-----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, WruAnBs4DoBuJ0Z1YdpmkcPv79jcq84bM62faOrsU52UuF/Z7WcI7V8ph9sMCsQu P/EeoM1RYp2zL4zCUyTiaQ== 0000931763-99-003084.txt : 19991111 0000931763-99-003084.hdr.sgml : 19991111 ACCESSION NUMBER: 0000931763-99-003084 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990827 ITEM INFORMATION: FILED AS OF DATE: 19991110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTELLIGENT LIFE CORP CENTRAL INDEX KEY: 0001080866 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 650423472 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-25681 FILM NUMBER: 99745223 BUSINESS ADDRESS: STREET 1: 11811 US HIGHWAY ONE STREET 2: STE 101 CITY: N PALM BEACH STATE: FL ZIP: 33408 BUSINESS PHONE: 5616277330 MAIL ADDRESS: STREET 1: 11811 US HIGHWAY ONE STREET 2: STE 101 CITY: N PALM BEACH STATE: FL ZIP: 33408 8-K/A 1 CURRENT FINANCIAL REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------- FORM 8-K/A 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 27, 1999 INTELLIGENT LIFE CORPORATION -------------------------------------------------- (exact name of registrant as specified in chapter) Florida 0-25681 65-0423422 - ----------------------------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 11811 U.S. Highway One Suite 101 North Palm Beach, Florida 33408 - ----------------------------------------------------------------------------------------------------- (zip code)
Registrant's telephone number, including area code: (561) 627-7330 Not Applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits The undersigned registrant hereby amends its Form 8-K dated August 27, 1999 by adding Items 7 (a) and 7 (b). (a) Financial Statements of Business Acquired The following financial statements of Green Magazine, Inc. are filed herewith: Independent Auditors' Report Balance Sheet at December 31, 1998 Statement of Operations for the year ended December 31, 1998 Statement of Stockholders' Deficit for the year ended December 31, 1998 Statement of Cash Flows for the year ended December 31, 1998 Notes to Financial Statements Independent Auditors' Report The Board of Directors Green Magazine, Inc.: We have audited the accompanying balance sheet of Green Magazine, Inc., as of December 31, 1998, and the related statements of operations, stockholders' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Green Magazine, Inc., as of December 31, 1998, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ Koppelman, Eglow, Francis, & Wiener Springfield, New Jersey November 3, 1999 GREEN MAGAZINE, INC. Balance Sheet December 31, 1998
Assets 1998 --------- Current assets: Cash $ 24,295 Magazine inventory at distributors 1,000 --------- Total current assets 25,295 Organization costs net of $800 accumulated amortization 200 --------- Total assets $ 25,495 ========= Liabilities and Stockholders' Deficit Liabilities: Accrued expenses $ 7,058 Deferred subscription revenue 67,740 --------- Total current liabilities 74,798 Loans payable to officers 58,400 --------- Total liabilities 133,198 --------- Stockholders' deficit: Common stock, no par value, authorized 1,500 shares; issued and outstanding 300 shares 1,000 Accumulated deficit (108,703) --------- Total stockholders' deficit (107,703) --------- Total liabilities and stockholders' deficit $ 25,495 =========
See accompanying notes to financial statements. GREEN MAGAZINE, INC. Statement of Operations For the Year ended December 31,1998
1998 ---------- Revenue: Subscription revenue $ 12,015 Advertising revenue 612 -------- Total revenue 12,627 -------- Cost of operations: Publication and marketing 32,475 General and administrative expenses 4,623 Depreciation and amortization 200 -------- Total cost of operations 37,298 -------- Operating loss (24,671) -------- Interest income 223 -------- Net loss before provision for state taxes (24,448) Provision for state and local income taxes 525 -------- Net loss after provision for state taxes $(24,973) ========
See accompanying notes to financial statements. GREEN MAGAZINE, INC. Statement of Stockholders' Deficit For the Year Ended December 31, 1998
Additional Total Common Stock Paid-in Accumulated Stockholders' Shares Amount Capital Deficit Deficit ------- --------- ---------- ----------- ------------ Balance at January 1, 1998 300 $ 1,000 -- $ (83,730) $ (82,730) Net loss -- -- -- (24,973) (24,973) ------- -------- --------- --------- --------- Balance at December 31, 1998 300 $ 1,000 -- $(108,703) $(107,703) ======= ======== ========= ========= =========
See accompanying notes to financial statements. GREEN MAGAZINE, INC. Statement of Cash Flows For the Year Ended December 31, 1998
1998 --------- Cash flows from operating activities: Net loss $(24,973) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 200 Changes in assets and liabilities: Magazine inventory at distributors (1,000) Prepaid expenses 3,500 Accrued expenses 4,904 Deferred subscription revenue 2,230 -------- Net cash used in operating activities (15,139) -------- Cash flows from financing activities: Borrowings from officers 50,000 Repayment of borrowings from officers (10,000) -------- Net cash provided by financing activities 40,000 -------- Net increase in cash 24,861 Cash at beginning of period (566) Cash at end of period 24,295 -------- Supplemental disclosure of cash paid during the period for state taxes $ 525 ========
