<PAGE>
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): September 18, 1996
------------------
PREMIERE TECHNOLOGIES, INC.
(Exact name of registrant
as specified in its charter)
Georgia 0-27778 59-3074176
- - --------------------------- ----------------- -------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
3399 Peachtree Road, N.E.
The Lenox Building, Suite 400
Atlanta, Georgia 30326
----------------------------------------- ----------
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code: (404) 262-8400
N/A
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Premiere Technologies, Inc. (the "Company") hereby amends its Current
Report on Form 8-K dated September 18, 1996 (filed October 2, 1996) to include
the referenced financial statements and pro forma financial information and
exhibit.
<TABLE>
<S> <C>
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Report of Independent Public Accountants ..................
Balance Sheet as of December 31, 1995 .....................
Statement of Operations for the period from inception
(March 3, 1995) to December 31, 1995 ....................
Statement of Shareholders' Deficit for the period
from inception (March 3, 1995) to December 31, 1995......
Statement of Cash Flows for the period from inception
(March 3, 1995) to December 31, 1995 ....................
Notes to Financial Statements .............................
(B) PRO FORMA FINANCIAL INFORMATION.
Unaudited Pro Forma Consolidated Statements of Income
for the year ended December 31, 1995 ....................
Unaudited Pro Forma Consolidated Statements of Income
for the nine months ended September 30, 1996 ............
(C) EXHIBITS.
23.1 Consent of Arthur Andersen LLP.
</TABLE>
- 2 -
<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.
PREMIERE TECHNOLOGIES, INC.
By: /s/ Patrick G. Jones
------------------------------------
Patrick G. Jones
Senior Vice President of Finance
and Legal
Dated: December 2, 1996
----------------
- 3 -
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of
Connect, Inc.:
We have audited the accompanying balance sheet of CONNECT, INC. (a Maryland
corporation and development-stage enterprise) as of December 31, 1995 and the
related statements of operations, shareholders' deficit, and cash flows for the
period from inception (March 3, 1995) to December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Connect, Inc. as of December
31, 1995 and the results of its operations and its cash flows for the period
from inception (March 3, 1995) to December 31, 1995 in conformity with generally
accepted accounting principles.
/s/ Arthur Andersen LLP.
Atlanta, Georgia
November 8, 1996
<PAGE>
CONNECT, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
BALANCE SHEET
DECEMBER 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
PROPERTY AND EQUIPMENT
Computer and office equipment 89,766
Furniture and fixtures 1,600
Software 34,880
---------
126,246
Less accumulated depreciation (8,570)
---------
Net property and equipment 117,676
---------
Total assets $ 117,676
=========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Line of credit with shareholders (Note 3) $ 225,000
Accounts payable and accrued expenses 37,850
Other current liabilities 3,520
---------
Total current liabilities 266,370
---------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
SHAREHOLDERS' DEFICIT:
Common stock, $1 par value; XX shares authorized, XX shares issued and
outstanding at December 31, 1995 (Note 2) 1,000
Subscriptions receivable (Note 2) (1,000)
Deficit accumulated during the development stage (148,694)
---------
Total shareholders' deficit (148,694)
---------
Total liabilities and shareholders' deficit $ 117,676
=========
</TABLE>
The accompanying notes are an integral part of this balance sheet.
<PAGE>
CONNECT, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (MARCH 3, 1995) TO DECEMBER 31, 1995
REVENUES $ 0
---------
OPERATING EXPENSES:
Research and development 55,446
General and administrative 48,194
Selling and marketing 26,781
Depreciation and amortization 8,570
---------
Total operating expenses 138,991
---------
OPERATING LOSS (138,991)
---------
OTHER EXPENSE:
Interest expense 9,703
---------
NET LOSS $(148,694)
=========
The accompanying notes are an integral part of this statement.
