<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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 1, 2000
THE OFFICIAL INFORMATION COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-10263 73-1341805
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
250 West 57th Street, Suite 2421, New York, New York 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 247-5160
<PAGE>
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Report on Form 8-K dated June 12,
2000 as set forth in the pages attached hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
(b) Pro Forma Financial Information:
<PAGE>
E-PRODUCTS DIVISION OF
THIRD MILLENNIUM COMMUNICATIONS, INC.
Financial Statements
March 31, 2000
(With Independent Auditors' Report Thereon)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
(A) E-PRODUCTS DIVISION OF THIRD MILLENNIUM COMMUNICATIONS, INC.
Independent Auditors' Report.............................................................................1
Historical Summary of Assets Acquired and Liabilities Assumed as of December 31, 1999
audited and March 31, 2000 (Unaudited)...............................................................2
Historical Summary of Revenues and Direct Operating Expenses for the
period from April 1, 1998 (inception) through December 31, 1998,
and the year ended December 31, 1999 audited and the three months
ended March 31, 1999 (Unaudited) and 2000
(Unaudited)...................3
Notes to Historical Summaries............................................................................4
(B) THE OFFICIAL INFORMATION COMPANY UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION
Introduction.............................................................................................1
Unaudited Pro Forma Combined Balance Sheet as of March 31, 2000..........................................2
Notes to Unaudited Pro Forma Combined Balance Sheet as of March 31, 2000.................................3
Unaudited Pro Forma Combined Statement of Operations for the year ended
December 31, 1999....................................................................................4
Unaudited Pro Forma Combined Statement of Operations for the three months ended
March 31, 2000.......................................................................................5
Unaudited Pro Forma Combined Statement of Operations for the three months ended
March 31, 1999.......................................................................................6
Notes to Unaudited Pro Forma Combined Statements of Operations...........................................7
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Third Millennium Communications, Inc.:
We have audited the accompanying historical summary of assets acquired and
liabilities assumed of the E-Products Division of Third Millennium
Communications, Inc. ("3MC") as of December 31, 1999, and the related historical
summary of revenues and direct operating expenses for the period from April 1,
1998 (inception) through December 31, 1998 and for the year ended December 31,
1999 ("Historical Summaries"). These Historical Summaries are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these Historical Summaries based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether Historical Summaries are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the Historical Summaries An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall Historical Summaries presentation. We believe that our
audits provide a reasonable basis for our opinion.
The accompanying Historical Summaries were prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission and for
inclusion in Form 8-K of The Official Information Company, as described in note
1. The presentation is not intended to be a complete presentation of the
E-Products Division of 3MC of financial position, results of operations, or cash
flows.
In our opinion, the Historical Summaries referred to above present fairly, in
all material respects, the assets acquired and liabilities assumed of the
E-Products Division of 3MC as of December 31, 1999, and its revenues and direct
operating expenses for the period from April 1, 1998 (inception) through
December 31, 1998 and for the year ended December 31, 1999, as described in note
1, in conformity with generally accepted accounting principles.
August 11, 2000 /s/ KPMG LLP
New York, New York
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E-PRODUCTS DIVISION OF
THIRD MILLENNIUM COMMUNICATIONS, INC.
Historical Summary of Assets
Acquired and Liabilities Assumed
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
--------------- ----------------
(UNAUDITED)
<S> <C> <C>
Assets acquired:
Current assets:
Accounts receivable $ 172,917 $ 170,293
--------------- ----------------
Total current assets 172,917 170,293
Property and equipment, net 280,066 374,738
--------------- ----------------
Total assets acquired 452,983 545,031
--------------- ----------------
Liabilities assumed:
Deferred revenue 255,239 354,566
--------------- ----------------
Total liabilities assumed 255,239 354,566
Commitments and contingencies (note 3)
--------------- ----------------
Net assets acquired $ 197,744 $ 190,465
=============== ================
</TABLE>
See accompanying notes to Historical Summaries.
2
<PAGE>
E-PRODUCTS DIVISION OF
THIRD MILLENNIUM COMMUNICATIONS, INC.
