<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-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): February 11, 2000
SKYLYNX COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-24687 84-1360029
- ------------ -------------------------- --------------------
(State or other (Commission file number) (Employer Identi-
incorporation) fication No.)
600 South Cherry Street, Suite 400, Denver, Colorado 80246
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 316-0400
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(Former name or former address, if changed since last report)
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ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
- ------ ---------------------------------
(a) Financial Statements
Pursuant to Item 7(a)(4), the Registrant files herewith the
following financial statements of the acquired business:
Report of Independent Certified Public Accountants
Alternate Access, Inc. Balance Sheet as of December 31, 1999
Alternate Access, Inc. Statement of Operations for the year ended
December 31, 1999
Alternate Access, Inc. Statement of Stockholders' Deficit for the
year ended December 31, 1999
Alternate Access, Inc. Statement of Cash Flows for the year ended
December 31, 1999
Alternate Access, Inc. Notes to Financial Statements
(b) Pro Forma Statements
Pursuant to Item 7(b) and Item 7(a)(4), the Registrant files
herewith the following pro forma statements:
Unaudited Pro Forma Condensed, Combined Balance Sheet as of December
31, 1999
Unaudited Pro Forma Condensed, Combined Statement of Operations for
the year ended December 31, 1999
(c) Exhibits
Number Exhibit
- ------ -------
1.0 Consent of Arthur Andersen LLP
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders of
Alternate Access, Inc.:
We have audited the accompanying balance sheet of Alternate Access, Inc.
(a Delaware corporation) as of December 31, 1999, and the related statements
of operations, stockholders' deficit and cash flows for the year then ended.
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 auditing standards generally
accepted in the United States. 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 Alternate Access, Inc., as of
December 31, 1999, and the results of its operations and its cash flows for
the year then ended in conformity with accounting principles generally
accepted in the United States.
Tampa, Florida,
April 11, 2000
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ALTERNATE ACCESS, INC.
BALANCE SHEET -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 67,907
Accounts receivable 14,079
Related party receivable 83,995
Prepaid expenses 1,417
------------
Total current assets 167,398
PROPERTY AND EQUIPMENT, net 344,528
OTHER ASSETS 15,015
------------
Total assets $ 526,941
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 777,191
Deferred revenue 162,219
Current portion of capital lease obligations 130,407
------------
Total current liabilities 1,069,817
CAPITAL LEASE OBLIGATIONS, less current maturities 69,251
STOCKHOLDERS' DEFICIT:
Common stock, no par value; 1,500 shares authorized,
1,499 shares issued and outstanding 30,000
Accumulated deficit (642,127)
-------------
Total stockholders' deficit (612,127)
-------------
Total liabilities and stockholders' deficit $ 526,941
=============
</TABLE>
The accompanying notes are an integral part of this balance sheet.
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ALTERNATE ACCESS, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
REVENUES $ 1,895,729
COSTS AND EXPENSES:
Cost of revenues 603,737
Selling, general and administrative 1,043,848
Depreciation and amortization 234,042
-------------
Total costs and expenses 1,881,627
-------------
INCOME FROM OPERATIONS 14,102
-------------
INTEREST AND OTHER EXPENSE (24,732)
-------------
NET LOSS $ (10,630)
=============
NET LOSS PER SHARE - BASIC AND DILUTED $ (7.09)
SHARES USED IN COMPUTING NET LOSS PER SHARE -
BASIC AND DILUTED 1,499
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
<PAGE>
ALTERNATE ACCESS, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Common Stock Accumulated
Shares Amount Deficit Total
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1998 1,499 $ 30,000 $ (409,915) $ (379,915)
Distributions - - (221,582) (221,582)
Net loss - - (10,630) (10,630)
----------- ---------- ----------- -----------
BALANCE, December 31, 1999 1,499 $ 30,000 $ (642,127) $ (612,127)
========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
<PAGE>
ALTERNATE ACCESS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (10,630)
Adjustments to reconcile net loss to net
cash provided by operating activities-
Depreciation and amortization 234,042
Changes in operating assets and liabilities-
Accounts receivable (13,025)
Related party receivable (66,021)
Prepaid expenses 123
Other assets (11,926)
Accounts payable and accrued liabilities 287,975
Deferred revenue 22,975
------------
Net cash provided by operating activities 443,513
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (65,780)
------------
Net cash used in investing activities (65,780)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on related party debt (4,386)
Principal payments on capital lease obligations (173,891)
Distributions (221,582)
------------
Net cash used in financing activities (399,859)
------------
NET DECREASE IN CASH (22,126)
CASH, beginning of year 90,033
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CASH, end of year $ 67,907
============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 788
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Acquisition of property and equipment through
capital lease obligations $ 57,381
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
<PAGE>
ALTERNATE ACCESS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION AND BUSINESS:
-------------------------
Alternate Access, Inc., a Delaware corporation (the Company), was formed to
provide high-speed Internet connectivity and enhanced Internet services to
residential and commercial customers in the Seattle metropolitan area.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts 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.
