Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A (No. 1)
Amending Form 8-K dated June 19, 2007 and filed July 3, 2007

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report: June 27, 2007
(Date of earliest event reported)
 
VoIP, Inc.
(Exact name of Company as specified in its charter)

Texas
  
000-28985
  
75-2785941
(State or Other Jurisdiction)
  
(Commission File Number)
  
(I.R.S. Employer Identification)
of Incorporation)
  
 
  
 
 
 151 So. Wymore Rd., Suite 3000, Altamonte Springs, Florida 32714
 
  (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (407) 389-3232
 
N/A

 (Former name or former address, if changed since last report)
 
o
 
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 40.13e-4(c))
 
 
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

See Item 2.01 below.
 
ITEM 2.01 COMPLETION OF ACCQUISITION OR DISPOSITION OF ASSETS

This report amends and incorporates the VoIP, Inc. (the “Company”) Form 8-K filed on July 3, 2007. As previously disclosed, on June 27, 2007, VoIP, Inc. (the “Company”) and WQN, Inc., a Texas corporation, (the “Purchaser”) executed an agreement, pursuant to which the Company sold substantially all of the tangible operating assets utilized by its Dallas, Texas subsidiary, including assets related to the EasyTalk and Rocket VoIP products (the “Assets”), to the Purchaser. The Company’s patents and other intangible assets were not part of the transaction.

This report is amended to include the Company’s unaudited pro forma condensed consolidated balance sheet and statement of operations as of March 31, 2007 and for the three months then ended, and the pro forma condensed consolidated statement of operations for the year ended December 31, 2006.
 
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
 
VOIP, INC.
 
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


The following unaudited pro forma condensed consolidated financial statements were derived from and should be read in conjunction with the historical consolidated financial statements and related notes of the Company for the year December 31, 2006, as contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, and as of and for the three months ended March 31, 2007, as contained in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.

On June 27, 2007, the Company and the Purchaser executed an agreement, pursuant to which the Company sold substantially all of the tangible operating assets utilized by its Dallas, Texas subsidiary, including assets related to the EasyTalk and Rocket VoIP products, to the Purchaser. Pursuant to the agreement, the Purchaser acquired the Assets for a purchase price consisting of (1) cash payments totaling $400,000; (2) 4% of the defined monthly revenues related to the Assets in excess of $200,000 during the first year following execution of the agreement; (3) 3% of the defined monthly revenues related to the Assets in excess of $150,000 during the second year following execution of the agreement; and (4) 2% of the defined monthly revenues related to the Assets in excess of $100,000 during the third year following execution of the agreement.

The unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 2007 and for the year ended December 31, 2006, assumes that the sale of the Assets was consummated on January 1, 2006. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2007 assumes that the sale of the Assets was consummated on March 31, 2007.

The unaudited pro forma condensed consolidated balance sheet and statements of operations have been prepared based on currently available information and assumptions that are deemed appropriate by the Company's management. The pro forma information is for informational purposes only and is not intended to be indicative of the actual results that would have been reported had the transaction occurred on the date indicated, nor does the information represent a forecast of the financial condition or results of operation of the Company for any future period.
 
2

VoIP, Inc.
Proforma Condensed Consolidated Balance Sheet (Unaudited)
As of March 31, 2007

       
Deletion of
         
   
VoIP, Inc.
 
Dallas, TX
         
   
Consolidated
 
Assets
 
Adjustments
  
Proforma
  
ASSETS
                 
                   
Current assets
 
$
1,498,701
  
$
(363,903
)
$
400,000
(4)
$
1,534,798
  
Property and equipment, net
   
6,451,645
   
(224,500
)
  
-
   
6,227,145
 
Goodwill and other intangible assets
   
31,908,793
   
(6,569,538
)
  
-
   
25,339,255
 
Other assets
   
45,386
   
(5,282
)
  
-
   
40,104
 
                           
TOTAL ASSETS
 
$
39,904,525
  
$
(7,163,223
)
$
400,000
  
$
33,141,302
  
                           
LIABILITIES AND SHAREHOLDERS' EQUITY
                         
                           
Current liabilities:
                         
Accounts payable
 
$
8,896,960
  
$
(193,951
)
$
-
  
$
8,703,010
  
Accrued expenses
   
5,083,975
   
(397,382
)
  
-
   
4,686,593
 
Convertible notes payable
   
13,480,185
   
(3,700,000
)
  