Historical Summary of Revenues
and Direct Operating Expenses
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1998
(INCEPTION) THREE MONTHS
THROUGH YEAR ENDED ENDED MARCH 31,
DECEMBER 31, DECEMBER 31, -------------------------
1998 1999 1999 2000
----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net revenues $ 82,067 $ 424,790 $ 9,140 $ 214,232
----------- ----------- ----------- -----------
Direct operating expenses:
Cost of revenues 173,783 1,240,140 206,223 438,836
Sales and marketing 69,333 382,150 12,162 309,675
General and administrative 270,120 2,232,818 346,918 706,109
----------- ----------- ----------- -----------
Total direct operating expenses 513,236 3,855,108 565,303 1,454,620
----------- ----------- ----------- -----------
Direct operating expenses in
excess of revenues $ (431,169) $(3,430,318) $ (556,163) $(1,240,388)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to Historical Summaries.
3
<PAGE>
E-PRODUCTS DIVISION OF
THIRD MILLENNIUM COMMUNICATIONS, INC
Notes to Historical Summaries
December 31, 1999
(Information as of March 31, 2000 and for the
three months ended March 31, 1999 and 2000 is Unaudited)
(1) BASIS OF PRESENTATION
(A) GENERAL
On June 1, 2000, The Official Information Company ("TOIC" or the
"Company") acquired certain assets of the E-Products division
("ExpoExchange") of Third Millennium Communications, Inc. ("3MC")
including contracts, customer lists, certain property and equipment,
and intangible property pursuant to an Asset Contribution Agreement
(the "Agreement") dated May 3, 2000. The Company also assumed certain
liabilities associated with the business principally relating to
customer contracts. ExpoExchange was acquired through the issuance of
6,133,590 non-voting LLC units of Galaxy Information Services LLC, a
controlled affiliate of the Company. Additional adjustments to the
purchase price may result from closing adjustments.
The accompanying historical summaries present the assets acquired and
liabilities assumed as of December 31, 1999, and March 31, 2000
(Unaudited) and the revenues and direct operating expenses for the
period from April 1, 1998 (inception) through December 31, 1998 and for
the year ended December 31, 1999, and for the three month periods ended
March 31, 1999 and 2000 (Unaudited), for ExpoExchange ("Historical
Summaries") pursuant to the Agreement. This presentation is not
intended to be a complete presentation of ExpoExchange financial
position, results of operations or cash flows.
Historically, ExpoExchange had no separate legal status as it was
operated as a division of 3MC's overall operations. Under 3MC's
centralized management system, cash requirements of ExpoExchange were
generally provided directly by 3MC, and cash generated by ExpoExchange
was generally remitted directly to 3MC. Transaction systems (e.g.,
payroll, employee benefits, accounts payable, debt) used to record and
account for cash disbursements were provided by centralized 3MC
corporate systems. Most of these corporate systems are not designed to
track assets/liabilities and receipts/payments on a specific division
basis. As a result, separate financial statements of ExpoExchange were
not prepared. The accompanying Historical Summaries do not reflect any
purchase accounting adjustments that may be made by TOIC, including the
results of an independent appraisal of assets acquired.
ExpoExchange was an integral component of 3MC's overall business and
all corporate related income and expenses including corporate overhead,
such as common costs, data processing, administrative, accounting,
interest expense and income, and income taxes incurred by 3MC have not
been allocated to the respective division comprising the business in
the accompanying historical summary of revenues and direct operating
expenses. Such corporate related income and expenses have been excluded
from the historical summary of revenues and direct operating expenses
as these items are not incurred or negotiated on a specific division
basis and a basis for allocation was not determinable. These Historical
Summaries are not necessarily indicative of the
4
<PAGE>
E-PRODUCTS DIVISION OF
THIRD MILLENNIUM COMMUNICATIONS, INC
Notes to Historical Summaries
December 31, 1999
(Information as of March 31, 2000 and for the
three months ended March 31, 1999 and 2000 is Unaudited)
costs and expenses that would have been incurred had ExpoExchange been
operated as a stand-alone entity or the future operating results of the
business acquired.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) DESCRIPTION OF BUSINESS
ExpoExchange is a provider of Internet-based marketplace and e-commerce
products and services to the tradeshow industry.
