SEC Info - Preview Travel Inc - ‘8-K’ for 12/17/98

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Preview Travel Inc – ‘8-K’ for 12/17/98

As of: Thursday, 12/24/98 · For: 12/17/98 · Accession #: 1012870-98-3236 · File #: 0-23177

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/24/98  Preview Travel Inc                8-K:2,7    12/17/98    2:51K                                    Donnelley R R & S… 13/FA

Current Report — Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                        13     39K 
 2: EX-2.1      Note and Warrant Purchase Agreement                   13     58K

8-K — Current Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Acquisition or Disposition of Assets Financial Statements, Pro Forma Financial Information and Exhibits
1	1st Page - Filing Submission
2	Item 2. Acquisition or Disposition of Assets
3	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

8-K 1st Page of 13 TOC ↑Top Previous Next ↓Bottom Just 1st
 
SECURITIES AND EXCHANGE COMMISSION  
Washington, D.C. 20549

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):  December 17, 1998

PREVIEW TRAVEL, INC.
(Exact name of Registrant as specified in its charter)

     DELAWARE                      000-23177              94-2965892
(State or other jurisdiction of   (Commission File Number)   (I.R.S. Employer   
incorporation or organization)                             Identification No.)

747 Front Street, San Francisco, CA 94111 
(Address of principal executive offices) (Zip code) 

(415) 439-1200
(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report) 

-1- 

8-K 2nd Page of 13 TOC 1st Previous Next ↓Bottom Just 2nd
Item 2.  Acquisition or Disposition of Assets                                   

On December 17, 1998, Preview Travel, Inc. (the "Company") entered into an      
agreement with NewsNet Central, Inc. ("NNC"), under which substantially all of  
the assets of the Company's television business, as operated by the Company's   
wholly owned subsidiary, News Travel Network, Inc. ("NTN"), will be transferred 
to NNC (the "TV Disposition").  Prior to the closing of the TV Disposition,     
which is expected to occur on December 31, 1998, the Company will contribute    
certain assets to NTN, including the following:  (a) cash in the amount of      
$88,000, (b) certain assets related to NTN's business, including a library of   
travel video content, and (c) assignment of the Company's rights and obligations
under certain contracts related to NTN's business.                              

In consideration of the transfer of the assets of NTN to NNC, the Company will  
receive from NNC the following: (a) a convertible promissory note in the        
principal amount of $250,000 (the "Note"), (b) a subordinated promissory note in
the principal amount of $1,000,000 (the "Subordinated Note"), which will bear   
interest at the rate of 6% per annum and will be secured by certain portions of 
the assets of NNC, including its fixed assets and the video library, and (c) a  
warrant to purchase up to 2,275,445 shares of Common Stock of NNC at an exercise
price of $0.45 per share (the "Warrant"). The Note will be due and payable upon 
demand by the Company on December 31, 1999; provided, however, that the Note    
will be automatically converted into shares of Series A Preferred Stock of NTN  
at a conversion price of $4.50 per share upon the occurrence of certain         
conditions.                                                                     

NNC was incorporated under the laws of Delaware on October 19, 1998. As of      
December 17, 1998, James Hornthal, the Company's founder and Chairman holds     
800,000 shares and the Company holds 829,000 shares of Common Stock of NNC,     
which each purchased on November 15, 1998 at a price of $0.015 per share.       
Following the closing of the TV Disposition and the conversions of all          
outstanding convertible promissory notes, including the Note, the Company will  
own approximately 19.7% of NNC's Common Stock (assuming conversion of the Series
A Preferred Stock into Common Stock).                                           

In addition, the Company and NNC will enter into a Services Agreement that will 
provide for, among other things, the following:  (a) the sublease to NNC of the 
Company's facilities at One Beach Street in San Francisco, (b) the Company's    
right to act as the co-exclusive advertising sales representative for NTN's     
Travel Update programs, (c) a perpetual, nonexclusive, royalty-free license to  
use NTN's travel video library (including any enhancements thereto), and (d) the
continued branding of NTN's "Travel News" and "Travel Update" programs with     
"Preview Travel" marks. NNC will agree not to provide online travel services for
a period of five years following the termination of the Services Agreement.     

