8-K 1 file001.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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 6, 2002 CLARUS CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 0-24277 58-1972600 (State or other jurisdiction of (Commission (IRS Employer incorporation or organization) File No.) Identification No.) One Pickwick Plaza Greenwich, CT 06830 (Address of principal executive offices, including zip code) (203) 302-2000 (Registrant's telephone number, including area code) (Former name or Former Address if Changed Since Last Report) 3970 Johns Creek Court Suite 100 Suwanee, Georgia 30024 ================================================================================ ITEM 2. Acquisition Or Disposition Of Assets On December 6, 2002, Clarus Corporation ("Clarus" or the "Company") consummated the sale of substantially all of the assets of its electronic commerce business (the "Asset Sale" or the "Sale") to Epicor Software Corporation ("Epicor") for a purchase price, determined through arms-length negotiation of the parties, of $1.0 million in cash, pursuant to the terms of an Asset Purchase Agreement, dated as of October 17, 2002, between Clarus and Epicor ("Asset Purchase Agreement"). Upon the consummation of the Sale, Mr. Stephen P. Jeffery ceased serving as the Company's Chief Executive Officer and Chairman, and Mr. James McDevitt ceased serving as the Company's Chief Financial Officer. The description of the Asset Purchase Agreement and the transactions contemplated by it is not intended to be complete and is qualified in its entirety by the complete text of the Asset Purchase Agreement which is attached as Exhibit 2.1 to this report. The Company is currently seeking opportunities to sell its remaining operating assets. ITEM 5. Other Events and Required FD Disclosure. Following the Sale, Mr. Warren B. Kanders was appointed the Executive Chairman of the Company's Board of Directors, and Mr. Nigel P. Ekern was appointed the Company's Chief Administrative Officer and Secretary, each pursuant to the terms of an employment agreement with the Company. In addition, Mr. Jeffery entered into a Consulting Agreement with the Company. In order to supplement the Company's directors' and officers' liability insurance coverage, and to provide the Company's directors and executive officers with contractual assurance that the protection provided by the Company's Certificate of Incorporation will be available to them (regardless of any amendment or revocation of the Company's Certificate of Incorporation), the Company has agreed to enter into Indemnification Agreements with its directors and executive officers. ITEM 7. Financial Statements, Pro Forma Information and Exhibits (b) Pro Forma Financial Information The following unaudited pro forma Condensed Consolidated Statements of Operations for the twelve month period ended December 31, 2001 and the nine month period ended September 30, 2002 give effect to the Sale as though it occurred on January 1, 2001. The unaudited pro forma balance sheet assumes the Sale was completed as of September 30, 2002. The unaudited pro forma financial data and the notes thereto should be read in conjunction with the Company's historical financial statements. The unaudited pro forma financial data is based upon the Company's historical consolidated financial statements and certain assumptions and estimates of the Company's management that are subject to change. The unaudited pro forma financial data is presented for illustrative purposes only and is not necessarily indicative of any future results of operations or the results that might have occurred if the Sale had actually occurred on the indicated dates. CLARUS CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED DECEMBER 31, 2001 -------------------------------------------------------- PRO FORMA PRO FORMA HISTORICAL ADJUSTMENTS AS ADJUSTED --------------- -------------- ---------------- REVENUES: License fees $ 7,807 $(4,500)(1) $3,307 Services fees 9,198 (4,543)(1) 4,655 --------------- -------------- ---------------- Total revenues 17,005 (9,043)(1) 7,962 COST OF REVENUES: License fees 211 (122)(2) 89 Services fees 12,253 (6,818)(3) 5,435 --------------- -------------- ---------------- Total cost of revenues 12,464 (6,940) 5,524 OPERATING EXPENSES: Research and development 16,220 (9,853)(4) 6,367 Sales and marketing 27,294 (20,191)(5) 7,103 General and administrative 14,918 - (6) 14,918 Impairment of intangible assets 36,756 (36,756)(7) - Gain on disposal of assets (20) - (20) --------------- -------------- ---------------- Operating expenses, before non-cash items 95,168 (66,800) 28,368 Depreciation 3,750 (589)(8) 3,161 Amortization 8,462 (8,462)(9) - --------------- -------------- ---------------- Operating expenses, before compensation expense 107,380 (75,851) 31,529 Non-cash sales and marketing 6,740 (391)(10) 6,349 Non-cash general and administrative 252 - 252 --------------- -------------- ---------------- Total operating expenses 114,372 (76,242) 38,130 Operating income/(loss) (109,831) 74,139 (35,692) Other income 107 - 107 Loss on impairment of investments (16,472) - (16,472) Interest income 6,570 - 6,570 Interest expense 228 - 228 --------------- -------------- ---------------- Income/(loss) from continuing operations before tax provision (119,854) 74,139 (45,715) Income tax provision - - - --------------- -------------- ---------------- Net loss from continuing operations (119,854) 74,139 (45,715) =============== ============== ================ Loss per common share, basic and diluted Net loss from continuing operations $ (7.72) $ 4.77 $ (2.95) =============== ============== ================ Weighted average shares outstanding Basic 15,530 15,530 15,530 Diluted 15,530 15,530 15,530
