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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): December 31, 1997
NETWORK IMAGING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-22970 54-1590649
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
500 Huntmar Park Drive, Herndon, Virginia 20170
(Address of principal executive offices) (Zip code)
(703) 478-2260
(Registrant's telephone number, including area code)
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<PAGE>
Item 5. OTHER EVENTS.
The Company filed today with Nasdaq a pro forma balance sheet (the "Pro
Forma Balance Sheet") evidencing the Company's compliance with the net tangible
assets the Nasdaq Hearings Panel required the Company to have achieved by
December 31, 1997. Accordingly, the Company anticipates that its Common Stock
will continue to be listed on the Nasdaq National Market. A copy of the Pro
Forma Balance Sheet is attached as Exhibit 99.1 to this Form 8-K and is
incorporated herein by this reference.
On October 30, 1997, the Company was given a temporary exception from
the Nasdaq National Market listing requirements, conditioned on the Company's
ability to file a pro forma balance sheet as of December 31, 1997, indicating
net tangible assets of at least $6 million. The Pro Forma Balance Sheet
evidences approximately $9.197 million in net tangible assets. As described in
greater detail in the Pro Forma Balance Sheet, the Company's net tangible assets
increased primarily as a result of (i) the closing of the private sale of the
Series L Convertible Preferred Stock from which the Company received net
proceeds of $2.99 million; (ii) the sale of Dorotech, S.A., a wholly owned
subsidiary of the Company, for which the Company expects to realize a gain of
$880,000; (iii) the conversion of $4 million under a line of credit with Fred
Kassner to equity in the form of a Series M Preferred Stock; and (iv) the
approval of the Series A Preferred Stockholders and the Common Stockholders to
amend the terms of the Series A Preferred Stock, thereby enabling the Company to
reclassify accrued dividends of $1.35 million as equity.
The Pro Forma Balance Sheet is unaudited and includes a preliminary
estimate of accumulated deficit at December 31, 1997, as required by Nasdaq in
order for the Company to maintain its listing on the Nasdaq National Market.
There can be no assurance that the Company's audited consolidated balance sheet
as of December 31, 1997, and in particular its accumulated deficit following an
audit of the Company's consolidated statements of operations, will not be
materially different from the information presented in the Pro Forma Balance
Sheet.
This information is provided solely for the purpose of complying with
the requirements delineated by Nasdaq pursuant to the exception recently granted
to the Company. This information is not intended to be used by the investing
public.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c ) Exhibits
Exhibit Number Description
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99.1 Pro Forma Balance Sheet of the Company as of
December 31, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Network
Imaging Corporation has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
NETWORK IMAGING CORPORATION
Date: December 31, 1997 By: /s/ Jorge R. Forgues
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Jorge R. Forgues
Vice President of Finance and
Administration, Chief Financial
Officer and Treasurer
<TABLE>
NETWORK IMAGING CORPORATION
PRO FORMA CONDENSED BALANCE SHEET
DECEMBER 31, 1997
(Unaudited & In Thousands)
<CAPTION>
(A) (B) (C) (D) (E)
Q4 Pro Forma
Line of Preliminary as of
NIC US Dorotech Credit Series L Estimated Series A December
September Sale Conversion Issuance Results Amendment 31, 1997
------------ ---------- ----------- --------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Current assets $ 12,443 $ 7,700 $ $ 2,900 $ (2,097) $ $ 20,946
Intangible assets
(excluding goodwill) 2,372 24 2,396
Goodwill 540 (41) 499
Other long-term assets 9,953 (6,420) (213) 3,320
--------- --------- --------- --------- --------- --------- ---------
Total assets $ 25,308 $ 1,280 $ 0 $ 2,900 $ (2,327) $ 0 $ 27,161
Liabilities
Current liabilities $ 9,271 $ 400 $ $ $ (280) $ (1,338) $ 8,053
Long-term liabilities 7,102 (4,000) (47) 3,055
--------- --------- --------- --------- --------- --------- ---------
Total liabilities 16,373 400 (4,000) 0 (327) (1,338) 11,108
Redeemable Series F
Preferred Stock 6,357 6,357
Stockholders' equity:
Preferred stock -- --
Common Stock 3 3
Additional paid-in-capital 124,808 4,000 2,900 1,338 133,046
Accumulated deficit (113,933) (113,933)
Current Year Loss (8,300) 880 (2,000) (9,420)
--------- --------- --------- --------- --------- --------- ---------
Total stockholders' equity 2,578 880 4,000 2,900 (2,000) 1,338 9,696
--------- --------- --------- --------- --------- --------- ---------
Total liabilities and
stockholders' equity $ 25,308 $ 1,280 $ 0 $ 2,900 $ (2,327) $ 0 $ 27,161
========= ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
Network Imaging Corporation
Notes to Unaudited Pro Forma Condensed Balance Sheet
The unaudited pro forma condensed balance sheet for Network Imaging Corporation
("the Company") presents the financial position for the Company after giving
effect to the sale of the Company's Dorotech subsidiary, issuance of preferred
stock, conversion of a line of credit to preferred stock, Series A Preferred
Stock amendment and preliminary estimated loss for the forth quarter fiscal
1997. The financial position for the Company at December 31, 1997 is unaudited
and includes a preliminary estimate of retained earnings at December 31, 1997.
The NASDAQ informed the Company that in order to prevent delisting, the Company
would need to file by December 31, 1997, a pro forma balance sheet with the
Securities and Exchange Commission demonstrating a minimum of $6,000,000 in net
tangible assets. There can be no assurance that the Company's audited
consolidated balance sheet as of December 31, 1997, and in particular its
retained earnings following an audit of the Company's consolidated statement of
operations, will not be materially different from the information presented in
the pro forma balance sheet.
(A) The Company entered into an agreement during December 1997 for the sale of
the Company's Dorotech subsidiary. The pro forma entry includes estimates of
selling costs and the sale is expected to result in a gain of approximately
$880,000.
(B) The Company and Fred Kassner, the holder of a $5,000,000 line of credit,
agreed to convert $4,000,000 of the Company's $5,000,000 line of credit into a
Series M Preferred Stock. The remaining $1,000,000 on the line of credit is due
April 1, 1999.
(C) During December 1997, the Company issued 3,250 shares of Series L Preferred
Stock for which it received net proceeds of $2,900,000.
(D) The estimated preliminary results for Q4 represents the change in balance
sheet accounts which resulted from an expected $2,000,000 loss.
(E) The Series A Preferred Stock amendment resulted in the reversal of all
unpaid dividends previously accrued through September 30, totaling $1,338,000.
