SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
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) JULY 13, 2004
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EMRISE CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 77-0226211
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(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
001-10346
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(Commission
File Number)
9485 HAVEN AVENUE, SUITE 100, RANCHO CUCAMONGA, CALIFORNIA 91730
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (909) 987-9220
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to the terms of the Stock Purchase Agreement executed on July
13, 2004, Emrise Corporation (formerly MicroTel International Inc. ("Emrise"))
acquired, effective as of July 13, 2004, all of the issued and outstanding
common stock of Larus Corporation, a California corporation ("Larus"). Prior to
the acquisition, all of the common stock of Larus was owned by Noel C.
McDermott, as Trustee of the Noel C. McDermott Revocable Living Trust dated
December 18, 1995, and Warren P. Yost and Gail A. Yost, as Co-Trustees Under
Declaration of Trust dated March 9, 1988.
Larus is based in San Jose, California and engages in the manufacturing
and sale of telecommunications products. Larus has one wholly-owned subsidiary,
Vista Labs, Incorporated ("Vista"), which provides engineering services to
Larus. Emrise acquired all of the assets and liabilities of Larus in this
transaction, including the intellectual property, cash, accounts receivable and
inventories owned by each of Larus and Vista. Emrise intends to use these
acquired assets for the same purpose for which they were used by each of Larus
and Vista.
The purchase price for the acquisition consisted of $1,000,000 in cash,
the issuance of 1,213,592 shares of Emrise's common stock, $887,500 in the form
of two short-term, zero interest promissory notes, $3,000,000 in the form of two
subordinated secured promissory notes, and warrants to purchase up to an
aggregate of 150,000 shares of Emrise's common stock at $1.30 per share. In
addition, Emrise assumed $245,000 worth of accounts payable and accrued expenses
and entered into an above-market real property lease with the sellers, which
lease represents an obligation that exceeds the fair market value by
approximately $756,000 and is part of the acquisition purchase price. The cash
portion of the acquisition purchase price was funded with proceeds from Emrise's
credit facility with Wells Fargo Bank, N.A. and cash on-hand. In determining the
purchase price for Larus, Emrise took into account the historical and expected
earnings and cash flow of Larus, as well as the value of companies of a size and
in an industry similar to Larus, comparable transactions and the market for such
companies generally.
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ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
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To be filed under cover of Form 8-K/A on or before September 28, 2004.
(b) Pro Forma Financial Information.
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To be filed under cover of Form 8-K/A on or before September 28, 2004.
(c) Exhibits.
Number Description
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2.1 Stock Purchase Agreement dated July 13, 2004 between MicroTel
International Inc.; Noel C. McDermott; Warren P. Yost; Noel C.
McDermott, as Trustee of the Noel C. McDermott Revocable Living
Trust dated December 19, 1995; and Warren P. Yost and Gail A.
Yost, as Co-Trustees Under Declaration of Trust dated March 9,
1988 (1)
2.2 Subordinated Secured Promissory Note dated July 13, 2004 in the
principal amount of $1,681,318.68 made by MicroTel International
Inc. in favor of Noel C. McDermott Revocable Living Trust dated
December 19, 1995 (2)
2.3 Subordinated Secured Promissory Note dated July 13, 2004 in the
principal amount of $1,318,681.32 made by MicroTel International
Inc. in favor of Warren P. Yost and Gail A. Yost, as Co-Trustees
Under Declaration of Trust dated March 9, 1988 (2)
2.4 Pledge and Security Agreement dated July 13, 2004 between
MicroTel International Inc.; Noel C. McDermott, as Collateral
Agent; Noel C. McDermott, as Trustee of the Noel C. McDermott
Revocable Living Trust dated December 19, 1995; and Warren P.
Yost and Gail A. Yost, as Co-Trustees Under Declaration of Trust
dated March 9, 1988 (2)
2.5 Intercreditor Agreement dated July 13, 2004 between MicroTel
International Inc.; Noel C. McDermott, as Trustee of the Noel C.
McDermott Revocable Living Trust dated December 19, 1995; and
Warren P. Yost and Gail A. Yost, as Co-Trustees Under Declaration
of Trust dated March 9, 1988 (2)
2.6 Continuing Guarantee dated July 13, 2004 made by Larus
Corporation in favor of Noel C. McDermott, as Trustee of the Noel
C. McDermott Revocable Living Trust dated December 19, 1995, and
Warren P. Yost and Gail A. Yost, as Co-Trustees Under Declaration
of Trust dated March 9, 1988 (2)
2.7 Continuing Guarantee dated July 13, 2004 made by Vista Labs
Incorporated in favor of Noel C. McDermott, as Trustee of the
Noel C. McDermott Revocable Living Trust dated December 19, 1995,
and Warren P. Yost and Gail A. Yost, as Co-Trustees Under
Declaration of Trust dated March 9, 1988 (2)
2.8 Continuing Guarantee dated July 13, 2004 made by CXR Telcom in
favor of Noel C. McDermott, as Trustee of the Noel C. McDermott
Revocable Living Trust dated December 19, 1995, and Warren P.
Yost and Gail A. Yost, as Co-Trustees Under Declaration of Trust
dated March 9, 1988 (2)
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Number Description
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2.9 Security Agreement dated July 13, 2004 made by Larus Corporation
in favor of Noel C. McDermott, as Trustee of the Noel C.
McDermott Revocable Living Trust dated December 19, 1995, and
Warren P. Yost and Gail A. Yost, as Co-Trustees Under Declaration
of Trust dated March 9, 1988 (2)
2.10 Security Agreement dated July 13, 2004 made by Vista Labs
Incorporated in favor of Noel C. McDermott, as Trustee of the
Noel C. McDermott Revocable Living Trust dated December 19, 1995,
and Warren P. Yost and Gail A. Yost, as Co-Trustees Under
Declaration of Trust dated March 9, 1988 (2)
2.11 Security Agreement dated July 13, 2004 made by CXR Telcom in
favor of Noel C. McDermott, as Trustee of the Noel C. McDermott
Revocable Living Trust dated December 19, 1995, and Warren P.
Yost and Gail A. Yost, as Co-Trustees Under Declaration of Trust
dated March 9, 1988 (2)
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(1) Filed with the Securities and Exchange Commission on July 28,
2004 as an exhibit to the initial filing of this Form 8-K and
incorporated herein by reference.
(2) Filed with the Securities and Exchange Commission on August
16, 2004 as an exhibit to MicroTel's Form 10-Q for June 30,
2004 and incorporated herein by reference.
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.
Date: September 24, 2004 EMRISE CORPORATION
By: /s/ RANDOLPH D. FOOTE
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Randolph D. Foote, Chief Financial Officer
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