SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 2, 1999
SYMPOSIUM CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 0-25435 13-4042921
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
410 Park Avenue, Suite 830
New York, New York
(Address of Principal Executive Offices)
(212) 754-9901
(Registrant's Telephone Number)
Page 1
<PAGE>
ITEM 5: OTHER EVENTS.
AMERINET, INC
Symposium Corporation (the "Company") entered into a Stock Purchase Agreement
dated as of June 2, 1999 to acquire 50.1% of the outstanding shares of common
stock (the "Shares") of AmeriNet, Inc., an Oregon corporation. The Purchase
Price for the Shares is $5,000,000.
AmeriNet offers a complete direct electronic debit service both to merchants
selling goods over the Internet as a method of payment by the customer and as a
service for business to business transactions. AmeriNet currently services over
one hundred individual merchants. These merchants include calling centers,
distributors and fulfillment centers, all of which deal with transactions
generated through infomercials and direct response commercials, as well as
transactions which result from outbound and inbound direct marketing via
telemarketing. According to unaudited financial statements provided to the
Company by AmeriNet, AmeriNet processed approximately $16 million of
transactions in 1998, its first full year of operation, with a loss before
taxes, depreciation and amortization of approximately $400,000 for the year.
Under the terms of the Stock Purchase Agreement, the Company has previously made
a $250,000 loan to AmeriNet. Also, upon satisfaction of certain conditions, the
Company has agreed to make an additional loan of $750,000 to AmeriNet.
The Purchase Price is due and payable at the closing and will consist of a cash
payment in the amount equal to the Purchase Price minus the outstanding
principal and accrued interest on the loans. Either party may terminate the
agreement if the Closing does not occur on or prior to (i) the earlier of (A)
the 45th day following AmeriNet's delivery to the Company of the audited
financial statements for its year ended December 31, 1998 or (B) September 30,
1999 or (ii) such later date as may be agreed to in writing by the parties.
There can be no assurance that the Closing will occur or that the Company will
acquire the Shares.
The Company does not currently have the funds to complete the acquisition of
AmeriNet. While it is currently seeking the necessary financing, the Company has
no commitment from and no arrangements or understandings with any party with
regard to providing the necessary funds and there can be no assurance that the
Company will be able to secure the necessary financing.
Page 2
<PAGE>
If the transaction is terminated, the loans made by the Company to AmeriNet will
become due and payable no later than June 2, 2000.
DIRECT SALES INTERNATIONAL, L.P.
The Company has entered into an Option Agreement dated as of June 9, 1999
with Direct Sales International, L.P., a Georgia limited partnership ("DSI"),
the subsidiaries of DSI and Richard Prochnow. Mr. Prochnow is the sole
shareholder of DSI's general partner and directly or indirectly owns 96% of the
limited partnership interests of DSI. Pursuant to the Option Agreement, DSI and
its subsidiaries granted to the Company an option to purchase all of their
assets. DSI is a subscription sales agent provider for consumer magazines in the
United States.
The Company may exercise the option at any time on or before November 30,
1999. If the Company elects to exercise the option, the Company will pay DSI and
its subsidiaries an exercise price consisting of three parts: (1) $22.9 million
in cash; (2) additional cash equal to DSI's outstanding balance at the closing
under its loan facility with SouthTrust Bank, divided by 0.555; and (3) the
assumption of accounts payable, accrued expenses and deferred revenues of DSI
and its subsidiaries incurred in the ordinary course of business.
DSI, which is based in Atlanta, Georgia, is a subscription sales agent
provider for consumer magazines in the United States. DSI has been granted the
direct authority to act on behalf of magazine publishers, accepting magazine
subscription orders either directly from consumers or from independent telesales
organizations and placing those orders with fulfillment houses designated by the
publishers. The magazine subscriptions are sold to the customers in bundles of
magazines. DSI generally finances these purchases by accepting from customers'
12 equal monthly payments which are automatically charged to the customers'
credit cards. According to DSI, these receivables, net of reserves, exceeded $22
million at December 31, 1998.
According to unaudited financial statements provided by DSI, DSI had
revenues of approximately $106 million and EBITDA of approximately $5.3 million
for the year ended December 31, 1998. At that date, DSI's accounts payable,
accrued expenses and deferred revenues were approximately $3 million.
The Company's ability to exercise the option will depend in part on its
ability to obtain sufficient financing to pay the cash portion of the option
exercise price. The Company does not currently have the funds to exercise the
option. While it is currently seeking the necessary financing, the Company has
no commitment from and no arrangements or understandings with any party with
regard to providing the necessary funds and there can be no assurance that the
Company will be able to secure the necessary funds.
