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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
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October 15, 2002
AMEN Properties, 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)
00-22847
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(Commission File Number)
54-1831588
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(IRS Employer Identification No.)
303 W. Wall, Suite 1700
Midland, Texas 79701
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(Address of principal executive offices) (Zip Code)
(915) 684-3821
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(Registrant's telephone number, including area code)
Crosswalk.com, Inc.
4100 Lafayette Center Dr. Suite 110
Chantilly, VA 20151
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(Former Name of Former Address, if Changed Since Last Report)
Current Report Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On August 19, 2002, Crosswalk.com, Inc. (the "Company"), entered into an Asset
Purchase Agreement with Salem Communications Corporation (the "Buyer"), pursuant
to which the Buyer agreed to purchase substantially all of the assets, used,
required, useful or otherwise relating to the ownership, development and
operations of the crosswalk.com website (the "asset sale"). The crosswalk.com
interactive website provides information and resources that the Company believes
generally appeals to the English speaking Christian and family-friendly
community. The Biblically based content focuses on topical and lifestyle areas
such as entertainment, money, news, homeschooling, family living, and spiritual
life. In addition, online applications such as cross-referenced Bible study
databases, the largest Christian online directory, chat and forums, and over
thirty topical and community related email newsletters are available to visitors
of crosswalk.com.
There are no material relationships between Salem Communications Corporation and
the Company or any of its affiliates, any director or officer of the Company, or
any associate of any such director or officer of Crosswalk.com, Inc.
On October 4, 2002, the asset sale was completed as the Company received
approximately $4.1 million in cash and the Buyer acquired the crosswalk.com
website and related assets. This consideration is subject to post closing
adjustments, which are not expected to be material. Certain assets and
liabilities unrelated to the crosswalk.com website, primarily involving leases
and the card deck business were retained by the Company.
ITEM 5. OTHER
On October 11, 2002, Crosswalk.com issued a press release announcing that the
Company completed the sale of its crosswalk.com website, representing
substantially all of its assets, to Salem Communications Corporation, and that
it is in the process of implementing the shareholder approved business plan to
utilize the majority of the proceeds of the asset sale to among other things,
acquire cash generating assets. As part of this new business model the Company
has changed its name to AMEN Properties, Inc.
The Company also announced that it received notification of delisting from
Nasdaq due to the Company's noncompliance with the minimum $1.00 bid price per
share requirement set forth in Marketplace Rule 4310(c)(4). Thus the Company's
common stock will be delisted from The Nasdaq SmallCap Market effective with the
opening of business on October 17, 2002. However, the Company filed an appeal on
October 15, 2002, requesting an oral hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. Under Nasdaq Marketplace
Rules, the hearing request will stay the delisting of the Company's common stock
pending the Panel's decision.
The complete text of the press release is provided herein as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a. Financial Statements of Business Acquired.
Not applicable
b. Pro Forma Financial information.
The following unaudited pro forma condensed consolidated financial
statements are file with this report:
o Pro Forma Consolidated Balance Sheet at June 30, 2002
o Pro Forma Consolidated Statements of Operations for Year Ended
December 31, 2001
o Pro Forma Consolidated Statements of Operations for Six Months
Ended June 30, 2002
The Pro Forma Consolidated Balance Sheet of the Company as of June 30, 2002
reflects the financial position of the Company assuming the asset sale had
occurred on June 30, 2002. All material adjustments required to reflect the
asset sale are set forth in the column labeled "Asset Sale Proforma
Adjustments." The data contained in the column labeled "June 2002 Actual" is
derived from the Company's unaudited consolidated balance sheet as of June 30,
2002. The pro forma data is for informational purposes only and may not
necessarily reflect the Company's financial position or what the financial
position would have been had the asset sale occurred on June 30, 2002.
The unaudited Pro Forma Consolidated Statements of Operations were prepared to
illustrate the estimated effects of the discontinuance of the business
associated with the asset sale as of January 1, 2001. Pursuant to SFAS No. 144,
the Company has removed the business attributable to the asset being sold from
continuing operations in the periodic statement of operations for the six months
ended June 30, 2002. The net loss attributable to the business of the asset
being sold is reflected in discontinued operations in the income statement for
the six months ended June 30, 2002. The unaudited Pro Forma Consolidated
Statements of Operations exclude the effects of transactions that are not
reasonably expected to reoccur subsequent to the asset sale. The unaudited pro
forma consolidated statements of operations and related notes are provided for
informational purposes only and do not purport to be indicative of the results
of operations that would have been reported had the events assumed, occurred on
the dates indicated, or purport to be indicative of results of operations that
may be achieved in the future.