CLARUS CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED SEPTEMBER 30, 2002 -------------------------------------------------------- PRO FORMA PRO FORMA HISTORICAL ADJUSTMENTS AS ADJUSTED --------------- -------------- ---------------- REVENUES: License fees $ 2,649 $ (804)(1) $1,845 Services fees 5,352 (2,748)(1) 2,604 --------------- -------------- ---------------- Total revenues 8,001 (3,552)(1) 4,449 COST OF REVENUES: License fees 21 (6)(2) 15 Services fees 4,809 (2,726)(3) 2,083 --------------- -------------- ---------------- Total cost of revenues 4,830 (2,732) 2,098 OPERATING EXPENSES: Research and development 6,437 (3,508)(4) 2,929 Sales and marketing 7,249 (2,200)(5) 5,049 General and administrative 6,758 -(6) 6,758 Impairment of intangible assets 10,360 (10,360)(7) - Loss on disposal of assets 918 - 918 --------------- -------------- ---------------- Operating expenses, before non-cash items 31,722 (16,068) 15,654 Depreciation 3,404 (523)(8) 2,881 Amortization 455 (455)(9) - --------------- -------------- ---------------- Operating expenses, before compensation expense 35,581 (17,046) 18,535 Non-cash sales and marketing 450 (450)(10) - Non-cash general and administrative - - - --------------- -------------- ---------------- Total operating expenses 36,031 (17,496) 18,535 Operating income/(loss) (32,860) 16,676 (16,184) Other income 26 - 26 Loss on impairment of investments - - - Interest income 1,986 - 1,986 Interest expense 169 - 169 --------------- -------------- ---------------- Income/(loss) from continuing operations before tax provision (31,017) 16,676 (14,341) Income tax provision - - - --------------- -------------- ---------------- Net loss from continuing operations (31,017) 16,676 (14,341) =============== ============== ================ Loss per common share, basic and diluted Net loss from continuing operations $ (1.99) $ 1.07 $ (0.92) =============== ============== ================ Weighted average shares outstanding Basic 15,597 15,597 15,597 Diluted 15,597 15,597 15,597
CLARUS CORPORATION PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
SEPTEMBER 30, 2002 ----------------------------------------------------- PRO FORMA PRO FORMA HISTORICAL ADJUSTMENTS AS ADJUSTED -------------- --------------- --------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 17,745 $ 895(1) $ 18,640 Marketable securities 84,832 - 84,832 Accounts receivable, less allowance for doubtful accounts of $631 963 - 963 Prepaids and other current assets 1,488 (151)(2) 1,337 -------------- --------------- --------------- Total current assets 105,028 744 105,772 PROPERTY AND EQUIPMENT, NET 3,129 (694)(3) 2,435 OTHER ASSETS: Deposits and other long-term assets 45 - 45 -------------- --------------- --------------- TOTAL ASSETS $108,202 $ 50 $108,252 ============== =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 5,200 $ - $ 5,200 Deferred revenue 2,185 (604)(4) 1,581 -------------- --------------- --------------- Total current liabilities 7,385 (604) 6,781 LONG-TERM LIABILITIES: Deferred revenue 67 (5)(4) 62 Long-term debt 5,000 - 5,000 Other long-term liabilities 256 - 256 -------------- --------------- --------------- Total liabilities 12,708 (609) 12,099 STOCKHOLDERS' EQUITY: Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued - - - Common stock, $0.0001 par value; 100,000,000 shares 2 - 2 authorized: 15,728,108 shares issued and 15,653,108 outstanding Additional paid-in capital 361,018 - 361,018 Accumulated deficit (265,640) 659(5) (264,981) Treasury stock, at cost (2) - (2) Accumulated other comprehensive income 116 - 116 -------------- --------------- --------------- Total stockholders' equity 95,494 659 96,153 -------------- --------------- --------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 108,202 $ 50 $ 108,252 ============== =============== ===============
