-----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, Q4qpJxzuUdUExagnDbxtMKPgec1NL01Z7gkM7Tb96Elrrm73MlGP9sgm3jm+15Yc 3rhnhfddPoxPOr6BuPnTkQ== 0000351903-04-000046.txt : 20040817 0000351903-04-000046.hdr.sgml : 20040817 20040817153631 ACCESSION NUMBER: 0000351903-04-000046 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040602 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040817 FILER: COMPANY DATA: COMPANY CONFORMED NAME: J NET ENTERPRISES INC CENTRAL INDEX KEY: 0000351903 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 880169922 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09728 FILM NUMBER: 04981891 BUSINESS ADDRESS: STREET 1: 4020 LAKE CREEK DRIVE, #100 CITY: WILSON STATE: WY ZIP: 83014 BUSINESS PHONE: 307-739-8603 MAIL ADDRESS: STREET 1: 4020 LAKE CREEK DRIVE, #100 CITY: WILSON STATE: WY ZIP: 83014 FORMER COMPANY: FORMER CONFORMED NAME: JACKPOT ENTERPRISES INC DATE OF NAME CHANGE: 19920703 8-K/A 1 form8ka.txt UNITED STATES 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): June 2, 2004 J Net Enterprises, Inc. _____________________________________________________ (Exact name of registrant as specified in its charter) Commission File Number: 1-9728 Nevada 88-0169922 _______________________________ ________________________________ (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 4020 Lake Creek Drive, #100 Wilson, Wyoming 83014 ________________________________________ __________ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (307) 739-8603 ______________ N/A _____________________________________________________________ (Former name or former address, if changed since last report) J Net Enterprises, Inc. ("J Net" or the "Company") hereby amends its Current Report on Form 8-K filed on June 3, 2004 by providing definitive information related to the accounting treatment for the transaction and providing the information required in Item 7. Item 2. Acquisition or Disposition of Assets Item 7. Financial Statements and Exhibits Item 2. Acquisition or Disposition of Assets Accounting Treatment of the Acquisition The Company has determined that the proper accounting treatment is a reverse merger. Therefore, the transaction will be treated as if Epoch Investment Partners, Inc. ("Epoch") acquired J Net. Since J Net is being treated as the acquired company, its assets and liabilities will be adjusted to reflect their fair value. Deferred stock compensation, representing the fair value of the unvested shares issued to the Epoch employee shareholders at the closing of the transaction, will be expensed as the shares vest pursuant to the Stockholders Agreement. Due to the reverse merger treatment, the historical financial statements of Epoch will become the historical financial statements of the Company. Initially, these financial statements will be issued under the J Net name. However, it is the intent of the Company to change its name to Epoch as soon as practicable. Item 7. Financial Statements and Exhibits (A) Financial Statements of Business Acquired. (i) The consolidated balance sheets as of June 30, 2003 and 2002 and consolidated statements of operations of J Net, as presented on J Net's Annual Report on Form 10-K for each of the three years ended June 30, 2003, 2002 and 2001, are incorporated by reference. (ii) The condensed consolidated balance sheet as of March 31, 2004 and condensed consolidated statement of operations, as presented on J Net's Quarterly Report on Form 10-Q for the nine months ended March 31, 2004, are incorporated by reference. (B) Unaudited Pro Forma Financial Information. The pro forma condensed consolidated balance sheet of Epoch, as a result of the reverse merger accounting treatment for the transaction, reflects the financial position of Epoch as if it had acquired J Net on July 1, 2002. Because Epoch has limited operating history, the pro forma disclosures are adopting the June 30 fiscal year used by J Net. Epoch began conducting business on April 14, 2004. Therefore, the