UNITED STATES
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) APRIL 20, 2003
Commission File Number 0-15949
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2862863
(State or other jurisdiction (I.R.S. Employer identification No.)
of incorporation or organization)
100 ROWLAND WAY, NOVATO, CA 94945
(Address of principal executive offices) (Zip code)
(415) 878-4000
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(Registrant's telephone number including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 19, 2004 (the "Closing Date"), International Microcomputer Software,
Inc. ("IMSI") consummated the acquisition (the "Acquisition") of all the stock
of Aladdin Systems, Inc. ("Aladdin"), pursuant to a Stock Purchase Agreement
(the "Stock Purchase Agreement"), dated January 20, 2004, between Aladdin
Systems Holdings, Inc, the parent company of Aladdin, and IMSI.
The consideration paid in the Acquisition (which was determined as a result of
arms'-length negotiations and which was based upon an in depth analysis of
Aladdin's current and projected business activity in addition to comparable
companies and transactions) consists of a combination of cash in the amount of
$1,500,000, subject to a 10% escrow, 2,317,881 unregistered shares of IMSI
common stock (which are required to be registered within 90 days of the close of
the transaction) and two three-year convertible notes in the aggregate amount of
$3,000,000. Furthermore, additional cash earn-out payments may be earned, up to
an aggregate of $2,000,000, based on net revenues derived from Aladdin for the
three consecutive twelve month periods following the Closing Date. Additionally,
eligible employees of Aladdin will be given the opportunity to convert their
existing Aladdin Systems Holdings Inc. common stock options into IMSI common
stock options priced at market as of the date of the closing. The newly granted
options will be subject to vesting as set forth in our 2004 Incentive Stock
Option Plan. The conversion ratio was calculated using the Black-Scholes
valuation methodology. The total consideration paid is therefore subject to
modification as the number of options to be converted is not currently known.
Aladdin is a developer and publisher of utility software solutions in the areas
of information access, removal, recovery, security and distribution of
information and data for the Windows(R), Linux and Macintosh(R) platforms.
IMSI is relying on its available cash balance to honor the payment related to
the cash component of this transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
The financial statements required by this item will be filed by an amendment to
this Current Report on Form 8-K as soon as practicable but no later than 75 days
after the closing of the transaction.
(B) PRO FORMA FINANCIAL INFORMATION:
The pro forma financial statements required by this item will be filed by an
amendment to this Current Report on Form 8-K as soon as practicable but no later
than 75 days after the closing of the transaction.
(C) EXHIBITS:
NUMBER EXHIBIT DESCRIPTION
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2.1 Aladdin Stock Purchase Agreement, dated January 20, 2004, between
Aladdin Systems Holdings, Inc. and International Microcomputer Software, Inc.*
99.1 Press Release, dated April 20, 2004 of International Microcomputer
Software, Inc. announcing the closing of the Aladdin Systems, Inc acquisition.
In accordance with the procedural guidance in SEC Release Nos. 33-8216 and
34-47583, the information in this Form 8-K and the Exhibit attached hereto is
being furnished under "Item 7. Financial Statements and Exhibits" rather than
under "Item 12. Disclosure of Results of Operations and Financial Condition."
The information shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as expressly set forth by specific reference in such a
filing.
* The exhibits to the Stock Purchase Agreement are not being filed herewith. The
Stock Purchase Agreement filed herewith briefly describes the contents of each
exhibit to the Stock Purchase Agreement. The Registrant undertakes to furnish
supplementally a copy of any omitted exhibit to the Commission upon request. Set
forth below is a list of the omitted exhibits:
A Form of Promissory Note
B Form of Promissory Note
C Form of Pledge Agreement
D Form of Earn-Out Report
E Form of Escrow Agreement
F Form of Registration Rights Agreement
G Form of Executive Employment Agreement- Jonathan Kahn
H Form of Executive Employment Agreement- Darryl Lovato
I Form of Purchaser's Counsel Opinion
J Form of Seller's Counsel Opinion
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.
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
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DATED: APRIL 20, 2004
BY: /S/ MARTIN WADE, III
Martin Wade, III
Director & Chief Executive Officer