SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 3 TO 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 31, 1998
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THE LEARNING COMPANY, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-12375 94-2562108
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(Commission File Number) (I.R.S. Employer Identification No.)
One Athenaeum Street
Cambridge, MA 02142
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(Address of Principal Executive Offices) (Zip Code)
(617) 494-1200
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 5 and Item 7 of the Current Report on Form 8-K, as originally filed on
September 10, 1998, and amended on November 4, 1998 and November 10, 1998, of
The Learning Company, Inc. ("TLC" or the "Company") are hereby amended and
restated in their entirety as follows:
Item 5. Other Events
On September 10, 1998, TLC filed with the Securities and Exchange
Commission, as part of a Current Report on Form 8-K, dated August 31, 1998,
certain financial statements relating to the acquisition of Broderbund Software,
Inc. ("Broderbund"). TLC filed Amendment No. 1 to Current Report on Form 8-K/A,
dated November 4, 1998, and Amendment No. 2 to Current Report on Form 8-K/A,
dated November 10, 1998, which included Supplemental Consolidated Financial
Statements of TLC and Unaudited Supplemental Consolidated Financial Information
of TLC to reflect the acquisition of Broderbund which has been accounted for
using the pooling-of-interests method of accounting.
TLC is filing today as Exhibit 99.2 Supplemental Consolidated Financial
Statements of TLC as a result of the following:
In March 1998, the Company acquired Mindscape, Inc. and certain affiliated
companies ("Mindscape") for approximately $152 million in a business combination
accounted for as a purchase. The Company allocated $103 million of the purchase
price to in-process technology. The Company believes that the amount recorded as
an in-process technology charge at the date of its acquisition was determined in
a manner consistent with appraisal practices utilized at the time of the
acquisition. Subsequent to the acquisition, in a letter dated September 9, 1998
to the American Institute of Certified Public Accountants, the Chief Accountant
of the Securities and Exchange Commission (the "SEC") reiterated the views of
the staff of the SEC (the "Staff") on certain appraisal practices employed in
the determination of the fair value of the in-process technology and other
intangible assets.
The Company has had discussions with the Staff concerning the application
of the methodology to the valuation of the incomplete technology and other
intangible assets as detailed in the September 9, 1998 letter from the Chief
Accountant, and as a result of these discussions, the Company has implemented
the methodology. The Company has restated its previously issued results to
reflect the discussions with the Staff and to apply the appropriate guidance and
policies. The purchase price of Mindscape has been allocated by the Company
based upon the application of the recent guidance and certain of the Company's
financial statements have been restated. After applying the guidance and policy,
the allocation of the Mindscape purchase price was changed for in-process
technology from $103 million to $40 million; for complete and core technology
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from $13 million to $22 million; and for brands and trade names from
$30 million to $38 million, resulting in a change to goodwill from $9.85 million
to $55.85 million.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
See Exhibit Index attached hereto.
(d) Supplemental Consolidated Financial Statements of TLC
The supplemental consolidated balance sheets of TLC for the years ended
January 3, 1998 and January 4, 1997 and the related supplemental consolidated
statements of operations, stockholders' equity and cash flows for each of the
three TLC fiscal years in the period ended January 3, 1998 are hereby
incorporated by reference herein and filed as Exhibit 99.2 hereto.
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SIGNATURE
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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 hereunto duly authorized.
Date: March 25, 1999 THE LEARNING COMPANY, INC.
(Registrant)
By: /s/ R. Scott Murray
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R. Scott Murray
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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2.1* Agreement and Plan of Merger dated as of June 21, 1998 by and among
TLC, TLC Merger Corp. and Broderbund.
23.2 Consent of PricewaterhouseCoopers LLP.
99.1* Press Release dated August 31, 1998.
99.2 Supplemental Consolidated Financial Statements of TLC.
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* Previously filed.