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UNITED STATES SEC File Number
SECURITIES AND EXCHANGE COMMISSION 0-27658
Washington, D.C. 20549 -------
Cusip Number
FORM 12b-25 739905 10 7
NOTIFICATION OF LATE FILING
(Check One) [X]Form 10-K [ ]Form 20-F [ ]Form 11-K [ ]Form 10-Q [ ]Form N-SAR
For Period Ended: 12/31/1998
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[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
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READ ATTACHED INSTRUCTION SHEET BEFORE PREPARING FORM. PLEASE PRINT OR TYPE
Nothing in the form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates:
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PART I - REGISTRANT INFORMATION
Preferred Networks, Inc.
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Full Name of Registrant
Not Applicable
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Former Name if Applicable
850 Center Way
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Address of Principal Executive Office (STREET AND NUMBER)
Norcross, GA 30071
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City, State and Zip Code
PART II - RULES 12b-25(b) and (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following
should be completed. (Check box if appropriate)
| (a) The reasons described in reasonable detail in Part III of this
| form could not be eliminated without unreasonable effort or
| expense;
|
[X] | (b) The subject annual report, semi-annual report, transition
| report on Form 10-K, Form 20-F, 11-K, Form N-SAR, or portion
| thereof, will be filed on or before the 15th calendar day
| following the prescribed due date; or the subject quarterly
| report or transition report on Form 10-Q, or portion thereof
| will be filed on or before the fifth calendar day following
| the prescribed due date; and
|
| (c) The accountant's statement or other exhibit required by Rule
| 12b-25(c) has been attached if applicable.
PART III - NARRATIVE
State below in reasonable detail the reasons why the Form 10-K, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period. (Attach Extra Sheets if Needed)
The registrant is engaged in negotiations with its primary lender regarding a
proposed amendment to its existing credit facility necessary to provide the
registrant with relief from certain of the covenants in the credit facility.
Because the attention of the registrant's officers and employees has been
diverted to the negotiations and to the preparation of financial and other
information required by the lender, the registrant is unable, without
unreasonable effort or expense, to complete and file its annual report on Form
10-K by March 31, 1999, the prescribed deadline for filing. In addition, because
the registrant intends to file its Form 10-K promptly after agreements are
reached, the registrant may file its Form 10-K with information materially
different from the information now applicable. The independent auditors' report
may also be significantly different from the report that will be given upon
conclusion of the negotiations, which would be misleading under the
circumstances. The registrant believes that the delay in filing will allow the
registrant to resolve its negotiations and/or cause its officers and employees
to provide complete and appropriate disclosures in its Form 10-K.
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PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Kathryn L. Putnam 770 582-3552
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of
the Securities Exchange Act of 1934 or Section 30 of the Investment
Company Act of 1940 during the preceding 12 months or for such shorter
period that the registrant was required to file such report(s) been
filed? If the answer is no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject
report or portion thereof? [X] Yes [ ] No
If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons
why a reasonable estimate of the results cannot be made:
The registrant expects that its consolidated financial statements
will indicate gross revenues of $39.1 million for 1998, as compared to
$36.0 million for 1997, or an increase of 8.6%. This increase in
revenues from 1997 to 1998 is expected to be a result of (1) gross
income from network services increasing by $748,000, (2) product sales
revenue increasing by $1.7 million, and (3) other services revenue
increasing by $702,000. The primary reason for the increase in network
services gross revenues is that the registrant reported only 11 months
of activity during 1997 for its subsidiary Mercury Paging &
Communications, Inc. since acquiring Mercury on January 31, 1997. For
1998, the registrant expects that Mercury will report gross revenues
of $9.1 million, on a monthly basis averaging $754,000.
The registrant expects that its consolidated net loss for 1998
will be between $13.9 million and $17.9 million, as compared to a
consolidated net loss of $19.2 million for 1997. The registrant is
unable to provide a more precise estimate of the amount of the 1998
net loss because a financial audit of the registrant is underway and
has not been completed. The reduction in consolidated net loss from
1997 to 1998 is expected to be attributable to (1) decreases in
general and administrative expenses of $1.5 million, (2) a change in
depreciation and amortization from 1997, expected to be between
$500,000 less than, and $3.5 million more than, 1997 depreciation and
amortization, depending on the final determination of SFAS 121
adjustments, (3) decreases in other expenses of $170,000, and (4)
increases in gross revenues as discussed in the preceding paragraph.
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Preferred Networks, Inc.
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(Name of Registrant as Specified in Charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date March 31, 1999 By /s/ Kathryn L. Putnam
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Kathryn L. Putnam
Senior Vice President and
Chief Financial Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
persons signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
ATTENTION
Intentional misstatements or omissions of fact constitute Federal Criminal
Violations (See 18 U.S.C. 1001).
GENERAL INSTRUCTION
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the
General Rules and Regulations under the Securities Exchange Act of
1934.
2. One signed original and four conformed copies of this form and
amendments thereto must be completed and filed with the Securities and
Exchange Commission, Washington, D.C. 20549 in accordance with Rule 0-3
of the General Rules and Regulations under the Act. The information
contained in or filed with the form will be made a matter of public
record in the Commission files.
3. A manually signed copy of the form and amendments thereto shall be
filed with each national securities exchange on which any class of
securities of the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but
need not restate information that has been correctly furnished. The
form shall be clearly identified as an amendment notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers
unable to timely file a report solely due to electronic difficulties.
Filers unable to submit a report within the time period prescribed due
to difficulties in electronic filing should comply with either Rule
201 or Rule 202 of Regulation S-T (Section 232.201 or Section 232.202
of this chapter) or apply for an adjustment in filing date pursuant to
Rule 13(b) of Regulation S-T (Section 232.12(c) of this chapter).