See accompanying notes to financial statements. GREEN MAGAZINE, INC. Notes to Financial Statements December 31, 1998 (1) Description of Business Green Magazine, Inc. (the "Company") was incorporated under the laws of the State of Delaware on June 6, 1995. The Company was created to publish and distribute a quarterly financial magazine to the consumer. (2) Summary of Significant Accounting Policies (a) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. (b) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. (c) Revenue Recognition The Company generates revenue primarily from subscription income, wholesale newsstand distribution, and advertising income. Revenue is recognized when the pro-rata portion of the multi-issue subscription is delivered, when the distributor returns outstanding issues, and when the issue for which the advertising sold space is produced and distributed. Deferred subscription revenue represents the unfulfilled portion of magazine subscriptions. (d) Magazine Inventory Magazine inventory represents the number of current dated magazines on consignment to various newsstand distributors. The inventory is valued at production cost. At December 31, 1998, there were approximately 550 magazines outstanding. (e) Comprehensive Income No statements of comprehensive income have been included in the accompanying financial statements since comprehensive loss and net loss presented in the accompanying statements of operations would be the same. (3) Loans Payable to Officers Loans payable to officers represents non-interest bearing demand notes for monies lent to the Company by three officers. (4) Income Taxes The Company has incurred net operating losses since inception. Accordingly, the Company has not reflected any benefit of such net operating loss carryforwards in the accompanying financial statements. (5) Subsequent Event On August 27, 1999, Intelligent Life Corporation acquired certain assets and assumed certain liabilities of the Company for $200,000 in cash and 100,000 unregistered shares of Intelligent Life Corporation common stock valued at approximately $584,000. (b) Pro Forma Financial Information The following unaudited pro forma combined condensed financial statements are filed herewith: Unaudited Pro Forma Combined Condensed Balance Sheet at June 30, 1999 Unaudited Pro Forma Combined Condensed Statement of Operations for the Year Ended December 31, 1998 Unaudited Pro Forma Combined Condensed Statement of Operations for the Six Months Ended June 30, 1999 Notes to Unaudited Pro Forma Combined Condensed Financial Statements On August 27, 1999, Intelligent Life Corporation, a Florida corporation ("ILIF"), acquired certain assets and assumed certain liabilities of Green Magazine, Inc., a Delaware corporation ("Green"), for approximately $831,000 including acquisition costs. ILIF acquired the rights to all agreements, contracts, commitments, licenses, copyrights, trademarks and the subscriber/customer list of Green. The total consideration paid by ILIF in connection with the acquisition was approximately $784,000 consisting of $200,000 in cash and 100,000 unregistered shares of ILIF common stock valued at approximately $584,000. The acquisition was accounted for under the purchase method of accounting. The Unaudited Pro Forma Combined Condensed Balance Sheet as of June 30, 1999 gives effect to the acquisition of Green as if it had occurred on that date. The Unaudited Pro Forma Combined Condensed Statement of Operations for the year ended December 31, 1998 gives effect to the acquisition as if it had occurred on January 1, 1998 and is based on the historical results of operations of ILIF and Green for the year ended December 31, 1998. The Unaudited Pro Forma Combined Condensed Statement of Operations for the six months ended June 30, 1999 gives effect to the acquisition as if it had occurred on January 1, 1998 and is based on the historical results of operations of ILIF and Green for the six months ended June 30, 1999. The Unaudited Pro Forma Combined Condensed Balance Sheet and Statements of Operations and the accompanying notes should be read in conjunction with, and are qualified by, the historical financial statements of Green and the notes thereto included in this filing and by the historical financial statements of ILIF and the notes thereto included in ILIF's Transition Report on Form 10-K for the transition period from July 1, 1998 to December 31, 1998. The unaudited pro forma financial information has been prepared by ILIF and all calculations are based on assumptions deemed appropriate by ILIF. These assumptions are set forth in the Notes to Unaudited Pro Forma Combined Condensed Financial Statements. The unaudited pro forma financial information is intended for informational purposes only and is not necessarily indicative of the future financial position or future results of operations of the consolidated company after the acquisition of Green, or of the financial position or results of operations of the consolidated company that would have actually occurred had the acquisition of Green been effected on January 1, 1998. Intelligent Life Corporation Unaudited Pro Forma Combined Condensed Balance Sheet June 30, 1999
