Gandalf Technologies Inc.
130 Colonnade Road South
K2E 7M4 August 8, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Dear Sir or Madam:
Re: Gandalf Technologies Inc. - Current Report on Form 8-K
Commission File No. 0-12643
Transmitted herewith in electronic format for filing with the Securities and
Exchange Commission is the Current Report on Form 8-K.
If you have any comments or questions with respect to the foregoing, please
contact the undersigned at (613) 274-6563. Please acknowledge receipt of this
letter and validation of documents by means of CompuServe to:
User ID# 72741,124
and Legal Counsel
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) July 25, 1997
Gandalf Technologies Inc.
(Exact name of registrant as specified in its charter)
Ontario, Canada 0-12643
(State or other jurisdiction) (Commission File Number)
(I.R.S. Employer Identification No.)
130 Colonnade Road South, Nepean, Ontario K2E 7M4
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (613) 274-6500
(Former name, former address and former fiscal year, if changed since last
FORM 8-K Gandalf Technologies Inc.
Item 2. Disposition of Assets
Gandalf Technologies Inc. (the "Company") announced on August 8, 1997 the sale
to Mitel Corporation ("Mitel") of the assets of the Company's technology
business. The transaction was completed on August 7, 1997 through a receiver
appointed pursuant an order of the Ontario Court (General Division) at Ottawa,
Ontario (Court File No. 97-CU-2522) for that part of the business and assets
being the subject of the sale. The assets purchased by Mitel consist of all of
the product business ("the Business") of the Company, including intellectual
properties, the goodwill of the Business including the exclusive right to use,
world-wide, the name, tradename, and mark "Gandalf" or any variation thereof,
certain inventories and certain accounts receivable (the "Receivables"). The
aggregate purchase price was US$14.9 million, plus 50% of the Receivables as of
the closing of the transaction, and 50% of amounts realized by the purchaser
from the Receivables in excess of the amount paid on closing. The purchase price
was determined through negotiations between the parties. This transaction does
not include the Company's services business.
Item 3. Bankruptcy or Receivership
On July 25, 1997, the Company and its subsidiary Gandalf Canada Ltd. (GCL) were
granted an order pursuant to the Companies' Creditors Arrangement Act ("CCAA")
by the Ontario Court (General Division) at Ottawa, Ontario ( Court
File No. 97-CU-2522). The order grants to the Company and GCL, a stay of
proceedings and relief from its creditors, until October 31, 1997. During
this time the Company will continue to operate as a debtor in possession. The
Company's management and Board of Directors remain in control of day to day
operations and business decisions, subject to the supervision of the court
appointed monitor, Deloitte & Touche Inc. Pursuant to the terms of the order,
the Company has until August 31, 1997 to file with the court a plan of
reorganization. To date, no such plan has been filed.
Item 7. Financial Statements and Exhibits
- Press Release of GTI dated July 25, 1997
- Press Release of GTI dated July 31, 1997
- Press Release of GTI dated August 1, 1997
- Press Release of GTI dated August 8, 1997SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
August 8, 1997
Gandalf Technologies Inc.
By: s/RICHARD D. BUSTO
(Richard D. Busto)
GANDALF FILES APPLICATION UNDER THE COMPANIES' CREDITORSARRANGEMENT ACT ("CCAA")
Reduces North American Workforce
NEPEAN, Ontario July 25, 1997 Gandalf Technologies Inc. (GTI) reported today
that GTI and its subsidiary, Gandalf Canada Ltd. (GCL), have applied to the
Ontario courts for an order granting protection from their creditors under the
Companies' Creditors Arrangement Act (CCAA). The order, which was granted today,
has the effect of a stay of proceedings which suspends the claims of creditors
and other parties until after October 31st, 1997. The purpose is to grant
Gandalf sufficient time to restructure and reorganize its affairs. This
restructuring is intended to enable continued operations on a more economically
viable basis to allow the opportunity for the company to continue seeking an
investor or a partner to acquire all or part of Gandalf. The company is
currently assessing its options with respect to Gandalf Systems Corporation
(GSC) in the US, Gandalf Digital Communications Limited (GDCL) and Gandalf
International Ltd. (GIL) in the UK, Gandalf Nederland BV in the Netherlands and
Gandalf SA in France.