As the historical operations of the Company's television business were not      
profitable, and due to the significant risks inherent in the independent        
television business, the Company has attributed no value to the Subordinated    
Note and the Warrant.  The net value of the Company's investment in NNC will be 
recorded at $250,000.                                                           

As of the closing of the TV Disposition, substantially all of the Company's     
employees engaged in NTN's business are expected to become employees of NNC.    

-2- 

8-K 3rd Page of 13 TOC 1st Previous Next ↓Bottom Just 3rd
Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits     

(a)  Not applicable.                                                  

(b)  Pro Forma Financial Information.                                 
-------------------------------                             

Introduction to Pro Forma Financial Information (Unaudited) 
----------------------------------------------------------- 

Pro Forma Condensed Consolidated Balance Sheet              

          The following unaudited Pro Forma Condensed Consolidated Balance Sheet
   reflects the historical condensed consolidated balance sheet of
          Preview Travel, Inc. and subsidiaries (the "Company") at September 30,
1998, as adjusted to give effect to the TV Disposition.     

          The unaudited Pro Forma Condensed Consolidated Balance Sheet should be
       read in conjunction with the historical financial statements of the
 Company and notes thereto and the narrative sections included
         elsewhere herein. Because the TV Disposition will occur subsequent to
      September 30, 1998, actual adjustments and balances will vary from
          those presented in the Pro Forma Condensed Consolidated Balance Sheet.
    However, management believes that any differences between actual
adjustments and pro forma adjustments will not be material. 

Pro Forma Condensed Consolidated Statements of Operations   

The unaudited Pro Forma Condensed Consolidated Statements of
       Operations for the three years ended December 31, 1997 and the nine
 months ended September 30, 1998 are based upon the historical
          condensed consolidated statements of operations of the Company for the
   respective periods after giving effect to pro forma adjustments
    described in the notes thereto as if the TV Disposition had been
consummated on January 1, 1995.                             

The unaudited Pro Forma Condensed Consolidated Statements of
          Operations should be read in conjunction with the historical financial
          statements of the Company and notes thereto and the narrative sections
   included elsewhere herein. The Pro Forma Condensed Consolidated
          Statements of Operations are not necessarily indicative of what actual
   results of operations would have been for the period had the TV
          Disposition occurred on January 1, 1995 and do not purport to indicate
the results of future operations.                           

-3- 

8-K 4th Page of 13 TOC 1st Previous Next ↓Bottom Just 4th
Pro Forma Financial Information 
------------------------------- 

-4- 

8-K 5th Page of 13 TOC 1st Previous Next ↓Bottom Just 5th
PREVIEW TRAVEL, INC. AND SUBSIDIARIES 
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET  
SEPTEMBER 30, 1998  
(In thousands)  
(unaudited) 

                                                        [Enlarge/Download Table]

                                                                   Pro Forma               
                                                                 Adjustments               
                                                                  Reflecting     Pro Forma 
                                                    Historical  TV Disposition  As Adjusted
                                                    ----------  --------------  -----------
                                                                                           
                          Assets                                                           

Cash and cash equivalents                            $ 27,130      $  (88)(1)    $ 27,042  
Marketable securities                                  41,843                      41,843  
Accounts receivable, net                                3,099                       3,099  
Other assets                                            2,735         (78)(2)       2,657  
                                                     --------                    --------  
       Total current assets                            74,807                      74,641  
Film library, net                                       2,026      (2,026)(2)           -  
Property & equipment, net                               5,409      (1,384)(2)       4,025  
Investment in NewsNet Central                               -         250 (3)         250  
                                                     --------                    --------  
       Total assets                                  $ 82,242                    $ 78,916  
                                                     ========                    ========  