(B) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is calculated
using the straight-line method over the estimated useful lives of the
related assets, generally ranging from three years for computer systems
and equipment to seven years for furniture and fixtures.
(C) REVENUE RECOGNITION
Revenues are primarily derived from fixed fee contracts for the
development, design, and implementation of customized websites. Such
revenues are recognized ratably over the term of the contract. Deferred
revenue represents billing in excess of revenues earned.
(D) IMPAIRMENT OF LONG-LIVED ASSETS
ExpoExchange continually evaluates its investment in long-lived assets
used in operations for impairment based on judgments as to the future
undiscounted cash flows of property and equipment in accordance with
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Assets to Be Disposed Of."
(E) SALES AND MARKETING COSTS
ExpoExchange expenses the cost of advertising and promoting its
services as incurred.
5
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E-PRODUCTS DIVISION OF
THIRD MILLENNIUM COMMUNICATIONS, INC
Notes to Historical Summaries
December 31, 1999
(Information as of March 31, 2000 and for the
three months ended March 31, 1999 and 2000 is Unaudited)
(F) FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject ExpoExchange to
significant concentrations of credit risk consist of accounts
receivable and accrued expenses. At December 31, 1999 and 1998, and
March 31, 2000, the fair value of these instruments approximated their
financial statement carrying amount because of the short-term maturity
of these instruments. The Company has not experienced any significant
credit loss to date. One customer accounted for 43% of revenues for the
year ended December 31, 1999. No customer accounted for more than 10%
of accounts receivable at December 31, 1999.
(G) USE OF ESTIMATES
The preparation of historical summaries 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 as the
date of the historical summaries and the reported amounts of revenues
and direct operating expenses during the reported period. Actual
results may differ from those estimates.
(3) PROPERTY AND EQUIPMENT
Property and equipment are summarized as follows:
DECEMBER 31, MARCH 31,
1999 2000
---------- -----------
(Unaudited)
Computer systems and equipment $ 258,451 $ 346,144
Furniture and fixtures 96,472 133,288
---------- -----------
Less accumulated depreciation 74,857 104,694
---------- -----------
Property and equipment, net $ 280,066 $ 374,738
========== ===========
6
<PAGE>
THE OFFICIAL INFORMATION COMPANY
Unaudited Pro Forma Combined
Financial Information
Introduction
On June 1, 2000, The Official Information Company (the "Company" or
"TOIC"), through a subsidiary, acquired certain assets and assumed
certain liabilities of the E-Products division ("Expo Exchange") of
Third Millennium Communications, Inc. ("3MC") for a purchase price of
approximately $30,000,000 plus transaction costs.
ExpoExchange was acquired through the issuance of 6,133,590 non-voting
LLC units of Galaxy Information Services LLC, ("Galaxy") a controlled
affiliate of the Company.
The pro forma financial statements included herein are unaudited and
have been prepared by the Company to conform with the requirements
applicable to Form 8-K. These pro forma financial statements should be
read in conjunction with the Historical Summaries, including
accompanying notes, of the E-Products Division of 3MC, TOIC's annual
report filed on Form 10-K for the year ended December 31, 1999 and
TOIC's quarterly report filed on Form 10-Q for the three months ended
March 31, 2000.
The unaudited pro forma combined balance sheet as of March 31, 2000
presents the financial position of the combined company assuming the
acquisition had occurred on March 31, 2000. Assumptions necessary to
reflect these transactions are presented in the "Pro forma Adjustments"
column, which are further described in the notes to the Unaudited Pro
Forma combined balance sheet.
The unaudited pro forma combined statements of operations for the year
ended December 31, 1999 and the three months ended March 31, 1999 and
2000, presents the results of operations of the combined company
assuming the acquisition had occurred on January 1, 1999. Assumptions
necessary to reflect this transaction are presented in the "Pro forma
Adjustments" column, which are further described in the notes to the
Unaudited Pro Forma combined statement of operation.
