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): August 2, 1996
MarketLink, Inc.
(Exact name of registrant as specified in its charter)
Minnesota 0-25764 41-1675041
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) dentification No.)
10340 Viking Drive, Suite 150, Eden Prairie, Minnesota 55344
(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 996-9000
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
The undersigned registrant hereby amends Item 7 of its current report on
Form 8-K dated August 2, 1996 as set forth below:
Item 7. Financial Statements; Pro Forma Financial Information and Exhibits
(b) Pro forma Financial Information:
On August 2, 1996, the Company (the "Company") completed its
acquisition of Provident Worldwide Communications, Inc.
("Provident"), a provider of long distance telephone cards
(the "Acquisition"). Under the terms of the agreement,
Provident became a wholly-owned subsidiary of the Company.
Shares of Provident common stock were converted into Options
to purchase Common Stock of the Company at the ratio of 1
Company Option to acquire one share of Company Common Stock
for each 10.111 Provident shares outstanding at prices
indicated below. The Options received by the Provident
shareholders are subject to several conditions including
repayment by Provident, at any time prior to February 2,
1996, of certain loans and advances made to it by the
Company. Based upon the exchange ratio and assuming that all
conditions to the exercise of the Options are satisfied, the
Company will issue, upon exercise, a maximum of 200,000
shares of Company Common Stock as acquisition consideration
to former Provident shareholders. One half of the options
(100,000) are exercisable at a price equal to the fair
market value of the Company's Common Stock at the close of
business on the closing date and one half (100,000) of the
Options are exercisable at one cent ($0.01) per share. In
addition, Incentive Stock Options totaling 60,000 shares
were granted to key employees of Provident upon consummation
of the acquisition. An additional 30,000, Non-Qualified
Options were granted in exchange for satisfaction of certain
obligations of Provident to creditors and former Provident
directors.
<PAGE>
MarketLink, Inc.
Unaudited Pro forma Consolidated Combined Balance Sheets
as of June 30, 1996
The following Unaudited Pro forma Consolidated Combined Balance Sheet sets
forth historical balance sheet information for the Company and Provident at June
30, 1996.
<TABLE>
<CAPTION>
Provident
Worldwide
MarketLink, Communications, MarketLink
Inc. Inc. Eliminations Consolidated
------------------ ---------------------- ------------------- --------------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,832,842 $ (510) $ 1,832,331
Trade accounts receivable, net of
allowance for doubtful accounts 135,397 132,047 267,444
Minimum lease payments receivable 34,200 -- 34,200
Note receivable 100,000 -- (100,000)(1) 0
Computer parts and supplies, net of
reserve for obsolescence 98,296 31,844 130,140
Accrued interest receivable 404 -- (404)(2) 0
Prepaid expenses 87,059 10,780 97,840
------------ ----------- --------------
Total current assets 2,288,198 174,161 2,361,955
Property and equipment:
Furniture and equipment 675,469 140,182 815,652
Equipment leased to others 291,080 -- 291,080
----------- -------------- -------------
966,549 140,182 1,106,732
Accumulated depreciation (430,009) (34,290) (464,299)
----------- ----------- -------------
536,540 105,892 642,433
Other assets:
Investment in sales type leases 21,414 29,349 50,763
Merger costs 71,725 -- (16,788)(3) 54,937
Goodwill -- -- 150,499(3) 150,499
Deposits 45,885 -- 45,885
----------- -------------- ------------
139,024 29,349 302,083
----------- ----------- ----------- -------------
Total Assets $ 2,963,762 $ 309,402 $ 33,307 $ 3,306,471
=========== ========== ======== ============
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 125,021 $ 137,578 $ 262,599
Notes payable 9,690 157,376 (100,000)(1) 67,066
Current maturities of long-term debt 57,849 -- 57,849
Accrued expenses 39,790 -- 39,790
Customer deposits 1,642 -- 1,642
Deferred revenue 86,037 -- 86,037
Other accrued liabilities 204,366 37,989 (404)(2) 241,951
----------- ----------- ------------
Total current liabilities 524,395 332,943 756,934
<PAGE>
Long-term debt - related parties 3,594 110,171 113,765
Long-term debt, net of current maturities 70,410 -- 70,410
Shareholders' equity: Common stock,
par value $.01 per share Authorized
shares--5,000,000 Issued and outstanding
shares: 1996--2,943,831 29,438 87,892 (87,892)(3) 29,438
Additional paid-in capital 6,081,018 -- 6,081,018
Accumulated deficit (3,745,094) (221,603) 221,603(3) (3,745,094)
----------- ----------- -----------
Total shareholders' equity (deficit) 2,365,363 (133,711) 2,365,362
----------- ----------- ----------- -----------
Total liabilities and shareholders'
equity $ 2,963,762 $ 309,402 $ 33,307 $ 3,306,471
=========== ========== ======== ===========
</TABLE>
See Accompanying Notes.
