SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
JUNE 30, 2000
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Date of Report (date of earliest event reported)
NETVOICE TECHNOLOGIES CORPORATION
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(Exact name of registrant as specified in its charter)
NEVADA 0-29025 91-1986538
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(State or other (Commission file (I.R.S. Employer
jurisdiction of number) Identification Number)
incorporation or
organization)
3201 WEST ROYAL LANE, SUITE 160
IRVING, TEXAS 75063
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(Address of principal executive offices, including zip code)
(972) 788-2988
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(Registrant's telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
Pursuant to paragraph (a)(4) of Item 7 of Form 8-K, Netvoice
Technologies Corporation and its wholly owned subsidiary Netvoice Encom LP
(collectively, "Netvoice" or "Company") hereby files the historical
financial statements required in connection with the acquisition of Enhanced
Communications ("Encom"), a wholly owned subsidiary of World Access
Telecommunications Group, Inc. ("World Access") included as Exhibit 99.11
and incorporated by reference herein.
(b) PRO FORMA FINANCIAL INFORMATION
In June 2000, an Asset Purchase Agreement (the "Agreement") was
entered into between World Access and NetVoice Encom LP, whereby NetVoice
Encom LP acquired certain assets associated with Encom. Pursuant to the
Agreement, the purchase price for the acquisition of Encom was $8.1 million,
paid with $6.0 million in cash and a $2.1 million convertible note payable,
payable in quarterly payments, maturing on June 30, 2005, and bearing interest
at the London Interbank Offering Rate plus a margin of 2%. The outstanding
principal amount of the convertible note payable can be converted into shares
of common stock at any time prior to or on the maturity date at the market
price, but in no event less than $10.00 per share. The assets purchased
include all of accounts receivable accruing on or after June 1, 2000; all
accounts payable and accrued liabilities incurred on or after June 2, 2000, in
the ordinary course of business; and all other assets and liabilities as of
June 1, 2000. Excluded assets included cash, Edge Debit Cards in inventory,
prepaid accounts, rights to Voice Compression Gear, NACT Debit Card Switches
and any contracts, accounts receivable or accounts payable related to
CapRock Communications. The acquired liabilities consist of all obligations
associated with leases and other agreements purchased as assets. Netvoice
recorded this transaction under the purchase method of accounting.
The accompanying unaudited pro forma financial information does not
include a pro forma balance sheet due to the fact the Company has filed its
most recent balance sheet on the Company's Form 10-QSB as of September 30,
2000, which balance sheet include the assets and liabilities of Encom. The
total purchase price has been allocated to the tangible assets and
liabilities of Encom based upon their relative fair values. The amounts and
components of the purchase price, along with the preliminary allocation of
the purchase price to the net asset acquired attributable to the acquisition
are presented below, and are subject to change as the allocation is finalized.
The following reflects the recording of the entries required under the
purchase method of accounting for the acquisition of Encom.
PURCHASE PRICE $ 8,100,000
============
NET ASSETS ACQUIRED
Fair value of assets purchased $ 4,668,300
Fair value of liabilities assumed (3,030,173)
Excess of cost of investment over
net assets acquired 6,461,873
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$ 8,100,000
============
The accompanying unaudited pro forma condensed statements of
operations give effect to the acquisition by NetVoice of Encom,
which has been accounted for using the purchase method of accounting. The
unaudited pro forma condensed statement of operations for the year ended
December 31, 1999 and the nine months ended September 30, 2000, gives
effect to the transaction as if they had occurred on January 1, 1999.
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The unaudited pro forma condensed financial statements are provided
for comparative purposes and have been based upon the historical financial
statements of NetVoice and Encom. The pro forma adjustments, which
are described in the accompanying notes, reflect NetVoice's preliminary
assumptions and estimates based upon available information. The unaudited
pro forma condensed financial statements do not purport to be indicative of
the results which would actually have been obtained if the transactions had
been effected on the date indicated nor are they necessarily indicative of
the results of operations that may be achieved in the future. The
unaudited pro forma condensed financial statements, including the related
notes, are qualified in their entirety by reference to, and should be read
in conjunction with, the historical financial statements and related notes
of Encom, included elsewhere in this filing, and the historical consolidated
financial statements and related notes of the Company contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999
filed with the Securities and Exchange Commission.