At or prior to the closing of the Company's exercise of the option, the
Company will enter into a consulting agreement with Mr. Prochnow and a lease for
DSI's premises.
ISSUANCE OF SHARES
The Company has issued 2,500,000 shares (the "Prochnow Shares") of its
common stock to Richard Prochnow at a purchase price of $1.00 per share pursuant
to a Stock Purchase Agreement between the Company and Mr. Prochnow dated June 9,
1999. Mr. Prochnow paid the purchase price for the Prochnow Shares with a
promissory note in the principal amount of $2,500,000. The note bears interest
at an annual rate of 7.75% and is due and payable on the earlier of December 31,
2000 or the closing date of the Company's purchase of the DSI assets if the
Company elects to exercise its option. The note is secured by the
Page 3
<PAGE>
Prochnow Shares of the Company's common stock issued to Mr. Prochnow, and by a
25% limited partnership interest in DSI held by Mr. Prochnow.
The Stock Purchase Agreement provides that if the Company does not acquire
all or substantially all of the assets or equity interests of DSI on or before
November 30, 1999, Mr. Prochnow may elect to rescind his purchase by giving the
Company notice on or before December 10, 1999. If this occurs, Mr. Prochnow
would return the Prochnow Shares to the Company and the Company would cancel Mr.
Prochnow's promissory note. If Mr. Prochnow does not choose to rescind his
purchase of the Prochnow Shares, the Company would have the right to purchase a
25% limited partnership interest in DSI from Mr. Prochnow in consideration of
the Company's return to Mr. Prochnow of his promissory note.
The Stock Purchase Agreement provides that if Mr. Prochnow does not elect
to rescind his purchase of the Prochnow Shares, the Company would have the right
to repurchase all or any portion of the such shares for a purchase price of
$1.20 per share. The Company may exercise this right at any time from December
10, 1999 until June 2, 2000. The Company may pay the purchase price with a 25%
limited partnership interest in DSI (if the Company owns such interest), or with
cash, cancellation of Mr. Prochnow's promissory note or any combination of cash
or note cancellation that equals the aggregate purchase price.
If the Company acquires the DSI assets by exercising the option, the
Company will grant Mr. Prochnow registration rights acceptable to Mr. Prochnow
and the Company with respect to the Prochnow Shares.
Page 4
<PAGE>
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.
June 25, 1999 SYMPOSIUM CORPORATION
By: /s/ Ronald Altbach
------------------------------
Ronald Altbach
Chief Operating Officer
Page 6
<PAGE>
EXHIBIT INDEX
EXHIBITS
99.1 Press Release dated June 24, 1999
CONTACT: -OR- INVESTOR RELATIONS COUNSEL:
Symposium Corporation The Equity Group Inc.
Rupert Galliers-Pratt, Co-Chairman & CEO www.theequitygroup.com
Ronald Altbach, Co-Chairman & COO Arthur Occhi (212) 836-9605
(212) 754-9901 Devin Sullivan (212) 836-9608
[email protected]
FOR IMMEDIATE RELEASE
SYMPOSIUM CORPORATION ANNOUNCES SEPARATE AGREEMENTS TO ACQUIRE
TWO TRANSACTION-ORIENTED COMPANIES
New York, NY -- June 24, 1999 -- Symposium Corporation (OTCBB: SYPM)
("Symposium") today announced that, as part of its overall strategy to identify,
acquire and consolidate companies in niche markets in direct marketing and
financial services, it entered agreements to acquire two transaction-oriented
companies.
Symposium has acquired from Direct Sales International LP ("DSI") an option to
purchase all of DSI's assets for $22.9 million plus the amount necessary to
enable DSI to repay its bank loan and the assumption of DSI's accounts payable,
accrued expenses and deferred revenues. The amount necessary to enable DSI to
repay its bank loan is expected to be less than $1 million. The option expires
on November 30, 1999.
DSI, which is based in Atlanta, Georgia, is a subscription sales agent provider
for consumer magazines in the United States. DSI has been granted the direct
authority to act on behalf of magazine publishers, accepting magazine
subscription orders either directly from consumers or from independent telesales
organizations and placing those orders with fulfillment houses designated by the
publishers. The magazine subscriptions are sold to the customers in bundles of
magazines. DSI generally finances these purchases by accepting from customers'
12 equal monthly payments which are automatically charged to the customers'
credit cards. According to DSI, these receivables, net of reserves, exceeded $22
million at December 31, 1998.
According to unaudited financial statements provided by DSI, DSI had revenues of
approximately $106 million and EBITDA of approximately $5.3 million for the year
ended December 31, 1998. At that date, DSI's accounts payable, accrued expenses
and deferred revenues were approximately $3 million.