pro forma condensed consolidated statements of operations for the year ended June 30, 2003 and the nine months ended March 31, 2004 present only historical J Net operations and any stock based compensation resulting from the June 2, 2004 transaction described in Item 2. These pro forma statements are for informational purposes only. They should not be interpreted to be indicative of the Company's consolidated results of operations had the transaction actually occurred on the assumed date nor should they be used to project results for any future dates or periods. J Net Enterprises, Inc. and Subsidiaries Pro Forma Condensed Consolidated Balance Sheet As of June 30, 2003 (Dollars in thousands) (Unaudited) Pro Forma Adjustments __________________________________ Reverse Other Pro Historical Merger Forma Epoch (a) J Net (b) Entries Adjustments Pro Forma __________ _________ _______ ___________ _________ Assets ______ Current assets: Cash and cash equivalents $ - $ 5,537 $ - $ (916) (f) $ 4,621 Short term investments - 12,325 - - 12,325 Accounts receivable and other current assets - 166 - - 166 ____ _______ ____ _______ ________ Total current assets - 18,028 - (916) 17,112 ____ _______ ____ _______ ________ Property, plant and equipment, net of accumulated depreciation - 79 - - 79 Goodwill and intangible assets - - - (458)(e) 458 916 (f) Investments in technology-related businesses - 2,000 - - 2,000 Other non-current assets - 735 - - 735 ____ _______ ____ _______ ________ Total assets $ - $20,842 $ - $ (458) $ 20,384 ==== ======= ==== ======= ======== Pro Forma Adjustments __________________________________ Reverse Other Pro Historical Merger Forma Epoch (a) J Net (b) Entries Adjustments Pro Forma __________ _________ _______ ___________ _________ Liabilities and Stockholders' Equity ____________________________________ Current liabilities: Accounts payable and accrued expenses $ - $ 3,399 $ - $ - $ 3,399 - - Deferred revenue and customer deposits - 689 - - 689 ____ ________ ________ _______ ________ Total current liabilities - 4,088 - - 4,088 ____ ________ ________ _______ ________ Deferred income taxes - 6,910 - - 6,910 Deferred rent and other non-current liabilities - 405 - - 405 Stockholders' equity: Preferred stock - - - - - Common stock - 102 91 (c) - 195 2 (h) Additional paid-in capital - 75,250 (91)(c) (458)(e) 38,596 (46,031)(d) 9,628 (g) 298 (h) - Deferred compensation expense - - - (9,157)(g) (9,157) Retained earnings (deficit) - (49,859) 46,031 (d) (471)(g) (4,599) (300)(h) Treasury stock - (16,054) - - (16,054) ____ ________ ________ _______ ________ Total stockholders' equity - 9,439 - (458) 8,981 ____ ________ ________ _______ ________ Total liabilities and stockholders' equity $ - $ 20,842 $ - $ (458) $ 20,384 ==== ======== ======== ======= ========
Notes: (a) Epoch began conducting business on April 14, 2004. There are no historical financials as of June 30, 2003. (b) Condensed consolidated balance sheet of J Net as of June 30, 2003. (c) Issuance of 9,095,716 shares of $.01 par value stock in exchange for outstanding common shares of Epoch. (d) Eliminate J Net accumulated deficit. (e) Record goodwill. (f) Payment of direct acquisition costs. (g) Deferred compensation expense, 5,531,332 shares which are scheduled to vest over three years. A total of 3,907,904 shares, representing the initial stock consideration shares, are valued at $1.50 per share, the closing price of J Net's stock on June 2, 2004, the effective date of the transaction. The remaining shares, representing the escrow stock consideration shares, have been valued at $2.03 per share, the value of J Net's stock on June 18, 2004, the date on which the escrow targets for assets under management were surpassed. For the pro forma twelve months ended June 30, 2003, 231,918 shares of the escrow stock consideration were earned and recorded as stock compensation expense. (h) Record issuance of stock award (200,000 shares at $1.50). J Net Enterprises, Inc. and