-----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, R+yUkVRKE4qx35VPVCCujRKcL+rw1U+0pPCBcZN/m1Jc5zaC8/L87PWeH+AYGdzt cbrk6oc1Uj1s/glYrxoX9Q== 0000931763-96-000999.txt : 19971105 0000931763-96-000999.hdr.sgml : 19971105 ACCESSION NUMBER: 0000931763-96-000999 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960918 ITEM INFORMATION: FILED AS OF DATE: 19961202 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIERE TECHNOLOGIES INC CENTRAL INDEX KEY: 0000880804 STANDARD INDUSTRIAL CLASSIFICATION: 4899 IRS NUMBER: 593074176 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-27778 FILM NUMBER: 96674990 BUSINESS ADDRESS: STREET 1: 3399 PEACHTREE ROAD NE STREET 2: LENOX BUILDING SUITE 400 CITY: ATLANTA STATE: GA ZIP: 30326 BUSINESS PHONE: 4042628435 MAIL ADDRESS: STREET 1: 3399 PEACHTREE RD NE STREET 2: STE 400 CITY: ATLANTA STATE: GA ZIP: 30326 8-K/A 1 PREMIERE TECHNOLOGIES CURRENT 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): September 18, 1996 ------------------ PREMIERE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Georgia 0-27778 59-3074176 - - --------------------------- ----------------- ------------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) 3399 Peachtree Road, N.E. The Lenox Building, Suite 400 Atlanta, Georgia 30326 ----------------------------------------- ---------- (Address of principal executive officers) (Zip Code) Registrant's telephone number, including area code: (404) 262-8400 N/A ------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. Premiere Technologies, Inc. (the "Company") hereby amends its Current Report on Form 8-K dated September 18, 1996 (filed October 2, 1996) to include the referenced financial statements and pro forma financial information and exhibit. (A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Report of Independent Public Accountants .................. Balance Sheet as of December 31, 1995 ..................... Statement of Operations for the period from inception (March 3, 1995) to December 31, 1995 .................... Statement of Shareholders' Deficit for the period from inception (March 3, 1995) to December 31, 1995...... Statement of Cash Flows for the period from inception (March 3, 1995) to December 31, 1995 .................... Notes to Financial Statements ............................. (B) PRO FORMA FINANCIAL INFORMATION. Unaudited Pro Forma Consolidated Statements of Income for the year ended December 31, 1995 .................... Unaudited Pro Forma Consolidated Statements of Income for the nine months ended September 30, 1996 ............ (C) EXHIBITS. 23.1 Consent of Arthur Andersen LLP.
- 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. PREMIERE TECHNOLOGIES, INC. By: /s/ Patrick G. Jones ------------------------------------ Patrick G. Jones Senior Vice President of Finance and Legal Dated: December 2, 1996 ---------------- - 3 - REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders of Connect, Inc.: We have audited the accompanying balance sheet of CONNECT, INC. (a Maryland corporation and development-stage enterprise) as of December 31, 1995 and the related statements of operations, shareholders' deficit, and cash flows for the period from inception (March 3, 1995) to December 31, 1995. 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 Connect, Inc. as of December 31, 1995 and the results of its operations and its cash flows for the period from inception (March 3, 1995) to December 31, 1995 in conformity with generally accepted accounting principles. /s/ Arthur Andersen LLP. Atlanta, Georgia November 8, 1996 CONNECT, INC. (A DEVELOPMENT-STAGE ENTERPRISE) BALANCE SHEET DECEMBER 31, 1995
ASSETS PROPERTY AND EQUIPMENT Computer and office equipment 89,766 Furniture and fixtures 1,600 Software 34,880 --------- 126,246 Less accumulated depreciation (8,570) --------- Net property and equipment 117,676 --------- Total assets $ 117,676 ========= LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES: Line of credit with shareholders (Note 3) $ 225,000 Accounts payable and accrued expenses 37,850 Other current liabilities 3,520 --------- Total current liabilities 266,370 --------- COMMITMENTS AND CONTINGENCIES (NOTE 4) SHAREHOLDERS' DEFICIT: Common stock, $1 par value; XX shares authorized, XX shares issued and outstanding at December 31, 1995 (Note 2) 1,000 Subscriptions receivable (Note 2) (1,000) Deficit accumulated during the development stage (148,694) --------- Total shareholders' deficit (148,694) --------- Total liabilities and shareholders' deficit $ 117,676 =========