Notes - Statements of Operations: The Asset Sale involves the sale of certain assets associated with our electronic commerce business to Epicor. The assets sold include the following products and related assets: eProcurement, Sourcing, View (for eProcurement), eTour (for eProcurement), ClarusNet and Settlement products, our customer lists, certain contracts and certain intellectual property rights that are primarily related to the transferred assets, maintenance payments that we received between October 17, 2002, and the closing date of the Asset Sale for maintenance and services to be performed by Epicor after the closing date of the Asset Sale, and certain property and equipment. (1) Reflects the revenues directly associated with the products and certain contracts included in the Asset Sale. (2) Represents the cost of royalties associated with products licensed to customers included in the Asset Sale. (3) Cost of services revenue associated with the assets sold. With the exception of our Cashbook product, services costs are not capable of being calculated on a product- by-product basis. All cost of services revenue, other than cost of services revenue attributable to the Cashbook product, has been allocated based upon revenue. (4) Reflects the development costs associated with the assets sold allocated based upon the research and development headcount by product. (5) Represents the sales and marketing expenses associated with the assets sold based upon an allocation utilizing license fee revenue as the basis. (6) General and administrative expenses are not included in the assets sold. The majority of our general and administrative costs are related to administration and our facilities. (7) Reflects the intangible impairment loss related to the assets sold. (8) Depreciation related to the specific property and equipment included in the Asset Sale. (9) Amortization of the intangible assets included in the Asset Sale. (10) Noncash sales and marketing expense related to sales and marketing agreements included in the Asset Sale. Notes - Balance Sheet (1) Includes the $1.0 million closing cash payment less certain expenses related to the sale including $50,000 to be paid to our financial advisor, U.S. Bancorp Piper Jaffray and $55,000 to Willamette for issuing a fairness opinion. (2) Prepaid expenses for future support related to licensed products used in research and development that are included in the Asset Sale. (3) Net book value of property and equipment that are included in the Asset Sale. (4) Deferred revenue associated with the products and certain contracts included in the Asset Sale. (5) Gain on the Asset Sale assuming the transaction occurred on September 30, 2002. The gain on sale is calculated is follows (in thousands): Total proceeds from sale $ 1,000 Less: Transaction costs 105 ------------ Net proceeds from sale 895 Assets sold to Epicor: Prepaid assets 151 Property and equipment 694 ------------ Total Assets sold to Epicor 845 Liabilities assumed by Epicor: Deferred revenue 609 ------------ Net assets sold to Epicor 236 ------------ Gain on sale of assets $ 659 ------------ (c) Exhibits 2.1 Asset Purchase Agreement, dated as of October 17, 2002, by and between Epicor Software Corporation and Clarus Corporation (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.2 Form of Bill of Sale and Assumption Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.3 Form of Trademark Assignment (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.4 Form of Patent Assignment (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.5 Form of Noncompetition Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.6 Form of Legal Opinion (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.7 Form of Transition Services Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.8 Form of Escrow Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.9 Source Code Sublicense Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 10.1 Form of Indemnification Agreement for Directors and Executive Officers of the Company. 10.2 Employment Agreement, dated as of December 6, 2002, between the Company and Warren B. Kanders. 10.3 Employment Agreement, dated as of December 6, 2002, between the Company and Nigel P. Ekern. 10.4 Consulting Agreement, dated as of December 6, 2002, between the Company and Stephen P. Jeffery. 99.1 Press Release SIGNATURE 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. CLARUS CORPORATION Date: December 23, 2002 /S/ NIGEL P. EKERN -------------------------- NIGEL P. EKERN Chief Administrative Officer EXHIBIT INDEX 2.1 Asset Purchase Agreement, dated as of October 17, 2002, by and between Epicor Software Corporation and Clarus Corporation (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.2 Form of Bill of Sale and Assumption Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.3 Form of Trademark Assignment (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.4 Form of Patent Assignment (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.5 Form of Noncompetition Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.6 Form of Legal Opinion (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.7 Form of Transition Services Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.8 Form of Escrow Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 2.9 Source Code Sublicense Agreement (Incorporated by reference from the Company's Form 8-K filed on October 18, 2002) 10.1 Form of Indemnification Agreement for Directors and Executive Officers of the Company. 10.2 Employment Agreement, dated as of December 6, 2002, between the Company and Warren B. Kanders. 10.3 Employment Agreement, dated as of December 6, 2002, between the Company and Nigel P. Ekern. 10.4 Consulting Agreement, dated as of December 6, 2002, between the Company and Stephen P. Jeffery. 99.1 Press Release