In order to facilitate continued operations and restructuring, an interim credit
facility has been established between the company and the Royal Bank of Canada.
As part of the restructuring, the company today reduced its workforce in North
America by approximately 180 employees. This reduction will help achieve a more
streamlined and cost efficient operation, while allowing the company to continue
to provide critical services and support, as well as ship new products to
The company also announced the appointment of Rod Yaehne, as Vice President of
Engineering and Chief Technology Officer, replacing Mick Chawner, who has
resigned from this position. Mr. Chawner remains on GTI's Board of Directors.
GANDALF CLARIFIES STATUS UNDER COMPANIES' CREDITORS ARRANGEMENTACT ("CCAA")
NEPEAN, Ontario - - July 31, 1997 - - In response to recent press and media
coverage, and by way of information to its stakeholders, Gandalf Technologies
Inc. (GTI) is providing this clarification.
Gandalf Technologies Inc. reported on Friday, July 25, 1997, that GTI and its
subsidiary, Gandalf Canada Ltd., was granted an order under the Companies'
Creditors Arrangement Act ("CCAA"). The order grants a stay of proceedings until
after October 31, 1997. During this time period, the management and Board of
Directors of the company remain in control of both day to day operations and all
business decisions. The company continues to supply products, as well as provide
services and support, to both existing and new customers.
Gandalf management and the Board continue to work collaboratively with the Royal
Bank of Canada (RBC), as well as a monitor from Deloitte & Touche Inc. As a
result of confidentiality agreements that are in place, neither Gandalf nor the
Royal Bank is in a position to comment on on-going discussions, as part of the
restructuring process. While Gandalf has been in discussions with interested
parties, it has not received a firm and binding offer for the company; therefore
neither Gandalf nor the Royal Bank has been in the position to accept or reject
any binding offer. The Royal Bank continues to be supportive of Gandalf and the
company's business decisions.
GANDALF ANNOUNCES ADDITIONAL RESTRUCTURING EFFORTS
NEPEAN, Ontario August 1, 1997 Gandalf Technologies Inc. announced today that in
collaboration with the Royal Bank of Canada, the company has agreed to the
appointment of an administrative receiver for its UK subsidiary, Gandalf Digital
The actions are taken to further the company's restructuring activities under
the Companies' Creditors Arrangement Act, and will assist Gandalf in its efforts
to streamline its worldwide operations.
MITEL ACQUIRES GANDALF'S TECHNOLOGY BUSINESS
NEPEAN, Ontario, August 8, 1997 Mitel Corporation and Gandalf Technologies Inc.
announced today that they have reached an agreement in which Mitel will acquire
the assets of Gandalf's technology businesses, in particular the remote access
business, for $14.9 US million cash.
The acquired assets include Gandalf's leading edge remote access products and
technology, which facilitate high volume data and voice communications between
the corporate office, local branches, teleworkers and agents in the field in an
extremely cost-effective manner. These products are currently sold worldwide as
the XpressStack(TM), Xpressway(TM), XpressConnect(TM) and LANline lines of
remote access devices. The technology acquisition also includes Gandalf's other
product inventory. This agreement does not include Gandalf's services business.
With this transaction, Mitel will operate the business as a Gandalf-branded
division of Mitel and will employ a number of current Gandalf employees in R&D,
sales & marketing, manufacturing and administrative support functions.
Dr. John B. Millard, Mitel's President and C.E.O., said: "The acquisition of
Gandalf's remote access business and technology is an excellent complement to
our other initiatives in bringing telecommunications and computers together, and
fits nicely with our recent purchase of the UK assets of Global Village
Communications which occurred in January of 1997.""Mitel's acquisition of Gandalf's technology business is very exciting for the
market," added Richard Busto, President and C.E.O. for Gandalf. "Gandalf's
strength in remote access, combined with Mitel's position in the
telecommunications industry, brings powerful end-to-end solutions for networking
customers. Gandalf's customers will continue to realize the benefits of Gandalf
products in the future through Mitel, while continuing to receive the highest
level of support from our existing services business."
Dates Referenced Herein and Documents Incorporated By Reference