-----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, OkMMGO9eG1kcsqeNW/ScVE59OsGJu7251+Zze8xvJLIz91TBB5AOhJa80SIetnKs 4AUpFtAO+xCvZWgPezrNOQ== 0000849145-96-000017.txt : 19960624 0000849145-96-000017.hdr.sgml : 19960624 ACCESSION NUMBER: 0000849145-96-000017 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960223 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960621 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDCROSS INC CENTRAL INDEX KEY: 0000849145 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 592291344 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-17973 FILM NUMBER: 96584222 BUSINESS ADDRESS: STREET 1: 3227 BENNET ST N CITY: ST PETERSBURG STATE: FL ZIP: 33713 BUSINESS PHONE: 8135211793 MAIL ADDRESS: STREET 1: 3227 BENNET STREET NORTH CITY: ST PETERSBURG STATE: FL ZIP: 33713 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A#2 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) February 23, 1996 Medcross, Inc. (Exact name of registrant as specified in its charter) Florida 0-17973 59-2291344 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 3227 Bennet Street North, St. Petersburg, Florida 33713 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (813) 521-1793 (Former name or former address, if changed since last report.) 1 Item 7. Financial Statements, Proforma Financial Information, and Exhibits. Page (a) Financial Statements of Businesses Acquired. 2/ (b) Proforma Financial Information. 19 (c) Exhibits. 2(a) Stock Purchase Agreement dated February 13, 1996, by and among Medcross, Inc., ILINK, Ltd., and Gnet Enterprises, Inc. 1/ 2(b) Escrow Agreement dated February 21, 1996, by and among Medcross, Inc., ILINK, Ltd., and DeMartino, Finkelstein, Rosen & Virga. 1/ 2(c) Form of Promissory Note. 1/ 99 Press Release dated February 23, 1996. 1/ - ----------------------- 1/ Previously filed with the Company's current report on Form 8-K, filed on March 11, 1996 (File No. 0-17973). 2/ Previously filed with the Company's current report on Form 8-K, filed on May 10, 1996 (File No. 0-17973). 2 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 hereunto duly authorized. MEDCROSS, INC. By: /S/ Henry Y.L. Toh Henry Y.L. Toh President, CEO, Acting CFO Date June 20, 1996 3 Item 7. Financial Statements, Proforma Financial Information, and Exhibits. (b) Proforma Financial Information. Pro Forma Condensed Combined Financial Statement (Unaudited) Medcross, Inc. and I-Link Worldwide Inc. 19
MEDCROSS, INC. AND I-LINK WORLDWIDE INC. PRO FORMA CONDENSED COMBINED BALANCE SHEET (Unaudited) December 31, 1995 -------------------------------------------------------------- Pro Forma I-Link Adjustment Medcross Worldwide Increase Pro Forma Assets Inc. Inc. (Decrease) Combined ----------- ----------- ----------- ------------ Current Cash and cash equivalents $ 79,316 $ 7,437 $ 845,000 $ 931,753 Accounts receivable 921,793 - - 921,793 Inventory 829,988 - - 829,988 Prepaid expenses 87,253 - - 87,253 --------- --------- --------- ---------- Total current assets 1,918,350 7,437 845,000 2,770,787 --------- --------- --------- ---------- Property and equipment, net 1,620,157 181,973 - 1,802,130 --------- --------- --------- ---------- Intangible assets, net 535,468 223,677 2,645,712 3,404,857 Investment in unconsolidated subsidiary 6,250 - - 6,250 Other assets 66,638 12,335 205,000 78,973 --------- --------- --------- ---------- Total assets $ 4,146,863 $ 425,422 $ 3,695,712 $ 8,267,997 ========= ========= ========= ========== Liabilities and Stockholders' Equity (Capital Deficit) Current liabilities Accounts payable and accrued expenses $ 615,373 $ 1,050,397 $ - $ 1,665,770 Accounts payable - related parties - 73,450 - 73,450 Advance deposits received 233,728 - - 233,728 Note payable - related party 88,000 669,500 - 757,500 Note payable - other 400,000 53,482 1,050,000 1,503,482 Current portion of long-term debt 702,447 - - 702,447 Current portion of long-term debt - related parties 39,230 - - 39,230 Current obligations under capital lease 155,145 83,252 - 238,397 Accrued royalty fees - 345,000 - 345,000 --------- --------- --------- ---------- Total current liabilities 2,233,923 2,275,081 1,050,000 5,559,004 --------- --------- --------- ---------- Long-term debt - related parties 87,682 - - 87,682 Capital lease obligations - 30,156 - 30,156 Minority interest in consolidated subsidiaries 370,092 - - 370,092 Stockholders' Equity (Capital Deficit) Preferred stock 2,075,000 - ( 400,000) 1,675,000 Common stock 12,622 1 16,651 29,274 Additional paid-in capital 3,428,854 - 3,183,348 6,612,202 Deficit (4,061,310) (1,879,816) ( 154,287) ( 6,095,413) --------- --------- --------- ---------- Total stockholders' equity (capital deficit) 1,455,166 (1,879,815) 2,645,712 2,221,063 Total liabilities and stockholders' --------- --------- --------- ---------- equity (capital deficit) $ 4,146,863 $ 425,422 $ 3,695,712 $ 8,267,997 ========= ========= ========= ========== See note to unaudited pro forma condensed combined financial statements.
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MEDCROSS, INC. AND I-LINK WORLDWIDE, INC. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (Unaudited) For the Year Ended December 31, 1995 ------------------------------------------------------------- Pro Forma I-Link Adjustment Medcross Worldwide Increase Pro Forma Inc. Inc. (Decrease) Combined ----------- ----------- ----------- ----------- Net operating revenue $ 3,122,953 $ 229,721 $ - $ 3,352,674 --------- --------- --------- --------- Expenses: Cost of sales 154,481 55,201 - 209,682 Salaries and benefits 1,123,340 118,908 185,000 1,427,248 Repairs and maintenance 309,255 - - 309,255 Network expense - 565,831 - 565,831 Provision for doubtful accounts 365,093 - - 365,093 Advertising - 366,844 - 366,844 Depreciation and amortization 465,020 54,613 3,119,633 3,639,266 Other operating expenses 1,199,519 492,309 - 1,691,828 --------- --------- --------- --------- Operating loss ( 493,755) (1,423,985) (3,304,633) (5,222,373) --------- --------- --------- --------- Interest expense ( 160,423) ( 20,661) - ( 181,084) Interest income 10,717 - - 10,717 Gain on sale of interest in unconsolidated subsidiary 20,500 - - 20,500 Other income (expense) 58,612 ( 1,573) - 57,039 --------- --------- --------- --------- Loss before minority interest in net income of consolidated subsidiaries ( 564,349) (1,446,219) (3,304,633) (5,315,201) Minority interest in net income of consolidated subsidiaries 12,440 - - 12,440 --------- --------- --------- --------- Net loss $( 551,909) $(1,446,219) $(3,304,633) $(5,302,761) ========= ========= ========= ========= Net loss per share after prefered dividends $( .39) $( 1.28) ========= ========= Weighted average common shares outstanding 1,756,540 2,378,891 4,135,431 ========= ========= ========= See note to unaudited pro forma condensed combined financial statements.
