UNITED STATES
SECURITIES AND
EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 12b-
25
Commission File
Number 1-13760
NOTIFICATION OF
LATE FILING
(CHECK ONE): /X /Form 10-K / /Form 11-K / /Form
20-F / /Form 10-Q / /Form N-SAR
For Period Ended: 12/31/98
--------------
- -----------------------------
/ / 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:
-----------
- -------------------
- - -------------------------------------------------
- ---------
- --------------------
READ INSTRUCTION (ON BACK PAGE) BEFORE PREPARING
FORM. PLEASE
PRINT OR TYPE.
NOTHING IN THIS 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:
- - -------------------------------------------------
- ---------
- --------------------
PART I -- REGISTRANT INFORMATION
- - -------------------------------------------------
- ---------
- --------------------
Full Name of Registrant
The Network Connection, Inc. ----------------------
- ---------------------------------------------------
- ----
Former Name if Applicable
- - -------------------------------------------------
- ---------
- --------------------
Address of Principal Executive Office (Street and
Number)
1324 Union Hill Road
- - ----------------------------------------------
- -------------------------------
City, State and Zip Code
Alpharetta, GA 30004
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 12b25(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;
(b) The subject annual report, semi-
annual report, transition report
on Form 10-K, Form 20-F, 11-K or
Form N-SAR, or portion thereof,
/x / will be filed on or before the
fifteenth
calendar day following
the prescribed due date; or the subject
quarterly report of
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
Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion
thereof, could
not be filed within
the prescribed time period.
Due to the timing and difficulty of the
reporting process
and auditor review
the additional expense would be unreasonable.
(ATTACH EXTRA SHEETS IF NEEDED)
SEC 1344 (6/84)
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to
contact in regard to this notification
Bryan Carr 770
751-0889
---------------------------------- ---------
- -------- ---------------------
(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
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 Company expects to report decreased revenues
and a greater net loss for the fiscal year ended
December 31, 1998 over 1997 results. The Company
expects to report a net loss of $8.7 million, or
$1.97 a share based on 4,426,535 weighted
average shares, on revenues of $5.0 million for
the fiscal year ended December 31, 1998. That
compares with a net loss of $2.0 million, or 53
cents per share based on 3,845,097 weighted
average shares, on revenues of $7.8 million for
1997. Approximately, $6.2 million, or $1.40 per
share, of the loss for 1998 is expected to
result from charges related to a provision for
doubtful accounts and inventory and special
charges as defined below.
Revenues are expected to decrease 36% to $5.0
million for the fiscal year ended December 31,
1998 from $7.8 million for the fiscal year ended
December 31, 1997. This decrease will primarily
result from deliveries in 1997 of the Company's
larger AirView systems to Fairlines and
shipments on the South Korean Government High
School Program, which did not occur in the 1998
period.
It is expected that the provision for doubtful
accounts and inventory will reflect a change
from fiscal 1997 of $5.6 million for the fiscal
year ended December 31, 1998: $2.7 million for
the fiscal year ended December 31, 1998 is
expected to result from a writedown of
inventories and a reserve for the uncertainty
and possible uncollectibility of outstanding
receivables due to (i) repeated program schedule
delays by Fairlines under a contract for the
delivery and installation of AirView on 10
aircraft and (ii) the length of time that
accounts receivable for extended programs with
Fairlines and the South Korean Government High
School Program (which was impacted by the
adverse economic conditions in Asia during 1998)
have been past due; $1.0 million increase in
the provision for doubtful accounts is expected
to result from a reserve taken for a fixed fee
arrangement with a major aeronautical
electronics company negotiated in June 1998 with
respect to the licensing of the company's
technology; $1.9 million in 1998 is expected to
result from accounts receivable in dispute under
an agreement for the installation and delivery
of CruiseView on a vessel for Star Cruises.
While the Company has commenced proceedings for
arbitration to enforce its rights under the
agreement for the Star Cruises program, should
the Company be unsuccessful in enforcing its
contractual rights in arbitration, an additional
writedown of approximately $1.9 million could
occur.
Special charges for fiscal year 1998 are
expected primarily from the write-off of
$595,263 in other assets which were capitalized
in 1997 and related to costs for obtaining
Federal Aviation Administration ("FAA")
certification for the Company's AirView system.
These costs previously were being amortized over
10 years. These assets were written off due to
the uncertainty of recoverability resulting from
the inability of Fairlines to obtain additional
aircraft for installation of the AirView system
and absence of additional orders received for
the AirView system for use in a commercial
aircraft requiring FAA certification.
The Network Connection, Inc.
- - ----------------------------------------------
- ------------------------------------------------
- ------------------------
(Name of Registrant as
Specified in Charter)
has caused this notification to be signed on its
behalf
by the undersigned
hereunto duly authorized.
Date 3/31/99
By
/s/ Wilbur Riner
------------------------------
- ---------------------------
Wilbur Riner, CEO
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
person 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
INSTRUCTIONS
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 O-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 amended
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 232.13(b) of this chapter).
