U.S. 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):
May 7, 2003
Commission File Number: 001-13217
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
(Exact name of small business issuer as specified in its charter)
Florida 91-1796903
------------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
4901 Vineland Road
Suite 150
Orlando, Florida 32811
----------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (407) 648-4444
(Former name or former address, if changed since last report)
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements.
None.
(b) Pro Forma Financial Information.
Pro forma financial information is set forth at pages F-1 through F-6
(c) Exhibits.
Exhibit 99.1 - Agreement of Purchase and Sale
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 hereunto duly authorized.
Orlando Predators Entertainment, Inc.
(Registrant)
By: /s/ Keli Davis
-----------------------------------
Keli Davis, Chief Financial Officer
Dated: May 22, 2003
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
PRO FORMA EXPLANATORY HEADNOTE
The following unaudited pro forma consolidated financial statements give effect
to the sale of certain assets of The Orlando Predators Entertainment, Inc. (the
"Company"), related to the operations of Louisiana IceGators, LLC (the
"IceGators"), and are based on the estimates and assumptions set forth herein
and in the notes to such statements. This pro forma information has been
prepared utilizing the historical financial statements of the Company and notes
thereto, which are incorporated by reference herein and the separate historical
financial information of the IceGators. The pro forma financial data does not
purport to be indicative of the results which actually would have been obtained
had the sale been effected on the dates indicated or the results which may be
obtained in the future.
The pro forma consolidated statements of operations for the six months ended
March 31, 2003 and for the year ended September 30, 2002 assume that the sale
had occurred at the beginning of the applicable periods. The March 31, 2003
consolidated balance sheet assumes that the sale occurred on March 31, 2003.
In May 2003, the Company reached an agreement to sell the IceGators to an
unaffiliated party (the "buyer"). The buyer purchased the certain assets of the
IceGators, including the ECHL membership, fixed assets, inventory, intellectual
property and certain contracts. As consideration, the buyer assumed the
Company's $600,000 note payable to the former owners of the IceGators and
applicable accrued interest through the date of the sale.
During May 2003, the Company also entered into an amendment to the agreement for
the sale of the Orlando Predators arena football team ("Predators") to provide
for an increase in the line of credit to $700,000 and a $650,000 reduction of
the promissory note payable to the Orlando Predators Football Team, LLC ("OPF"),
which will be recorded as a reduction of the loss on the sale of the team. As
consideration, the Company has agreed to forego it's right to a percentage
sharing of the net operational proceeds of the Predators and forfeit its right
to a percentage sharing of any net proceeds from a subsequent sale, merger or
transfer of the Predators. In addition, the Company has agreed to share in up to
25% of the potential net operational losses of the Predators resulting from the
2004 and 2005 playing seasons, not to exceed $250,000 in aggregate.
Page F-1
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2003
The Orlando The Orlando
Predators Predators
Entertainment, Entertainment,
Inc. Pro Forma Inc. Pro Forma
Consolidated Adjustments Consolidated
------------ ----------- ------------
ASSETS
CURRENT ASSETS:
Cash $ 270,488 $ -- $ 270,488
Accounts receivable, sponsorships 358,342 -- 358,342
Accounts receivable, af2 1,584 -- 1,584
AFL receivable, current portion 68,738 -- 68,738
af2 expansion fees receivable 109,697 -- 109,697
Inventory 42,127 -- 42,127
Prepaid expenses 661,568 -- 661,568
Other current assets 26,171 -- 26,171
---------- ---------- ----------
Total Current Assets 1,538,715 -- 1,538,715
PROPERTY AND EQUIPMENT, at cost, net 96,163 (34,824) 2 61,339
INVESTMENT IN AFL 4,032,650 -- 4,032,650
AFL RECEIVABLE, net of current portion 576,136 -- 576,136
NOTE RECEIVABLE, related party 300,000 -- 300,000
MEMBERSHIP COST, net 1,157,917 (640,000) 2 517,917
af2 TEAM INVESTMENTS 567,705 -- 567,705
OTHER ASSETS 83,780 -- 83,780
---------- ---------- ----------
TOTAL ASSETS $8,353,066 $ (674,824) $7,678,242
========== ========== ==========
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Page F-2
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (Continued)