The acquisition will be accounted for under the purchase method of
accounting. The preliminary allocation of purchase price represents an
estimate of the fair values of assets acquired and liabilities assumed,
including $500,000 of estimated professional fees and other acquisition
expenses expected to be incurred. The historical carrying value as of
March 31, 2000 of the accounts receivable and deferred revenue of
ExpoExchange are assumed to approximate fair value. The excess of the
purchase price over the estimated fair values of the assets acquired
including identified intangibles has been recorded as goodwill. The
allocation is subject to change and is not necessarily indicative of
the ultimate purchase price allocation; however, the Company does not
expect the estimated values to change materially upon finalization of
the allocation of the purchase price, based upon an independent
appraisal.
1
<PAGE>
THE OFFICIAL INFORMATION COMPANY
Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2000
(in thousands)
<TABLE>
<CAPTION>
THE OFFICIAL
INFORMATION PRO FORMA PRO FORMA
COMPANY EXPOEXCHANGE ADJUSTMENTS COMBINED
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 597 $ -- $ -- $ 597
Accounts receivable, net 25,480 170 25,650
Inventories 101 -- -- 101
Deferred tax assets 137 -- -- 137
Notes receivable and other
current assets 2,805 -- -- 2,805
-------------- --------------- -------------- --------------
Total current assets 29,120 170 -- 29,290
-------------- --------------- -------------- --------------
Notes receivable and investments 212 -- -- 212
Property, plant, and equipment, net 10,669 375 -- 11,044
23,635
Intangible and other assets, net 76,593 -- 6,675 106,903
-------------- --------------- -------------- --------------
Total assets $ 116,594 545 30,310 147,449
============== =============== ============== ==============
CURRENT LIABILITIES: --
Accounts payable 3,372 -- -- 3,372
Accrued liabilities 13,885 -- -- 13,885
Customer deposits 22,148 -- -- 22,148
Borrowing under credit facility 1,411 -- -- 1,411
Deferred revenue 10,108 355 -- 10,463
Current portion of long-term debt 1,723 -- -- 1,723
-------------- --------------- -------------- --------------
Total current liabilities 52,647 355 -- 53,002
-------------- --------------- -------------- --------------
Long-term debt 100,565 -- -- 100,565
Other liabilities 754 -- -- 754
Minority interest 11,169 -- 30,500 41,669
Total stockholders' equity (deficit) (48,541) 190 (190) (48,541)
-------------- --------------- -------------- --------------
Total liabilities and
stockholders' equity $ 116,594 545 30,310 147,449
============== =============== ============== ==============
</TABLE>
See Notes to Unaudited Pro Forma Combined Balance Sheet.
2
<PAGE>
THE OFFICIAL INFORMATION COMPANY
Notes to Unaudited Pro Forma Combined Balance Sheet
March 31, 2000
To record the purchase consideration for the acquisition by TOIC's
controlled affiliate as a credit to minority interest and record the
allocation of the purchase price. The purchase price and purchase price
allocation are summarized as follows:
<TABLE>
<CAPTION>
Purchase price paid:
<S> <C>
Issuance of 6,133,590 units $ 30,000,000
Estimated professional fees incurred 500,000
--------------
Total purchase consideration 30,500,000
==============
Allocated to:'
Property and equipment 375,000
Accounts receivable 170,000
Deferred revenue (355,000)
Developed technology 4,100,000
Workforce 1,025,000
Trade Name 1,550,000
Excess of purchase price over allocation to identifiable
assets and liabilities (goodwill) 23,635,000
--------------
Total $ 30,500,000
==============
</TABLE>
3
<PAGE>
THE OFFICIAL INFORMATION COMPANY
Unaudited Pro Forma Combined
Statement of Operations
Year ended December 31, 1999
(in thousands)
<TABLE>
<CAPTION>
THE OFFICIAL
INFORMATION PRO FORMA PRO FORMA
COMPANY EXPOEXCHANGE ADJUSTMENTS COMBINED
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenue:
Operating revenues $ 107,709 $ 425 $ -- $ 108,134
Gain (loss) on sale of fixed
assets, net (19) -- -- (19)
Other income 103 -- -- 103
-------------- -------------- -------------- --------------
Total revenue 107,793 425 -- 108,218
-------------- -------------- -------------- --------------
Costs and expenses: --
Operating costs 48,435 1,240 -- 49,675
General and administrative 34,046 2,164 -- 36,210
Sales and marketing -- 382 -- 382
Interest 10,792 -- -- 10,792
Depreciation and amortization 10,998 69 10,274(1) 21,341
-------------- -------------- -------------- --------------
Total costs and expenses 104,271 3,855 10,274 118,400
-------------- -------------- -------------- --------------
Income (loss) before income taxes 3,522 (3,430) (10,274) (10,182)
Income tax (expense) benefit (2,944) -- -- (2,944)
Minority interest in consolidated
subsidiaries (455) -- 13,704(2 ) 13,249
Gain on sale of subsidiary 4,842 -- -- 4,842
-------------- -------------- -------------- --------------
Net (loss) income $ 4,965 $ (3,430) $ 3,430 $ 4,965
============== ============== ============== ==============
</TABLE>
See Notes to Unaudited Pro Forma Combined Statement of Operations.