        Liabilities & Stockholders' Equity                                                 

Accounts payable                                          506                         506  
Accrued liabilities                                     3,595         720 (4)       4,315  
Deferred revenue                                          166                         166  
Current portion of capital lease obligations            1,357                       1,357  
                                                     --------                    --------  
        Total current liabilities                       5,624                       6,344  
Capital lease obligations, less current portion         2,051                       2,051  
                                                     --------                    --------  

        Total liabilities                               7,675                       8,395  
                                                     --------                    --------  

Stockholders' equity:                                                                      
Common stock                                               14                          14  
Additional paid-in capital                            115,161                     115,161  
Other stockholders' equity                               (393)                       (393) 
Accumulated deficit                                   (40,215)     (4,046)(5)     (44,261) 
                                                     --------                    --------  
        Total stockholders' equity                     74,567                      70,521  
                                                     --------                    --------  
        Total liabilities and stockholders' equity   $ 82,242                    $ 78,916  
                                                     ========                    ========  

The accompanying notes are an integral part of these unaudited pro forma  
condensed consolidated financial statements.  

-5- 

8-K 6th Page of 13 TOC 1st Previous Next ↓Bottom Just 6th
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET 
(Unaudited) 

The TV Disposition pro forma adjustments have been made to reflect the          
following:                                                                      

(1)  Cash consideration paid by the Company to NNC upon disposition.            

(2)  Elimination of assets included in TV Disposition.                          

(3)  Value of investment in NNC in exchange for assets and other consideration. 

(4)  Additional liabilities for transaction costs associated with TV Disposition
     and loss on the sublet of the TV facility to NNC over the remaining term of
the Company's lease.                                                  

(5)  Loss on TV Disposition.                                                    

-6- 

8-K 7th Page of 13 TOC 1st Previous Next ↓Bottom Just 7th
PREVIEW TRAVEL, INC. AND SUBSIDIARIES 
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998  
(In thousands, except per share amounts)  
(unaudited) 

                                                                [Download Table]

                                                     Pro Forma               
                                                   Adjustments               
                                                    Reflecting     Pro Forma 
                                      Historical  TV Disposition  As Adjusted
                                      ----------  --------------  -----------
                                                                             
Revenues:                                                                    
   Online                             $   9,435                    $   9,435 
   Television                             5,000    $ (4,769) (A)         231 
                                      ---------                    --------- 
        Total revenues                   14,435                        9,666 

Cost of revenues:                                                            
   Online                                 4,293                        4,293 
   Television                             3,882      (3,882) (B)           - 
                                      ---------                    --------- 
        Total cost of revenues            8,175                        4,293 

        Gross profit                      6,260                        5,373 
Operating expenses:                                                          
   Marketing and sales                   15,148      (1,132) (C)      14,016 
   Research and development               2,619                        2,619 
   General and administrative             4,711        (627) (D)       4,084 
                                      ---------                    --------- 
        Total operating expenses         22,478                       20,719 

        Loss from operations            (16,218)                     (15,346)
Interest income (expense), net            1,822                        1,822 
                                      ---------                    --------- 

        Loss before income taxes        (14,396)                     (13,524)
Income tax expense                          (36)                         (36)
                                      ---------                    --------- 

Net Loss                              $ (14,432)                   $ (13,560)
                                      =========                    ========= 

Basic and diluted net loss per share  $   (1.15)                   $   (1.08)
                                      =========                    ========= 
Weighted average shares outstanding                                          
  used in per share calculation          12,528                       12,528 
                                      =========                    ========= 

The accompanying notes are an integral part of these unaudited pro forma  
condensed consolidated financial statements.  