The unaudited Pro Forma Consolidated Balance Sheet and the unaudited Pro Forma
Consolidated Statements of Operations should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements of the Company, including
the notes thereto, appearing in the Company's Annual Form 10-K for the year
ended December 31, 2001 and "Management's Discussion and Analysis or Plan of
Operation" and the consolidated financial statements of the Company, including
the notes thereto, appearing on interim report Form 10-QSB for the quarter ended
June 30, 2002.
CROSSWALK.COM, INC. PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 2002
Asset Sale
June 2002 Proforma
ASSETS Actual Adjustments Proforma
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(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 392,878 $ 4,100,000 (A) $ 4,492,878
Short-term investments 306,246 -- 306,246
Accounts receivable 420,918 -- 420,918
Deferred costs 203,800 (172,220)(B) 31,580
Note receivable from officer 16,183 -- 16,183
Assets held for sale 2,433,350 (2,433,350)(C) --
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Total current assets 3,773,375 1,494,430 5,267,805
LONG TERM INVESTMENTS 52,822 -- 52,822
PROPERTY AND EQUIPMENT, net 287,412 (277,000)(D) 10,412
OTHER ASSETS:
Deposits 60,887 (60,000)(D) 887
Deferred costs 609 -- 609
Goodwill, net 750,339 -- 750,399
Total other assets 811,895 (60,000) 751,895
------------ ------------ ------------
TOTAL ASSETS $ 4,925,504 $ 1,157,430 $ 6,082,934
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 317,232 (56,205)(D) $ 261,027
Accrued expenses 601,211 1,250,000 (D) 1,851,211
Deferred revenue 115,083 (115,083)(B) --
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Total current liabilities 1,033,526 1,078,712 2,112,238
OTHER LIABILITIES:
Accounts payable 131,211 -- 131,211
Other liabilities 19,439 -- 19,439
STOCKHOLDERS' EQUITY
Preferred stock 160 -- 160
Common stock 79,682 -- 79,682
Common stock warrants 127,660 -- 127,660
Additional paid-in capital 42,056,199 -- 42,056,199
Accumulated deficit (38,519,456) 78,718 (E) (38,440,738)
Accumulated other comprehensive loss:
Net unrealized loss on available-for-sale securities (2,917) -- (2,917)
------------ ------------ ------------
Total stockholders' equity 3,741,328 78,718 3,820,046
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,925,504 $ 1,157,430 $ 6,082,934
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Notes to Adjustments to Unaudited Pro Forma Consolidated Balance Sheet
The unaudited Pro Forma Consolidated Balance Sheet gives effect to the asset
sale, as if it had occurred as of June 30, 2002.
The following adjustments are reflected in the unaudited Pro Forma Consolidated
Balance Sheet:
(A) To record the asset sale price of approximately $4.1 million in cash.
(B) To record reversal of deferred revenue and cost associated with
contracts, which are part of the asset sale.
(C) To record elimination of carrying value of goodwill, intangible
assets, and property plant and equipment included in the asset sale
and classified as Assets held for sale pursuant to Statement of
Financial Accounting Standards (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."
(D) To record further reduction in property, plant and equipment included
in asset sale, forfeiture of deposits related to rental agreement and
reduction in payables associated with asset sale, and the accrual for
estimated costs related to the asset sale, which include, but are not
limited to, $50,000 of license fees, $770,000 of commitments related
to rent, hosting and lease agreements, $253,000 of employee severance
costs, and $160,000 of legal and advisory fees.
(E) To record the estimated pro forma gain on the asset sale.
