<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report: October 2, 2000
Date of earliest event reported: July 18, 2000
ALLOY ONLINE, INC.
(Exact name of registrant as specified in its charter)
000-26023
(Commission
File Number)
Delaware 04-3310676
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
151 West 26th Street, 11th Floor
New York, NY 10001
(Address of principal executive offices) (Zip Code)
(212) 244-4307
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
<PAGE>
The undersigned Registrant hereby amends Item 7 of its Current Report on Form
8-K dated August 2, 2000 to read in its entirety as follows:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements of business acquired.
-----------------------------------------
On July 18, 2000, Alloy Online, Inc. ("Alloy") completed an acquisition of
all the outstanding capital stock of Kubic Marketing, Inc. ("Kubic"), a Delaware
corporation with a principal place of business in San Luis Obispo, California.
The acquisition was effected pursuant to an Agreement and Plan of Reorganization
dated as of July 17, 2000, (the "Reorganization Agreement") by and between
Alloy, Alloy Acquisition Sub, Inc., a Delaware corporation ("Acquisition Sub")
and a wholly-owned subsidiary of Alloy, Kubic and SWI Holdings LLC, a Delaware
limited liability company and the sole stockholder of Kubic (the "Stockholder"),
pursuant to which Acquisition Sub was merged with and into Kubic (the "Merger")
with Kubic continuing as the surviving corporation and a wholly-owned subsidiary
of Alloy.
Kubic is the holding company for its wholly-owned subsidiary, Phase Three,
Inc. (formerly CCS, Inc. and which conducts business as CCS), which is one of
the largest mail order catalog and Internet marketers of skateboards, snowboards
and related apparel, equipment and accessories. CCS is also one of the largest
mail order catalogs serving the Generation Y skate and snowboard market with a
database of over one million buyers and requesters. In addition, CCS reaches the
extreme-sport oriented Generation Y boys through its Website that it promotes in
its catalogs.
Prior to the acquisition by Alloy, Kubic made a distribution to the
Stockholder of primarily all of its net assets not attributed to Phase Three,
Inc., after which Kubic was comprised solely of Phase Three, Inc. net assets.
Accordingly, the accompanying unaudited pro forma condensed consolidated
financial information and historical financial statements for Kubic, as well as
all references to Kubic, are comprised solely of information relating to Phase
Three, Inc., which represents the historical financial information of CCS, Inc.
See Exhibit 99.4 to this Amendment on Current Report 8-K/A for the audited
balance sheets of CCS, Inc. as of February 29, 2000 and February 28, 1999 and
the related statements of income, stockholders' equity and cash flows for the
period from August 14, 1999 through February 29, 2000 and the period from March
1, 1999 through August 13, 2000 and for the years ended February 28, 1999 and
1998; and the unaudited balance sheet at May 31, 2000 and the related unaudited
statements of income, stockholders' equity and cash flows for the three month
periods ended May 31, 2000 and May 31, 1999, and notes thereto, which describe
the previous transactions related to Kubic and CCS, Inc.
In connection with the acquisition, Alloy issued, subject to certain escrow
and lockup provisions, to the Stockholder 3,267,981 shares of Alloy's common
stock, $.01 par value per share, having a value of $40,033,000, or $12.25 per
share, and a warrant to purchase shares of Alloy's restricted common stock, $.01
par value per share, in an aggregate amount if any, as determined pursuant to
the provisions of the warrant. The warrant represents contingent consideration,
the amount of which, if any, will be recorded at the time when the number and
amount of any additional shares or cash consideration is fixed. In addition,
Alloy paid $10,000,000 in cash from its cash reserves to Kubic's lenders to
retire certain debt obligations of Kubic. The acquisition will be accounted for
under the purchase method of accounting.
<PAGE>
(b) Pro forma financial information.
-------------------------------
The following unaudited condensed consolidated financial information sets
forth the consolidated financial position and consolidated results of operations
of Alloy and Kubic assuming the combination was accounted for using the purchase
method of accounting and that the combination was consummated (i) on April 30,
2000 for the unaudited pro forma condensed consolidated balance sheet and (ii)
as of the beginning of the earliest period presented in the unaudited pro forma
condensed statements of operations. Accordingly, the assets acquired and
liabilities assumed have been recorded at their estimated fair values and useful
lives, which are subject to further adjustment based on future events and future
analysis.
The unaudited pro forma information consolidates Alloy's historical balance
sheet as of April 30, 2000 with the balance sheet of Kubic as of May 31, 2000,
and Alloy's historical statements of operations for the fiscal year ended
January 31, 2000 and the three months ended April 30, 2000 with the historical
statements of operations of Kubic for the year ended February 29, 2000 and the
three months ended May 31, 2000, respectively. The results of operations of
Kubic for the months of February 1999 and 2000 and May 2000 were not considered
material with respect to the pro forma consolidated results of operations for
the year ended January 31, 2000 and the three months ended April 30, 2000.