The accompanying notes are an integral part of this balance sheet. CONNECT, INC. (A DEVELOPMENT-STAGE ENTERPRISE) STATEMENT OF OPERATIONS FOR THE PERIOD FROM INCEPTION (MARCH 3, 1995) TO DECEMBER 31, 1995 REVENUES $ 0 --------- OPERATING EXPENSES: Research and development 55,446 General and administrative 48,194 Selling and marketing 26,781 Depreciation and amortization 8,570 --------- Total operating expenses 138,991 --------- OPERATING LOSS (138,991) --------- OTHER EXPENSE: Interest expense 9,703 --------- NET LOSS $(148,694) ========= The accompanying notes are an integral part of this statement. CONNECT, INC. (A DEVELOPMENT-STAGE ENTERPRISE) STATEMENT OF SHAREHOLDERS' DEFICIT FOR THE PERIOD FROM INCEPTION (MARCH 3, 1995) TO DECEMBER 31, 1995
TOTAL COMMON SUBSCRIPTIONS ACCUMULATED SHAREHOLDERS' STOCK RECEIVABLE DEFICIT (DEFICIT) ------- ------------- ----------- ------------ BALANCE at inception, (March 3, 1995) 0 0 0 0 Subscriptions receivable on loans to shareholders 0 (1,000) 0 (1,000) Issuance of common stock 1,000 0 0 1,000 Net loss 0 0 (148,694) (148,694) ------ ------- --------- --------- BALANCE, December 31, 1995 $1,000 $(1,000) $(148,694) $(148,694) ====== ======= ========= =========
The accompanying notes are an integral part of these statements. CONNECT, INC. (A DEVELOPMENT-STAGE ENTERPRISE) STATEMENT OF CASH FLOWS FOR THE PERIOD FROM INCEPTION (MARCH 3, 1995) TO DECEMBER 31, 1995
1995 ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(148,694) ---------- Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 8,570 Changes in assets and liabilities: Accounts payable and accrued expenses 37,850 Other current liabilities 3,520 ---------- Total adjustments 49,940 ---------- Net cash used in operating activities (98,754) ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (126,246) ---------- Net cash provided by investing activities (126,246) ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Loans from shareholders 225,000 ---------- Net cash provided by financing activities 225,000 ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 0 CASH AND CASH EQUIVALENTS, beginning of period 0 CASH AND CASH EQUIVALENTS, end of period $ 0 ========== SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES: Stock issued for subscriptions receivable $ 1,000 ==========
The accompanying notes are an integral part of these statements. CONNECT, INC. (A DEVELOPMENT-STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 1. ORGANIZATION AND NATURE OF BUSINESS Connect, Inc. (the "Company"), a development-stage enterprise, was incorporated in Maryland on March 3, 1995. The Company is a developer of high technology products and services which enable consumers and businesses to effectively communicate via the Internet using only a touch tone phone. The Company has four shareholders, two shareholders each owning 45% and two others each owning 5%. The Company has not yet sold or delivered any products, and as of December 31, 1995, the Company had no customers. The Company's activities to date consist primarily of research and development activities in order to develop Internet-based software products. Expenses incurred have primarily been research and development, administrative and marketing costs. The developmental nature of the activities is such that inherent risks exist in the Company's operations. Successful future operations are subject to several risks, including the ability of the Company to successfully develop software products, to market and generate significant revenue related to the sale of its products, and continued development of additional products and enhancements to allow entry into new markets. After products have been developed and successfully introduced into a market, additional time may be necessary before significant revenues are realized. The Company has available a line of credit with one of its shareholders for up to $250,000 (see Note 3). In addition, the Company received additional financing during 1996 from outside sources and was acquired by an unrelated party on September 18, 1996 (see Note 5). 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRESENTATION The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Since the accompanying financial statements are from the inception of the Company (March 3, 1995) to December 31, 1995, all amounts included herein reflect the cumulative transactions of the Company in its developmental stage. PROPERTY AND EQUIPMENT Property and equipment are recorded at cost, and depreciation is provided for using the straight-line method over the estimated useful lives of the assets, commencing when the assets are installed or placed in service. The estimated useful lives are five years for computer and office equipment and purchased software, and seven years for office furniture. The cost of installed equipment includes expenditures