately 75% of the outstanding common stock of the combined companies and
the shareholders of PlanetCAD would receive 25% of the outstanding common stock
of the combined companies. On September 27, 2002, PlanetCAD Inc. filed a
Registration Statement on Form S-4, which included a proxy statement soliciting
the affirmative vote of a majority of the PlanetCAD common stock (including
common stock underlying PlanetCAD convertible preferred stock) and two-thirds of
the Avatech common stock. On November 19, 2002, the merger was approved by the
respective shareholder groups and Avatech Solutions, Inc. merged with and into
PlanetCAD, Inc. The merger was effected by the exchange of Avatech common stock
for PlanetCAD common stock, after which Avatech became a subsidiary of PlanetCAD
Inc. Since the shareholders of Avatech became the holders of a majority of the
common stock of the combined company, the merger was deemed to be a "reverse
acquisition" with Avatech as the acquiror of PlanetCAD. Accordingly, on November
19, 2002, PlanetCAD changed its name to Avatech Solutions, Inc. and assumed the
fiscal year of June 30 to conform to the fiscal year of Avatech. Effective
October 31, 2002, Avatech allocated the acquisition cost of approximately $2.2
million for PlanetCAD to the estimated fair value of the acquired net assets.
The merger was treated as a purchase business combination for financial
reporting purposes and Avatech's financial statements are now considered to be
the financial statements of the post-merger combined company.
Item 4. Changes in Registrant's Certifying Accountant.
In May 2002, the management of Avatech Solutions, Inc. engaged Ernst & Young LLP
as their independent auditors for the year ended June 30, 2002 in anticipation
of Avatech becoming a public registrant. Avatech's board of directors ratified
this engagement of Ernst & Young LLP effective May 28, 2002. During the 2002
fiscal year and through the date of this report, there were no disagreements
with Ernst & Young on any matter of accounting principle or practice, financial
statement disclosure, or auditing scope or procedures which, if not resolved,
would have caused them to make reference to the subject matter in connection
with their report on Avatech's consolidated financial statements for such year.
Ernst & Young LLP's report on Avatech's financial statements for the past year
did not contain an adverse opinion or a disclaimer of opinion, or was qualified
or modified as to uncertainty, audit scope, or accounting principles.
Additionally, there were no reportable events as defined in Item 304(a)(1)(v) of
Regulation S-K.
Walpert & Wolpoff, LLP had been engaged to audit Avatech's consolidated
financial statements for the fiscal years ended June 30, 2001 and 2000. During
these two fiscal years and through the date of this report, there were no
disagreements with Walpert & Wolpoff on any matter of accounting principle or
practice, financial statement disclosure, or auditing scope or procedures which,
if not resolved, would have caused them to make reference to the subject matter
in connection with their report on Avatech's consolidated financial statements
for such years. Neither of Walpert & Wolpoff, LLP's reports on Avatech's
financial statements for either of the past two years contained an adverse
opinion or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope, or accounting principles. Additionally, there were no
reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Pro Forma Financial Information. Unaudited condensed combined pro
forma balance sheet as of September 30, 2002 and unaudited
condensed combined pro forma statements of income for the year
ended June 30, 2002 and the three-month period ended September 30,
2002, including notes thereto, are attached as Exhibit 99.1
hereto.
(b) Management's Discussion and Analysis of Financial Condition and
Results of Operations. Avatech's Management's Discussion and
Analysis of Financial Conditions and Results of Operations is
attach as Exhibit 99.2 hereto.
(c) Financial Statements of Acquired Business. Financial statements of
Avatech Solutions, Inc. as of June 30, 2001 and 2002, and for each
of the three years in the period ended June 30, 2002, including
notes thereto, are attached as Exhibit 99.3 hereto and
incorporated herein by reference.
(d) Exhibits.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Walpert & Wolpoff LLP, Independent Auditors
99.1 Unaudited condensed combined pro forma balance sheet as of
September 30, 2002 and unaudited condensed combined pro forma
statements of income for the year ended June 30, 2002 and the
three-month period ended September 30, 2002, including notes
thereto.
99.2 Avatech's Management's Discussion and Analysis of Financial
Condition and Results of Operations.
99.3 Audited financial statements of Avatech Solutions, Inc. June
30, 2001 and 2002, and for each of the three years in the
period ended June 30, 2002, including notes thereto.
99.4 Certification of Principal Executive Officer Pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002).
99.5 Certification of Principal Financial Officer Pursuant to 18
U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of
2002).
99.6 Schedule II - Valuation and Qualifying Accounts
Item 8. Change in Fiscal Year.
In connection with the merger on November 19, 2002, PlanetCAD Inc. changed its
fiscal year end from December 31 to June 30 to conform with the fiscal year of
Avatech Solutions Inc., the accounting acquiror. This change takes effect as of
December 31, 2002 upon Avatech's filing of a Form 10-Q for the combined company
for the six-month period ended December 31, 2002. No transition report has been
filed; however, all periodic reports for periods ended prior to the merger have
been filed by PlanetCAD as they became due in the ordinary course of business.
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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.
Avatech Solutions, Inc.
By: /s/ Gary Rever
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Gary Rever, Chief Financial Officer
Date: January 31, 2003
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CERTIFICATIONS
I, Donald R. Walsh, certify that:
1. I have reviewed this report on Form 8-K of Avatech Solutions, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
report (the "Evaluation Date"); and
(c) presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: January 31, 2003
/s/ Donald R. Walsh
------------------------------
Donald R. Walsh
Chief Executive Officer
(principal executive officer)
I, Gary Rever, certify that:
1. I have reviewed this report on Form 8-K of Avatech Solutions, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
report (the "Evaluation Date"); and
(c) presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: January 31, 2003
/s/ Gary Rever
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Gary Rever
Chief Financial Officer (principal financial accounting
officer)