INTELLIGENT SYSTEMS CORPORATION
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): August 1, 2006
INTELLIGENT SYSTEMS CORPORATION
(Exact name of Registrant as specified in its charter)
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Georgia
(State or other jurisdiction
of incorporation or organization)
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1-9330
Commission file number
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58-1964787
(I.R.S. Employer Identification No.) |
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| 4355 Shackleford Road, Norcross, Georgia
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30093 |
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| (Address of principal executive offices)
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(Zip Code) |
Registrant’s telephone number, including area code: (770) 381-2900
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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFP 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
TABLE OF CONTENTS
Item 2.01. Completion of Acquisition or Disposition of Assets.
On August 1, 2006, Intelligent Systems Corporation (the “Company”) completed the sale of the
business and certain assets of its QS Technologies, Inc. (“QS”) subsidiary to Netsmart Public
Health, Inc. and its parent company, Netsmart Technologies, Inc. (“Buyer”). The sale is
effective as of July 31, 2006.
The QS subsidiary is involved in the design, development, sale and support of software and services
for the public health industry. The Company sold certain assets used in the QS business,
consisting principally of intangibles (including but not limited to intellectual property, goodwill
and contracts), furniture and equipment, prepaid expenses and work-in-process for a combination of
$1.9 million in cash, a promissory note of Buyer in the amount of $1.435 million and the assumption
by Buyer of approximately $1.8 million in net liabilities of QS. The Company retained accounts
receivable and cash of QS Technologies aggregating approximately $2 million.
The promissory note bears interest at the rate of 8.25 percent annually and is payable in
thirty-six monthly payments of $45,133 beginning September 1, 2006. The principal amount of the
note is subject to adjustment based on revenue and earnings of the QS operations for the period
from August 1, 2006 through December 31, 2006.
In addition, the transaction provides for contingent payments to the Company of up to $1.45 million
in 2008 based on the attainment by the QS operation of certain levels of
revenue and bookings in 2007.
The
Company will furnish pro forma financial information related to the
transaction in an amendment to this Form 8-K within 71 calendar days
of the date of this Form 8-K.
Item 7.01. Regulation FD Disclosure.
On August 2, 2006, Intelligent Systems Corporation issued a press release disclosing the sale of
the QS Technologies’ business and assets. A copy of the August 2, 2006 press release, attached
hereto as Exhibit 99.1, is being furnished pursuant to Regulation FD and is incorporated by
reference herein.
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Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit 2.1 Asset Purchase Agreement dated as of July 31, 2006 by and between QS Technologies,
Inc. and Intelligent Systems Corporation, as Sellers, and Netsmart Public Health, Inc. as Buyer
and Netsmart Technologies, Inc.
Exhibit 99.1 Press Release issued by Intelligent Systems Corporation dated August 2, 2006.
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.
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| Date: August 7, 2006 |
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INTELLIGENT SYSTEMS CORPORATION |
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(Registrant) |
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By:
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/s/ Bonnie L. Herron
Bonnie L. Herron
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Chief Financial Officer |
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Exhibit Index
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| Exhibit Number |
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Description |
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2.1
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Asset Purchase Agreement dated as of July 31, 2006 by and between QS Technologies, Inc.
and Intelligent Systems Corporation, as Sellers, and Netsmart Public Health, Inc. as Buyer and
Netsmart Technologies, Inc. |
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99.1
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Press release issued by Intelligent Systems Corporation on August 2, 2006 |
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