for installation. LONG-LIVED ASSETS The Company periodically reviews the values assigned to long-lived assets such as property and equipment to determine if any impairments have occured. Management believes that the long-lived assets in the accompanying balance sheets are appropriately valued. INCOME TAXES The Company is treated as an S-Corporation. As such, the Company is generally not subject to corporate level taxes, rather the income or losses of the Company flow through pro rata to the individual shareholders. Accordingly, there is no income tax provision or deferred taxes in the accompanying financial statements. SUBSCRIPTION RECEIVABLE The founders of the Company purchased their shares of common stock by giving to the Company a total of $1,000 in nonrecourse, noninterest-bearing notes (the "Notes"). The outstanding principal balance of the Notes has been reflected as a reduction to shareholders' deficit in the accompanying balance sheet. Interest is not material for the period presented. 3. RELATED-PARTY TRANSACTIONS General and administrative expenses includes consulting and professional fees paid to companies that the shareholders of the Company own a portion of and which the company merged with in early 1996 (see Note 5). The Company paid these parties approximately $9,100 in 1996. The Company rents office space in Baltimore, Maryland from a related party. During 1996 the Company incurred approximately $4,400 related to this lease. The Company maintains a bank account with nominal funds, but finances its operations primarily by drawing on a line of credit with a shareholder bearing interest at 10%. This line of credit had no scheduled maturity date. The Company received advances of $225,000 under this line of credit during the period from inception (March 3, 1995) to December 31, 1995. No payments were made in connection with these advances. The Company incurred interest costs of approximately $ 9,700 related to this note. 4. COMMITMENTS AND CONTINGENCIES OPERATING LEASES The Company leases office space. Rental expense was approximately $4,400 for the period from inception (March 3, 1995) to December 31, 1995. At December 31, 1995, the Company had no minimum rental commitments under noncancelable operating leases with initial or remaining terms of more than one year. LEGAL PROCEEDINGS The Company is subject to legal proceedings and claims which arise in the ordinary course of business. There are no pending legal proceedings to which the Company is a party. 5. SUBSEQUENT EVENTS MERGER OF CONNECT, LEITESS INFORMATION SOLUTIONS, AND PLANET COMMUNICATIONS On January 4, 1996, the Company, Leitess Information Solutions, LLC, and Planet Communications LLC merged into one company operating under the name Connect, Inc. ("Connect II"). Along with this transaction, an outside investor purchased 10,000 shares of Connect II common stock representing an approximately 9% interest in the newly formed company. See pro forma financial statements of operations contained elsewhere in this filing. FORMATION OF TELET COMMUNICATIONS On March 29, 1996, TeleT Communications LLC ("TeleT") was formed through a purchase agreement between Connect II and CMG@Ventures, L.P. ("CMG") in which CMG contributed $750,000 for a 50% interest in the newly formed company. See pro forma results of operations contained elsewhere in this filing. LINE OF CREDIT WITH SHAREHOLDER Subsequent to year end, $20,225 of additional principal was drawn on this line. On March 29, 1996, a portion of this loan ($75,000) was assigned to another shareholder for a note between the two shareholders. On May 17, 1996, an additional $41,448 was assigned to the same shareholder for another note. $25,000 of the line was converted by the original shareholder into 3,473 units of Series A-1 Convertible Preferred Stock ("Series A") in TeleT. The portion of the line assigned on March 29, 1996 ($75,000) was converted into 10,417 shares of Series A stock. The remainder of the line of credit ($145,225), including the portion assigned on May 17, 1996, was repaid in conjunction with the Premiere Acquisition (as discussed herein). PREMIERE TECHNOLOGIES ACQUISITION OF TELET On September 18, 1996, Premiere Technologies, Inc. ("Premiere") purchased 100% of TeleT in a stock and cash transaction. Premiere exchanged 498,187 shares of its $.01 par value common stock and paid approximately $2.8 million in cash considerations for TeleT. Premiere Technologies UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME FOR THE YEAR ENDED 12/31/95
