SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Earliest Event Reported): January 16, 1996
Exact name of Registrant
as specified in its charter: The Diana Corporation
State or Other Jurisdiction of Incorporation: Delaware
Commission File Number: 1-5486
I.R.S. Employer Identification Number: 36-2448698
Address of Principal Executive Office: 8200 West Brown Deer Road
Suite 200
Milwaukee, WI 53223
Registrant's Telephone Number, Including Area Code: (414) 355-0037
The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Form 8-K
Report dated January 31, 1996 as set forth in the pages attached
hereto:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired:
The audited financial statements of Sattel
Communications Company ("Sattel") for the period
November 23, 1994 (inception) through December 31,
1994 and for the year ended December 31, 1995 are
filed with this report.
(b) Pro Forma Financial Information:
The following unaudited pro forma condensed
consolidated financial information is filed with this
report:
Unaudited Pro Forma Condensed Consolidated
Balance Sheet at January 6, 1996
Unaudited Pro Forma Condensed Consolidated
Statements of Operations for the 52 Weeks Ended
April 1, 1995 and the 40 Weeks Ended January 6,
1996
<PAGE>
On January 16, 1996, The Diana Corporation
("Diana" or "Registrant") acquired an additional 30%
ownership interest in Sattel Communications Corp.
("SCC") (collectively the "SCC Acquisition"). As a
result, Diana increased its ownership interest in SCC
from 50% to 80%. Diana issued 350,000 shares of its
newly issued common stock ("the Diana Shares") to
Sattel Technologies, Inc. ("STI") in connection with
the transaction. STI retained a 20% ownership
interest in SCC. Diana also agreed to undertake
certain obligations to register the Diana Shares and
to grant STI certain registration rights with respect
thereto. In addition, pursuant to another agreement
entered into on January 16, 1996, Diana agreed to
provide SCC with additional cash sufficient to
increase its capital contributions to $2.5 million
and make additional loans to SCC of up to $1.425
million.
In addition, on January 10, 1996, Diana and STI
entered into certain agreements. Pursuant to these
agreements, Diana and STI each contributed their
partnership interests in Sattel to a newly-formed
corporation, SCC, following the contribution to
capital by Diana of its note and interest receivable
from Sattel.
On May 3, 1996, Diana and STI entered into a
Supplemental Agreement to amend the Exchange
Agreement entered into in January 1996. STI agreed
to convey to Diana an additional 15% of SCC and
50,000 Diana Shares in exchange for being released
from the obligation to pay for certain product
development and STI's proportionate share of a $10
million capital contribution to SCC.
Between October 1994 and June 1996, the Company
invested $13.9 million and issued 300,000 shares
of its common stock in order to acquire an 80%
interest in SCC, to acquire ownership of the
intellectual property and licenses necessary to
manufacture and sell DSS and DataNet switches, to
further engineer and advance such switches, and to
fund SCC's startup costs, working capital and
investment in Concentric Network Corporation.
On November 20, 1995, C&L Acquisition
Corporation, a subsidiary of the Registrant's
subsidiary, C&L Communications, Inc., acquired 80% of
the common stock of Valley Communications, Inc.
("Valley") from Henry P. Mutz, Christopher M.
O'Connor and Kenneth R. Hurst for approximately
$4,320,000 including expenses and future
consideration contingent on Valley attaining defined
levels of pretax earnings in specified time periods
through March 2001 (the "Valley Acquisition"). A
separate Form 8-K was filed on December 5, 1995 and
amended on January 31, 1996 for Diana's acquisition
of Valley.
<PAGE>
The following unaudited pro forma financial
statements give effect to the SCC Acquisition and
the Valley Acquisition which are both accounted for
as a purchase. The unaudited pro forma condensed
consolidated balance sheet presents the combined
financial position of Diana and SCC as of January 6,
1996 assuming that the SCC Acquisition had occurred
as of January 6, 1996. Such pro forma information
is based upon the historical balance sheet data of
Diana, including Valley, as of January 6, 1996, and
Sattel as of December 31, 1995. The unaudited pro
forma condensed consolidated statement of operations
for the 52 weeks ended April 1, 1995 gives effect to
the SCC Acquisition and the Valley Acquisition by
combining the following results of operations:
1) Diana for the 52 weeks ended April 1, 1995
2) Sattel for the period November 23, 1994
(inception) through March 31, 1995
3) Valley for the year ended April 30, 1995
The unaudited pro forma condensed consolidated
statement of operations for the 40 weeks ended
January 6, 1996 gives effect to the SCC Acquisition
and the Valley Acquisition by combining the following
results of operations:
1) Diana for the 40 weeks ended January 6, 1996
2) Sattel for the 9 months ended December 31, 1995
3) Valley for the 7 months ended November 30, 1995
The results of operations of Valley for the one month
ended April 30, 1995 were not material to the pro
forma results of operations for the 40 weeks ended
January 6, 1996.
The unaudited pro forma condensed consolidated
financial information has been prepared by the
Registrant based upon assumptions deemed proper by
it. The unaudited pro forma condensed consolidated
financial information presented herein is shown for
illustrative purposes only and is not necessarily
indicative of the future financial position or future
results of operations of the Registrant, or of the
financial position or results of operations of the
Registrant that would have actually occurred had the
transactions been in effect as of the date or for the
periods presented.
The unaudited pro forma condensed consolidated
financial information should be read in conjunction
with the historical financial statements and related
notes of the Registrant.
<PAGE>
(c) Exhibits
2.1 Exchange Agreement dated January 16, 1996 by
and among The Diana Corporation and Sattel
Technologies, Inc., incorporated herein by
reference to Exhibit 10.2 of the Registrant's
Registration Statement on Form S-3 (Reg. No.
333-1055)
23 Consent of Price Waterhouse LLP
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 thereunto duly authorized.
THE DIANA CORPORATION
(Registrant)
Date: July 15, 1996 /s/ R. Scott Miswald
Vice President and Treasurer