Fair Value of Financial Instruments
- -----------------------------------
The carrying value of financial instruments on the accompanying balance sheet
approximates their fair value.
Property and Equipment
- ----------------------
Property and equipment are stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of depreciable assets.
Amortization of leasehold improvements is determined using the straight-line
method over the shorter of the estimated useful life of the improvements or
the term of the lease.
Expenditures for repairs and maintenance are charged to expense when incurred.
Expenditures for major renewals and betterments, which extend the useful lives
of existing equipment, are capitalized and depreciated. Upon retirement or
disposition of property and equipment, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or loss is
recognized in the statements of operations.
Revenue Recognition and Deferred Revenue
- ----------------------------------------
Revenue, comprised primarily of billings for internet services, is recognized
as the services are provided. Any amounts collected in advance of the
provision of service are reflected as deferred revenue until the service is
rendered.
Income Taxes
- ------------
The Company has elected S corporation status under the provisions of the
Internal Revenue Code. Accordingly, income of the Company is passed through
to the stockholders; therefore, the Company has recorded no provision for
income taxes for federal tax purposes.
Loss Per Share
- --------------
Net loss per share - basic and diluted is determined by dividing net loss
available to stockholders by the number of common shares outstanding at
December 31, 1999. There is no difference between the basic and diluted
shares outstanding during the period.
3. PROPERTY AND EQUIPMENT:
----------------------
Property and equipment consisted of the following as of December 31, 1999:
<TABLE>
<CAPTION>
Useful Lives
in Years Amount
------------ ------
<S> <C> <C>
Computer equipment 3-7 $225,688
Office equipment 5 78,274
Office furniture 7 3,584
Leasehold improvements 5 13,294
Capital leases 3-5 565,025
---------
885,865
Less- Accumulated depreciation (541,337)
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Property and equipment, net $344,528
=========
</TABLE>
4. CAPITAL LEASE OBLIGATIONS:
-------------------------
As of December 31, 1999, the Company had capital lease obligations aggregating
approximately $200,000, bearing imputed interest of 9 percent, maturing
through November 2003 and secured by various computer equipment.
Maturities of capital lease obligations are as follows as of December 31,
1999:
<TABLE>
<CAPTION>
Year Ending
December 31, Amount
------------ ---------
<S> <C>
2000 $130,407
2001 40,071
2002 18,479
2003 10,702
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$199,659
=========
</TABLE>
5. OPERATING LEASES:
----------------
The Company leases office space and computer equipment under operating leases.
Future minimum lease payments for noncancellable operating leases in effect
at December 31, 1999, are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31, Amount
------------ ---------
<S> <C>
2000 $111,508
2001 121,404
2002 123,424
2003 127,632
2004 131,448
Thereafter 294,262
---------
$909,678
==========
</TABLE>
Rent expense under operating leases for the year ended December 31, 1999,
totaled approximately $112,000.
6. RELATED-PARTY TRANSACTIONS:
--------------------------
During 1999, the Company paid approximately $66,000 in expenses on behalf of
an entity owned by the Company's primary stockholder. As of December 31,
1999, approximately $84,000 was due to the Company related to these
transactions and is included in related party receivable in the accompanying
financial statements. During 1999, the Company also paid in full debt owed to
a former stockholder totaling $4,386.
7. EMPLOYEE 401(K) PROFIT SHARING PLAN:
-----------------------------------
The Company has a 401(k) profit sharing plan (the Plan). No contributions
were made during the year ended December 31, 1999.
8. SUBSEQUENT EVENTS:
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On February 11, 2000, the Company signed an agreement with SkyLynx
Communications, Inc. (SkyLynx), to which it will sell substantially all of the
Company's net assets for $1.95 million in cash and approximately $2.2 million
in SkyLynx common stock. Additionally, SkyLynx will hold back approximately
204,000 shares of SkyLynx common stock, which will be used to indemnify
SkyLynx for Company liabilities incurred, but unknown as of the date of
closing on the acquisition.
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SKYLYNX COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED, COMBINED FINANCIAL STATEMENTS
The unaudited pro forma condensed combined financial statements give effect to
the acquisition by SkyLynx Communications, Inc. of the assets of Alternate
Access, Inc.
The pro forma condensed combined balance sheet gives effect to the acquisition
as if it had occurred on December 31, 1999. The pro forma condensed combined
statement of operations gives effect to the acquisition as if it had occurred
as of January 1, 1999, combining the results of SkyLynx Communications, Inc.
for the year ended December 31, 1999 with those of the same period for
Alternate Access, Inc.
