SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
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 30, 2000
Grow Biz International, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
000-22012 41-1622691
(Commission File Number) (I.R.S. Employer Identification Number)
4200 Dahlberg Drive, Golden Valley, MN 55422-4837
(Address of Principal Executive Offices) (Zip Code)
(763) 520-8500
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
See previously filed Current Report on Form 8-K dated August 30, 2000
and filed on September 1, 2000, and Current Report on Form 8-K/A (Amendment No.
1) dated August 30, 2000 and filed on September 14, 2000.
Item 7. Financial Statement and Exhibits
A. Financial statements of businesses acquired.
Not applicable.
B. Pro forma financial information.
The following pro forma financial statements include the balance sheet
as of June 24, 2000 and the statements of operations for the fiscal year ended
December 25, 1999 and six months ended June 24, 2000. The pro forma financial
statements reflect the disposition of substantially all the assets related to
the Registrant's Computer Renaissance(R) franchising and retailing operations as
if such disposition had been consummated as of the date of the balance sheet and
at the earliest date presented for the statements of operations.
<PAGE>
GROW BIZ INTERNATIONAL, INC.
Unaudited Pro Forma Condensed
BALANCE SHEETS
as of JUNE 24, 2000
<TABLE>
<CAPTION>
-------------------- ----------------- -- --------------------
As Reported Adjustments Pro Forma
-------------------- ----------------- -- --------------------
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 174,700 $ 1,200 (a) $ 173,500
Receivables, less allowance for doubtful accounts of
$2,049,600 7,562,700 719,700 6,843,000
Inventories 1,654,500 376,200 1,278,300
Prepaid expenses and other 1,031,600 263,000 768,600
Deferred income taxes 2,074,200 -- 2,074,200
----------- ----------- -----------
Total current assets 12,497,700 1,360,100 11,137,600
Notes receivables 388,300 -- 388,300
Property and equipment, net 4,264,700 73,700 4,191,000
Other assets, net
873,800 65,800 808,000
----------- ----------- -----------
$18,024,500 $ 1,499,600 $16,524,900
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,835,000 $ 400 $ 2,834,600
Accrued liabilities 2,887,500 (185,800) 3,073,300
Current maturities of long-term debt 9,817,500 2,000,000 7,817,500
Deferred franchise fee revenue
865,800 -- 865,800
----------- ----------- -----------
Total current liabilities 16,405,800 1,814,600 14,591,200
Long-Term Debt 396,600 -- 396,600
Shareholders' Equity:
Common stock, no par, 10,000,000 shares authorized,
5,386,433 shares issued and outstanding 1,419,100 -- 1,419,100
Retained earnings (197,000) (315,000) (b) 118,000
----------- ----------- -----------
Total shareholders' equity 1,222,100 (315,000) 1,537,100
----------- ----------- -----------
$18,024,500 $ 1,499,600 $16,524,900
=========== =========== ===========
</TABLE>
(a) This number does not reflect $1.0 million of escrowed cash purchase price
("Escrowed Cash") which will not be recorded until actually received by the
Company.
(b) After tax gain on the disposition of Computer Renaissance(R).
<PAGE>
GROW BIZ INTERNATIONAL, INC.