-7- 

8-K 8th Page of 13 TOC 1st Previous Next ↓Bottom Just 8th
PREVIEW TRAVEL, INC. AND SUBSIDIARIES 
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE YEAR ENDED DECEMBER 31, 1997  
(In thousands, except per share amounts)  
(unaudited) 

                                                                [Download Table]

                                                     Pro Forma               
                                                   Adjustments               
                                                    Reflecting     Pro Forma 
                                      Historical  TV Disposition  As Adjusted
                                      ----------  --------------  -----------
                                                                             
Revenues:                                                                    
   Online                             $   6,010                    $   6,010 
   Television                             7,634    $ (7,388) (A)         246 
                                      ---------                    --------- 
        Total revenues                   13,644                        6,256 

Cost of revenues:                                                            
   Online                                 3,648                        3,648 
   Television                             5,751      (5,751) (B)           - 
                                      ---------                    --------- 
        Total cost of revenues            9,399                        3,648 

        Gross profit                      4,245                        2,608 
Operating expenses:                                                          
   Marketing and sales                    8,668      (1,643) (C)       7,025 
   Research and development               1,825                        1,825 
   General and administrative             4,184        (564) (D)       3,620 
                                      ---------                    --------- 
        Total operating expenses         14,677                       12,470 

        Loss from operations            (10,432)                      (9,862)
Interest income (expense), net              266                          266 
                                      ---------                    --------- 

        Loss before income taxes        (10,166)                      (9,596)
Income tax expense                           (2)                          (2)
                                      ---------                    --------- 

Net Loss                              $ (10,168)                    $ (9,598)
                                      =========                    ========= 

Basic and diluted net loss per share  $   (3.54)                    $  (3.35)
                                      =========                    ========= 
Weighted average shares outstanding                                          
  used in per share calculation           2,869                        2,869 
                                      =========                    ========= 

The accompanying notes are an integral part of these unaudited pro forma  
condensed consolidated financial statements.  

-8- 

8-K 9th Page of 13 TOC 1st Previous Next ↓Bottom Just 9th
PREVIEW TRAVEL, INC. AND SUBSIDIARIES 
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE YEAR ENDED DECEMBER 31, 1996  
(In thousands, except per share amounts)  
(unaudited) 

                                                                [Download Table]

                                                     Pro Forma               
                                                   Adjustments               
                                                    Reflecting     Pro Forma 
                                      Historical  TV Disposition  As Adjusted
                                      ----------  --------------  -----------
                                                                             
Revenues:                                                                    
   Online                             $   2,573                    $   2,573 
   Television                             9,801    $ (9,203) (A)         598 
                                      ---------                    --------- 
        Total revenues                   12,374                        3,171 

Cost of revenues:                                                            
   Online                                 2,308                        2,308 
   Television                             7,000      (7,000) (B)           - 
                                      ---------                    --------- 
        Total cost of revenues            9,308                        2,308 

        Gross profit                      3,066                          863 
Operating expenses:                                                          
   Marketing and sales                    4,373      (1,558) (C)       2,815 
   Research and development               1,314                        1,314 
   General and administrative             2,880      (1,440) (D)       1,440 
                                      ---------                    --------- 
        Total operating expenses          8,567                        5,569 

        Loss from operations             (5,501)                      (4,706)
Interest income (expense), net              (89)                         (89)
                                      ---------                    --------- 
        Loss before income taxes         (5,590)                      (4,795)
Income tax expense                           (2)                          (2)
                                      ---------                    --------- 

Net Loss                              $  (5,592)                   $  (4,797)
                                      =========                    ========= 

Basic and diluted net loss per share  $   (3.43)                   $   (2.94)
                                      =========                    ========= 
Weighted average shares outstanding                                          
  used in per share calculation           1,631                        1,631 
                                      =========                    ========= 

The accompanying notes are an integral part of these unaudited pro forma  
conxdensed consolidated financial statements. 

-9- 

8-K 10th Page of 13 TOC 1st Previous Next ↓Bottom Just 10th
PREVIEW TRAVEL, INC. AND SUBSIDIARIES 
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS  
FOR THE YEAR ENDED DECEMBER 31, 1995  
(In thousands, except per share amounts)  
(unaudited) 

                                                                [Download Table]

                                                    Pro Forma                
                                                   Adjustments               
                                                    Reflecting     Pro Forma 
                                      Historical  TV Disposition  As Adjusted
                                      ----------  --------------  -----------
                                                                             
Revenues:                                                                    
   Online                             $     579                    $     579 
   Television                             9,564    $ (9,163) (A)         401 
                                      ---------                    --------- 
        Total revenues                   10,143                          980 

