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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): February 28, 2006
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SMARTPROS LTD.
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(Exact name of Registrant as specified in its charter)
Delaware 001-32300 13-4100476
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
12 Skyline Drive
Hawthorne, New York 10532
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(Address Of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (914) 345-2620
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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:
[ ] 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))
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ITEM 2.01. COMPLETION OF ACQUISITION OF ASSETS
(a) On February 28, 2006, SmartPros Ltd, a Delaware corporation
("SmartPros") completed the acquisition of Skye Multimedia, Inc.
("Skye"). Skye merged with and into Skye Acquisition Company, Inc.,
a wholly-owned subsidiary of SmartPros formed for the purpose of the
merger.
(b) The assets acquired include accounts receivable, existing contracts,
course content, and intellectual property rights.
(c) The shareholders of Skye were Seth and Susan Elizabeth Oberman.
There was no pre-existing relationship between SmartPros or any of
its affiliates and Mr. Oberman. However, as part of the transaction,
Mr. Oberman was hired by SmartPros as the president of its new Skye
Multimedia subsidiary.
(d) At the closing, SmartPros paid a total of $465,658 in cash. In
addition, at closing Skye had $35,074 of liabilities. The cash
portion of the purchase price was paid out of SmartPros' company
funds. In addition, under the merger agreement, the purchaser shall
pay the seller, within 90 days from December 31, 2008, up to $1.2
million as additional purchase price (the "Earn-out Amount"),
calculated as follows: First, the purchaser's earnings before
interest and taxes for the period beginning March 1, 2006 and ending
December 31, 2008 shall be divided by 34. Next, that quotient shall
be multiplied by 36. That product is then reduced by an amount equal
to a 5% annualized return on the net capital contributed by
SmartPros to the purchaser over the 34-month period beginning March
1, 2006. Net capital includes the purchase price (as adjusted) and
any other amounts advanced by SmartPros to the purchaser for working
capital prior to December 31, 2008 reduced by any amounts
distributed by the purchaser to SmartPros during such period. In no
event shall the result obtained by virtue of the above calculation
exceed $1.4 million. Finally, such amount is further reduced by an
amount equal to the sum of (a) $200,000 and (b) any uncollected
receivables included in the transaction. The Earn-out Amount is
payable at least 50% in cash and the balance in cash and/or shares
of restricted common stock of SmartPros so long as such shares are
listed on the New York Stock Exchange, the American Stock exchange
or the Nasdaq National Market and SmartPros has timely filed all
periodic reports it is required to file under the Securities
Exchange Act of 1934 for the two consecutive years immediately prior
to the issuance of such stock. Any stock issued in partial payment
of the Earn-out Amount shall be valued at the average closing price
of such stock on the principal market on which it trades over the
first twenty trading days following December 31, 2008.
ITEM 8.01: OTHER EVENTS.
On March 1, 2006, SmartPros issued a press release, a copy of which is
attached as Exhibit 99.1.
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ITEM 9.01: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits:
EXHIBIT
NUMBER DESCRIPTION
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10.1 Asset Purchase Agreement(1)
99.1 Press release dated March 1, 2006
(1) Filed on February 21, 2006, as Exhibit 10.1 to SmartPros' Current Report on
Form 8-K and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report on Form 8-K to be signed on
its behalf by the undersigned, hereunto duly authorized.
SmartPros Ltd.
Dated: March 7, 2006 By: /s/ Allen S. Greene
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Allen S. Greene,
Chief Executive Officer
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