1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 3, 2000 Commission File Number 000-27707
AETHER SYSTEMS, INC.
(Exact name of registrant)
Delaware 52-2186634
(State of organization) (I.R.S. Employer Identification Number)
11460 Cronridge Drive, Owings Mills, Maryland 21117
(Address of principal executive offices and zip code)
(410) 654-6400
(Registrant's telephone Number)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. None.
(b) Pro forma financial information.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma condensed consolidated financial information
has been prepared by Aether's management and gives effect to the acquisitions of
LocusOne Communications, Inc. completed on February 3, 2000, Riverbed
Technologies, Inc. completed on March 6, 2000, NetSearch, LLC completed on April
20, 2000, IFX Group Plc completed on April 6, 2000 and the related formation of
Sila Communications Limited completed on May 5, 2000, Cerulean Technology, Inc.
completed on September 14, 2000, SunPro, Inc. completed on September 18, 2000,
Motient's retail transportation business completed on December 1, 2000, and RTS
Wireless, Inc. completed on December 22, 2000, which are collectively referred
to in this "Unaudited Pro Forma Condensed Consolidated Financial Information"
section as the "Completed Transactions." The unaudited pro forma condensed
consolidated statement of operations for the year ended December 31, 2000 has
been prepared to give effect to the Completed Transactions as if they had
occurred on January 1, 2000.
The pro forma adjustments, which are based upon available information
and certain assumptions that Aether believes are reasonable in the
circumstances, are applied to the historical financial statements of LocusOne,
Riverbed, NetSearch, IFX, Sila, Cerulean, SunPro, Motient's retail
transportation business, and RTS. The acquisitions are accounted for under the
purchase method of accounting. Aether's allocation of the purchase price is
based upon the estimated fair value of assets acquired and liabilities assumed
in accordance with Accounting Principles Board Opinion No. 16. Certain of the
purchase price allocations reflected in the accompanying unaudited pro forma
condensed consolidated financial statements are preliminary and may be different
from the final allocation of the purchase price and any such differences may be
material.
The unaudited pro forma condensed consolidated financial information
is provided for informational purposes only and does not purport to represent
what Aether's financial position or results of operations would actually have
been had the acquisitions and investments occurred on such dates or to project
Aether's results of operations or financial position for any future period. The
unaudited pro forma consolidated financial data should be read in conjunction
with:
- the historical financial statements of Aether included
in Aether's Form 10-K for the year ended December 31,
2000;
- the historical financial statements and the notes
thereto for LocusOne. included in Aether's Report on
Form 8-K/A filed March 16, 2000;
- the historical financial statements and the notes
thereto for Riverbed included in Aether's registration
statement on Form S-1 (File No. 333-30852), as amended
and incorporated herein by reference.
(c) Exhibits.
99.1 Unaudited Pro Forma Combined Financial Data
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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.
AETHER SYSTEMS, INC.
