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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
AUGUST 20, 2004
Date of Report (Date of earliest event reported)
DATAWATCH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 000-19960 02-0405716
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
175 CABOT STREET, SUITE 503 LOWELL, MASSACHUSETTS 01854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 441-2200
Not Applicable
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 11, 2004, Datawatch Corporation ("Datawatch") acquired all
of the outstanding stock of Mergence Technologies Corporation ("Mergence") from
the shareholders of Mergence (the "Sellers"). The acquisition of Mergence (the
"Acquisition") was consummated pursuant to a stock purchase agreement dated as
of August 11, 2004, among Datawatch, Mergence and the four Sellers who owned a
majority of the Mergence stock and managed Mergence (the "Management Sellers")
(the "Management Sellers Purchase Agreement"), and separate stock purchase
agreements with the non-management Sellers (the "Non-Management Sellers Purchase
Agreement"). In connection with the Acquisition, Datawatch paid the Sellers an
aggregate purchase price of $2,500,000. In addition, Datawatch will pay the
Sellers on a quarterly basis payments equal to 10% of the revenues, as defined,
from Mergence's Researcher product for a period of six years. The Management
Sellers have agreed to indemnify Datawatch with respect to damages relating to a
breach of the representations, warranties or covenants in the Management Sellers
Purchase Agreement. Datawatch will retain $125,000 of the $2,500,000 cash
consideration and the first year's earnout payments for a period of one year to
satisfy any indemnification claim. The terms of the Acquisition and the
consideration received by the Sellers were the result of arm's-length
negotiations between Datawatch and the Sellers.
The cash consideration came from Datawatch's available cash
resources.
The name of Mergence has been changed to Datawatch Technologies
Corporation.
One of the Management Sellers, Renee Tenazas, will continue to serve
as President of Datawatch Technologies Corporation.
Datawatch issued a press release regarding the Acquisition on August
11, 2004. A copy of the press release is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The required financial statements will be filed not
later than 60 days after the date that this Current
Report on Form 8-K must be filed.
(b) Pro Forma Financial Information.
The required financial information will be filed not
later than 60 days after the date that this Current
Report on Form 8-K must be filed.
(c) Exhibits.
Exhibit Number Description
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Exhibit 2.1 Stock Purchase Agreement among Datawatch,
Mergence and the Management Sellers, dated as
of August 11, 2004
Exhibit 2.2 Form of Non-Management Sellers Purchase
Agreement
Exhibit 99.1 Press release of Datawatch, dated August 11,
2004
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.
DATAWATCH CORPORATION
August 20, 2004 By: /s/ Robert W. Hagger
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Name: Robert W. Hagger
Title: President, Chief Executive Officer
and Director
EXHIBIT INDEX
Exhibit Number Description
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Exhibit 2.1 Stock Purchase Agreement among Datawatch, Mergence and the
Management Sellers, dated as of August 11, 2004
Exhibit 2.2 Form of Non-Management Sellers Purchase Agreement
Exhibit 99.1 Press release of Datawatch, dated August 11, 2004