<PAGE>
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)
<PAGE>
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)
<PAGE>
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.
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Consolidated
Allin
Communications Pro Forma Pro Forma
Corporation Adjustments Notes Consolidated
-------------- --------------- ---------- --------------
<S> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Consolidated
Allin
Communications Pro Forma Pro Forma
Corporation Adjustments Notes Consolidated
-------------------- ---------------- ------- --------------------
<S> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(Unaudited)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Consolidated
Allin
Communications Pro Forma Pro Forma
Corporation Adjustments Notes Consolidated
------------------- ------------------- ------- --------------------
<S> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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)
