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): September 30, 2020
PAR Technology Corporation
(Exact Name of Registrant as Specified in Charter)

Delaware
 
001-09720
 
16-1434688
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
   
PAR Technology Park
8383 Seneca Turnpike
New Hartford, New York
 
13413-4991
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (315) 738-0600

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock
PAR
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01          Other Information.

On December 19, 2019, PAR Technology Corporation (the “Company”) filed a Current Report on Form 8-K (the “Original 8-K”) disclosing that ParTech, Inc., a wholly owned subsidiary of the Company, had completed the acquisition of AccSys, LLC (f/k/a AccSys, Inc., and otherwise known as Restaurant Magic (“Restaurant Magic”)) on December 18, 2019 pursuant to the terms of an interest purchase agreement dated November 7, 2019.

On February 3, 2020, the Company filed a Current Report on Form 8-K/A to amend and supplement the Original 8-K to include the financial statements of Restaurant Magic and the pro forma financial information required in connection with the acquisition of Restaurant Magic.

The Company is filing this Current Report on Form 8-K to update the previously filed pro forma financial information with the unaudited pro forma condensed combined consolidated statement of operations of the Company for the fiscal year ended December 31, 2019.

Item 9.01          Financial Statements and Exhibits.

(b)          Pro Forma Financial Information.

The unaudited pro forma condensed combined consolidated statement of operations of the Company for the fiscal year ended December 31, 2019 are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference. The unaudited pro forma condensed combined consolidated statement of operations of the Company give effect to the acquisition of Restaurant Magic as if it had occurred on January 1, 2019.

(d)          Exhibits

Exhibit No.
 
Description
 
Unaudited pro forma condensed combined consolidated statement of operations of PAR Technology Corporation for the year ended December 31, 2019.
104
  Cover Page Interactive Data File (embedded within the Inline XBRL document).

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.
 
PAR Technology Corporation
 
Date:  September 30, 2020
By: /s/ Bryan A. Menar
 
 
Name: Bryan A. Menar
Title:  Chief Financial Officer and Accounting Officer
(Principal Financial Officer)

Exhibit 99.1

Unaudited pro forma condensed combined consolidated financial information

On December 19, 2019, PAR Technology Corporation (the “Company”) filed a Current Report on Form 8-K (the “Original 8-K”) disclosing that ParTech, Inc. (“ParTech”), a wholly owned subsidiary of the Company, had completed the acquisition of AccSys, LLC (f/k/a AccSys, Inc., and otherwise known as “Restaurant Magic”), on December 18, 2019 (“the Acquisition”) pursuant to the terms of an interest purchase agreement dated November 7, 2019. On February 3, 2020 the Company filed a Current Report on Form 8-K/A (the “Supplemental 8-K/A”) to amend and supplement the Original 8-K to include the financial statements of Restaurant Magic and the pro forma financial information required in connection with the Acquisition.

The unaudited pro forma condensed combined consolidated financial information included in this Current Report on Form 8-K further supplements the Original 8-K and the Supplemental 8-K/A to include the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019, which gives effect to the Acquisition as if it occurred on January 1, 2019.

The Company accounted for the Acquisition as a business combination using the acquisition method of accounting as prescribed in Accounting Standards Codification 805, Business Combinations (“ASC 805”) and ASC 820 – Fair Value Measurements and Disclosures (“ASC 820”). In accordance with ASC 805 and ASC 820, the Company used its best estimates and assumptions to accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed as of the closing date of the Acquisition. Goodwill as of the closing date is measured as the excess of the aggregate of the fair value of consideration transferred and the fair value of noncontrolling interest in the target over the fair values of tangible and identifiable intangible assets acquired and liabilities assumed.

The unaudited pro forma condensed combined consolidated financial information is based upon, and should be read in conjunction with:

•
The accompanying notes to the unaudited pro forma condensed combined consolidated statement of operations;

•
The Company’s audited consolidated financial statements and accompanying notes as of and for the fiscal year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 16, 2020;

•
Restaurant Magic’s audited consolidated financial statements for the year ended December 31, 2018 included in the Supplemental 8-K/A; and

•
Restaurant Magic’s unaudited financial statements for the nine months ended September 30, 2019 included in the Supplemental 8-K/A

   
PAR Technology
Corporation
   
AccSys, Inc.
(Restaurant Magic)
   
Pro Forma
Adjustment
   
Note
Ref
   
Pro Forma
Combined
 
                   
Net revenues:
                             
Product
 
$
66,329
   
$
—
   
$
—
         
$
66,329
 
Service
   
56,978
     
7,409
     
—
           
64,387
 
Contract
   
63,925
     
—
     
—
           
63,925
 
 
   
187,232
     
7,409
     
—
           
194,641
 
Costs of sales:
                                     
Product
   
51,147
     
—
     
—
           
51,147
 
Service(1)
   
40,386
     
3,798
     
75

 
A, B, E

   
44,259
 
Contract
   
58,243
     
—
     
—
             
58,243
 
     
149,776
     
3,798
     
75

           
153,649
 
Gross margin
   
37,456
     
3,611
     
(75)
             
40,992
 
Operating expenses:
                                       
Selling, general and administrative
   
37,014
     
5,266
     
(1,290
)
 
C, D

   
40,990
 
Research and development
   
13,372
     
—
     
2,013
     A

   
15,385
 
Amortization of identifiable intangible assets(1)
   