<PAGE>
CONNECT, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
STATEMENT OF SHAREHOLDERS' DEFICIT
FOR THE PERIOD FROM INCEPTION (MARCH 3, 1995) TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
TOTAL
COMMON SUBSCRIPTIONS ACCUMULATED SHAREHOLDERS'
STOCK RECEIVABLE DEFICIT (DEFICIT)
------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
BALANCE at inception, (March 3, 1995) 0 0 0 0
Subscriptions receivable on loans to
shareholders 0 (1,000) 0 (1,000)
Issuance of common stock 1,000 0 0 1,000
Net loss 0 0 (148,694) (148,694)
------ ------- --------- ---------
BALANCE, December 31, 1995 $1,000 $(1,000) $(148,694) $(148,694)
====== ======= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
CONNECT, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (MARCH 3, 1995) TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
1995
----------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(148,694)
----------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 8,570
Changes in assets and liabilities:
Accounts payable and accrued expenses 37,850
Other current liabilities 3,520
----------
Total adjustments 49,940
----------
Net cash used in operating activities (98,754)
----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (126,246)
----------
Net cash provided by investing activities (126,246)
----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from shareholders 225,000
----------
Net cash provided by financing activities 225,000
----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 0
CASH AND CASH EQUIVALENTS, beginning of period 0
CASH AND CASH EQUIVALENTS, end of period $ 0
==========
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Stock issued for subscriptions receivable $ 1,000
==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
CONNECT, INC.
(A DEVELOPMENT-STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. ORGANIZATION AND NATURE OF BUSINESS
Connect, Inc. (the "Company"), a development-stage enterprise, was
incorporated in Maryland on March 3, 1995. The Company is a developer of
high technology products and services which enable consumers and businesses
to effectively communicate via the Internet using only a touch tone phone.
The Company has four shareholders, two shareholders each owning 45% and two
others each owning 5%.
The Company has not yet sold or delivered any products, and as of December
31, 1995, the Company had no customers. The Company's activities to date
consist primarily of research and development activities in order to develop
Internet-based software products. Expenses incurred have primarily been
research and development, administrative and marketing costs. The
developmental nature of the activities is such that inherent risks exist in
the Company's operations. Successful future operations are subject to
several risks, including the ability of the Company to successfully develop
software products, to market and generate significant revenue related to the
sale of its products, and continued development of additional products and
enhancements to allow entry into new markets. After products have been
developed and successfully introduced into a market, additional time may be
necessary before significant revenues are realized.
The Company has available a line of credit with one of its shareholders for
up to $250,000 (see Note 3). In addition, the Company received additional
financing during 1996 from outside sources and was acquired by an unrelated
party on September 18, 1996 (see Note 5).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRESENTATION
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
<PAGE>
that affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Since the accompanying financial statements are from the inception of the
Company (March 3, 1995) to December 31, 1995, all amounts included herein
reflect the cumulative transactions of the Company in its developmental
stage.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost, and depreciation is provided for
using the straight-line method over the estimated useful lives of the assets,
commencing when the assets are installed or placed in service. The estimated
useful lives are five years for computer and office equipment and purchased
software, and seven years for office furniture. The cost of installed
equipment includes expenditures for installation.
LONG-LIVED ASSETS
The Company periodically reviews the values assigned to long-lived assets
such as property and equipment to determine if any impairments have occured.
Management believes that the long-lived assets in the accompanying balance
sheets are appropriately valued.
INCOME TAXES
The Company is treated as an S-Corporation. As such, the Company is
generally not subject to corporate level taxes, rather the income or losses
of the Company flow through pro rata to the individual shareholders.
Accordingly, there is no income tax provision or deferred taxes in the
accompanying financial statements.
SUBSCRIPTION RECEIVABLE
The founders of the Company purchased their shares of common stock by giving
to the Company a total of $1,000 in nonrecourse, noninterest-bearing notes
(the "Notes"). The outstanding principal balance of the Notes has been
reflected as a reduction to shareholders' deficit in the accompanying balance
sheet. Interest is not material for the period presented.
<PAGE>
3. RELATED-PARTY TRANSACTIONS
General and administrative expenses includes consulting and professional fees
paid to companies that the shareholders of the Company own a portion of and
which the company merged with in early 1996 (see Note 5). The Company paid
these parties approximately $9,100 in 1996.
