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
JULY 15, 2002
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Date of Report (Date of earliest event reported)
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iBASIS, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-27127 04-3332534
- ---------------------------- ---------------------------- ---------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
20 SECOND AVENUE, BURLINGTON, MA 01803
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(Address of Principal Executive Offices) (Zip Code)
(781) 505-7500
(Registrant's telephone number, including area code)
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This Current Report on Form 8-K/A amends and restates, in its entirety, the
Current Report on Form 8-K (date of report July 15, 2002), which was filed with
the Securities and Exchange Commission on July, 29, 2002.
ITEM 2. DISPOSITION OF ASSETS
On July 15, 2002, iBasis, Inc. ("iBasis") completed the sale of
substantially all of the assets of its wholly owned subsidiary, iBasis Speech
Solutions, Inc. ("ISS"), to Convergys Customer Management Group Inc. (the
"Purchaser"), a wholly owned subsidiary of Convergys Corporation ("Convergys"),
for $17 million in cash delivered upon closing on July 15, 2002, an additional
$1.5 million placed in escrow to secure certain indemnification obligations
assumed by iBasis, and up to $16 million in earn-out payments that may be
awarded upon the achievement of certain milestones by the business of ISS. The
earn-out period will conclude on December 31, 2003. The consideration
received for the sale was determined to be the fair value of the assets sold.
The assets of ISS sold to Purchaser included, but were not limited to:
accounts receivable; equipment, fittings, furniture and leasehold improvements;
customer lists; all rights under leases, contracts and other agreements or
instruments; intellectual property; goodwill; and business records and other
documents.
ISS developed and hosted advanced Interactive Voice Response (IVR) and
Advanced Speech Recognition (ASR) solutions for large carrier and enterprise
customers. Based in Reston, Va., ISS employed 130 employees and had
approximately 40 customers.
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION
Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 2002 (Unaudited) 4
Pro Forma Condensed Consolidated Statement of Operations
for the Six Months Ended June 30, 2002 (Unaudited) 5
Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 2001 (Unaudited) 6
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The following Unaudited Pro Forma Condensed Consolidated Balance Sheet has been
prepared based on the unaudited historical condensed consolidated balance sheets
of iBasis and ISS as of June 30, 2002 as if the sale of ISS had occurred as of
June 30, 2002.
The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the six months ended June 30, 2002 and for the year ended
December 31, 2001 give effect to the sale of ISS as if the sale had occurred as
of January 1, 2001. Pro Forma adjustments are described in the accompanying
notes.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations are not
necessarily indicative of the actual results of operations that would have been
reported had the sale of ISS been completed as of January 1, 2001, nor do they
purport to indicate the results of future operations of iBasis, Inc. In the
opinion of management, all adjustments necessary to present fairly such pro
forma financial statements have been made.
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iBASIS, INC.
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2002
(UNAUDITED)
PROFORMA
ADJUSTMENTS
HISTORICAL (A) PROFORMA
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Cash and cash equivalents $ 50,254,601 $ 17,000,000 $ 67,254,601
Restricted cash 8,066,667 - 8,066,667
Accounts receivable, net 27,232,337 - 27,232,337
Prepaid expenses and other current assets 6,638,362 1,500,000 8,138,362
Assets of discontinued operations 22,494,998 (22,494,998) -
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Total current assests 114,686,965 (3,994,998) 110,691,967
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Property and equipment, net 64,744,989 - 64,744,989
Deferred debt financing costs, net 1,762,295 - 1,762,295
Long term investment in non-marketable security 5,000,000 - 5,000,000
Other assets 2,041,362 - 2,041,362
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Total assets $188,235,611 $ (3,994,998) $184,240,613
============= ============== ==============
Accounts payable $ 12,822,235 $ - $ 12,822,235
Accrued expenses 28,176,852 - 28,176,852
Liabilities of discontinued operations 3,994,998 (3,994,998) -
Long term debt, current portion 33,819,923 - 33,819,923
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Total current liabilities 78,814,008 (3,994,998) 74,819,010
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Long term debt, net of current portion 120,844,361 - 120,844,361
Common stock 45,626 - 45,626
Additional paid-in capital 369,186,694 - 369,186,694
Deferred compensation (710,334) - (710,334)
Accumulated deficit (379,944,744) - (379,944,744)
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Total stockholders' equity (11,422,758) - (11,422,758)
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Total liabilities and stockholders' equity $188,235,611 $ (3,994,998) $184,240,613
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(A) Proforma adjustments reflect the sale of the net assets of ISS (including
$17.0M in cash and a $1.5M escrow receivable).
