-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FJAE2BPytBLerLVSUNKn77FJXL3Ov0eBLK1vBuA7aJ4/s7eZ5vzGhCC+lLiwVNUo 3TLKktP7bcmRUu4n3xh7ww== 0000950132-98-000920.txt : 19981204 0000950132-98-000920.hdr.sgml : 19981204 ACCESSION NUMBER: 0000950132-98-000920 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 ITEM INFORMATION: FILED AS OF DATE: 19981203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIN COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001020391 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 211792655 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-21395 FILM NUMBER: 98763445 BUSINESS ADDRESS: STREET 1: 400 GREENTREE COMMONS STREET 2: 381 MANSFIELD AVENUE CITY: PITTSBURGH STATE: PA ZIP: 15220 BUSINESS PHONE: 4129288800 MAIL ADDRESS: STREET 1: 400 GREENTREE COMMONS STREET 2: 381 MANSFIELD AVENUE CITY: PITTSBURGH STATE: PA ZIP: 15220 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K OF 09/30/1998 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8 - K/A (Amendment No. 1) 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, 1998 Allin Communications Corporation (Exact Name of Registrant as Specified in its Charter) Delaware (State of Other Jurisdiction of Incorporation) 0-21395 21-1795265 (Commission File Number) (IRS Employer Identification No.) 400 Greentree Commons, 381 Mansfield Avenue Pittsburgh, Pennsylvania 15220-2751 (Address of Principal Executive Offices) (Zip Code) (412) 928-8800 (Registrant's Telephone Number, Including Area Code) Item 7. Financial Statements and Exhibits (a) Pro Forma Financial Information (b) Exhibits 2.1 Stock Purchase Agreement dated as of September 30, 1998 by and between Allin Communications Corporation and Lighthouse Holdings, Inc. (previously filed) 4 Loan and Security Agreement dated as of October 1, 1998 by and between Allin Communications Corporation and S&T Bank, a Pennsylvania banking association (previously filed) 10.1 Transition Services Agreement dated as of September 30, 1998 by and between Allin Communications Corporation and SportsWave, Inc. (previously filed) PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The following Pro Forma Condensed Consolidated Financial Statements of Allin Communications Corporation (the "Company") are based on its historical financial statements, adjusted to give effect to the sale of its wholly-owned subsidiary, SportsWave, Inc. ("SportsWave"). The Pro Forma Condensed Consolidated Financial Statements of Operations for the year ended December 31, 1997 and for the six months ended June 30, 1998 assume that such divestiture had occurred on January 1, 1997. The Pro Forma Condensed Consolidated Financial Statements reflect the estimated gain on disposal of SportsWave as gain realized on disposal of a segment since SportsWave's operations comprised the entirety of the Company's sports marketing business. The following Pro Forma Condensed Consolidated Financial Statements of the Company do not give effect to the Company's August 1998 purchase of KCS Computer Services, Inc., since the acquisition occurred subsequent to the periods presented. The pro forma condensed consolidated financial information reflects certain assumptions described above and in Notes to Pro Forma Condensed Consolidated Financial Statements of Operations below. The pro forma financial information does not purport to present what the Company's results of operations would actually have been if the divestiture of SportsWave had occurred on the assumed date, as specified above, or to project the Company's financial condition or results of operations for any future period. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1998 (Unaudited) (Dollars in thousands)
Consolidated Allin Communications Pro Forma Pro Forma Corporation Adjustments Notes Consolidated -------------- --------------- ---------- -------------- ASSETS: Current Assets: Cash and cash equivalents $ 5,111 $ 2,944 (1) $ 8,055 Accounts receivable 2,594 (982) (2) 1,612 Notes receivable 500 (1) 500 Inventory 1,858 1,858 Prepaid Expenses 337 (162) (2) 175 ---------------- ---------------- Total current assets 9,900 12,200 Property and equipment, net 4,635 (70) (2) 4,565 Other assets 4,303 (2,022) (2) 2,281 ---------------- ---------------- Total assets $ 18,838 $ 19,046 ================ ================ LIABILITIES AND SHAREHOLDERS' EQUITY: Notes and accounts payable $ 679 $ 522 (2)(4) $ 1,201 Accrued liabilities 1,349 (98) (2) 1,251 Current portion of deferred revenue 905 (724) (2) 181 ---------------- ---------------- Total current liabilities 2,933 2,633 Non-current portion of deferred revenue 424 (424) (2) - Series A convertible, redeemable preferred stock 2,500 2,500 Shareholder's equity 12,981 932 (3) 13,913 ---------------- ---------------- Total liabilities and shareholders' equity $ 18,838 $ 19,046 ================ ================ The accompanying notes are an integral part of these financial statements.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (Unaudited) (Dollars in thousands, except per share data)
Consolidated Allin Communications Pro Forma Pro Forma Corporation Adjustments Notes Consolidated -------------------- ---------------- ------- -------------------- Revenue $ 13,187 $ (3,590) (1) $ 9,597 Cost of sales 8,103 (2,115) (1) 5,988 --------------------- --------------------- Gross profit 5,084 3,609 Selling, general & administrative 16,164 (1,647) (1) 14,517 --------------------- --------------------- Loss from operations (11,080) (10,908) Interest income, net 425 178 (1) (3) 603 --------------------- (4) --------------------- Loss before income tax expense (10,655) (10,305) Income tax expense 48 (3) (1) 45 --------------------- --------------------- Loss before disposal of segment (10,703) (10,350) Gain on disposal of segment -- 907 (2) 907 --------------------- --------------------- Net loss $ (10,703) $ (9,443) ===================== ===================== Net loss per common share - basic and diluted $ (2.08) $ (1.83) --------------------- --------------------- Weighted average shares outstanding - basic and diluted 5,157,399 5,157,399 --------------------- --------------------- The accompanying notes are an integral part of these financial statements.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (Unaudited) (Dollars in thousands, except per share data)