BY: /s/ David C. Reymann
-------------------------------
David C. Reymann
Chief Financial Officer
Dated: April 11, 2001
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AETHER SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------
ADJUSTMENTS FOR
HISTORICAL COMPLETED PRO FORMA
AETHER TRANSACTIONS CONSOLIDATED
==========================================================
Subscriber revenue 31,160 23,131 54,291
Engineering services revenue 9,444 - 9,444
Software revenue and related services 17,550 26,526 44,076
----------------------------------------------------------
Total revenue 58,154 49,657 107,811
----------------------------------------------------------
Cost of subscriber revenue 18,412 10,070 28,482
Cost of engineering services revenue 5,693 - 5,693
Cost of software revenue and related services 5,911 6,348 12,259
----------------------------------------------------------
Total cost of revenue 30,016 16,418 46,434
----------------------------------------------------------
Gross profit 28,138 33,239 61,377
----------------------------------------------------------
Operating Expenses:
Research and development 30,189 18,786 48,975
General and administrative 52,937 21,892 74,829
In process research and development 7,860 - 7,860
Selling and marketing 54,151 23,090 77,241
Depreciation and amortization 238,074 112,222 350,296
Option and warrant expense 14,345 6,462 20,807
----------------------------------------------------------
397,556 182,452 580,008
----------------------------------------------------------
Operating Loss: (369,418) (149,213) (518,631)
Other Income (expense):
Interest income (expense), net 42,351 (582) 41,769
Other - 76 76
Minority interest 10,692 6,619 17,311
Equity in losses of investments (47,886) - (47,886)
----------------------------------------------------------
(Loss) income before income
tax provision (364,261) (143,100) (507,361)
Income tax (provision) benefit 1,561 (680) 881
----------------------------------------------------------
Net loss (362,700) (143,780) (506,480)
==========================================================
Net loss per share basic and diluted (9.99)
======
Weighted average shares used in computing
net loss per share -- basic and diluted 36,310
======
Pro forma net loss per share --
basic and diluted (13.13)
===================
Pro forma weighted average
shares used in per share
computations - basic and diluted 38,578
===================
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AETHER SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
ADJUSTMENTS FOR COMPLETED TRANSACTIONS
(in thousands)
For the Year Ended December 31, 2000
-------------------------------------------------------------------------------
Period from January 1, 2000 Through Period from January 1, 2000 Through
February 2, 2000 March 5, 2000
------------------------------------- -------------------------------------
Pro Forma Pro Forma
Historical Acquisition Historical Acquisition
LocusOne (A) Adjustments Riverbed (B) Adjustments
------------------ ------------------ ----------------- ------------------
Subscriber revenue - -
Engineering services revenue - -
Software revenue and related services 84 170
------------------ ------------------ ----------------- ------------------
Total revenue 84 170
------------------ ------------------ ----------------- ------------------
Cost of subscriber revenue - -
Cost of engineering services revenue - -
Cost of software revenue and related services 79 197
------------------ ------------------ ----------------- ------------------
Total cost of revenue 79 197
------------------ ------------------ ----------------- ------------------
Gross profit 5 (27)
------------------ ------------------ ----------------- ------------------
Operating Expenses:
Research and development 11 797
General and administrative 122 929
In process research and development - -
Selling and marketing 26 1,271
Depreciation and amortization 8 730 (I) 53 40,284 (I)
Option and warrant expense 50 811 (J) 149
------------------ ------------------ ----------------- ------------------
217 1,541 3,199 40,284
------------------ ------------------ ----------------- ------------------
Operating income (loss): (212) (1,541) (3,226) (40,284)
Other Income (expense):
Interest income (expense), net (7) 7 (L) 50
Other - -
Minority interest - -
------------------ ------------------ ----------------- ------------------
(Loss) income before income
tax provision (219) (1,534) (3,176) (40,284)
Income tax (provision) benefit - -
------------------ ------------------ ----------------- ------------------
Net (loss) income (219) (1,534) (3,176) (40,284)
================== ================== ================= ==================
------------------------------------------------------------------------------------
Period from January 1, 2000 Through Period from January 1, 2000 Through
April 5, 2000 April 19, 2000
---------------------------------------- ---------------------------------------
Pro Forma Pro Forma
Historical Acquisition Historical Acquisition
Sila/IFX (C) Adjustments NetSearch (D) Adjustments