MARCH 31, 2003
The Orlando The Orlando
Predators Predators
Entertainment, Entertainment,
Inc. Pro Forma Inc. Pro Forma
Consolidated Adjustments Consolidated
------------ ----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 675,463 $ (27,583) 2 $ 647,880
Accounts payable and accrued expenses, related party 13,194 -- 13,194
Note payable-acquisition, current portion 150,000 (150,000) 2 --
af2 expansion fees payable 200,000 -- 200,000
Deferred revenue 601,055 -- 601,055
------------ ------------ ------------
Total Current Liabilities 1,639,712 (177,583) 1,462,129
NOTE PAYABLE-ACQUISITION, net of current portion 450,000 (450,000) 2 --
BRIDGE LOANS PAYABLE 1,991,372 -- 1,991,372
LINE OF CREDIT, related party 181,902 --
-- 181,902
NOTE PAYABLE, related party 1,067,000 (650,000) 3 417,000
------------ ------------ ------------
5,329,986 (1,277,583) 4,052,403
------------ ------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, 1,500,000 shares authorized; none
issued or outstanding -- -- --
Class A Common Stock, 15,000,000 shares
authorized; 10,109,425 issued and outstanding 16,010,483 -- 16,010,483
Class B Common Stock, 1,000 shares authorized;
1,000 issued and outstanding 5,000 -- 5,000
Additional paid-in capital 4,839,729 -- 4,839,729
Accumulated (deficit) (17,832,132) 602,759 2,3 (17,229,373)
------------ ------------ ------------
Total Stockholders' Equity 3,023,080 602,759 3,625,839
------------ ------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,353,066 $ (674,824) $ 7,678,242
============ ============ ============
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Page F-3
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 2003
The Orlando The Orlando
Predators Predators
Entertainment, Entertainment,
Inc. Pro Forma Inc. Pro Forma
Consolidated Adjustments Consolidated
------------ ------------- ------------
REVENUES:
Ticket $ 708,145 $ (646,441) $ 61,704
Concession 48,739 (48,739) 4 --
Advertising and promotions 310,069 (287,574) 4 22,495
Sponsorship trade Revenue 46,546 (14,743) 4 31,803
Other 11,832 (3,511) 4 8,321
----------- ------------- -----------
Total Revenue 1,125,331 (1,001,008) 124,323
----------- ------------- -----------
COSTS AND EXPENSES:
Operations 1,145,880 (1,120,180) 4 25,700
Selling and promotional 319,522 (290,601) 4 28,921
Trade expenses 39,096 (13,122) 4 25,974
General and administrative 661,164 (123,349) 4 537,815
Depreciation 20,662 (18,604) 4 2,058
Write-down of assets available for sale 25,000 -- 25,000
----------- ------------- -----------
Total Costs and Expenses 2,211,324 (1,565,856) 645,468
----------- ------------- -----------
OPERATING (LOSS) (1,085,993) 564,848 (521,145)
----------- ------------- -----------
OTHER INCOME (EXPENSES):
Interest expense (134,156) 22,761 4 (111,395)
Interest income 10,537 -- 10,537
Interest income, AFL 87,487 -- 87,487
Loan fees (427,308) -- (427,308)
Gain on sale of af2 membership 413,225 -- 413,225
----------- ------------- -----------
Net Other Income (Expense) (50,215) 22,761 (27,454)
----------- ------------- -----------
(LOSS) FROM CONTINUING OPERATIONS (1,136,208) 587,609 (548,599)
----------- ------------- -----------
DISCONTINUED OPERATIOINS
(Loss) from operations of discontinued subsidiary (566,718) -- (566,718)
(Loss) on disposal of subsidiary (1,078,283) 650,000 (428,283)
----------- ------------- -----------
Total (Loss) From Discontinued Operations (1,645,001) 650,000 (995,001)
----------- ------------- -----------
NET (LOSS) BEFORE MINORITY INTEREST (2,781,209) 1,237,609 (1,543,600)
----------- ------------- -----------
MINORITY INTEREST 5,517 (5,517) 4 --
----------- ------------- -----------
NET (LOSS) $(2,775,692) $ 1,232,092 $(1,543,600)
=========== ============= ===========
NET (LOSS) PER SHARE, BASIC AND DILUTED
Continuing operations (0.13) (0.07)
Discontinued operations:
Loss from operations (0.07) (0.07)
Loss on disposal (0.13) (0.05)
----------- -----------
$ (0.33) $ (0.19)
=========== ===========
Weighted Average Number of Common Shares Outstanding,
basic and diluted 8,288,403 8,288,403
=========== ===========
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Page F-4
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2002
The Orlando The Orlando
Predators Predators
Entertainment, Entertainment,
Inc. Pro Forma Inc. Pro Forma
Consolidated Adjustments Consolidated
------------ ----------- ------------
REVENUES:
Ticket $ 490,549 $ -- $ 490,549
Playoff 182,621 -- 182,621
Advertising and promotions 208,904 (360) 4 208,544
Sponsorship trade Revenue 309,442 -- 309,442
Other 37,787 (100) 4 37,687
----------- ----------- -----------
Total Revenue 1,229,303 (460) 1,228,843
