U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 12, 2001
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ACTIVE LINK COMMUNICATIONS, INC.
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(Exact Name of Registrant as Specified in Charter)
Commission file number: 0-30220
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Colorado 84-0917382
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
7388 South Revere Parkway, Suite 1000, Englewood, Colorado 80112
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(Address of principal executive offices) (Zip Code)
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(303) 721-8200
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Registrant's telephone number, including area code
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 12, 2001, the Company sold certain assets related to its Denver
voice, inside cabling and national account operations to Carrier Solutions, LLC
for approximately $200,000 in cash, a $100,000 note receivable and the
assumption of approximately $300,000 in liabilities.
The Company will use the proceeds from the sale, less transaction costs, to
reduce debt associated with the assets sold.
Prior to the sale, there was no material relationship between the Company and
Carrier Solutions, LLC.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Pro Forma Financial Information
The following unaudited pro forma condensed balance sheet and
statements of operations illustrate the Company's disposition of its
Denver voice, inside cabling and national account operations. The Pro
Forma Condensed Balance Sheet at July 31, 2001 was prepared as if the
sale occurred on July 31, 2001. The Pro Forma Condensed Statement of
Operations for the Year Ended April 30, 2001 and the Three Months Ended
July 31, 2001 were prepared as if the transactions had occurred on May
1, 2000 and 2001 respectively.
The pro forma adjustments reflect the sale of the Denver voice, inside
cabling and national account operations for total consideration of
$600,000 consisting of cash, a note receivable and the assumption of a
note payable. The cash proceeds have been applied to the repayment of
debt related to the assets sold as required by the secured lender.
The Pro Forma Financial Information is presented for illustrative
purposes only and does not purport to represent what the Company's
financial position or results of operations would have been had the
transactions described in fact occurred on the date or at the beginning
of the periods indicated or to project the Company's financial position
or results of operations for any future date or period. The pro forma
disposition adjustments are based upon available information which the
Company believes is reasonable under the circumstances.
The following Pro Forma Condensed Financial Information should be read
in conjunction with (i) the audited financial statements of the Company
and its subsidiaries for the year ended April 30, 2001, which are
contained in the Company's Form 10-KSB dated August 13, 2001 and (ii)
the unaudited condensed financial statements of the Company for the
three months ended July 31, 2001 contained in the Company's For 10-QSB
dated September 14, 2001.
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ACTIVE LINK COMMUNICATIONS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(IN THOUSANDS OF DOLLARS)
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<Caption>
Denver Voice,
Inside Cabling,
Historical National
Balance Accounts,
Sheet Operations
July 31, July 31, Pro Forma
2001 2001 Adjustments Combined
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ASSETS
Current assets:
Trade accounts/note receivable $ 2,407 $ 100[2] $ 2,507
Costs and estimated earnings in excess of
billings on uncompleted contracts 1,794 1,794
Inventory 1,508 $ 263 1,245
Prepaid expenses 390 390
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Total current assets 6,099 5,936
Property and equipment, net 462 108 354
Deposits and other assets 195 195
Intangible assets, net 1,795 254 1,541
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$ 8,551 $ 8,026
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Checks issued in excess of funds on deposit $ 155 $ 25[2] $ 130
Trade accounts payable 3,795 50[3] 3,745
Revolving line of credit 1,781 125[1] 1,656
Current portion of notes payable 484 $ 125 359
Current portion of capital lease obligations 44 5 39
Billings in excess of costs and estimated
earnings on uncompleted contracts 127 127
Accrued expenses 1,560 1,560
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Total current liabilities 7,946 7,616
Capital lease obligations 45 15 30
Accrued Interest 202 202
Notes payable 3,127 180 2,947
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Total liabilities 11,320 10,795
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Stockholders' deficit:
Common stock 11,557 11,557
Additional paid-in capital 1,192 1,192
Accumulated deficit (15,518) (15,518)
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Total stockholders' deficit (2,769) (2,769)
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$ 8,551 $ 8,026
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3
ACTIVE LINK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)
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<Caption>
Denver Voice,
Inside Cabling,
Historical National
Statement of Accounts,
Operations Operations
April 30, April 30, Pro Forma
2001 2001 Adjustments Combined
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Revenue:
Direct equipment and service sales $ 17,033 $ 5,474 $ 11,559
Costs and expenses:
Cost of direct equipment and service sales 12,521 3,967 8,554
Selling 1,748 722 1,026
General and administrative 3,620 836 2,784
Interest expense and loan fees 803 56 $ 71[4] 676
Depreciation and amortization 467 260 207
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19,159 5,841 13,247
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Loss from continuing operations before income taxes
(2,126) (367) (1,688)
Income tax benefit 76 -- 76
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Loss from continuing operations (2,050) (367) (1,610)
Discontinued operations
Income from discontinued operations, net of
income tax expense of $76 in 2001 127 -- 127
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Net loss $ (1,923) $ (367) $ 1,483
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Loss per common share:
Basic and Diluted:
Loss from continuing operations $ (.21) $ (.16)
Income from discontinued operations .01 .01
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Net loss $ (.20) $ (.15)
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Weighed-average number of outstanding common shares
Basic and Diluted 9,578,516 9,578,516
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ACTIVE LINK COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT EARNINGS PER SHARE DATA)
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<Caption>
Denver Voice,
Inside Cabling,
Historical National
Statement of Accounts,
Operations Operations
July 31, July 31, Pro Forma
2001 2001 Adjustments Combined
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Revenue:
Direct equipment sales and service $ 4,737 $ 1,432 $ 3,305
Costs and expenses:
Cost of direct equipment sales and service 3,499 1,023 2,476
Selling 503 164 339
General and administrative 869 223 646
Depreciation and amortization 132 37 95
Interest expense 192 14 $16[4] 162
Permanent impairment of goodwill 3,500 -- 3,500
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8,695 1,461 7,218
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Loss from continuing operations before income
taxes (3,958) (29) (3,913)
Income tax benefit 93 -- 93
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Loss from continuing operations (3,865) (29) (3,820)
Discontinued operations
Income from discontinued operations, net of
income expense of $5 in 2001 30 -- 30
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Loss before extraordinary item (3,835) (29) (3,790)
Extraordinary item - gain on restructuring of an
account payable 165 -- 165
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Net (loss) $ (3,670) $ (29) $ (3,625)
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Loss per common share:
Basic and Diluted
Loss from continuing operations $ (.37) $ (.37)
Extraordinary item .02 .02
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Net loss $ (.35) $ (.35)
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Weighted average number of shares outstanding:
Basic and Diluted 10,380,297 10,380,297
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ACTIVE LINK COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION (UNAUDITED)
Note 1: Proceeds used to pay down secured lender.
Note 2: Amounts due secured lender upon maturity of short term note receivable.
Note 3. Proceeds used to satisfy obligations at closing.
Note 4. Reduced interest expense.
(c) Exhibits
2.1 Asset Purchase Agreement effective October 1, 2001 by and among
Active Link Communications, Inc., IAC Acquisition Corporation, Digital
Telecom, Inc. and Carrier Solutions, LLC
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Active Link Communications, Inc.
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(Registrant)
Date: October 22, 2001 /s/ David E. Welch
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David E. Welch
Vice President and Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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2.1 Asset Purchase Agreement effective October 1, 2001 by and
among Active Link Communications, Inc., IAC Acquisition
Corporation, Digital Telecom, Inc. and Carrier Solutions, LLC
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