21 MEDCROSS, INC. AND I-LINK WORLDWIDE, INC. NOTES TO THE PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - Basis of Preparation The unaudited pro forma condensed combined balance sheet as a December 31, 1995 and the unaudited pro forma condensed combined statements of operation for the year ended December 31, 1995 give effect to the acquisition of 100% of the outstanding common stock of I-Link Worldwide, Inc. by Medcross, Inc. (the "Company") as if the acquisition, accounted for as a purpose, had occurred on the balance sheet date with respect to the balance sheet and at the beginning of 1995, with respect to the statements of operations. During 1996, the assets and liabilities of ILINK, Ltd. ("ILINK"), were transferred to I-Link Worldwide, Inc. at their historical basis. I-Link Worldwide, Inc. had no activity prior to this transaction. The pro forma financial statements have been prepared based upon the financial statements of the Company and ILINK as of and for the year ended December 31, 1995. These pro forma financial statements may not be indicative of the results that actually would have occurred if the combination had been in effect on the dates indicated or which may be obtained in the future. The pro forma adjustments are based upon certain estimates which may change as additional infromation becomes available. The pro forma financial statements should be read in conjunction with the audited financial statements of the Company and ILINK. NOTE 2 - Pro Forma Adjustments
A. The following pro forma adjustment reflects the purchase of all of the outstanding common stock of I-Link Worldwide, Inc. by the Company in return for the issuance of 1,400,000 shares of common stock of the Company to the stockholder of I-Link Worldwide, Inc. Common stock (1,400,000 shares issued at $.007 par with a current market value of $2.00 per share) . . . . . . . . . . . . . . . . . . . . . $ 9,800 Additional paid-in capital . . . . . . . . . . . . . . 2,790,200 --------- Purchase price . . . . . . . . . . . . . . . . . . . . 2,800,000 Transaction costs . . . . . . . . . . . . . . . . . . . 116,000 --------- Total Acquistion Costs . . . . . . . . . . . . . . . . 2,916,000 Carrying amount of net liabilities acquired . . . . . . 1,879,815 --------- Excess (allocated to intangible assets) . . . . . . . . $ 4,795,815 =========
The excess purchase price was allocated as follows:
Amount Amortization Period ---------- ---------------------------------------- Subscriber list $ 323,100 12 months beginning on acquisition date Purchased Research & Development 2,034,103 Immediated write-off Patents 913,751 Period to be determined upon approval of patents Goodwill 1,524,861 24 months beginning on acquisition date --------- $4,795,815 =========
The allocation of the excess purchase price is a preliminary estimate and is subject to adjustment pursuant to the availability of additional information. 22 MEDCROSS, INC. AND I-LINK WORLDWIDE INC. NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (Unaudited) Under the terms of the stock purchase agreement, a further 1,600,000 shares of common stock of the Company will be released to the stockholders of I-Link Worldwide, Inc. at such time as the Company receives gross proceeds greater than or equal to $4,000,000 from the issuance of deby or equity securities through one or more private or public offerings prior to December 31, 1996. A further 1,000,000 shares of common stock of the Company will be released at such time as the monthly revenue from the ILINK business exceeds $1,000,000 or the number of subscribers serviced by the business exceeds 100,000 one year from the date of receipt of the above mentioned financing. At the time that these criteria are met, additional adjustments will be recorded based upon the value of the shares issued.
B. The following pro forma adjustments are reflected in the pro forma condensed combined statements of operations: Year Ended December 31 1995 Additional compensation expense arising from executive employment arrangements entered into by I-Link Worldwide, Inc. in January 1996. . . . . . . . . . . . . . . $ 185,000 Additional amortization of intangibles of ILINK after purchase price allocation and acquistion costs . . . . . . . . . . . . 3,119,633 --------- $3,654,244 $ 3,304,633 =========
Intangible assets consist of unpatented technological know-how used in the provision of a broad range of Internet services. The Company's intangibles consist of costs related to the acquisition of ILINK. These assets are amortized over periods ranging from 1 to 24 months for purposes of this pro form presentation.
C. The following pro form adjustments reflect the issuance of the $1,050,000 10% convertible promissory notes. The Notes are due and payable on the earlier of August 31, 1996 or the closing of a debt or equity offering. December 31 1995 Cash . . . . . . . . . . . . . . . . . . . . . $ 845,000 Other Assets . . . . . . . . . . . . . . . . . 205,000 Notes payable. . . . . . . . . . . . . . . . . (1,050,000)
D. The following pro forma adjustment reflects the conversion of 40,000 shares of Class A Preferred Stock of the Company with a par value of $10 per share into 978,891 shares of common stock of the Company with a par value of $.007 per share. December 31 1995 Class A Preferred Stock. . . . . . . . . . . . . $(400,000) Common stock . . . . . . . . . . . . . . . . . . 6,852 Additional paid-in capital . . . . . . . . . . . 393,148 23
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