Pro Forma Intelligent Life ------------------------------ Corporation Green Adjustments Combined ---------------- ------------ ------------- ------------ Assets Cash and cash equivalents $39,397,886 $ 7,697 (A) $(200,000) $39,197,886 (B) (7,697) Accounts receivable, net 1,040,888 1,040,888 Other current assets 750,711 -- -- 750,711 ----------- ------------ --------- ----------- Total current assets 41,189,485 7,697 40,989,485 Furniture, fixtures and equipment, net 1,328,461 1,328,461 Goodwill and intangible assets, net 83,498 100 (A) 902,485 985,983 ----------- ------------ ---------- (B) 100 --------- Total assets $42,601,444 $ 7,797 $ 694,688 $43,303,929 =========== ============ ========= =========== Liabilities and Stockholders' Equity (Deficit) Accounts payable $ 1,514,697 $ $ $ 1,514,697 Accrued stock compensation expense 488,072 488,072 Other accrued expenses 995,729 706 (A) 47,431 1,043,160 (B) (706) Deferred revenue 554,203 71,274 625,477 Current portion of capital lease obligations 201,857 201,857 Other current liabilities 109,644 -- -- 109,644 ----------- ------------ --------- ----------- Total current liabilities 3,864,202 71,980 46,725 3,982,907 Officer loan payable -- 46,900 (B) (46,900) -- Long-term portion of capital lease obligations 353,744 -- 353,744 ----------- ------------ --------- ----------- Total liabilities 4,217,946 118,880 (175) 4,336,278 Stockholders' equity (deficit) 38,383,498 (111,083)(A) 583,780 38,967,278 ----------- ------------ ----------- (B) 111,083 --------- Total liabilities and stockholders' equity (deficit) $42,601,444 $ 7,797 $ 694,688 $43,303,929 =========== ============ ========= ===========
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. Intelligent Life Corporation Unaudited Pro Forma Combined Condensed Statement of Operations Year Ended December 31, 1998
Pro Forma Intelligent Life ------------------------------ Corporation Green Adjustments Combined ---------------- ------------ ------------- ------------ Revenue: Online publishing $ 2,582,444 $ -- $ -- $ 2,582,444 Print publishing and licensing 3,039,085 -- 3,039,085 Other -- 12,627 12,627 ------------ ---------- ------------ Total revenue 5,621,529 12,627 5,634,156 ------------ ---------- ------------ Cost of operations: Online publishing 1,519,755 -- 1,519,755 Print publishing and licensing 2,104,960 32,475 2,137,435 Sales 1,365,110 -- 1,365,110 Marketing 432,427 -- 432,427 Product research 1,638,592 -- 1,638,592 General and administrative expenses 1,839,594 4,623 1,844,217 Depreciation and amortization 140,069 200 140,269 Goodwill amortization -- -- (A) 300,828 300,828 Noncash stock based compensation 757,563 -- -- 757,563 ------------ ---------- --------- ------------ 9,798,070 37,298 300,828 10,136,196 ------------ ---------- --------- ------------ Loss from operations (4,176,541) (24,671) (300,828) (4,502,040) ------------ ---------- --------- ------------ Other income (expense): Interest income 36,006 223 36,229 Interest expense (18,649) (18,649) Other 185,588 -- -- 185,588 ------------ ---------- --------- ------------ 202,945 223 -- 203,168 ------------ ---------- --------- ------------ Loss before income taxes (3,973,596) (24,448) (300,828) (4,298,872) Income taxes -- 525 -- 525 ------------ ---------- --------- ------------ Net loss (3,973,596) (24,973) (300,828) (4,299,397) Accretion of Convertible Series A and Series B preferred stock to redemption value (4,438,141) -- -- (4,438,141) ------------ ---------- --------- ------------ Net loss applicable to common stock $ (8,411,737) $ (24,973) $(300,828) $ (8,737,538) ============ ========== ========= ============ Basic and diluted net loss per share $ (2.14) $ (2.17) ============ ============ Weighted average shares outstanding used in basic and diluted per-share calculation 3,925,597 (B) 100,000 4,025,597 ============ ========= ============
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. Intelligent Life Corporation Unaudited Pro Forma Combined Condensed Statement of Operations Six Months Ended June 30, 1999 Pro Forma Intelligent Life ------------------------------ Corporation Green Adjustments Combined ---------------- ------------ ------------- ------------ Revenue: Online publishing $ 3,295,685 $ -- $ -- $ 3,295,685 Print publishing and licensing 1,742,536 -- -- 1,742,536 Other -- -- -- -- ------------ -------- --------- ------------ Total revenue 5,038,221 -- -- 5,038,221 ------------ -------- --------- ------------ Cost of operations: Online publishing 1,616,998 -- 1,616,998 Print publishing and licensing 1,190,970 1,000 1,191,970 Sales 1,283,392 -- 1,283,392 Marketing 2,700,755 -- 2,700,755 Product research 1,227,978 -- 1,227,978 General and administrative expenses 