-
   
9,780,185
 
Nonregistration penalties and other stock-based payables
   
7,113,382
   
-
   
-
   
7,113,382
 
Accrued litigation charges
   
2,012,350
   
-
   
-
   
2,012,350
 
Other current liabilities
   
1,285,488
   
(342,280
)
  
-
   
943,207
 
Total current liabilities
   
37,872,340
   
(4,633,613
)
  
-
   
33,238,727
 
                           
Other liabilities
   
199,597
   
-
   
-
   
199,597
 
                           
TOTAL LIABILITIES
   
38,071,937
   
(4,633,613
)
  
-
   
33,438,324
 
                           
Shareholders' equity:
                         
Common stock and paid-in capital
                         
400,000,000 shares authorized; 98,609,701shares
   
91,319,504
   
(3,191,600
)
  
8,003,123
   
96,131,027
 
Accumulated deficit
   
(89,486,916
)
  
661,990
   
(7,603,123
)(5)
  
(96,428,049
)
Total shareholders' equity
   
1,832,588
   
(2,529,610
)
  
400,000
   
(297,022
)
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
39,904,525
  
$
(7,163,223
)
$
400,000
  
$
33,141,302
  
 
The accompanying notes are an integral part of this proforma condensed consolidated balance sheet.
 
3
 
VoIP Inc.
Proforma Condensed Consolidated Statement of Operations (Unaudited)
Three Months Ended March 31, 2007 
       
Deletion of
     
   
VoIP, Inc.
 
Dallas, TX
     
   
Consolidated
 
Assets
 
Proforma
  
               
Revenues
 
$
3,189,543
  
$
(1,392,009
)
$
1,797,534
  
                     
Cost of sales
   
3,054,571
   
(906,079
)
  
2,148,492
 
                     
Gross profit (loss)
   
134,972
   
(485,930
)
  
(350,958
)
                     
Operating expenses
                   
Compensation and related expenses
   
1,668,531
   
(110,197
)
  
1,558,334
 
Commissions and fees to third parties
   
130,500
   
-
   
130,500
 
Professional, legal and consulting expenses
   
1,507,345
   
(54,339
)
  
1,453,006
 
Depreciation and amortization
   
1,223,432
   
(157,698
)
  
1,065,734
 
General and administrative expenses
   
371,040
   
(95,754
)
  
275,286
 
Total operating expenses
    
4,900,848
   
(417,988
)
  
4,482,860
 
                     
Loss from continuing operations before income taxes
   
(4,765,876
)
  
(67,942
)
  
(4,833,818
)
                     
Other expenses:
                   
Interest expense
   
2,520,582
   
(97,040
)
  
2,423,542
 
Financing penalties and expenses
   
2,274,896
   
-
   
2,274,896
 
Increase in fair value liability for warrants
   
3,550,551
   
-
   
3,550,551
 
Litigation charges
   
1,043,620
   
-
   
1,043,620
 
Impairment of intangible and other assets
   
-
   
-
   
-
 
Total other expenses
   
9,389,649
   
(97,040
)
  
9,292,609
 
                     
Loss before income taxes and results of
                   
discontinued operations
   
(14,155,525
)
  
29,098
   
(14,126,427
)
                     
Provision for income taxes
    
-
   
-
   
-
 
                     
Net loss before discontinued operations
    
(14,155,525
)
  
29,098
   
(14,126,427
)
                     
Gain from discontinued operations,
                    
net of income taxes
   
665,221
   
-
   
665,221
 
                     
Net loss
  
$
(13,490,304
)
$
29,098
  
$
(13,461,206
)
                     
                     
Basic and diluted loss per share:
                   
                     
Loss before discontinued operations
 
$
(0.15
)
      
$
(0.15
)
Gain from discontinued operations,
                   
net of income taxes
   
0.01
         
0.01
 
Net loss per share
 
$
(0.14
)
      
$
(0.14
)
                     
Weighted average number of shares outstanding
   
98,609,701
         
98,609,701
 
 
The accompanying notes are an integral part of this proforma condensed consolidated statement of operations.
 
4
 
VoIP Inc.
Proforma Condensed Consolidated Statement of Operations (Unaudited)
Year Ended December 31, 2006 
 
       
Deletion of
     
   
VoIP, Inc.
 