----------------- ------------------ ----------------- ------------------
Subscriber revenue 4,693 403
Engineering services revenue - -
Software revenue and related services - -
----------------- ------------------ ----------------- ------------------
Total revenue 4,693 403
----------------- ------------------ ----------------- ------------------
Cost of subscriber revenue 2,266 111
Cost of engineering services revenue - -
Cost of software revenue and related services - -
----------------- ------------------ ----------------- ------------------
Total cost of revenue 2,266 111
----------------- ------------------ ----------------- ------------------
Gross profit 2,427 292
----------------- ------------------ ----------------- ------------------
Operating Expenses:
Research and development 73 -
General and administrative 866 454
In process research and development - -
Selling and marketing 884 39
Depreciation and amortization 37 14,460 (I) 6 1,661 (I)
Option and warrant expense - - 147 (K)
----------------- ------------------ ----------------- ------------------
1,860 14,460 499 1,808
----------------- ------------------ ----------------- ------------------
Operating income (loss): 567 (14,460) (207) (1,808)
Other Income (expense):
Interest income (expense), net - -
Other - -
Minority interest - 6,619 (M) -
----------------- ------------------ ----------------- ------------------
(Loss) income before income
tax provision 567 (7,841) (207) (1,808)
Income tax (provision) benefit (227) (502) (N) -
----------------- ------------------ ----------------- ------------------
Net (loss) income 340 (8,343) (207) (1,808)
================= ================== ================= ==================
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-------------------------------------------------------------------------------
Period from January 1, 2000 Through Period from January 1, 2000 Through
September 13, 2000 September 17, 2000
------------------------------------ ----------------------------------------
Pro Forma Pro Forma
Historical Acquisition Historical Acquisition
Cerulean (E) Adjustments SunPro (F) Adjustments
----------------- ------------------ ----------------- ------------------
Subscriber revenue - -
Engineering services revenue - -
Software revenue and related services 10,938 3,013
----------------- ------------------ ----------------- ------------------
Total revenue 10,938 3,013 -
----------------- ------------------ ----------------- ------------------
Cost of subscriber revenue - -
Cost of engineering services revenue - -
Cost of software revenue and related services 3,423 388
----------------- ------------------ ----------------- ------------------
Total cost of revenue 3,423 388 -
----------------- ------------------ ----------------- ------------------
Gross profit 7,515 2,625 -
----------------- ------------------ ----------------- ------------------
Operating Expenses:
Research and development 3,556 1,111
General and administrative 1,677 1,165
In process research and development - -
Selling and marketing 7,550 375
Depreciation and amortization 525 15,299 (I) 27 1,640 (I)
Option and warrant expense - 1,992 (J)
----------------- ------------------ ----------------- ------------------
13,308 17,291 2,678 1,640
----------------- ------------------ ----------------- ------------------
Operating income (loss): (5,793) (17,291) (53) (1,640)
Other Income (expense): - -
Interest income (expense), net (62) 8
Other - 76
Minority interest - -
----------------- ------------------ ----------------- ------------------
(Loss) income before income
tax provision (5,855) (17,291) 31 (1,640)
Income tax (provision) benefit - 763 (763) (O)
----------------- ------------------ ----------------- ------------------
Net (loss) income (5,855) (17,291) 794 (2,403)
================= ================== ================= ==================
-------------------------------------------------------------------------------
Period from January 1, 2000 Through Period from January 1, 2000 Through
November 30, 2000 December 21, 2000
--------------------------------------- -------------------------------------
Pro Forma Pro Forma
Historical Acquisition Historical Acquisition
Motient (G) Adjustments RTS (H) Adjustments
----------------- ----------------- ---------------- ------------------
Subscriber revenue 18,035 -
Engineering services revenue - -
Software revenue and related services - 12,008 313
----------------- ----------------- ---------------- ------------------
Total revenue 18,035 - 12,008 313
----------------- ----------------- ---------------- ------------------
Cost of subscriber revenue 7,693 -
Cost of engineering services revenue - -
Cost of software revenue and related services - 2,261
----------------- ----------------- ---------------- ------------------
Total cost of revenue 7,693 - 2,261 -
----------------- ----------------- ---------------- ------------------
Gross profit 10,342 - 9,747 313
----------------- ----------------- ---------------- ------------------
Operating Expenses:
Research and development 2,782 10,456