<PAGE>
MarketLink, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For year ended December 31, 1995
The following Unaudited Pro Forma Condensed Combined Statements of
Operations set forth continuing operations of the Company for the year ended
December 31, 1995, as if the Acquisition had occurred as of January 1, 1995. The
Unaudited Pro Forma Condensed Combined Statements of Operations would not
necessarily reflect the results of operations that would have been attained if
the Acquisition had been consummated at the beginning of the year presented. The
following Unaudited Pro Forma Condensed Combined Statements of Operations do not
reflect cost savings that may result from the Acquisition.
<TABLE>
<CAPTION>
Provident
Worldwide
MarketLink, Communications, MarketLink
Inc. Inc. Consolidated
-------------------- ------------------ -----------------------------
<S> <C> <C> <C>
Revenues $ 704,068 $ 418,542 $ 1,122,610
Cost of revenues 400,995 242,938 643,933
------------- --------------- ---------------
Gross profit 303,073 175,604 478,677
Operating expenses:
Selling, general and administrative 949,540 386,268 1,335,808
Research and development 566,900 -- 566,900
------------- ---------------- ---------------
Total operating expenses 1,516,440 386,268 1,902,708
------------- ---------------- ---------------
Operating loss (1,213,367) (210,664) (1,424,031)
Interest income 122,074 6 122,080
Interest expense (86,293) -- (86,293)
Other income (expenses) 132,542 -- 132,542
----------- ---------------- ---------------
Net loss $(1,045,044) (210,657) (1,255,701)
============ =============== ===============
</TABLE>
See Accompanying Notes.
<PAGE>
MarketLink, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
Six months ended June 30, 1996
The following Unaudited Pro Forma Condensed Combined Statements of
Operations set forth continuing operations of the Company for the six months
ended June 30, 1996, as if the Acquisition had occurred as of January 1, 1995.
The Unaudited Pro Forma Condensed Combined Statements of Operations would not
necessarily reflect the results of operations that would have been attained if
the Acquisition had been consummated at the beginning of the year presented. The
following Unaudited Pro Forma Condensed Combined Statements of Operations do not
reflect cost savings that may result from the Acquisition.
<TABLE>
<CAPTION>
Provident
Worldwide
MarketLink, Communications, MarketLink
Inc. Inc. Eliminations Consolidated
------------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Revenues $ 423,458 $ 62,297 $ 486,755
Cost of revenues 177,716 55,054 232,770
--------- ------------ ----------
Gross profit 245,742 7,243 252,985
Operating expenses:
Selling, general and administrative 873,817 57,816 931,633
Research and development 324,249 -- 324,249
--------- ------------- -----------
Total operating expenses 1,198,066 57,816 1,255,882
--------- ------------ -----------
Operating loss (952,324) (50,573) (1,002,897)
Interest income 57,554 -- (404)(2) 57,150
Interest expense (9,041) (404) 404(2) (9,041)
Other income (expense) 14,734 18,678 33,412
---------- ------------ ------------ -----------
Loss before income taxes (889,077) 32,299 0 (921,376)
Provision for income taxes -- -- --
------------ ------------- ------------ -----------
Net loss (889,077) (32,299) -- (921,376)
========= ============ ============ ============
</TABLE>
See Accompanying Notes.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
(1) Elimination of the inter-company operating note used to sustain
operations prior to the closing of the transaction.
(2) Elimination of the inter-company interest accrued on the operating
note to Provident.
(3) Adjustments represent the recording of the transaction using the purchase
method of accounting.
<PAGE>
(c) Exhibits:
Exhibit Description
2.0* Agreement and Plan of Merger, dated August 2, 1996 by and among
the Company, MarketLink Acquisition Corp. and Provident Worldwide
Communications, Inc.
10.1* Employment Agreement dated August 2, 1996, between Kevin Pollari
and Provident Worldwide Communications, Inc.
* previously filed
<PAGE>
MarketLink, Inc.
Form 8-K/A
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.
MarketLink, Inc.
(Registrant)
Date: October 15, 1996 By:/s/ Rodney Larson
-----------------
Rodney Larson
Controller (Principal
Financial & Accounting Officer)
<PAGE>
MarketLink, Inc.
Exhibit Index
Form 8-K/A
Exhibit
Number Description
2.0* Agreement and Plan of Merger, dated August 2, 1996 by and among the
Company, MarketLink Acquisition Corp. and Provident Worldwide
Communications, Inc.
10.1* Employment Agreement dated August 2, 1996, between Kevin
Pollari and Provident Worldwide Communications, Inc.
* previously filed