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(c) EXHIBITS
See Exhibit Index attached hereto.
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NETVOICE TECHNOLOGIES CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
HISTORICAL
---------------------------- PRO FORMA
NETVOICE ENCOM ADJUSTMENTS PRO FORMA
(AS RESTATED,
SEE NOTE A)
REVENUES $ 1,212,363 $ 22,531,160 $ - $ 23,743,523
EXPENSES:
Direct expenses 2,043,399 20,752,103 22,795,502
General and administrative expenses 3,477,104 5,531,427 646,187 (B) 9,654,718
------------ ------------ ------------ ------------
Total expenses 5,520,503 26,283,530 646,187 32,450,220
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OPERATING LOSS (4,308,140) (3,752,370) (646,187) (8,706,697)
OTHER INCOME (EXPENSE):
Interest expense, net (675,195) (292,395) (168,000) (C) (1,135,590)
Other expense (31,518) (172,957) (204,475)
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Total other expense, net (706,713) (465,352) (168,000) (1,340,065)
------------ ------------ ------------ ------------
NET LOSS $ (5,014,853) $ (4,217,722) $ (814,187) $(10,046,762)
============ ============ ============ ============
BASIC AND DILUTED LOSS
PER SHARE $ (0.48) $ (0.97)
============ ============
WEIGHTED AVERAGE BASIC AND
DILUTED SHARES OUTSTANDING 10,404,446 10,404,446
============ ============
See notes to the unaudited pro forma condensed statement of operations.
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NETVOICE TECHNOLOGIES CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
HISTORICAL
---------------------------- PRO FORMA
NETVOICE ENCOM ADJUSTMENTS PRO FORMA
REVENUES $ 3,829,041 $ 17,148,703 $ - $ 20,977,744
EXPENSES:
Direct expenses 3,891,991 15,989,282 19,881,273
General and administrative expenses 6,727,103 2,283,266 484,640 (B) 9,495,009
------------ ------------ ------------ ------------
Total expenses 10,619,094 18,272,548 484,640 29,376,282
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OPERATING LOSS (6,790,053) (1,123,845) (484,640) (8,398,538)
OTHER INCOME (EXPENSE):
Interest expense (807,624) (100,477) (126,000) (C) (1,034,101)
Interest income 96,274 115 96,389
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Total other expense, net (711,350) (100,362) (126,000) (937,712)
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NET LOSS $ (7,501,403) $ (1,224,207) $ (610,640) $ (9,336,250)
============ ============ ============ ============
BASIC AND DILUTED LOSS
PER SHARE $ (0.55) $ (0.68)
============ ============
WEIGHTED AVERAGE BASIC AND
DILUTED SHARES OUTSTANDING 13,712,945 13,712,945
============ ============
See notes to the unaudited pro forma condensed statement of operations.
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Notes to Unaudited Pro Forma Condensed Statement of Operations
(A) Subsequent to the issuance of the Company's consolidated
financial statements as of and for the year ended December 31,
1999, the Company's management determined that the cost for the
purchase of a customer list from a company owned by a shareholder
in June 1999 should have been accounted for as a capital
distribution, and the proceeds from the sale of such customer
list and the excess of the proceeds from the sale of another
customer list over its amortized carrying cost, both having been
sold to another minority shareholder in December 1999, should
have been accounted for as capital contribution. Previously, the
purchase was accounted for as an asset acquisition with
amortization of the cost charged to expense, and the sale was
accounted for as an asset disposition with a gain recognized. As
a result, the Company's 1999 consolidated financial statements
have been restated from amounts previously reported to
appropriately account for these transactions. The effects of the
restatement are summarized as follows:
A summary of the significant effects of the restatement on the
1999 consolidated statement of operations is as follows:
AS PREVIOUSLY AS
REPORTED RESTATED
Statement of operations
General and Administrative Expenses 3,412,473 3,477,104
Total Expenses 5,455,872 5,520,503
Operating Loss (4,243,509) (4,308,140)
Net Loss (4,950,222) (5,014,853)
(B) Amount reflects the adjustment to record the amortization of goodwill
from the allocation of the purchase price. The pro forma adjustment
assumes goodwill will be amortized on a straight-line basis over an
estimated useful life of ten (10) years. This determination of the
estimated useful life at the date of consummation of the acquisition
is based on the best information available at that date.