Crosswalk.com, Inc. Pro Forma Consolidated Statements of Operations for
the Year Ended December 31, 2001 and the Six Months Ended June 30, 2002
Historical Proforma Historical Proforma
Year Ended Year Ended Six Months Six Months
December 31, Proforma December 31, Ended Proforma Ended
2001 Adjustment 2001 June 30, 2002 Adjustment June 30, 2002
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TOTAL REVENUES $ 4,506,291 $ (3,302,484)(a) $ 1,203,807 $ 484,615 $ -- $ 484,615
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OPERATING EXPENSES:
Cost of goods and services 1,737,095 (783,078)(a) 954,017 374,340 -- 374,340
Crosswalk operations 2,774,780 (2,774,780)(a) -- 112,034 (112,034)(a) --
Sales and marketing 1,525,243 (1,331,013)(a) 194,230 70,430 -- 70,430
Amortization of Goodwill
and Intangibles 1,682,235 (1,485,557)(b) 196,678 -- -- --
General and administrative 1,654,513 (1,185,471)(a) 469,042 351,777 (60,157)(a) 291,620
------------ ------------ ------------ ------------ ------------ ------------
Total operating expenses 9,373,866 (7,559,899) 1,813,967 908,581 (172,191) 736,390
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INCOME (LOSS) FROM CONTINUING
OPERATIONS (4,867,575) 4,257,413 (610,162) (423,966) 172,191 (251,775)
OTHER INCOME NET 83,061 -- 83,061 18,183 -- 18,183
------------ ------------ ------------ ------------ ------------ ------------
INCOME (LOSS FROM CONTINUING
OPERATIONS) $ (4,784,514) $ 4,257,413 $ (527,101) $ (405,783) $ 172,191 $ (233,592)
Loss from discontinued operations -- -- -- (504,187) 504,187 (a) --
------------ ------------ ------------ ------------ ------------ ------------
Gain (loss) before cumulative
effect of a change in accounting
policy $ (4,784,514) $ 4,257,413 $ (527,101) $ (909,970) $ 676,378 $ (233,592)
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Recognition of impairment loss as
a result of transitional goodwill
impairment test -- -- -- (750,000) -- (750,000)
------------ ------------ ------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (4,784,514) $ 4,257,413 $ (527,101) $ (1,659,970) $ 676,378 $ (983,592)
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Amounts per common share:
Loss from continuing operations $ (0.60) $ (0.07) $ (0.05) $ (0.03)
Loss from discontinued operations -- -- (0.06) --
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Loss before cumulative effect of a
change in accounting principle $ (0.60) $ (0.07) $ (0.11) $ (0.03)
Recognition of impairment loss as
a result of transitional goodwill
impairment test -- -- (0.10) (0.10)
------------ ------------ ------------ ------------
Net loss per common share
(basic and diluted) $ (0.60) $ (0.07) $ (0.21) $ (0.13)
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Weighted average number of common
shares outstanding 7,947,555 7,947,555 7,967,470 7,967,470
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Notes to Adjustments to Unaudited Pro Forma
Consolidated Statements of Operations
The following footnotes set forth the contributing factors to the proforma
(a) To reflect the elimination of revenues and associated costs and
expenses generated from substantially all of Crosswalk's Internet
assets and intellectual property and other technology assets sold to
Buyer.
(b) To record the elimination of expenses incurred during the respective
period for goodwill and intangible assets sold to Buyer.
(c) Exhibits
2.1 Purchase Agreement dated as of August 19, 2002 by and between
Crosswalk.com, Inc. and Salem Communications Corporation, is
incorporated by reference to Annex A of the Company's Definitive
Proxy Statement filed with the Securities and Exchange Commission
on August 27, 2002.
2.2 Closing Date Extension Agreement dated September 20, 2002 between
Crosswalk.com, Inc. and Salem Communications Corporation.
99.1 Press release of Crosswalk.com dated October 11, 2002, titled
"Crosswalk.com Announces Completion of Asset Sale and Forthcoming
Name Change. Company also Receives Nasdaq Delisting Notice"
EXHIBIT INDEX
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EXHIBIT NO. DOCUMENT DESCRIPTION
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2.2 Closing Date Extension Agreement dated September 20, 2002 between
Crosswalk.com, Inc. and Salem Communications Corporation.
99.1 Press release of Crosswalk.com dated October 11, 2002, titled
"Crosswalk.com Announces Completion of Asset Sale and Forthcoming Name
Change. Company also Receives Nasdaq Delisting Notice"
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Crosswalk.com, Inc.
Date: October 15, 2002 By: /s/ Eric Oliver
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Eric Oliver
Chairman of the Board of Directors
and Chief Executive Officer