The Company rents office space in Baltimore, Maryland from a related party.
During 1996 the Company incurred approximately $4,400 related to this lease.
The Company maintains a bank account with nominal funds, but finances its
operations primarily by drawing on a line of credit with a shareholder
bearing interest at 10%. This line of credit had no scheduled maturity date.
The Company received advances of $225,000 under this line of credit during
the period from inception (March 3, 1995) to December 31, 1995. No payments
were made in connection with these advances. The Company incurred interest
costs of approximately $ 9,700 related to this note.
4. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
The Company leases office space. Rental expense was approximately $4,400 for
the period from inception (March 3, 1995) to December 31, 1995.
At December 31, 1995, the Company had no minimum rental commitments under
noncancelable operating leases with initial or remaining terms of more than
one year.
LEGAL PROCEEDINGS
The Company is subject to legal proceedings and claims which arise in the
ordinary course of business. There are no pending legal proceedings to which
the Company is a party.
5. SUBSEQUENT EVENTS
MERGER OF CONNECT, LEITESS INFORMATION SOLUTIONS, AND PLANET COMMUNICATIONS
On January 4, 1996, the Company, Leitess Information Solutions, LLC, and
Planet Communications LLC merged into one company operating under the name
Connect, Inc. ("Connect II"). Along with this transaction, an outside
investor purchased 10,000 shares of Connect II common stock representing an
<PAGE>
approximately 9% interest in the newly formed company. See pro forma
financial statements of operations contained elsewhere in this filing.
FORMATION OF TELET COMMUNICATIONS
On March 29, 1996, TeleT Communications LLC ("TeleT") was formed through a
purchase agreement between Connect II and CMG@Ventures, L.P. ("CMG") in which
CMG contributed $750,000 for a 50% interest in the newly formed company. See
pro forma results of operations contained elsewhere in this filing.
LINE OF CREDIT WITH SHAREHOLDER
Subsequent to year end, $20,225 of additional principal was drawn on this
line. On March 29, 1996, a portion of this loan ($75,000) was assigned to
another shareholder for a note between the two shareholders. On May 17,
1996, an additional $41,448 was assigned to the same shareholder for another
note. $25,000 of the line was converted by the original shareholder into
3,473 units of Series A-1 Convertible Preferred Stock ("Series A") in TeleT.
The portion of the line assigned on March 29, 1996 ($75,000) was converted
into 10,417 shares of Series A stock. The remainder of the line of credit
($145,225), including the portion assigned on May 17, 1996, was repaid in
conjunction with the Premiere Acquisition (as discussed herein).
PREMIERE TECHNOLOGIES ACQUISITION OF TELET
On September 18, 1996, Premiere Technologies, Inc. ("Premiere") purchased
100% of TeleT in a stock and cash transaction. Premiere exchanged 498,187
shares of its $.01 par value common stock and paid approximately $2.8 million
in cash considerations for TeleT.
<PAGE>
Premiere Technologies
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEAR ENDED 12/31/95
<TABLE>
<CAPTION>
Historical
Premiere Proforma TeleT Transaction Company Pro
(A) (A) Adjustments Forma
------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues $22,325,938 $108,318 $0 $22,434,256
Costs and Expenses
Cost of Services 7,602,511 27,947 0 7,630,458
Operating Expenses 12,424,457 241,594 71,429 (B) 12,737,480
------------- ----------- --------- ------------
Total Costs and Expenses 20,026,968 269,541 71,429 20,367,938
------------- ----------- --------- ------------
Income (loss) from operations 2,298,970 (161,223) (71,429) 2,066,318
Other Income (Expense) (50,890) (6,860) (169,904)(C) (227,654)
------------- ----------- --------- ------------
Income (loss) before income taxes 2,248,080 (168,083) (241,333) 1,838,664
(Provision for) benefit from
income taxes (330,486) 65,552 94,120 (D) (170,814)
Net income (loss) $1,917,594 ($102,531) ($147,213) $1,667,851
============= =========== ========= ============
Mod. t.s. adj. and pref. div ($110,212) (110,212)
------------- ------------
Net income available $1,807,382 $1,557,639
Weighted Average O/S Shares 17,529,000 17,529,000
Acquisition shares (E) 498,187 498,187
------------- --------- ------------
Total Pro forma Shares 18,027,187
Historical EPS $0.10
=============
Pro forma EPS $0.09
============
</TABLE>
(A) Derived from the historical statements of operations of the Company and
Connect, Inc. (contained elsewhere herein), Leitess Information Solutions,
LLC, and Planet Communications LLC (collectively, "Telet Communications
LLC").