1,738,107 1,847 1,739,954 Depreciation and amortization 176,535 100 176,635 Goodwill amortization -- -- (A) 150,414 150,414 Noncash stock based compensation 2,618,867 -- -- 2,618,867 ------------ -------- --------- ------------ 12,553,602 2,947 150,414 12,706,963 ------------ -------- --------- ------------ Loss from operations (7,515,381) (2,947) (150,414) (7,668,742) ------------ -------- --------- ------------ Other income (expense): Interest income 249,450 92 249,542 Interest expense (40,023) (40,023) Noncash financing charge (2,656,000) -- (2,656,000) Other 10,457 -- -- 10,457 ------------ -------- --------- ------------ (2,436,116) 92 -- (2,436,024) ------------ -------- --------- ------------ Loss before income taxes (9,951,497) (2,855) (150,414) (10,104,766) Income taxes -- 525 -- 525 ------------ -------- --------- ------------ Net loss (9,951,497) (3,380) (150,414) (10,105,291) Accretion of Convertible Series A and Series B preferred stock to redemption value (2,281,000) -- -- (2,281,000) ------------ -------- --------- ------------ Net loss applicable to common stock $(12,232,497) $ (3,380) $(150,414) $(12,386,291) ============ ======== ========= ============ Basic and diluted net loss per share $ (1.84) $ (1.83) ============ ============ Weighted average shares outstanding used in basic and diluted per-share calculation 6,661,558 (B) 100,000 6,761,558 ============ ========= ============
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements. Intelligent Life Corporation Notes to Unaudited Pro Forma Combined Condensed Financial Statements Note 1 -- Basis of Presentation The Unaudited Pro Forma Combined Condensed Balance Sheet as of June 30, 1999 has been prepared to reflect the acquisition of Green Magazine, Inc. ("Green") by Intelligent Life Corporation ("ILIF") as if the acquisition had occurred on June 30, 1999. The Unaudited Pro Forma Combined Condensed Statement of Operations for the year ended December 31, 1998 gives effect to the acquisition as if it had occurred on January 1, 1998 and is based on the historical results of operations of ILIF and Green for the twelve months ended December 31, 1998. The Unaudited Pro Forma Combined Condensed Statement of Operations for the six months ended June 30, 1999 gives effect to the acquisition as if it had occurred on January 1, 1998 and is based on the historical results of operations of ILIF and Green for the six months ended June 30, 1999. There were no significant differences in the accounting policies of ILIF and Green for the periods presented. Note 2 -- Purchase Accounting On August 27, 1999, ILIF acquired certain assets and assumed certain liabilities of Green for approximately $831,000 including acquisition costs. ILIF acquired the rights to all agreements, contracts, commitments, licenses, copyrights, trademarks and the subscriber/customer list of Green. The total consideration paid by ILIF in connection with the acquisition was approximately $784,000 consisting of $200,000 in cash and 100,000 unregistered shares of ILIF common stock valued at approximately $584,000. The acquisition was accounted for under the purchase method of accounting. The net assets acquired were assumed to be at fair market value. The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill and will be amortized over three years, the expected benefit period. The pro forma adjustments to the Unaudited Pro Forma Combined Condensed Statements of Operations reflect amortization of goodwill for the periods presented assuming the acquisition occurred at January 1, 1998. The value of goodwill at January 1, 1998 would have been approximately $902,000. Note 3 -- Pro Forma Adjustments The following adjustments were made to the historical balance sheets to arrive at the Unaudited Pro Forma Combined Condensed Balance Sheet at June 30, 1999: (A) Record the payment of cash, the issuance of ILIF common stock, the net assets acquired and the excess of the purchase price over the fair value of the net assets acquired. (B) Eliminate the assets, liabilities and equity not acquired. The following adjustments were made to the historical statements of operations to arrive at the Unaudited Pro Forma Combined Condensed Statements of Operations for the year ended December 31, 1998 and for the six months ended June 30, 1999: (A) Record goodwill amortization. (B) Record additional shares of common stock issued. (c) Exhibits: 2.1 Asset Purchase Agreement, dated August 27, 1999, by and among Intelligent Life Corporation, Green Magazine, Inc., Kenneth A. Kurson, John F. Packel and James Michaels.* 99.1 Text of Press Release of Intelligent Life Corporation dated August 30, 1999* - -------------------------------------------------------------------------------- * Previously filed with Form 8-K dated August 27, 1999. SIGNATURES 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 thereunto duly authorized. INTELLIGENT LIFE CORPORATION /s/ Robert J. DeFranco -------------------------------------- Date: November 10, 1999 Robert J. DeFranco Vice President -- Finance and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----