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iBASIS, INC.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2002
(UNAUDITED)
PRO FORMA
ADJUSTMENTS
HISTORICAL (B) PRO FORMA
-------------- ------------- ------------
Net revenue $ 83,648,996 - $ 83,648,996
-
Cost and operating expenses:
Data communications and telecommunications 73,286,078 - 73,286,078
Research and development 9,515,657 - 9,515,657
Selling and marketing 6,864,148 - 6,864,148
General and administrative 17,338,792 - 17,338,792
Depreciation and amortization 19,227,038 - 19,227,038
Non-cash stock-based compensation 668,531 - 668,531
Loss on sale of messaging business 2,498,165 - 2,498,165
Restructuring costs 4,361,697 - 4,361,697
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Total operating expenses 133,760,106 - 133,760,106
Loss from operations (50,111,110) - (50,111,110)
Interest income 690,830 - 690,830
Interest expense (7,529,748) - (7,529,748)
Other expenses, net (183,560) - (183,560)
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Loss from continuing operations before extraordinary gain on
repurchase of Convertible Subordinated Notes (57,133,588) - (57,133,588)
Loss from discontinued operations (65,369,936) 65,369,936 -
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Loss before extraordinary gain on repurchase of Convertible
Subordinated Notes (122,503,524) 65,369,936 (57,133,588)
Extraordinary gain on repurchase of Convertible Subordinated Notes 23,354,551 - 23,354,551
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Net loss $(99,148,973) $65,369,936 $(33,779,037)
=============== ============ ===============
Basic and diluted net loss per share:
Loss from continuing operations before extraordinary gain on
repurchase of Convertible Subordinated Notes $ (1.26) $ (1.26)
Loss from discontinued operations (1.45) -
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Loss before extraordinary gain on repurchase of
Convertible Subordinated Notes (2.71) (1.26)
Extraordinary gain on repurchase of Convertible Subordinated Notes 0.52 0.52
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Net loss applicable to common stockholders $ (2.19) $ (0.74)
=============== ===============
Basic and diluted weighted average common shares outstanding 45,203,182 45,203,182
=============== ===============
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(B) Proforma adjustments include:
Write-off of goodwill and other purchased intangibles $57,272,765
Estimated costs to sell the operation 1,315,500
Loss from operations 6,781,671
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$65,369,936
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iBASIS, INC.
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001
(UNAUDITED)
PROFORMA
ADJUSTMENTS
HISTORICAL (C) PROFORMA
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Net revenue:
Data communications and telecommunications $124,577,766 $(14,398,001) $110,179,765
Professional services 9,191,919 (9,191,919) -
--------------- --------------- ---------------
Total net revenue 133,769,685 (23,589,920) 110,179,765
Cost and operating expenses:
Data communications and telecommunications 108,716,131 (6,396,446) 102,319,685
Professional services 4,251,862 (4,251,862) -
Research and development 28,522,536 (4,583,318) 23,939,218
Selling and marketing 23,791,617 (3,468,859) 20,322,758
General and administrative 27,801,153 (2,251,496) 25,549,657
Depreciation and amortization 59,832,932 (27,469,323) 32,363,609
Non-cash stock-based compensation 1,381,800 - 1,381,800
Write-off of in-process research and development costs 24,431,466 (24,431,466) -
Restructuring costs 51,834,318 - 51,834,318
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Total operating expenses 330,563,815 (72,852,770) 257,711,045
Loss from operations (196,794,130) 49,262,850 (147,531,280)
Interest income 9,413,013 (244,110) 9,168,903
Interest expense (17,269,909) 752,216 (16,517,693)
Other expenses, net (587,317) - (587,317)
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Loss before extraordinary gain on
repurchase of Convertible Subordinated Notes (205,238,343) 49,770,956 (155,467,387)
Extraordinary gain on repurchase of Convertible Subordinated Notes 14,548,973 - 14,548,973
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Net loss $(190,689,370) $ 49,770,956 $(140,918,414)
=============== =============== ===============
Basic and diluted net loss per share:
Loss before extraordinary gain on repurchase of
Convertible Subordinated Notes $ (4.81) $ (3.65)
Extraordinary gain on repurchase of Convertible Subordinated Notes 0.34 0.34
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Net loss applicable to common stockholders $ (4.47) $ (3.30)
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Basic and diluted weighted average common shares outstanding 42,644,700 42,644,700
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(C) Proforma adjustments reflect the removal of ISS's statement of operations
from the consolidated statement of operations.
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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.
Date September 25, 2002 iBASIS, INC.
By: /s/ RICHARD TENNANT
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Vice President, Finance and Administration
And Chief Financial Officer
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
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