201
     
—
     
152
     E

   
353
 
     
50,587
     
5,266
     
875
             
56,728
 
Operating loss
   
(13,131
)
   
(1,655
)
   
(950
)
           
(15,736
)
Other expense, net
   
(1,503
)
   
—
     
—
             
(1,503
)
Interest expense
   
(4,571
)
   
(274
)
   
214
   
F, G

   
(4,631
)
Loss before benefit from income taxes
   
(19,205
)
   
(1,929
)
   
(736
)
           
(21,870
)
Benefit from income taxes
   
3,634
     
—
     
—
    H

   
3,634
 
Net loss
  $
(15,571
)
  $
(1,929
)
  $
(736
)
          $
(18,236
)
Basic Loss per Share:
                                       
Net loss
 
$
(0.96
)
 


   


           
$
(1.06
)
Diluted Loss per Share:
                                       
Net loss
 
$
(0.96
)
 


   


           
$
(1.06
)
Weighted average shares outstanding
                                       
Basic
   
16,223
     
—
     
908
     I

   
17,131
 
Diluted
   
16,223
     
—
     
908
     I

   
17,131
 


(1)
Beginning with the three months ended March 31, 2020, the Company reclassified presentation of certain costs and expenses in the condensed consolidated statement of operations from amortization of intangible assets to cost of service. To conform to the latest presentation, certain costs and expenses amounting to $1 million were similarly reclassified in the presentation of the Company’s condensed consolidated statement of operations for the year ended December 31, 2019. This reclassification had no effect on previously reported total costs, operating expenses and net loss.

1

1. Basis of Presentation

The accompanying unaudited pro forma condensed combined consolidated financial information presents the pro forma condensed combined consolidated statement of operations of the combined Company based upon the financial statements of the Company and Restaurant Magic after giving effect to the Acquisition.

The unaudited pro forma condensed combined consolidated statement of operations for the twelve months ended December 31, 2019 combines the historical consolidated statement of operations of the Company and the historical consolidated statement of operations of Restaurant Magic. This unaudited pro forma condensed combined consolidated statement of operations gives effect to the Acquisition as if it had been consummated on January 1, 2019.

The unaudited pro forma condensed combined consolidated financial statements were prepared using the acquisition method of accounting with the Company considered the acquirer of Restaurant Magic. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed with any excess allocated to goodwill. The pro forma purchase price allocation was based on an estimate of the fair market value of the tangible and intangible assets acquired and liabilities assumed by the Company.

The unaudited pro forma condensed combined consolidated financial statements do not reflect the costs of any integration activities or benefits that may result from the realization of future cost savings from operating efficiencies or revenue synergies expected to result from the Acquisition.

The Company adopted FASB ASC Topic 606; Revenue from Contracts with Customers (ASC 606), on January 1, 2018. Restaurant Magic as a private company was not required to adopt ASC 606 until its December 31, 2019 financial statements and as such, the Company has performed a preliminary review of Restaurant Magic’s revenue streams in order to determine if any pro forma adjustments were necessary for the twelve months ended December 31, 2019. No adjustments were deemed necessary to conform Restaurant Magic’s revenue to the Company’s revenue policy.

2

2. Pro Forma Adjustments

The unaudited pro forma financial information is not necessarily indicative of what the financial position actually would have been had the Acquisition been completed at the date indicated. Such information includes adjustments that are preliminary and may be revised. Such revisions may result in material changes. The financial position shown herein is not necessarily indicative of what the past financial position of the companies would have been on a consolidated basis.

The following describes the pro forma adjustments related to the Acquisition that have been made in the accompanying unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019, which have been prepared to reflect the Acquisition for the net purchase price of $45.97 million and assumed Restaurant Magic’s long-term incentive plan (the “RM Incentive Plan”) of $2.0 million, if the Acquisition was completed on January 1, 2019:

3

Statement of Operations Pro Forma Adjustments:

A.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to reflect reclass of R&D expense from Cost of Sales to Research & Development Operating Expenses to be consistent with the Company’s treatment of Research and Development expenses.

B.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to remove Research & Development costs dedicated to AfterWords, Inc. (“AfterWords”) that was eliminated as part of the transaction consideration. AfterWords was a wholly-owned subsidiary of Restaurant Magic that was excluded from the Acquisition.

C.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to reflect the increase in equity compensation due to the granting of $2 million of 3 year time vested restricted stock units under the RM Incentive Plan.  The Company issued restricted stock units in connection with its assumption of awards granted by Restaurant Magic to its employees and contractors prior to the closing of the Acquisition. The restricted stock units vest in equal annual installments over three (3) years.

D.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to remove acquisition costs incurred by Restaurant Magic as part of the Acquisition.

E.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to include amortization expense related to the identifiable intangible assets acquired as part of the transaction consideration.

F.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to remove interest expense related to AccSys indebtedness that was eliminated as part of the transaction.

G.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to include interest expense (used 5.75%) related to the $2 million 3 year Promissory Note issued by the Company as part of transaction consideration.

H. There are no tax provision adjustments as the Company has been in a full valuation allowance position since 2018.

I.  Adjustments have been included in the unaudited pro forma condensed combined consolidated statement of operations for the year ended December 31, 2019 to reflect restricted common shares issued for $27.5 million of equity consideration as part of the transaction.  The shares have been reflected as if they were issued on January 1, 2019.

4