The pro forma adjustments are based on estimates, available information and
certain assumptions that management deems appropriate. The pro forma
financial data do not purport to represent what our financial position or
results of operations would actually have been if such transactions had
occurred on those dates and are not necessarily representative of our
financial position or results of operations for any future period. The pro
forma financial statements should be read in conjunction with the other
financial statements and footnotes included elsewhere in this Report and the
Company's other reports filed with the SEC.
<PAGE>
<PAGE>
PRO FORMA CONDENSED, COMBINED BALANCE SHEET
AS OF DECEMBER 31,1999
<TABLE>
<CAPTION>
SkyLynx
Communications, Alternate Pro Forma Pro Forma
Inc. Access, Inc. Adjustments Combined
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Assets:
Cash 1,947,982 67,907 (1,950,000)(a) 65,889
Accounts Receivable 710,878 98,074 808,952
Prepaid Expenses and
other current assets 734,569 1,417 735,986
Current Assets 3,393,429 167,398 (1,950,000) 1,610,827
Property and equipment 3,566,045 344,528 3,910,573
Goodwill and intangible
assets 9,572,707 - 4,743,751(c) 14,316,458
Other assets - 15,015 15,015
------------ ----------- ----------- -----------
Total Assets 16,532,181 526,941 2,793,751 19,852,873
============ =========== =========== ===========
Liabilities and Equity:
Accounts payable and
accrued liabilities 2,359,897 777,191 3,137,088
Notes payable and
convertible debt 1,529,529 - 1,529,529
Deferred revenue 998,230 162,219 1,160,449
Obligations under capital
leases, current 584,186 130,407 714,593
Dividends payable on
preferred stock 720,082 - 720,082
------------ ----------- ----------- -----------
Total Current
Liabilities 6,191,924 1,069,817 7,261,741
Obligations under
capital leases 290,776 69,251 360,027
Notes payable 6,751 - 6,751
------------ ----------- ----------- -----------
Total Liabilities 6,489,451 1,139,068 7,628,519
Stockholders' Equity:
Common stock 15,194 30,000 (29,316)(a)(b) 15,878
Additional paid in capital48,725,112 - 2,180,940(b)50,906,052
Preferred stock 7,293,134 - 7,293,134
Retained Deficit (45,990,710) (642,127) 642,127(b)(45,990,710)
------------ ----------- ----------- -----------
Total Stockholders'
Equity (Deficit) 10,042,730 (612,127) 2,793,751 12,224,354
------------ ----------- ----------- -----------
Total Liabilities and
Stockholders' Equity16,532,181 526,941 19,852,873
============ =========== =========== ===========
</TABLE>
(a) Adjustment to reflect the cash and common stock paid for the acquisition
(b) Adjustment to reflect the removal of shareholders' deficit accounts for
Alternate Access
(c) Adjustment to record goodwill and intangibles related to the acquisition
<PAGE>
<PAGE>
PRO FORMA CONDENSED, COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1999
<TABLE>
<CAPTION>
SkyLynx
Communications, Alternate Pro Forma Pro Forma
Inc. Access, Inc. Adjustments Combined
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues 4,726,589 1,895,729 6,622,318
Operating Costs and
Expenses (31,256,220) (1,881,627)(1,580,677)(a)(34,718,524)
------------ ----------- ----------- -----------
Income (loss) from
operations (26,529,631) 14,102 (1,580,677) (28,096,206)
Interest and other
income (expense) (446,013) (24,732) (470,745)
------------ ----------- ----------- -----------
Net Loss (26,975,644) (10,630) (1,580,677) (28,566,951)
Preferred stock dividends
and accretion of
beneficial conversion
feature (13,461,480) - (13,461,480)
------------ ----------- ----------- -----------
Net loss attributable to
common shareholders (40,437,124) (10,630) (1,580,677) (42,028,431)
============ =========== =========== ===========
Basic and diluted loss
per share (3.44) (3.38)
Weighted average common
shares outstanding -
basic and diluted 11,763,251 684,431(b) 12,447,682
</TABLE>
(a) Adjustment to reflect amortization of goodwill and intangibles related to
the acquisition
(b) Adjustment to revise the weighted-average common shares outstanding for
the common shares issued in the acquisition
<PAGE>
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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 hereunto duly authorized.
SKYLYNX COMMUNICATIONS , INC.
Dated: April 25, 2000 By: /s/ Jeffery A. Mathias
-------------------- --------------------------------
Jeffery A. Mathias, President
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation of our report included in this 8-K into the Company's previously
filed Registration Statement File Nos. 333-74487 and 333-92065.
Tampa, Florida /s/ ARTHUR ANDERSEN LLP
April 20, 2000