(C) Pro forma adjustment to interest expense to reflect the $2.1 million
convertible note payable, bearing interest at the London Interbank
Offering Rate (approximately 6%) plus a margin of 2%.
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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.
NETVOICE TECHNOLOGIES CORPORATION
Date: March 9, 2001 By: /s/ JEFFREY ROTHELL
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Jeffrey Rothell, President,
Chief Executive Officer
Date: March 9, 2001 By: /s/ GARTH COOK
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Garth Cook, Treasurer, Chief
Financial Officer and Chief
Accounting Officer
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INDEX TO EXHIBITS
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Exhibit
Number Description
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2.1 Asset Purchase Agreement dated June 30, 2000 by and between
Netvoice Technologies Corporation, Netvoice Encom LP and World
Access Telecommunications Group and Exhibits (filed as Exhibit
2.1 to the Company's Form 8-K and incorporated herein by
reference)
4.1 Certificate of Voting Powers, Designations, Preferences, and
Relative, Participating, Optional or Other Special rights of
Series A Convertible Preferred Stock of Netvoice Technologies
Corporation (filed as Exhibit 4.1 to the Company's form 8-K and
incorporated herein by reference)
99.1 Securities Purchase Agreement dated June 30, 2000 by and between
Netvoice Technologies Corporation, BG Media Intermediate Fund
L.P., NV Investments, L.P., and other investors (filed as Exhibit
99.1 to the Company's Form 8-K and incorporated herein by
reference)
99.2 Registration Rights Agreement dated June 30, 2000 between
Netvoice Technologies Corporation, BG Media Intermediate Fund
L.P. and other investors (filed as Exhibit 99.2 to the Company's
Form 8-K and incorporated herein by reference)
99.3 Convertible Secured Promissory Note from Netvoice Encom LP to
World Access Telecommunications Group, Inc. in the principal
amount of $2,100,000 (filed as Exhibit 99.3 to the Company's Form
8-K and incorporated herein by reference)
99.4 Registration Rights Agreement dated June 30, 2000 between
Netvoice Technologies Corporation and World Access
Telecommunications Group, Inc. (filed as Exhibit 99.4 to the
Company's Form 8-K and incorporated herein by reference)
99.5 Unconditional Guarantee of Payment and Performance dated July 30,
2000 by Netvoice Technologies Corporation in favor of World
Access Telecommunications Group, Inc. (filed as Exhibit 99.5 to
the Company's Form 8-K and incorporated herein by reference)
99.6 Amended and Restated Securities Purchase Agreement dated July 28,
2000 by and between Netvoice Technologies Corporation, BG Media
Intermediate Fund L.P., NV Investments, L.P., Paribas North
America, Inc. and other investors and Exhibits (filed as Exhibit
99.6 to the Company's Form 8-K and incorporated herein by
reference)
99.7 Amended and Restated Registration Rights Agreement dated July 28,
2000 between Netvoice Technologies Corporation, BG Media
Intermediate Fund L.P., NV Investments, L.P., Paribas North
America and other investors (filed as Exhibit 99.7 to the
Company's Form 8-K and incorporated herein by reference)
99.8 Form of NASDAQ Warrant for Series A Convertible Preferred Stock
or Common Stock of Netvoice Technologies Corporation (filed as
Exhibit 99.8 to the Company's Form 8-K and incorporated herein by
reference)
99.9 Form of EBITDA Warrant for Series A Convertible Preferred Stock
or Common Stock of Netvoice Technologies Corporation (filed as
Exhibit 99.9 to the Company's Form 8-K and incorporated herein by
reference)
99.10 Financial Statements of Synetric, Inc. (filed as Exhibit 99.10 to
the Company's Form 8-K and incorporated herein by reference)
99.11* Financial Statements of Enhanced Communications Corporation, a
wholly owned subsidiary of World Access Telecommunications Group, Inc.
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* Filed herewith.