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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) December 15, 1997
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NHhancement Technologies Inc.
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(Exact name of registrant as specified in charter)
Delaware 0-21999 84-1360852
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(State or other jurisdiction (S.E.C. File Number) (IRS Employer
of Incorporation) Identification No.)
39420 Liberty Street, Suite 250, Fremont, CA 94538
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 744-3333
1746 Cole Blvd., Suite 265, Golden, CO 80401
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
(a) Pursuant to an Agreement for the Sale of Shares in Advantis
Network & System Sdn. Bhd. ("Advantis") between NHancement Technologies Inc.,
a Delaware corporation ("NHancement"), and the six individuals ("Vendors") who
owned one hundred percent of all of the issued and fully paid up shares of
Advantis, dated as of June 20, 1997 (the "Original Agreement"), as amended by
two Supplemental Agreements each dated as of November 26, 1997 (individually,
"Supplement No. 1" and "Supplement No. 2", and collectively with the Original
Agreement referred to as the "Agreement"), NHancement purchased one hundred
percent of the shares of Advantis. Consummation of the acquisition transaction,
pursuant to the Agreement, occurred on December 15, 1997, the date the last
Vendor signed Supplement No. 2. As a result of the transaction, Advantis has
become a wholly-owned subsidiary of NHancement. Advantis is a
telecommunications systems integrator formed to address the growing
telecommunications infrastructure needs of Malaysia.
The consideration payable to the Vendors in connection with consummation
of the transaction is 300,00 shares of common stock of Nhancement ("Nhancement
shares"), to be paid to each Vendor pro rata proportional to his Advantis share
ownership. Additionally, the Vendors have the opportunity to receive up to a
maximum of 230,000 additional Nhancement shares if Advantis exceeds certain
minimum profit levels for its next two fiscal years ending March 31, 1998 and
1999. All Nhancement shares to be distributed to the Vendors pursuant to the
Agreement will be issued by Nhancement in reliance upon Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"), and will be subject to the
restrictions on transferability as imposed by the 1933 Act. In addition, the
NHancement shares are subject to a lockup provision prohibiting transfer of
fifty percent of them for one year following the close, and prohibiting transfer
of the remaining fifty percent for a two year period following the close.
The principle followed in determining the amount of the non-contingent
consideration payable to the Vendors utilized a formula that established a
purchase price based upon a percentage of the price of NHancement's stock as of
June 20, 1997, the date of the Original Agreement. Based upon that formula, the
initial 300,000 shares to be distributed were valued at US$840,000. Based upon
the value of NHancement's common stock on December 15, 1997, as determined by
reference to the closing price quoted on the Nasdaq SmallCap Market, these
shares would be valued at approximately US$656,400. (For accounting purposes,
these shares have been discounted by twenty percent to reflect certain lockup
provisions applicable to them.)
During the due diligence period provided for in the Original Agreement,
NHancement uncovered an account receivable in the amount of Ringgit Malaysia
640,174 (approximately US$183,000 at the exchange rate in effect as of the
date of this Form 8-K), the collectability of which NHancement determined was
in doubt. Pursuant to the Second Supplement, the Vendors have guaranteed the
collectability of this receivable. The Vendors may utilize their NHancement
share holdings in satisfaction of their guarantee obligations.
The amount of consideration paid in connection with the purchase was
determined in arms-length negotiations between officers of Nhancement and the
selling Vendors.
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In connection with the acquisition of Advantis, certain of the directors
and managers of Advantis reaffirmed their employment agreements and agreed to
continue to be employed by Advantis for not less than two (2) years after the
close of the transaction. Each of these individuals have also agreed that if
they resign voluntarily or are terminated for cause after the close and before
the distribution (if any) of the 230,000 additional NHancement shares, they
forfeit their right to receive any such undistributed shares.
(b) Not applicable.
Item 5. Other Events
Effective as of November 12, 1997, BioFactors, Inc., a Delaware
corporation and a wholly-owned subsidiary of NHancement ("BioFactors"), was
merged with and into VoicePlus, Inc., a California corporation and a
wholly-owned subsidiary of NHancement ("VoicePlus"), in a statutory merger
intended to qualify, for federal income tax purposes, as a reorganization under
Section 368 of the Internal Revenue Code of 1986, as amended. VoicePlus was
the surviving corporation in the merger transaction, and the separate existence
of BioFactors ceased on the effective date of the merger. The operations of
the combined entity are being conducted under the name of "VoicePlus", which is
headquartered in Fremont, CA.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
The financial statements required by this item are not being
included in this initial report on Form 8-K. It is expected that
such financial statements will be filed by the registrant on or
before January 30, 1998, but in no event later than sixty (60) days
following the date of this report on Form 8-K.
(b) Pro Forma Financial Information
The financial statements required by this item are not being
included in this initial report on Form 8-K. It is expected that
such financial statements will be filed by the Registrant on or
before January 30, 1998, but in no event later than sixty (60) days
following the date of this report on Form 8-K.
(c) Exhibits
Exhibit
Number Description
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2.01 Agreement for the Sale of Shares in Advantis Network &
System Sdn. Bhd. dated June 20, 1997, as amended by the
Supplemental Agreement to the Agreement to the
Agreement dated November 26, 1997; and the Second
Supplemental Agreement to the Agreement, dated
November 26, 1997
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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.
NHANCEMENT TECHNOLOGIES INC.
(Registrant)
Dated: December 30, 1997 By: /s/ Esmond T. Goei
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Esmond T. Goei, Chairman, President and
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit
Number Description
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2.01 Agreement for the Sale of Shares in Advantis Network &
System Sdn. Bhd. dated June 20, 1997, as amended by
the Supplemental Agreement to the Agreement dated
November 26, 1997; and the Second Supplemental
Agreement to the Agreement, dated November 26, 1997