Consolidated Allin Communications Pro Forma Pro Forma Corporation Adjustments Notes Consolidated ------------------- ------------------- ------- -------------------- Revenue $ 7,089 $ (2,061) (1) $ 5,028 Cost of sales 3,603 (1,191) (1) 2,412 -------------------- --------------------- Gross profit 3,486 2,616 Selling, general & administrative 6,079 (599) (1) 5,480 -------------------- --------------------- Loss from operations (2,593) (2,864) Interest income, net 121 86 (1)(3) 207 -------------------- --------------------- Loss before income tax expense (2,472) (2,657) Income tax expense 6 6 -------------------- --------------------- Net loss $ (2,478) $ (2,663) ==================== ===================== Net loss per common share - basic and $ (0.48) $ (0.52) diluted -------------------- --------------------- Weighted average shares outstanding - and diluted 5,157,399 5,157,399 -------------------- --------------------- The accompanying notes are an integral part of these financial statements.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) The pro forma adjustments to the condensed consolidated balance sheets are as follows: (1) To record the sale proceeds received from Lighthouse Holdings, Inc. ("Lighthouse") for all of the issued and outstanding shares of SportsWave as if the proceeds had been received as of June 30, 1998. Proceeds include receipt of cash in the amount of $2,944 and a note receivable in the amount of $500. (2) To remove the assets and liabilities of SportsWave, as of June 30, 1998, which were included in the Company's consolidated balance sheet as of that date, but which are assumed to be transferred to Lighthouse. Assets assumed transferred to Lighthouse include SportsWave's accounts receivable, prepaid expenses, property and equipment, net of accumulated depreciation, and other asset balances. Other assets consists primarily of intangible assets related to the Company's purchase of SportsWave, net of accumulated amortization, and long-term portion of prepaid expenses. Liabilities assumed transferred to Lighthouse include accounts payable, accrued expenses and the current and long-term portions of deferred revenue. SportsWave's cash balance as of June 30, 1998 is assumed to be utilized to repay a portion of the intercompany balance due the Company. (3) To adjust shareholder's equity to reflect an estimated gain on the disposal of SportsWave of $932. The pro forma balance sheet presentation assumes the disposal of SportsWave occurred as of June 30, 1998. The assumed gain was estimated by comparing the sale proceeds, as identified in Note (1) above, less a liability to the former shareholders of SportsWave, as discussed in Note (4), to the Company's recorded investment in SportsWave. The recorded investment reflects the Company's original purchase at cost, adjustment for its equity basis ownership interest in SportsWave's results of operations from acquisition through June 30, 1998, plus the Company's intercompany receivable balance from SportsWave, net of SportsWave's June 30, 1998 cash which is assumed to be utilized to repay a portion of the intercompany balance. The Company had sufficient federal and state net operating loss carryforwards as of the actual date of disposal of SportsWave, September 30, 1998, to offset the estimated gain to be recorded on disposal. Consequently, no provision for income taxes is expected to be recorded in connection with the gain and therefore no provision for income taxes related to the gain on disposal has been reflected in the pro forma condensed consolidated financial statements. (4) To record a liability for $600 to reflect the Company's settlement of any contingent liability owed the former shareholders of SportsWave related to the earn-out provisions of the original stock purchase agreement. The pro forma adjustments to the condensed consolidated statements of operations are as follows: (1) To remove the revenue, cost of sales, selling, general & administrative expenses, interest income and income tax expenses applicable to the operations of SportsWave for the periods presented. (2) To reflect an assumed gain on disposal of SportsWave of $907 as of the beginning of the income statement periods presented. The gain is reflected as if the disposal had occurred as of January 1, 1997. The assumed gain was estimated by comparing the sale proceeds, less a liability to the former shareholders of SportsWave, as discussed in Note (4) to pro forma balance sheet, to the Company's recorded investment in SportsWave. The recorded investment reflects the Company's original purchase at cost, net of SportsWave's January 1, 1997 cash balance which is assumed to be retained by the Company. As discussed above in Note (3) to pro forma balance sheet, no provision for income taxes has been reflected for the gain on disposal because the Company has sufficient federal and state net operating loss carryforwards as of actual date of disposal to offset the estimated gain. (3) To reflect interest income based on estimated money market rates for the assumed cash receipt of $2,944 at closing of disposal of SportsWave and $500 three months later, to reflect the three month maturity of the promissory note received from Lighthouse in connection with the sale of SportsWave. Assumed additional interest income is $179 for the year ended December 31, 1997, and $94 for the six months ended June 30, 1998. (4) To reflect interest income on the promissory note received from Lighthouse in connection with the sale of SportsWave. Assumed additional interest income is $11 for the year ended December 31, 1997. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALLIN COMMUNICATIONS CORPORATION Date: December 1, 1998 By: /s/ Richard W. Talarico ----------------------- Richard W. Talarico Chairman and Chief Executive Officer EXHIBIT INDEX 2.1 Stock Purchase Agreement dated as of September 30, 1998 by and between Allin Communications Corporation and Lighthouse Holdings, Inc. (previously filed) 4 Loan and Security Agreement dated as of October 1, 1998 by and between Allin Communications Corporation and S&T Bank, a Pennsylvania banking association (previously filed) 10.1 Transition Services Agreement dated as of September 30, 1998 by and between Allin Communications Corporation and SportsWave, Inc. (previously filed) -----END PRIVACY-ENHANCED MESSAGE-----