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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): December 17, 1998
PREVIEW TRAVEL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 000-23177 94-2965892
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
747 Front Street, San Francisco, CA 94111
(Address of principal executive offices) (Zip code)
(415) 439-1200
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On December 31, 1998, Preview Travel, Inc. (the "Company") completed a
transaction with NewsNet Central, Inc. ("NNC"), pursuant to which
substantially all of the assets of the Company's television business, as
operated by the Company's wholly owned subsidiary, News Travel Network, Inc.
("NTN"), were transferred to NNC (the "TV Disposition"). Prior to the closing
of the TV Disposition, the Company contributed certain assets to NTN,
including the following: (a) cash in the amount of $88,000, (b) certain assets
related to NTN's business, including a library of travel video content, and
(c) assignment of the Company's rights and obligations under certain contracts
related to NTN's business.
In consideration of the transfer of the assets of NTN to NNC, the Company
received from NNC the following: (a) a convertible promissory note in the
principal amount of $250,000 (the "Note"), (b) a subordinated promissory note in
the principal amount of $1,000,000 (the "Subordinated Note"), which will bear
interest at the rate of 6% per annum and will be secured by certain portions of
the assets of NNC, including its fixed assets and the video library, and (c) a
warrant to purchase up to 2,275,445 shares of Common Stock of NNC at an exercise
price of $0.45 per share (the "Warrant"). The Note will be due and payable upon
demand by the Company on December 31, 1999; provided, however, that the Note
will be automatically converted into shares of Series A Preferred Stock of NTN
at a conversion price of $4.50 per share upon the occurrence of certain
conditions.
NNC was incorporated under the laws of Delaware on October 19, 1998. As of
December 17, 1998, James Hornthal, the Company's founder and Chairman holds
800,000 shares and the Company holds 829,000 shares of Common Stock of NNC,
which each purchased on November 15, 1998 at a price of $0.015 per share.
Following the closing of the TV Disposition and the conversions of all
outstanding convertible promissory notes, including the Note, the Company
owns approximately 19.7% of NNC's Common Stock (assuming conversion of the
Series A Preferred Stock into Common Stock).
In addition, the Company and NNC entered into a Services Agreement that
provides for, among other things, the following: (a) the sublease to NNC of the
Company's facilities at One Beach Street in San Francisco, (b) the Company's
right to act as the co-exclusive advertising sales representative for NTN's
Travel Update programs, (c) a perpetual, nonexclusive, royalty-free license to
use NTN's travel video library (including any enhancements thereto), and (d) the
continued branding of NTN's "Travel News" and "Travel Update" programs with
"Preview Travel" marks. NNC will agree not to provide online travel services for
a period of five years following the termination of the Services Agreement.
As the historical operations of the Company's television business were not
profitable, and due to the significant risks inherent in the independent
television business, the Company has attributed no value to the Subordinated
Note and the Warrant. The net value of the Company's investment in NNC will be
recorded at $250,000.
As of the closing of the TV Disposition, substantially all of the Company's
employees engaged in NTN's business have become employees of NNC.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable.
(b) Unaudited pro forma financial information has been previously filed
with the Company's Current Report on Form 8-K, as filed with the
Securities and Exchange Commission on December 24, 1998.
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(c) Exhibits.
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2.1* Note and Warrant Purchase Agreement dated December 17,
1998 among the Company, News Travel Network, Inc., a wholly
owned subsidiary of the Company, and NewsNet Central, Inc.
* Previously filed.
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.
PREVIEW TRAVEL, INC.
(Registrant)
Date: January 12, 1999 By: /s/ Kenneth R. Pelowski
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Kenneth R. Pelowski
Executive Vice President, Finance and
Administration and Chief Financial Officer
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INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description Page
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2.1* Note and Warrant Purchase Agreement dated
December 17, 1998 among the Company, News
Travel Network, Inc., a wholly owned subsidiary
of the Company, and NewsNet Central, Inc.
* Previously filed.
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