The pro forma condensed consolidated balance sheet and statements of
operations have been prepared by the management of Alloy. The following
unaudited pro forma condensed consolidated information is presented for
illustration purposes only. It is not necessarily indicative of the financial
position or results of operations that would actually have been reported had the
combination been in effect during those periods or that may be reported in the
future. The statements should be read in conjunction with Alloy's historical
financial statements and notes thereto included in filings with the Securities
and Exchange Commission and CCS financial statements, which have been included
in Exhibit 99.4 of this report.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
APRIL 30, 2000
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ALLOY KUBIC PRO FORMA
HISTORICAL HISTORICAL (1) ADJUSTMENTS PRO FORMA
---------- -------------- ----------- ---------
ASSETS
------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,024 $ 210 $ (10,000) (a), (b) $ 8,234
Available-for-sale marketable securities 41,275 -- -- 41,275
Accounts receivable, net 2,629 96 -- 2,725
Inventories, net 4,457 4,371 -- 8,828
Prepaid expenses and other current assets 2,382 508 -- 2,890
--------- --------- --------- ---------
TOTAL CURRENT ASSETS 68,767 5,185 (10,000) 63,952
Property and equipment, net 2,540 1,754 -- 4,294
Intangible assets 11,539 16,105 30,623 (a) 58,267
Due from Parent -- 4,739 (4,739) (a) --
Other assets 1,492 109 (82) (a) 1,519
--------- --------- --------- ---------
TOTAL ASSETS $ 84,338 $ 27,892 $ 15,802 $ 128,032
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 32 $ 1,305 $ (1,130) (b) $ 207
Accounts payable and accrued liabilities 9,311 4,255 2,967 (a) 16,533
--------- --------- --------- ---------
TOTAL CURRENT LIABILITIES 9,343 5,560 1,837 16,740
LONG-TERM DEBT -- 8,311 (7,962) (b) 349
STOCKHOLDERS' EQUITY:
Common Stock 176 1 32 (a) 209
Additional paid-in capital 97,764 12,781 23,134 (a) 133,679
Retained earnings (accumulated deficit) (29,521) 1,239 (1,239) (a) (29,521)
Deferred compensation
(623) -- -- (623)
Accumulated other comprehensive income 7,199 -- -- 7,199
--------- --------- --------- ---------
TOTAL STOCKHOLDERS' EQUITY 74,995 14,021 21,927 110,943
--------- --------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 84,338 $ 27,892 $ 15,802 $ 128,032
========= ========= ========= =========
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 30, 2000
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ALLOY KUBIC PRO FORMA
HISTORICAL HISTORICAL (2) ADJUSTMENTS PRO FORMA
---------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 7,660 $ 9,617 $ -- $ 17,277
Cost Of Sales 3,001 5,961 -- 8,962
------------ -------- ---------- --------
Gross Profit 4,659 3,656 -- 8,315
Selling, General And Administrative Expenses 10,586 2,657 -- 13,243
Goodwill Amortization 811 215 2,121 (c) 3,147
------------ -------- ---------- --------
Income (Loss) From Operations (6,738) 784 (2,121) (8,075)
Interest income (expense), net 433 (246) 105 (d) 292
Other income (expense), net -- (105) 105 (e) --
------------ -------- ---------- --------
Income (Loss) Before Income Taxes (6,305) 433 (1,911) (7,783)
Provision (Benefit) For Income Taxes -- 195 (157)(e) 38
------------ -------- ---------- --------
Net Income (Loss) $ (6,305) $ 238 $ (1,754) $ (7,821)
=========== ======== ========== ===========
Net Loss Per Common Share:
Basic And Diluted $ (0.41) $ (0.42)
=========== ===========
Weighted Average Common Shares Outstanding:
Basic and Diluted 15,245,159 3,267,981 (a) 18,513,140
=========== ========== ===========
</TABLE>
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 2000
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ALLOY KUBIC PRO FORMA
HISTORICAL HISTORICAL (3) ADJUSTMENTS PRO FORMA
---------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 31,166 $ 34,722 $ - $ 65,888
Cost of Sales 13,765 21,005 - 34,770
---------- ------------ ---------- ------------
Gross Profit 17,401 13,717 - 31,118
Selling, General And Administrative Expenses 33,245 10,241 - 43,486
Goodwill Amortization 332 498 8,848 (c) 9,678
---------- ------------ ---------- ------------
Income (Loss) From Operations (16,176) 2,978 (8,848) (22,046)
Interest Income (Expense), Net 1,542 (512) 12 (d) 1,042
Other Income (Expense), Net - 69 (69)(e) -
---------- ------------ ---------- ------------
Income (Loss) Before Income Taxes (14,634) 2,535 (8,905) (21,004)
Provision (Benefit) For Income Taxes - 1,214 (945)(e) 269
---------- ------------ ---------- ------------
Income (Loss) Before Extraordinary Item (14,634) 1,321 (7,960) (21,273)
Extraordinary Item:
Charge For Early Retirement Of Debt (235) - - (235)
---------- ------------ ---------- ------------
Net Income (Loss) $ (14,869) $ 1,321 $ (7,960) $ (21,508)
========== ============ ========= ===========
Basic And Diluted Loss Per Common Share:
Before Extraordinary Item $ (1.15) $ (1.33)
Extraordinary Charge $ (0.02) $ (0.01)
---------- -----------
Net Loss $ (1.17) $ (1.34)
========== ===========
Weighted Average Common Shares Outstanding:
Basic And Diluted 12,722,676 3,267,981 (a) 15,990,657
========== ========= ==========
</TABLE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
PRO FORMA ADJUSTMENTS
(a) To reflect Alloy's purchase of Kubic for $10,000 in cash and 3,267,981
shares of Alloy's common stock valued at $35,948, or $11.00 per share as of
the assumed transaction date of April 30, 2000, and estimated cash
acquisition expenses of $2,967, less $2,187 equal to the net book value at
May 31, 2000 of the assets acquired based upon a preliminary purchase price
allocation. Net book value excludes $4,739 due from related party at May 31,
2000, which was not acquired by Alloy, as well as $82 of other assets
consisting of deferred debt issuance costs pushed down from Kubic to CCS,
which was not acquired by Alloy. The purchase price is subject to adjustment
and, accordingly, the final allocation may involve a revaluation of certain
assets.