(more)
<PAGE>
Symposium Corporation Press Release Page 2
June 24, 1999
Symposium also signed an agreement with AmeriNet, Inc. to purchase 50.1% of the
outstanding common shares of AmeriNet, Inc. for $5 million. This acquisition is
scheduled to close within 45 days of the completion of AmeriNet's audit, which
has recently commenced. According to unaudited financial statements provided to
Symposium by AmeriNet, AmeriNet processed approximately $16 million of
transactions in 1998, its first full year of operation, with a loss before
taxes, depreciation and amortization of approximately $400,000 for the year.
Based in Oregon, AmeriNet seeks to capitalize on the growth in E-commerce by
offering a complete direct electronic debit service known as "DEBIT-IT"(TM) both
to merchants selling goods over the Internet as a method of payment by the
customer and as a service for business to business transactions. AmeriNet's
service permits merchants to offer customers an alternative to payment by credit
card, which is particularly important in generating E-commerce sales to the
estimated 40% of American adults who do not have a credit card. Payment by this
method has approximately the same cost to the merchant as a credit card and is
designed to be as easy to use by the customer as a credit card. AmeriNet, which
conducts business under the name WWW.DEBIT-IT.COM, currently services over one
hundred individual merchants. These merchants include calling centers,
distributors and fulfillment centers, all of which deal with transactions
generated through infomercials and direct response commercials, as well as
transactions which result from outbound and inbound direct marketing via
telemarketing.
Rupert Galliers-Pratt, Co-Chairman and CEO of Symposium Corporation, commented,
"These acquisitions represent an important step in our overall strategy and
define the business and technology platform upon which Symposium expects to
continue to grow. These companies each enjoy a prominent position in niche
markets, have low capital expenditure requirements, operate in a fragmented
competitive landscape and offer the opportunity for high growth potential and a
high rate of return on investment. Each of these businesses, once acquired, will
be actively managed so as to take full advantage of economies of scale,
encourage third-party competitive pricing, capitalize on symbiotic opportunities
and create additional transactional opportunities by leveraging the personal
preference information produced by the transactions of these businesses.
Moreover, Symposium will use each of these businesses as a springboard upon
which to pursue a consolidation strategy in specific niches."
Symposium is in the process of completing due diligence for each of these
transactions. In addition, Symposium does not presently have the cash necessary
to complete either the DSI or AmeriNet transaction. Accordingly, there is no
assurance that Symposium will be able to complete either transaction.
(more)
<PAGE>
Symposium Corporation Press Release Page 3
June 24, 1999
Symposium also noted that the shareholders of Hamilton Telecommunications Ltd.
had agreed to extend the final closing date to August 14, 1999 (from June 14,
1999). With the commencement of quotation for the Common Stock of Symposium on
the OTC Bulletin Board, the principal remaining condition to closing that
acquisition is obtaining the financing for the $5.75 million cash portion of the
purchase price. Symposium is presently seeking to raise that financing, but as
of this date has no commitments. Hamilton is an international audiotext service
operator.
Lastly, Symposium announced that it had sold to Richard Prochnow, the principal
owner and President of DSI and a 50% owner of AmeriNet, 2.5 million shares of
Symposium Common Stock representing approximately 20% of the outstanding Common
Stock, for a secured promissory note due December 31, 1999. Mr. Prochnow has the
right to rescind the transaction, and the Company has the right to repurchase
the shares, under certain conditions. As a result of that purchase, Mr. Prochnow
has become the largest shareholder of Symposium. If the DSI transaction is
completed, it is anticipated that Mr. Prochnow would become a member of the
Board of Directors of Symposium.
This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 ("Securities Act") and Section 21E of
the Securities Exchange Act of the 1934 (the "Exchange Act"). Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable at this time, it can give no assurance that such
expectations will prove to have been correct. Forward-looking statements involve
numerous risks and uncertainties. Forward-looking statements in this press
release include the Company's statements that (or to the effect that) (i) the
Company will be successful in raising the necessary funds to complete the
acquisitions, (ii) these or other acquisitions will be completed, and (iii) the
Company intends to expand business operations through developing niche market
businesses. As a result of these factors and other important risks and
uncertainties described in the Company's most recently filed Registration
Statement on Form 10-SB and quarterly report on Form 10-QSB which should be read
in conjunction herewith, copies of which are available from the Company's
Investor Relations Department, actual results may differ materially from those
contemplated by the forward-looking statements set forth herein. The Company
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any statement herein or to reflect any change in the
Company's expectations or any change in events, conditions or circumstances on
which any such statement is based.
# # #
