UNITED STATES
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): June 2, 2004
J Net Enterprises, Inc.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Commission File Number: 1-9728
Nevada 88-0169922
_______________________________ ________________________________
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
4020 Lake Creek Drive, #100
Wilson, Wyoming 83014
________________________________________ __________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (307) 739-8603
______________
N/A
_____________________________________________________________
(Former name or former address, if changed since last report)
J Net Enterprises, Inc. ("J Net" or the "Company") hereby amends its
Current Report on Form 8-K filed on June 3, 2004 by providing definitive
information related to the accounting treatment for the transaction and
providing the information required in Item 7.
Item 2. Acquisition or Disposition of Assets
Item 7. Financial Statements and Exhibits
Item 2. Acquisition or Disposition of Assets
Accounting Treatment of the Acquisition
The Company has determined that the proper accounting treatment is a
reverse merger. Therefore, the transaction will be treated as if Epoch
Investment Partners, Inc. ("Epoch") acquired J Net. Since J Net is being
treated as the acquired company, its assets and liabilities will be
adjusted to reflect their fair value. Deferred stock compensation,
representing the fair value of the unvested shares issued to the Epoch
employee shareholders at the closing of the transaction, will be expensed
as the shares vest pursuant to the Stockholders Agreement. Due to the
reverse merger treatment, the historical financial statements of Epoch will
become the historical financial statements of the Company. Initially,
these financial statements will be issued under the J Net name. However,
it is the intent of the Company to change its name to Epoch as soon as
practicable.
Item 7. Financial Statements and Exhibits
(A) Financial Statements of Business Acquired.
(i) The consolidated balance sheets as of June 30, 2003 and 2002 and
consolidated statements of operations of J Net, as presented on J
Net's Annual Report on Form 10-K for each of the three years
ended June 30, 2003, 2002 and 2001, are incorporated by
reference.
(ii) The condensed consolidated balance sheet as of March 31, 2004 and
condensed consolidated statement of operations, as presented on J
Net's Quarterly Report on Form 10-Q for the nine months ended
March 31, 2004, are incorporated by reference.
(B) Unaudited Pro Forma Financial Information.
The pro forma condensed consolidated balance sheet of Epoch, as a
result of the reverse merger accounting treatment for the transaction,
reflects the financial position of Epoch as if it had acquired J Net
on July 1, 2002. Because Epoch has limited operating history, the pro
forma disclosures are adopting the June 30 fiscal year used by J Net.
Epoch began conducting business on April 14, 2004. Therefore, the pro
forma condensed consolidated statements of operations for the year
ended June 30, 2003 and the nine months ended March 31, 2004 present
only historical J Net operations and any stock based compensation
resulting from the June 2, 2004 transaction described in Item 2.
These pro forma statements are for informational purposes only.
They should not be interpreted to be indicative of the Company's
consolidated results of operations had the transaction actually
occurred on the assumed date nor should they be used to project
results for any future dates or periods.
J Net Enterprises, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2003
(Dollars in thousands)
(Unaudited)
Pro Forma
Adjustments
__________________________________
Reverse Other Pro
Historical Merger Forma
Epoch (a) J Net (b) Entries Adjustments Pro Forma
__________ _________ _______ ___________ _________
Assets
______
Current assets:
Cash and cash equivalents $ - $ 5,537 $ - $ (916) (f) $ 4,621
Short term investments - 12,325 - - 12,325
Accounts receivable and
other current assets - 166 - - 166
____ _______ ____ _______ ________
Total current assets - 18,028 - (916) 17,112
____ _______ ____ _______ ________
Property, plant and equipment,
net of accumulated depreciation - 79 - - 79
Goodwill and intangible assets - - - (458)(e) 458
916 (f)
Investments in technology-related
businesses - 2,000 - - 2,000
Other non-current assets - 735 - - 735
____ _______ ____ _______ ________
Total assets $ - $20,842 $ - $ (458) $ 20,384
==== ======= ==== ======= ========
Pro Forma
Adjustments
__________________________________
Reverse Other Pro
Historical Merger Forma
Epoch (a) J Net (b) Entries Adjustments Pro Forma
__________ _________ _______ ___________ _________
Liabilities and Stockholders' Equity
____________________________________
Current liabilities:
Accounts payable and accrued
expenses $ - $ 3,399 $ - $ - $ 3,399
- -
Deferred revenue and customer
deposits - 689 - - 689
____ ________ ________ _______ ________
Total current liabilities - 4,088 - - 4,088
____ ________ ________ _______ ________
Deferred income taxes - 6,910 - - 6,910
Deferred rent and other
non-current liabilities - 405 - - 405
Stockholders' equity:
Preferred stock - - - - -
Common stock - 102 91 (c) - 195
2 (h)
Additional paid-in capital - 75,250 (91)(c) (458)(e) 38,596
(46,031)(d) 9,628 (g)
298 (h) -
Deferred compensation
expense - - - (9,157)(g) (9,157)
Retained earnings (deficit) - (49,859) 46,031 (d) (471)(g) (4,599)
(300)(h)
Treasury stock - (16,054) - - (16,054)
____ ________ ________ _______ ________
Total stockholders' equity - 9,439 - (458) 8,981
____ ________ ________ _______ ________
Total liabilities and
stockholders' equity $ - $ 20,842 $ - $ (458) $ 20,384
==== ======== ======== ======= ========
Notes:
(a) Epoch began conducting business on April 14, 2004. There are no
historical financials as of June 30, 2003.