(B) Reflects additional depreciation and amortization expense (utilizing the
Company's depreciable lives) associated with the recording of the acquired
assets by the Company at fair market value in conjunction with the
Acquisition.
(C) Reflects reduction equal to cash portion of acquisition times Company's
weighted average return on investment of 5.92%.
(D) Reflects income tax effect of pro forma adjustments.
(E) Reflects additional shares issued in conjunction with the Acquistion as if
they were outstanding for all periods.
(F) Reflects the reversal of one time charge for in process research and
development.
<PAGE>
Premiere Technologies
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS PERIOD ENDED 9/30/96
<TABLE>
<CAPTION>
Historical Proforma Transaction Company
Premiere(A) TeleT(A) Adjustments Pro Forma
----------- --------- ------------- -----------
<S> <C> <C> <C> <C>
Revenues $34,868,465 $ 250,603 $ 0 $35,119,068
Costs and Expenses
Cost of Services 11,775,061 0 11,775,061
Operating Expenses 31,432,404 884,576 53,571 (B) 21,341,019
(11,029,532)(F)
----------- -------- ------------- -----------
Total Costs and Expenses 43,207,465 884,576 (10,975,961) 33,116,080
----------- -------- ------------- -----------
Income (loss) from operations (8,339,000) (633,973) 10,975,961 2,002,988
Other Income (Expense) 1,687,348 (13,007) (111,930)(C) 1,562,411
----------- -------- ------------- -----------
Income (loss) before income taxes (6,651,652) (646,980) 10,864,031 3,565,399
(Provision for) benefit from income taxes 3,087,679 252,322 (4,236,972)(D) (896,971)
Extraordinary Loss, net (59,251) 0 0 (59,251)
----------- -------- ------------- -----------
Net income (loss) $(3,623,224) $(394,658) $6,627,059 $ 2,609,177
=========== ========= ============= ===========
Modified treasury stock adjustments $ 619,157 619,157
----------- -------- ------------- -----------
Net income available $(3,004,067) 3,228,334
Weighted Average O/S Shares 22,374,935 22,374,935
Acquisition shares (E) 498,187 498,187
----------- -------- ------------- -----------
Total Pro forma Shares 22,873,122
Historical EPS $ (0.13)
===========
Pro forma EPS $ 0.14
===========
</TABLE>
(A) Derived from the historical statements of operations of the Company and
Connect, Inc. (contained elsewhere herein), Leitess Information Solutions,
LLC, and Planet Communications LLC (collectively, "Telet Communications
LLC").
(B) Reflects additional depreciation and amortization expense (utilizing the
Company's depreciable lives) associated with the recording of the acquired
assets by the Company at fair market value in conjunction with the
Acquisition.
(C) Reflects reduction equal to cash portion of acquisition times Company's
weighted average return on investment of 5.2%.
(D) Reflects income tax effect of pro forma adjustments.
(E) Reflects additional shares issued in conjunction with the Acquistion as if
they were outstanding for all periods.
(F) Reflects the reversal of one time charge for in process research and
development.
<PAGE>
EXHIBIT INDEX
PAGE
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23.1 Consent of Arthur Andersen LLP.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated November 8, 1996 included in Premiere
Technologies, Inc.'s Report on Form 8-K into the Company's Registration
Statement File No. 333-11281.
/s/ Arthur Andersen LLP.
Atlanta, Georgia
December 2, 1996