Subsidiaries Pro Forma Condensed Consolidated Statement of Operations For the Year Ended June 30, 2003 (Dollars in thousands, except per share data) (Unaudited) Pro Forma Adjustments ___________________ Historical Epoch (a) J Net (b) Other Pro Forma __________ _________ ______ _________ Revenues, net $ - $ 2,625 $ - $ 2,625 Cost of revenues - (609) - (609) _____ _______ ______ ________ Gross profit - 2,016 - 2,016 Operating expenses - 6,349 - 6,349 Stock based compensation - - 771 (c) 771 Losses on disposal of assets and impairments - 1,328 - 1,328 _____ _______ ______ ________ Total operating expenses - 7,677 771 8,448 Loss from operations - (5,661) (771) (6,432) Other income - 1,521 - 1,521 Gain on repurchase of convertible subordinated notes - 553 - 553 _____ _______ ______ ________ Loss from operations before income taxes - (3,587) (771) (4,358) Income tax expense - 241 - 241 _____ _______ ______ ________ Net loss $ - $(3,828) $ (771) $ (4,599) ===== ======= ====== ======== Issued and outstanding shares of common stock - 8,525 9,296 17,821 ===== ======= ====== ======== Basic and diluted loss per share $ - $ (.45) $ - $ (.26) ===== ======= ====== ======== Notes: (a) Epoch began conducting business on April 14, 2004. Therefore, there are no operations for pro forma disclosures. (b) Historical unaudited statement of operations for J Net and Subsidiaries for the twelve months ended June 30, 2003. (c) Stock award issued at closing of 200,000 shares at $1.50 per share, the closing price of J Net's stock on June 2, 2004, issued at closing of transaction. Additional compensation expense is the result of 231,918 shares of escrow stock consideration, as defined in the Merger Agreement valued at $2.03, the date on which the targeted assets under management to earn the escrow consideration was achieved. J Net Enterprises, Inc. and Subsidiaries Pro Forma Condensed Consolidated Statement of Operations For the Nine Months Ended March 31, 2004 (Dollars in thousands, except per share data) (Unaudited) Pro Forma Adjustments ____________________ Historical Epoch (a) J Net (b) Other Pro Forma __________ _________ _______ _________ Revenues, net $ - $ 1,832 $ - $ 1,832 Cost of revenues - (524) - (524) _____ _______ _______ _______ Gross profit - 1,308 - 1,308 Operating expenses - 2,952 - 2,952 Stock based compensation - - 1,308 (c) 1,308 _____ _______ _______ _______ Total operating expenses - 2,952 1,308 4,260 Loss from operations - (1,644) (1,308) (2,952) Other income - 1,052 - 1,052 _____ _______ _______ _______ Loss from operations before income taxes - (592) (1,308) (1,900) Income taxes - - - - _____ _______ _______ _______ Net loss $ - $ (592) $(1,308) $(1,900) ===== ======= ======= ======= Issued and outstanding shares of common stock - 8,539 9,296 17,835 ===== ======= ======= ======= Basic and diluted loss per share $ - $ (.07) $ - $ (.11) ===== ======= ======= ======= Notes: (a) Epoch began conducting business on April 14, 2004. Therefore, there are no operations for pro forma disclosures. (b) Historical unaudited statement of operations for J Net and Subsidiaries for the nine months ended March 31, 2004. (c) The first vesting period for deferred stock compensation would be July 1, 2003 for these pro forma schedules. Total shares scheduled to vest would be 558,272 shares at $1.50 per share and 231,918 shares at $2.03 per share, the fair value of the initial stock consideration and escrow stock consideration earned, respectively. Exhibits 99.1 Annual Report on Form 10-K for the year ended June 30, 2003 of J Net Enterprises, Inc. is incorporated by reference. 99.2 Quarterly Report on Form 10-Q for the nine months ended March 31, 2004 of J Net Enterprises, Inc. is incorporated by reference. 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 thereunto duly authorized. Date: August 17, 2004 J NET ENTERPRISES, INC. /s/ Mark E. Wilson _______________________________ Name: Mark E. Wilson Title: Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----