(b) Represents payment by Alloy of certain Kubic indebtedness prior to the
acquisition to Kubic's lenders, in accordance with the Reorganization
Agreement.
(c) To reflect the amortization over five years of goodwill recorded on the
purchase of Kubic, net of the reversal of prior goodwill amortization
recorded by Kubic in the historical financial statements.
(d) To reflect the reduction in interest income by Alloy in connection with the
cash paid for the acquisition that would have occurred, offset by the
reduction in interest expense that Kubic would not have incurred if the
combination was made at the beginning of the periods presented.
(e) To reflect expenses for Kubic that would not have been incurred if the
combination was made at the beginning of the periods presented.
OTHER NOTES
(1) The Kubic historical information is as of May 31, 2000.
(2) The Kubic historical information is for the three months ended May 31, 2000.
(3) The Kubic historical information is for the combined periods of March 1,
1999 through August 13, 1999 and August 14, 1999 through February 29, 2000.
Reference is made to the discussion in Item 7. (a) and (b) of this report, as
well as the financial statements included in Exhibit 99.4 for further
information regarding the acquisition.
(c) EXHIBITS
<PAGE>
(c) Exhibits.
--------
2.1* Agreement and Plan of Reorganization dated as of July 17, 2000, by
and between Alloy Online, Inc., Alloy Acquisition Sub, Inc., Kubic
Marketing, Inc. and SWI Holdings, LLC.
4.1* Warrant to Purchase Shares of Common Stock of Alloy Online, Inc.
dated as of July 18, 2000 between Alloy Online, Inc. and SWI
Holdings, LLC.
23.1 Consent of Independent Auditors of CCS, Inc.
99.1* Investment Representation and Lockup Agreement, dated as of July 18,
2000, by and between Alloy Online, Inc. and SWI Holdings, LLC.
99.2* Amendment to Loan and Security Agreement, dated as of July 18, 2000,
by and among Phase Three, Inc., the financial institutions party
thereto and the other parties named therein.
99.3* Alloy's Press Release dated July 19, 2000.
99.4 CCS, Inc. audited financial statements as of February 29, 2000 and
February 28, 1999 and for the periods from August 14, 1999 through
February 29, 2000 and March 1, 1999 through August 13, 1999, and for
the years ended February 28, 1999 and 1998; and CCS, Inc. unaudited
financial statements at May 31, 2000 and for the three month periods
ended May 31, 2000 and May 31, 1999.
----------------------
* Previously Filed
<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.
Date: October 2, 2000 ALLOY ONLINE, INC.
(Registrant)
By: /s/ Matthew C. Diamond
----------------------
Matthew C. Diamond
Chief Executive Officer
<PAGE>
EXHIBIT INDEX
2.1* Agreement and Plan of Reorganization dated as of July 17, 2000, by
and between Alloy Online, Inc., Alloy Acquisition Sub, Inc., Kubic
Marketing, Inc. and SWI Holdings, LLC.
4.1* Warrant to Purchase Shares of Common Stock of Alloy Online, Inc.
dated as of July 18, 2000 between Alloy Online, Inc. and SWI
Holdings, LLC.
23.1 Consent of Independent Auditors of CCS, Inc.
99.1* Investment Representation and Lockup Agreement, dated as of July 18,
2000, by and between Alloy Online, Inc. and SWI Holdings, LLC.
99.2* Amendment to Loan and Security Agreement, dated as of July 18, 2000,
by and among Phase Three, Inc., the financial institutions party
thereto and the other parties named therein.
99.3* Alloy's Press Release dated July 19, 2000.
99.4 CCS, Inc. audited financial statements as of February 29, 2000 and
February 28, 1999 and for the periods from August 14, 1999 through
February 29, 2000 and March 1, 1999 through August 13, 1999, and for
the years ended February 28, 1999 and 1998; and CCS, Inc. unaudited
financial statements at May 31, 2000 and for the three month periods
ended May 31, 2000 and May 31, 1999.
-----------------------
* Previously Filed