Historical Premiere Proforma TeleT Transaction Company Pro (A) (A) Adjustments Forma ------------- -------------- ----------- ------------ Revenues $22,325,938 $108,318 $0 $22,434,256 Costs and Expenses Cost of Services 7,602,511 27,947 0 7,630,458 Operating Expenses 12,424,457 241,594 71,429 (B) 12,737,480 ------------- ----------- --------- ------------ Total Costs and Expenses 20,026,968 269,541 71,429 20,367,938 ------------- ----------- --------- ------------ Income (loss) from operations 2,298,970 (161,223) (71,429) 2,066,318 Other Income (Expense) (50,890) (6,860) (169,904)(C) (227,654) ------------- ----------- --------- ------------ Income (loss) before income taxes 2,248,080 (168,083) (241,333) 1,838,664 (Provision for) benefit from income taxes (330,486) 65,552 94,120 (D) (170,814) Net income (loss) $1,917,594 ($102,531) ($147,213) $1,667,851 ============= =========== ========= ============ Mod. t.s. adj. and pref. div ($110,212) (110,212) ------------- ------------ Net income available $1,807,382 $1,557,639 Weighted Average O/S Shares 17,529,000 17,529,000 Acquisition shares (E) 498,187 498,187 ------------- --------- ------------ Total Pro forma Shares 18,027,187 Historical EPS $0.10 ============= Pro forma EPS $0.09 ============
(A) Derived from the historical statements of operations of the Company and Connect, Inc. (contained elsewhere herein), Leitess Information Solutions, LLC, and Planet Communications LLC (collectively, "Telet Communications LLC"). (B) Reflects additional depreciation and amortization expense (utilizing the Company's depreciable lives) associated with the recording of the acquired assets by the Company at fair market value in conjunction with the Acquisition. (C) Reflects reduction equal to cash portion of acquisition times Company's weighted average return on investment of 5.92%. (D) Reflects income tax effect of pro forma adjustments. (E) Reflects additional shares issued in conjunction with the Acquistion as if they were outstanding for all periods. (F) Reflects the reversal of one time charge for in process research and development. Premiere Technologies UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME NINE MONTHS PERIOD ENDED 9/30/96
Historical Proforma Transaction Company Premiere(A) TeleT(A) Adjustments Pro Forma ----------- --------- ------------- ----------- Revenues $34,868,465 $ 250,603 $ 0 $35,119,068 Costs and Expenses Cost of Services 11,775,061 0 11,775,061 Operating Expenses 31,432,404 884,576 53,571 (B) 21,341,019 (11,029,532)(F) ----------- -------- ------------- ----------- Total Costs and Expenses 43,207,465 884,576 (10,975,961) 33,116,080 ----------- -------- ------------- ----------- Income (loss) from operations (8,339,000) (633,973) 10,975,961 2,002,988 Other Income (Expense) 1,687,348 (13,007) (111,930)(C) 1,562,411 ----------- -------- ------------- ----------- Income (loss) before income taxes (6,651,652) (646,980) 10,864,031 3,565,399 (Provision for) benefit from income taxes 3,087,679 252,322 (4,236,972)(D) (896,971) Extraordinary Loss, net (59,251) 0 0 (59,251) ----------- -------- ------------- ----------- Net income (loss) $(3,623,224) $(394,658) $6,627,059 $ 2,609,177 =========== ========= ============= =========== Modified treasury stock adjustments $ 619,157 619,157 ----------- -------- ------------- ----------- Net income available $(3,004,067) 3,228,334 Weighted Average O/S Shares 22,374,935 22,374,935 Acquisition shares (E) 498,187 498,187 ----------- -------- ------------- ----------- Total Pro forma Shares 22,873,122 Historical EPS $ (0.13) =========== Pro forma EPS $ 0.14 ===========
(A) Derived from the historical statements of operations of the Company and Connect, Inc. (contained elsewhere herein), Leitess Information Solutions, LLC, and Planet Communications LLC (collectively, "Telet Communications LLC"). (B) Reflects additional depreciation and amortization expense (utilizing the Company's depreciable lives) associated with the recording of the acquired assets by the Company at fair market value in conjunction with the Acquisition. (C) Reflects reduction equal to cash portion of acquisition times Company's weighted average return on investment of 5.2%. (D) Reflects income tax effect of pro forma adjustments. (E) Reflects additional shares issued in conjunction with the Acquistion as if they were outstanding for all periods. (F) Reflects the reversal of one time charge for in process research and development. EXHIBIT INDEX PAGE ---- 23.1 Consent of Arthur Andersen LLP. EX-23 2 CONSENT OF ARTHUR ANDERSEN CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference of our report dated November 8, 1996 included in Premiere Technologies, Inc.'s Report on Form 8-K into the Company's Registration Statement File No. 333-11281. /s/ Arthur Andersen LLP. Atlanta, Georgia December 2, 1996 -----END PRIVACY-ENHANCED MESSAGE-----