Dallas, TX
     
   
Consolidated
 
Assets
 
Proforma
  
               
Revenues
 
$
14,676,948
  
$
(8,743,700
)
$
5,933,248
  
                     
Cost of sales
   
14,685,010
   
(6,060,134
)
  
8,624,876
 
                     
Gross profit (loss)
   
(8,062
)
  
(2,683,566
)
  
(2,691,628
)
                     
Operating expenses
                   
Compensation and related expenses
   
13,184,377
   
(599,047
)
  
12,585,330
 
Commissions and fees to third parties
   
2,573,386
   
-
   
2,573,386
 
Professional, legal and consulting expenses
   
6,852,584
   
(336,082
)
  
6,516,502
 
Depreciation and amortization
   
5,168,467
   
(560,149
)
  
4,608,318
 
General and administrative expenses
   
3,236,871
   
(671,010
)
  
2,565,861
 
Total operating expenses
    
31,015,685
   
(2,166,288
)
  
28,849,397
 
                     
Loss from continuing operations before income taxes
   
(31,023,747
)
  
(517,278
)
  
(31,541,025
)
                     
Other (income) expenses:
                   
Interest expense
   
7,715,400
   
(501,075
)
  
7,214,325
 
Financing penalties and expenses
   
6,375,342
   
-
   
6,375,342
 
Decrease in fair value liability for warrants
   
(7,226,430
)
  
-
   
(7,226,430
)
Litigation charges
   
1,068,500
   
-
   
1,068,500
 
Other
   
260,000
   
-
   
260,000
 
Total other (income) expenses
   
8,192,812
   
(501,075
)
  
7,691,737
 
                     
Loss before income taxes and results of
                   
discontinued operations
   
(39,216,559
)
  
(16,203
)
  
(39,232,762
)
                     
Provision for income taxes
    
-
   
-
   
-
 
                     
Net loss before discontinued operations
    
(39,216,559
)
  
(16,203
)
  
(39,232,762
)
                     
Loss from discontinued operations,
                    
net of income taxes
   
(1,979,953
)
  
-
   
(1,979,953
)
                     
Net loss
  
$
(41,196,512
)
$
(16,203
)
$
(41,212,715
)
                     
Basic and diluted loss per share:
                   
                     
Loss before discontinued operations
 
$
(0.52
)
      
$
(0.52
)
Loss from discontinued operations,
                   
net of income taxes
   
(0.03
)
        
(0.03
)
                     
Net loss per share
 
$
(0.55
)
      
$
(0.55
)
                     
Weighted average number of shares outstanding
   
75,329,007
         
75,329,007
 
 
The accompanying notes are an integral part of this proforma condensed consolidated statement of operations.
 
5
 
VoIP,  INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

 
(1) VoIP, INC. Basis of Presentation

Historical financial information for the Company as of and for the three months ended March 31, 2007, and for the year ended December 31, 2006, has been derived from the Company's historical consolidated financial statements, as filed in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

(2) Deletion of Dallas, Texas Assets - Basis of Presentation

Historical financial information for the deletion of the Dallas, Texas Assets for the periods presented has been derived from the Company’s historical financial statements.

(3) Sale of the Dallas, Texas Assets

On June 27, 2007, the Company and the Purchaser executed an agreement, pursuant to which the Company sold substantially all of the tangible operating assets utilized by its Dallas, Texas subsidiary, including assets related to the EasyTalk and Rocket VoIP products, to the Purchaser. Pursuant to the agreement, the Purchaser acquired the Assets for a purchase price consisting of (1) cash payments totaling $400,000; (2) 4% of the defined monthly revenues related to the Assets in excess of $200,000 during the first year following execution of the agreement; (3) 3% of the defined monthly revenues related to the Assets in excess of $150,000 during the second year following execution of the agreement; and (4) 2% of the defined monthly revenues related to the Assets in excess of $100,000 during the third year following execution of the agreement.

(4) Cash Proceeds Adjustment

The $400,000 pro forma cash adjustment reflects the cash portion of the purchase price discussed in note 3 above.

(5) Accumulated Deficit Adjustment

The pro forma accumulated deficit includes an estimated loss on the sale of the Assets of $6,941,132, consisting primarily of the write-off of goodwill and other intangible assets related to the Assets sold.
 
6

(c) Exhibits.
 
 
2.1
Amendment to Asset Purchase Agreement Between VoIP, Inc. and WQN, Inc., dated July 3, 2007.

7
 
SIGNATURES

Pursuant to the requirement 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.
 
 
 
 
 
VoIP, INC.
 
 
 
 
 
 
Date: July 6, 2007
By:  
/s/ Robert Staats
 
Robert Staats
 
Chief Accounting Officer
 
8