4
<PAGE>
THE OFFICIAL INFORMATION COMPANY
Unaudited Pro Forma Combined
Statement of Operations
Three months ended March 31, 2000
(in thousands)
<TABLE>
<CAPTION>
THE OFFICIAL
INFORMATION PRO FORMA PRO FORMA
COMPANY EXPOEXCHANGE ADJUSTMENTS COMBINED
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenue $ 29,143 $ 214 $ -- $ 29,357
------------- ------------- ------------- -------------
Costs and expenses: --
Operating costs 12,289 439 -- 12,728
General and administrative 8,995 676 -- 9,671
Sales and marketing -- 310 -- 310
Interest 2,745 -- -- 2,745
Depreciation and amortization 2,302 30 2,568(1) 4,900
------------- ------------- ------------- -------------
Total costs and expenses 26,331 1,455 2,568 30,354
------------- ------------- ------------- -------------
Income (loss) before income taxes 2,812 (1,241) (2,568) (997)
Income tax expense (402) -- -- (402)
Minority interest in consolidated
subsidiaries (1,723) -- 3,809(2) 2,086
------------- ------------- ------------- -------------
Net income (loss) $ 687 $ (1,241) $ 1,241 $ 687
============= ============= ============= =============
</TABLE>
See notes to Unaudited Pro Forma Combined Statements of Operations.
5
<PAGE>
THE OFFICIAL INFORMATION COMPANY
Unaudited Pro Forma Combined
Statement of Operations
Three months ended March 31, 1999
(in thousands)
<TABLE>
<CAPTION>
THE OFFICIAL
INFORMATION PRO FORMA PRO FORMA
COMPANY EXPOEXCHANGE ADJUSTMENTS COMBINED
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenue $ 23,182 $ 9 $ -- $ 23,191
------------- ------------- ------------- -------------
Costs and expenses: --
Operating costs 10,578 206 -- 10,784
General and administrative 7,669 339 -- 8,008
Sales and marketing -- 12 -- 12
Interest 2,648 -- -- 2,648
Depreciation and amortization 1,825 8 2,568(1) 4,401
------------- ------------- ------------- -------------
Total costs and expenses 22,720 565 2,568 25,853
------------- ------------- ------------- -------------
- -------
Income (loss) before income taxes 462 (556) (2,568) (2,662)
Income tax expense benefit (120) -- -- (120)
Minority interest in consolidated
subsidiaries (562) -- 3,124(2) 2,562
------------- ------------- ------------- -------------
Net loss $ (220) $ (556) $ 556 $ (220)
============= ============= ============= =============
</TABLE>
See notes to Unaudited Pro Forma Combined Statements of Operations.
6
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THE OFFICIAL INFORMATION COMPANY
Notes to Unaudited Pro Forma Combined
Statements of Operations
Year ended December 31, 1999 and
Theree month period ended March 31, 2000 and 1999
(1) To reflect the increase in amortization and depreciation expense due to
(a) amortization of goodwill on a straight line basis over 3 years (b)
amortization of developed technology and trade name on a straight line
basis over 3 years, and (c) amortization of workforce on a straight basis
over 2 years.
(2) To reflect ExpoExchange loss as minority interest.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
Date: August 14, 2000
THE OFFICIAL INFORMATION COMPANY
By /s/ Ian L.M. Thomas
- - - - - - - - - - - - - - - - -
IAN L. M. THOMAS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
