SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): September 25, 2002
GOAMERICA, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-23959 22-3693371
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
433 Hackensack Avenue, Hackensack NJ 07601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 996-1717
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This Current Report on Form 8-K contains statements about expected future events
and financial results that are forward-looking and subject to risks and
uncertainties. These statements are intended to be protected by the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995 as
they are based on management's current expectations and are naturally subject to
uncertainty and changes in circumstances. Actual results may vary materially
from the expectations contained herein. GoAmerica is not under any obligation to
update or alter its forward-looking statements, whether as a result of new
information, future events, or otherwise.
ITEM 5. Other Events
On September 25, 2002, GoAmerica, Inc., a Delaware corporation (together with
its wholly owned subsidiary, GoAmerica Communications Corp., the "Company"),
formed a comprehensive strategic alliance with Earthlink, Inc., a Delaware
corporation ("Earthlink"), by entering into a series of agreements (filed
herewith as Exhibits 10.1 through 10.4, the "Agreements") pursuant to which,
among other things:
o Earthlink will purchase all of the Company's Cellular Digit Packet Data
(CDPD) subscribers as well as certain of the Company's Cingular and Motient
network subscribers (collectively, the "transferred subscribers");
o Earthlink will purchase the Company's rights under a credit for $1.4 million
of inventory from a hardware manufacturer, receiving the Company's equipment
pricing at a discount;
o The Company and Earthlink will market each other's wireless services in
exchange for commissions and/or recurring revenue shares;
o Earthlink will provide billing, customer support and network services to most
subscribers of the Company's technology; and
o The Company and Earthlink will collaborate on developing new applications and
extensions of existing technology, including Earthlink-branded wireless data
services, as well as new technologies.
As a result of the Agreements, the Company expects to receive between $3.2
million and $4.3 million in cash between the fourth quarter of 2002 and the
first quarter of 2003, subject to adjustment based upon the number of former
GoAmerica subscribers that
remain Earthlink subscribers through a certain transition period. Subscriber
revenue associated with the transferred subscribers was $9.6 million and $17.4
million with the related costs of subscriber airtime of $8.9 million and $18.6
million for the six months ended June 30, 2002 and for the year ended December
31, 2001, respectively. The Company expects to recognize an accounting charge
during the third quarter of 2002 relating to headcount reductions, inventory
valuation and other items stemming from this transaction, as well as other cost
reduction initiatives. Additionally, the Company is no longer pursuing its
previously announced intention to raise $10 million to $15 million in new
financing.
The Agreements also provide for certain competitive restrictions on each of
Earthlink and the Company and provides Earthlink with a right of refusal with
respect to the sale of the Company or of certain significant assets of the
Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
The following Exhibits are filed as part of this report on Form 8-K:
10.1++ Acquisition Agreement, dated as of September 25, 2002, between
Earthlink, Inc., GoAmerica, Inc. and GoAmerica Communications Corp.
10.2++ Sales Agent Agreement, dated as of September 25, 2002, between
Earthlink, Inc., GoAmerica, Inc. and GoAmerica Communications Corp.
10.3++ Technology Development Agreement, dated as of September 25, 2002,
between Earthlink, Inc., GoAmerica, Inc. and GoAmerica Communications
Corp.
10.4++ License Agreement, dated as of September 25, 2002, between Earthlink,
Inc., GoAmerica, Inc. and GoAmerica Communications Corp.
++ Confidential treatment has been requested for a portion of this Exhibit and
the Company is awaiting a final determination. Confidential materials have been
omitted and filed separately with the Securities and Exchange Commission.
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 hereunto duly authorized.
GOAMERICA, INC.
By: /s/ Aaron Dobrinsky
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Name: Aaron Dobrinsky
Title: Chairman and Chief Executive
Officer
Date: October 9, 2002
EXHIBIT INDEX
Exhibit No. Description
10.1++ Acquisition Agreement, dated as of September 25, 2002, between
Earthlink, Inc., GoAmerica, Inc. and GoAmerica Communications
Corp.
10.2++ Sales Agent Agreement, dated as of September 25, 2002, between
Earthlink, Inc., GoAmerica, Inc. and GoAmerica Communications
Corp.
10.3++ Technology Development Agreement, dated as of September 25, 2002,
between Earthlink, Inc., GoAmerica, Inc. and GoAmerica
Communications Corp.
10.4++ License Agreement, dated as of September 25, 2002, between
Earthlink, Inc., GoAmerica, Inc. and GoAmerica Communications
Corp.
++ Confidential treatment has been requested for a portion of this Exhibit and
the Company is awaiting a final determination. Confidential materials have been
omitted and filed separately with the Securities and Exchange Commission.