Cost of revenues:                                                            
   Online                                 1,078                        1,078 
   Television                             8,393      (8,393) (B)           - 
                                      ---------                    --------- 
        Total cost of revenues            9,471                        1,078 

        Gross profit                        672                          (98)
Operating expenses:                                                          
   Marketing and sales                    2,687      (2,150) (C)         537 
   Research and development                 626                          626 
   General and administrative             2,026      (1,620) (D)         406 
                                      ---------                    --------- 
        Total operating expenses          5,339                        1,569 

        Loss from operations             (4,667)                      (1,667)
Interest income (expense), net             (264)                        (264)
                                      ---------                    --------- 

        Loss before income taxes         (4,931)                      (1,931)
Income tax expense                           (2)                          (2)
                                      ---------                    --------- 

Net Loss                               $ (4,933)                    $ (1,933)
                                       =========                    =========
Basic and diluted net loss per share   $  (4.02)                     $ (1.57)
                                       =========                    =========
Weighted average shares outstanding                                          
  used in per share calculation           1,228                        1,228 
                                       =========                    =========

The accompanying notes are an integral part of these unaudited pro forma  
condensed consolidated financial statements.  

-10-  

8-K 11th Page of 13 TOC 1st Previous Next ↓Bottom Just 11th
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited) 

The TV Disposition pro forma adjustments have been made to reflect the          
following:                                                                      

(A)  Reduction in revenue associated with TV operations, offset by assumed      
Travel Update sales commission revenue under the Sales Representation 
Agreement.                                                            
(B)  Reduction in cost of revenues associated with TV operations.               
(C)  Reduction in marketing and sales expenses associated with TV operations.   
(D)  Reduction in general and administrative expenses associated with TV        
operations.                                                           

-11-  

8-K 12th Page of 13 TOC 1st Previous Next ↓Bottom Just 12th
(c)  Exhibits.                                                        
--------                                                    

2.1  Note and Warrant Purchase Agreement dated December 17, 
         1998 among the Company, News Travel Network, Inc., a wholly
        owned subsidiary of the Company, and NewsNet Central, Inc.

SIGNATURES

 Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf  
by the undersigned thereunto duly authorized.                                   

PREVIEW TRAVEL, INC.
(Registrant)        

Date:  December 23, 1998      By:   /s/ Kenneth R. Pelowski                     
                                  ------------------------------------------
           Kenneth R. Pelowski
                             Executive Vice President, Finance and
                                  Administration and Chief Financial Officer

-12-  

8-K Last Page of 13 TOC 1st Previous Next ↓Bottom Just 13th
INDEX TO EXHIBITS 

                                                        Sequentially
Exhibit                                                         Numbered        
Number    Description                                             Page          
------    -----------                                        --------------     

2.1       Note and Warrant Purchase Agreement dated                             
December 17, 1998 among the Company, News                   
Travel Network, Inc., a wholly owned subsidiary             
of the Company, and NewsNet Central, Inc.                   

-13-

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘8-K’ Filing	Date	First	Last	Other Filings

	12/31/99	2
	12/31/98	2		10-K
Filed on:	12/24/98
	12/23/98	12
For Period End:	12/17/98	1	13	8-K/A
	11/15/98	2
	10/19/98	2
	9/30/98	3	7	10-Q
	12/31/97	3	8	10-K405
	12/31/96	9
	12/31/95	10
	1/1/95	3
				List all Filings

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Filing Submission 0001012870-98-003236 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Preview Travel Inc – ‘8-K’ for 12/17/98

As of: Thursday, 12/24/98 · For: 12/17/98 · Accession #: 1012870-98-3236 · File #: 0-23177

Previous ‘8-K’: None · Next: ‘8-K/A’ on 1/12/99 for 12/17/98 · Latest: ‘8-K’ on / for 10/6/99

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Dates Referenced Herein and Documents Incorporated by Reference

Current Report — Form 8-K
Filing Table of Contents

8-K — Current Report
Document Table of Contents