General and administrative 4,092 12,587
In process research and development - -
Selling and marketing 3,627 9,318
Depreciation and amortization - 9,351 (I) - 28,141 (I)
Option and warrant expense - 2,158 1,155 (J)
----------------- ----------------- ---------------- ------------------
10,501 9,351 34,519 29,296
----------------- ----------------- ---------------- ------------------
Operating income (loss): (159) (9,351) (24,772) (28,983)
Other Income (expense):
Interest income (expense), net - (578)
Other - -
Minority interest - -
----------------- ----------------- ---------------- ------------------
(Loss) income before income
tax provision (159) (9,351) (25,350) (28,983)
Income tax (provision) benefit - 49
----------------- ----------------- ---------------- ------------------
Net (loss) income (159) (9,351) (25,301) (28,983)
================= ================= ================ ==================
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----------------
Aether as
Adjusted for
Completed
Transactions
-----------------
Subscriber revenue 23,131
Engineering services revenue -
Software revenue and related services 26,526
-----------------
Total revenue 49,657
-----------------
Cost of subscriber revenue 10,070
Cost of engineering services revenue -
Cost of software revenue and related services 6,348
-----------------
Total cost of revenue 16,418
-----------------
Gross profit 33,239
-----------------
Operating Expenses:
Research and development 18,786
General and administrative 21,892
In process research and development -
Selling and marketing 23,090
Depreciation and amortization 112,222
Option and warrant expense 6,462
-----------------
182,452
-----------------
Operating income (loss): (149,213)
Other Income (expense):
Interest income (expense), net (582)
Other 76
Minority interest 6,619
-----------------
(Loss) income before income
tax provision (143,100)
Income tax benefit (680)
-----------------
Net (loss) income (143,780)
=================
_________________
(A) Reflects the historical results of LocusOne for the period from January
1, 2000 to February 2, 2000. The results of LocusOne from February 3,
2000 to December 31, 2000 are included in Aether's historical results
for the year ended December 31, 2000.
(B) Reflects the historical results of Riverbed for the period from January
1, 2000 to March 5, 2000. The results of Riverbed from March 6, 2000 to
December 31, 2000 are included in Aether's historical results for the
year ended December 31, 2000.
(C) Reflects the historical results of IFX Group Plc for the period from
January 1, 2000 to April 5, 2000 and the historical results of Future
Pagers Ltd. for the period from January 1, 2000 to May 6, 2000. The
results of IFX from April 6, 2000 to December 31, 2000 and the results
of Futures Pagers from May 7, 2000 to December 31, 2000 are included in
Aether's historical results for the year ended December 31, 2000.
(D) Reflects the historical results of NetSearch for the period from January
1, 2000 to April 19, 2000. The results of NetSearch from April 20, 2000
to December 31, 2000 are included in Aether's historical results for the
year ended December 31, 2000.
(E) Reflects the historical results of Cerulean for the period from January
1, 2000 to September 13, 2000. The results of Cerulean from September
14, 2000 to December 31, 2000 are included in Aether's historical
results for the year ended December 31, 2000.
(F) Reflects the historical results of SunPro for the period from January 1,
2000 to September 17, 2000. The results of SunPro from September 18,
2000 to December 31, 2000 are included in Aether's historical results
for the year ended December 31, 2000.
(G) Reflects the historical results of Motient's retail transportation
business for the period from January 1, 2000 to November 30, 2000. The
results of Motient's retail transportation business from December 1,
2000 to December 31, 2000 are included in Aether's historical results
for the year ended December 31, 2000.
(H) Reflects the historical results of RTS for the period from January 1,
2000 to December 21, 2000. The results of RTS from December 22, 2000 to
December 31, 2000 are included in Aether's historical results for the
year ended December 31, 2000.
(I) Reflects the amortization of intangible assets, including goodwill, over
two to seven year periods.
(J) Reflects the amortization of the intrinsic value of options granted to
employees of LocusOne, Cerulean and RTS over the three year vesting
period.
(K) Reflects the amortization of the intrinsic value of options granted to
employees of NetSearch over the four year vesting period.
(L) Reflects the elimination of interest expense, as LocusOne's outstanding
debt was repaid by Aether as part of the acquisition.
(M) Reflects the allocation of 40 percent of Sila's proforma net loss to the
minority interest.
(N) Reflects the recording of a deferred tax benefit related to the
amortization of identifiable intangibles.
(O) Reflects the elimination of income tax expense, as any operating profits
generated by SunPro would be offset by Aether's consolidated net losses.