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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): November 1, 1998
CONCOURSE CORPORATION
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(Exact name of Registrant as specified in its charter)
Minnesota 2-86551C 41-1368898
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
230 W. Passaic Street, Maywood NJ 07607
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 712-1142
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
The Merger described in Item 2 of this Current Report may be deemed to
have resulted in a change of control of Concourse Corporation (the "Company"). A
description of the Merger is included in Item 2 below.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
THE MERGER
Effective on November 1, 1998, Peoples Acquisition Corporation, which
is a wholly-owned subsidiary of Concourse Corporation (the "Company"), merged
with and into The Peoples Publishing Group, Inc., a Delaware corporation
("PPG"), pursuant to an Amended and Restated Agreement and Plan of Merger, dated
as of August 31, 1998, by and between the Company, Peoples Acquisition
Corporation and PPG (the "Merger").
As a result of the Merger, the separate existence of Peoples
Acquisition Corporation ceased and PPG became a wholly-owned subsidiary of the
Company. PPG's shareholders received the following consideration for their
shares in PPG:
(1) Holders of PPG's common stock received 600,000 shares of the
Company's 1998 Convertible Stock, convertible into an aggregate of 13,050,000
shares of the Company's Common Stock;
(2) Holders of PPG's 1990 Redeemable Cumulative Convertible Preferred
Stock received 1,278,120 shares of the Company's 1990 Convertible Stock,
convertible into an aggregate of 27,799,110 shares of the Company's Common
Stock; and
(3) Holders of PPG's 1993 Redeemable Cumulative Convertible Preferred
Stock received 680,000 shares of the Company's 1993 Convertible Stock,
convertible to an aggregate of 14,790,000 shares of the Company's Common Stock.
There are currently 3,067,512 shares of the Company's Common Stock
outstanding held by the Company's shareholders prior to the Merger. As a result
of the Merger, shareholders of PPG own approximately 95% of the voting power of
the Company and the Company's shareholders prior to the Merger hold
approximately 5% of the voting power of the Company. James Peoples, President
and CEO of PPG and the new President and CEO of the Company, holds approximately
23% of the voting power of the Company. Diane Miller, Executive Vice President
of PPG and the new Executive Vice President of the Company, holds approximately
9% of the voting power of the Company. Cherry Tree Ventures III, LP, holds
approximately 59% of the voting power of the Company.
In addition, holders of PPG stock options to purchase 128,000 shares of
PPG's common stock received replacement options to purchase 2,784,000 shares of
the Company's Common Stock.
At the effective time of the Merger, all members of the Company's Board
of Directors resigned except for William Hultgren, Orville Huseby and Roland
Barrett. Messrs. Huseby and Barrett resigned as of November 10, 1998. John
Bergstrom, Anton
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Christianson, Roy Mayers, Diane Miller and James Peoples, who constituted the
PPG Board of Directors, were appointed as new directors of the Company. The
Company has scheduled a Regular Shareholders Meeting for December 22, 1998 to,
among other things, elect directors, at which meeting Mr. Hultgren will not
stand for re-election.
Following the Merger, the Company's Board of Directors approved an
agreement pursuant to which Mr. Hultgren acquired substantially all of the
Company's pre-Merger assets in exchange for the assumption of all liabilities of
the Company as of the effective time of the Merger, except certain specified
liabilities related to consummating the Merger. Such transferred assets
constitute an insignificant amount of the total assets of the Company,
consisting primarily of certain accounts receivable of the Company. In
consideration for the assets, Mr. Hultgren assumed a substantially equivalent
amount of liabilities, consisting primarily of certain accounts payable and
accrued wages of the Company prior to the Merger. The Company's business
following the Merger consists of the historical business of PPG, with such
changes as may be implemented from time to time. A brief summary of the business
of PPG is set forth below.
The Amended and Restated Agreement and Plan of Merger is incorporated
herein by reference as Exhibit 2.1. The foregoing description of the Merger and
such Agreement does not purport to be complete and is qualified in its entirety
by reference to such exhibit.
BUSINESS OF PPG
The Peoples Publishing Group, Inc. ("PPG") is a publisher and
distributor of supplemental educational materials for grades K-12. PPG focuses
its efforts in three market areas:
- INSTRUCTIONAL products with a focus on remedial and
multicultural products for the student-at-risk and urban
markets;
- ADVANCED PLACEMENT (AP) products for the academically rigorous
senior high and college prep markets; and
- TEST PREPARATION market, or supplementary materials to prepare
students for state and city standardized tests and
assessments.
PPG's proprietary products are supplemental in nature, meaning that
they are predominantly soft cover, high gross profit margin titles that can be
sold efficiently through catalogs, direct mail, telemarketing, and independent
commission sales representatives. Products are developed through a combination
of internal development capabilities with royalty-based author contracts and
freelance production and creative talent. The primary sales and marketing
efforts of PPG are conducted through an integrated system of niche catalogs,
telemarketing and independent commission sales people.
PPG's management is led by Mr. James Peoples and Ms. Diane Miller. Mr.
Peoples is PPG's Chairman, CEO, President and Treasurer and Ms. Miller is
Executive Vice President. Prior to his affiliation with PPG, Mr. Peoples was
President of the Prentice Hall School Group, and the Group
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President of the $350-million Simon & Schuster Educational Group. Immediately
prior to her affiliation with PPG, Ms. Miller was Publisher of Globe Books, a
Simon & Schuster remedial education publisher.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Reference is made to Item 8 of the Company's Annual Report on Form
10-KSB for the Years Ended December 31, 1995, 1996 and 1997 for a description of
a change in the Company's certifying accountant.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Financial information relating to the acquisition required by this item
will be filed as soon as practicable but in no event later than sixty (60) days
after the filing of this report.
(b) Pro forma financial information.
Financial information relating to the acquisition required by this item
will be filed as soon as practicable but in no event later than sixty (60) days
after the filing of this report.
(c) Exhibits.
Exhibit 2.1. Amended and Restated Agreement and Plan of Merger, dated
as of August 31, 1998 and incorporated herein by reference to Exhibit
10.6 of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997.
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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.
Concourse Corporation
Dated: November 16, 1998 By /s/ James J. Peoples
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James J. Peoples, Chairman,
President and Chief
Executive Officer
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