(b) Condensed consolidated balance sheet of J Net as of June 30, 2003.
(c) Issuance of 9,095,716 shares of $.01 par value stock in exchange for
outstanding common shares of Epoch.
(d) Eliminate J Net accumulated deficit.
(e) Record goodwill.
(f) Payment of direct acquisition costs.
(g) Deferred compensation expense, 5,531,332 shares which are scheduled to
vest over three years. A total of 3,907,904 shares, representing the
initial stock consideration shares, are valued at $1.50 per share, the
closing price of J Net's stock on June 2, 2004, the effective date of
the transaction. The remaining shares, representing the escrow stock
consideration shares, have been valued at $2.03 per share, the value
of J Net's stock on June 18, 2004, the date on which the escrow
targets for assets under management were surpassed. For the pro forma
twelve months ended June 30, 2003, 231,918 shares of the escrow
stock consideration were earned and recorded as stock compensation
expense.
(h) Record issuance of stock award (200,000 shares at $1.50).
J Net Enterprises, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended June 30, 2003
(Dollars in thousands, except per share data)
(Unaudited)
Pro Forma
Adjustments
___________________
Historical
Epoch (a) J Net (b) Other Pro Forma
__________ _________ ______ _________
Revenues, net $ - $ 2,625 $ - $ 2,625
Cost of revenues - (609) - (609)
_____ _______ ______ ________
Gross profit - 2,016 - 2,016
Operating expenses - 6,349 - 6,349
Stock based
compensation - - 771 (c) 771
Losses on disposal of
assets and
impairments - 1,328 - 1,328
_____ _______ ______ ________
Total operating
expenses - 7,677 771 8,448
Loss from operations - (5,661) (771) (6,432)
Other income - 1,521 - 1,521
Gain on repurchase of
convertible
subordinated notes - 553 - 553
_____ _______ ______ ________
Loss from operations
before income taxes - (3,587) (771) (4,358)
Income tax expense - 241 - 241
_____ _______ ______ ________
Net loss $ - $(3,828) $ (771) $ (4,599)
===== ======= ====== ========
Issued and outstanding
shares of common stock - 8,525 9,296 17,821
===== ======= ====== ========
Basic and diluted
loss per share $ - $ (.45) $ - $ (.26)
===== ======= ====== ========
Notes:
(a) Epoch began conducting business on April 14, 2004. Therefore, there
are no operations for pro forma disclosures.
(b) Historical unaudited statement of operations for J Net and
Subsidiaries for the twelve months ended June 30, 2003.
(c) Stock award issued at closing of 200,000 shares at $1.50 per share,
the closing price of J Net's stock on June 2, 2004, issued at closing
of transaction. Additional compensation expense is the result of
231,918 shares of escrow stock consideration, as defined in the Merger
Agreement valued at $2.03, the date on which the targeted assets
under management to earn the escrow consideration was achieved.
J Net Enterprises, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended March 31, 2004
(Dollars in thousands, except per share data)
(Unaudited)
Pro Forma
Adjustments
____________________
Historical
Epoch (a) J Net (b) Other Pro Forma
__________ _________ _______ _________
Revenues, net $ - $ 1,832 $ - $ 1,832
Cost of revenues - (524) - (524)
_____ _______ _______ _______
Gross profit - 1,308 - 1,308
Operating expenses - 2,952 - 2,952
Stock based compensation - - 1,308 (c) 1,308
_____ _______ _______ _______
Total operating
expenses - 2,952 1,308 4,260
Loss from operations - (1,644) (1,308) (2,952)
Other income - 1,052 - 1,052
_____ _______ _______ _______
Loss from operations
before income taxes - (592) (1,308) (1,900)
Income taxes - - - -
_____ _______ _______ _______
Net loss $ - $ (592) $(1,308) $(1,900)
===== ======= ======= =======
Issued and
outstanding shares
of common stock - 8,539 9,296 17,835
===== ======= ======= =======
Basic and diluted loss
per share $ - $ (.07) $ - $ (.11)
===== ======= ======= =======
Notes:
(a) Epoch began conducting business on April 14, 2004. Therefore, there
are no operations for pro forma disclosures.
(b) Historical unaudited statement of operations for J Net and
Subsidiaries for the nine months ended March 31, 2004.
(c) The first vesting period for deferred stock compensation would be July
1, 2003 for these pro forma schedules. Total shares scheduled to vest
would be 558,272 shares at $1.50 per share and 231,918 shares at $2.03
per share, the fair value of the initial stock consideration and
escrow stock consideration earned, respectively.
Exhibits
99.1 Annual Report on Form 10-K for the year ended June 30, 2003 of J Net
Enterprises, Inc. is incorporated by reference.
99.2 Quarterly Report on Form 10-Q for the nine months ended March 31,
2004 of J Net Enterprises, Inc. is incorporated by reference.
SIGNATURE
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.
Date: August 17, 2004 J NET ENTERPRISES, INC.
/s/ Mark E. Wilson
_______________________________
Name: Mark E. Wilson
Title: Chief Financial Officer