Unaudited Pro Forma Condensed
Consolidated Statements of Operations
For the year ended December 25, 1999
<TABLE>
<CAPTION>
------------------- ------------------ -- --------------------
As Reported Adjustments (a) Pro Forma
------------------- ------------------ -- --------------------
<S> <C> <C> <C>
REVENUE
Merchandise sales $ 45,163,000 $ 1,499,000 $ 43,664,000
Royalties 19,085,100 4,393,200 14,691,900
Franchise fees 1,942,200 654,400 1,287,800
Advertising and other 368,100 22,900 345,200
----------- ----------- -----------
Total revenue 66,558,400 6,569,500 (b) 59,988,900
COST OF MERCHANDISE SOLD 39,386,800 1,152,600 38,234,200
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 28,320,200 2,219,900 (c) 26,100,300
RESTRUCTURING AND OTHER 11,345,500 -- 11,345,500
----------- ----------- -----------
Income (loss) from operations (12,494,100) 3,197,000 (15,691,100)
INTEREST EXPENSE (1,545,700) (190,000) (1,355,700)
INTEREST INCOME 252,800 -- 252,800
----------- ----------- -----------
Income (loss) before income taxes (13,787,000) 3,007,000 (16,794,000)
(BENEFIT) PROVISION FOR INCOME TAXES (5,197,700) 1,133,600 (6,331,300)
----------- ----------- -----------
NET INCOME (LOSS) $ (8,589,300) $ 1,873,400 $ (10,462,700)
=========== =========== ===========
NET LOSS PER COMMON SHARE - BASIC & DILUTED $ (1.65) $ (2.01)
=========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC & DILUTED 5,205,900 5,205,900
=========== ===========
</TABLE>
(a) No portion of the Escrowed Cash is included in this column as such amounts
will not be recorded until actually received by the Company. If the
Escrowed Cash was reflected in this column, as much as $666,700 of
additional revenue would have been recorded.
(b) The Company entered into a Consultants Agreement with Hollis Technologies,
LLC, pursuant to which the Company will provide certain services to Hollis
Technologies, LLC in consideration of payment of $33,333 in each of the
60 months after August 30, 2000. Such amounts are not reflected in this
number.
(c) Includes corporate allocations using the average cost of shared service
personnel.
<PAGE>
GROW BIZ INTERNATIONAL, INC.
Unaudited Pro Forma Condensed
Consolidated Statements of Operations
For the SIX months ended JUNE 24, 2000
<TABLE>
<CAPTION>
------------------- ------------------ -- --------------------
As Reported Adjustments (a) Pro Forma
------------------- ------------------ -- --------------------
REVENUE:
<S> <C> <C> <C>
Merchandise sales $ 16,002,200 $ 1,765,400 $ 14,236,800
Royalties 8,412,800 1,220,000 7,192,800
Franchise fees 384,000 30,000 354,000
Advertising and other 292,100 2,600 289,500
----------- ----------- -----------
Total revenue 25,091,100 3,018,000 (b) 22,073,100
COST OF MERCHANDISE SOLD 13,879,000 1,112,600 12,766,400
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 10,124,200 1,568,800 8,555,400
NONRECURRING CHARGE 3,337,900 (738,600) 2,599,300
----------- ----------- -----------
Income (loss) from operations (2,250,000) (402,000) (1,848,000)
INTEREST INCOME 72,500 -- 72,500
INTEREST EXPENSE
(738,000) (95,000) (643,000)
----------- ----------- -----------
Income (loss) before income taxes (2,915,500) (497,000) (2,418,500)
(BENEFIT) PROVISION FOR INCOME TAXES (1,142,900) (194,800) (948,100)
----------- ----------- -----------
NET INCOME (LOSS) $(1,772,600) $ (302,200) $ (1,470,400)
=========== =========== ===========
NET LOSS PER COMMON SHARE - BASIC & DILUTED $ (.33) $ (.27)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC & DILUTED 5,372,109 5,372,109
=========== ===========
</TABLE>
(a) No portion of the Escrowed Cash is included in this column as such amounts
will not be recorded until actually received by the Company. If the
Escrowed Cash was reflected in this column, as much as $666,700 of
additional revenue would have been recorded.
(b) The Company entered into a Consultants Agreement with Hollis Technologies,
LLC, pursuant to which the Company will provide certain services to Hollis
Technologies, LLC in consideration of payment of $33,333 in each of the
60 months after August 30, 2000. Such amounts are not reflected in this
number.
<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 thereunto duly authorized.
GROW BIZ INTERNATIONAL, INC.
Date: October 24, 2000 By: /s/ John L. Morgan
John L. Morgan
Chairman and Chief Executive Officer