----------- ----------- -----------
COSTS AND EXPENSES:
Operations 484,414 (2,041) 4 482,373
Playoff expenses 190,900 -- 190,900
Selling and promotional 196,515 (3,819) 4 192,696
Trade expenses 323,435 -- 323,435
General and administrative 1,263,223 (56,373) 4 1,206,850
Amortization 6,875 -- 6,875
Depreciation 46,500 (672) 4 45,828
Write-down of assets available for sale 133,634 -- 133,634
----------- ----------- -----------
Total Costs and Expenses 2,645,496 (62,905) 2,582,591
----------- ----------- -----------
OPERATING (LOSS) (1,416,193) 62,445 (1,353,748)
----------- ----------- -----------
OTHER INCOME (EXPENSES):
Interest expense (156,461) 5,000 4 (151,461)
Interest income 1,698 -- 1,698
Interest income, AFL 246,705 -- 246,705
Loan fees (785,212) -- (785,212)
----------- ----------- -----------
Net Other Income (Expense) (693,270) 5,000 (688,270)
----------- ----------- -----------
(LOSS) FROM CONTINUING OPERATIONS (2,109,463) 67,445 (2,042,018)
----------- ----------- -----------
DISCONTINUED OPERATIOINS
(Loss) from operations of discontinued subsidiary (3,895,647) -- (3,895,647)
(Loss) on disposal of subsidiary -- -- --
----------- ----------- -----------
Total (Loss) From Discontinued Operations (3,895,647) -- (3,895,647)
----------- ----------- -----------
NET (LOSS) BEFORE MINORITY INTEREST (6,005,110) 67,445 (5,937,665)
----------- ----------- -----------
MINORITY INTEREST 6,258 (6,258) 4 --
----------- ----------- -----------
NET (LOSS) $(5,998,852) $ 61,187 $(5,937,665)
=========== =========== ===========
NET (LOSS) PER SHARE, BASIC AND DILUTED
Continuing operations (0.29) (0.28)
Discontinued operations:
Loss from operations (0.54) (0.54)
Loss on disposal -- --
----------- -----------
$ (0.83) $ (0.82)
=========== ===========
Weighted Average Number of Common Shares Outstanding,
basic and diluted 7,198,044 7,198,044
=========== ===========
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Page F-5
THE ORLANDO PREDATORS ENTERTAINMENT, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - PRO FORMA ADJUSTMENTS
The adjustments related to the unaudited pro forma consolidated balance sheet
are computed assuming the sale of the IceGators assets was consummated at March
31, 2003. The adjustments related to the unaudited pro forma consolidated
statements of operations for the six months ended March 31, 2003 and for the
year ended September 30, 2002 are computed assuming the sale of the IceGators
assets was consummated at the beginning of the period.
NOTE 2 - ADJUSTMENT OF ASSETS AND LIABILITIES
In connection with the sale of the IceGators, the buyer purchased certain assets
of the IceGators, including the ECHL membership, fixed assets, inventory,
intellectual property and certain contracts. As consideration, the buyer assumed
the Company's $600,000 note payable to the former owners of the IceGators and
applicable accrued interest through the date of the sale.
NOTE 3 - AMENDMENT TO AGREEMENT FOR THE SALE OF THE PREDATORS
During May 2003, the Company also entered into an amendment to the agreement for
the sale of the Predators to provide for an increase in the line of credit to
$700,000 and a $650,000 reduction of the promissory note payable to the buyer
("OPF"), which will be recorded as a reduction of the loss on the sale of the
team. As consideration, the Company has agreed to forego it's right to a
percentage sharing of the net operational proceeds of the Predators and forfeit
its right to a percentage sharing of any net proceeds from a subsequent sale,
merger or transfer of the Predators. In addition, the Company has agreed to
share in up to 25% of the potential net operational losses of the Predators
resulting from the 2004 and 2005 playing seasons, not to exceed $250,000 in
aggregate. The operations of the Predators have been reported as discontinued
operations.
NOTE 4 - CHANGES TO STATEMENTS OF OPERATIONS
The unaudited pro forma consolidated statements of operations for the six months
ended March 31, 2003 and for the year ended September 30, 2002 reflect
operations of the Company as if the IceGators had been sold at the beginning of
the period. The revenues and expenses of the IceGators have been eliminated.
Interest expense has been decreased to reflect the $600,000 decrease in the
balance of the note payable to the former owners of the IceGators.
The loss on disposal of a subsidiary has been decreased by $650,000 to reflect
the reduction in the note payable to OPF.
Interest expense has been decreased for the six months ended March 31, 2003 to
reflect the $650,000 decrease in the note payable to OPF.
Minority interest has been adjusted to reflect applicable changes to net loss.
Page F-6