-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CoeMl6YMzt8djCFkFYqBjlDxSeE839vObdRDHT6kJrHszjOfkS2d1uotvCoU/4rN Hpp7qlWCClnebCRL/RgZGQ== /in/edgar/work/20000724/0000950130-00-004013/0000950130-00-004013.txt : 20000921 0000950130-00-004013.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950130-00-004013 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000510 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000724 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MULTEX COM INC CENTRAL INDEX KEY: 0001061310 STANDARD INDUSTRIAL CLASSIFICATION: [7374 ] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-24559 FILM NUMBER: 677634 BUSINESS ADDRESS: STREET 1: 100 WILLIAM ST STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10038 BUSINESS PHONE: 2128599800 MAIL ADDRESS: STREET 1: 33 MAIDEN LANE 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10038 FORMER COMPANY: FORMER CONFORMED NAME: MULTEX SYSTEMS INC DATE OF NAME CHANGE: 19980508 8-K/A 1 0001.txt AMENDMENT TO FORM 8-K 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) May 10, 2000 -------------------------------- Multex.com, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter)
Delaware 0-24559 22-3253344 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.)
100 William Street, 7th Floor, New York, New York 10038 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 607-2500 ------------------------------ Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) This Current Report on Form 8-K/A amends the Current Report on Form 8-K filed on May 24, 2000 to incorporate Item 7(a), Financial Statements of Business Acquired and Item 7(b), Pro Forma Information. Item 2. ACQUISITION OF ASSETS --------------------- On May 10, 2000, Multex.com, Inc. (the "Registrant") acquired BuzzCompany.com Inc., a Delaware corporation ("Buzz"), pursuant to an Agreement and Plan of Merger dated May 10, 2000. In the merger, the Registrant issued approximately 1,058,000 shares of its common stock, assumed certain outstanding options of Buzz and paid approximately $500,000 in cash. The transaction was accomplished by merging a wholly owned subsidiary of the Registrant into Buzz. Buzz survived the merger and became a wholly owned subsidiary of the Registrant. A copy of the Agreement and Plan of Merger is attached hereto as Exhibit 2.1 and incorporated herein by reference. The merger consideration was determined in arm's-length negotiations between the Registrant and Buzz. The transaction is intended to qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended. A copy of the press release issued by the Registrant on May 10, 2000 concerning the foregoing transaction is attached hereto as Exhibit 99.1, and incorporated herein by reference. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL ----------------------------------------- INFORMATION AND EXHIBITS ------------------------ (a) Financial Statements of Business Acquired. ----------------------------------------- The following appear as Exhibit 99.2 to this Current Report on Form 8-K/A and are incorporated into this document by reference: Balance sheet of BuzzCompany.com Inc. as of December 31, 1999, and the related statements of operations, changes in stockholders' equity and cash flows for the year ended December 31, 1999. (b) Pro Forma Financial Information. ------------------------------- The following appear as Exhibit 99.3 to this Current Report on Form 8-K/A and are incorporated into this document by reference: Unaudited pro forma condensed consolidated statement of operations for the three-month period ended March 31, 2000 and the year ended December 31, 1999 and unaudited pro forma condensed consolidated balance sheet as of March 31, 2000. (c) Exhibits. The following documents are filed as exhibits to this -------- report: 2.1 * Agreement and Plan of Merger dated as of May 10, 2000 by and among Multex.com, Inc., Multex B Acquisition Corp., BuzzCompany.com Inc. and the shareholders of BuzzCompany.com Inc. 23.1 Consent of Independent Accountants. 99.1 * Press Release of Registrant, dated May 10, 2000, announcing the execution of the Agreement and Plan of Merger. 99.2 Balance sheet of BuzzCompany.com Inc. as of December 31, 1999, and the related statements of operations, changes in stockholders' equity and cash flows for the year ended December 31, 1999. 99.3 Unaudited pro forma condensed consolidated statement of operations for the three-month period ended March 31, 2000 and the year ended December 31, 1999 and unaudited pro forma condensed consolidated balance sheet as of March 31, 2000. ______________________ * Previously filed. 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 thereunto duly authorized. MULTEX.COM, INC. /s/ Isaak Karaev ---------------------------- Date: July 24, 2000 Isaak Karaev Chairman and Chief Executive Officer Exhibit Index ------------- Exhibit ------- 2.1 * Agreement and Plan of Merger dated as of May 10, 2000 by and among Multex.com, Inc., Multex B Acquisition Corp., BuzzCompany.com Inc. and the shareholders of BuzzCompany.com Inc. 23.1 Consent of Independent Accountants. 99.1 * Press Release of Registrant, dated May 10, 2000, announcing the execution of the Agreement and Plan of Merger. 99.2 Balance sheet of BuzzCompany.com Inc. as of December 31, 1999, and the related statements of operations, changes in stockholders' equity and cash flows for the year ended December 31, 1999. 99.3 Unaudited pro forma condensed consolidated statement of operations for the three-month period ended March 31, 2000 and the year ended December 31, 1999 and unaudited pro forma condensed consolidated balance sheet as of March 31, 2000. ______________________ * Previously filed. EX-23.1 2 0002.txt CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 Consent of Ernst & Young LLP, Independent Auditors We consent to the use of our report dated July 12, 2000 with respect to the financial statements of BuzzCompany.com Inc., for the year ended December 31, 1999 included in the Current Report on Form 8-K/A of Multex.com, Inc. /s/ Ernst & Young LLP New York, New York July 24, 2000 EX-99.2 3 0003.txt BALANCE SHEET OF BUZZCOMPANY.COM Exhibit 99.2 BuzzCompany.com Inc. Financial Statements Year ended December 31, 1999 Contents Report of Independent Auditors......................................... F-1 Balance Sheet.......................................................... F-2 Statement of Operations................................................ F-3 Statement of Changes in Stockholders' Equity........................... F-4 Statement of Cash Flows................................................ F-5 Notes to Financial Statements.......................................... F-6 Report of Independent Auditors To the Board of Directors and Stockholders BuzzCompany.com Inc. We have audited the accompanying balance sheet of BuzzCompany.com Inc. as of December 31, 1999 and the related statements of operations, changes in stockholders' equity and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BuzzCompany.com Inc. as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States. Ernst & Young LLP July 12, 2000 New York, N.Y. F-1 BuzzCompany.com Inc. Balance Sheet December 31, 1999
Assets Current assets: Cash and cash equivalents $ 252,888 Accounts receivable, net of allowance for doubtful accounts of $60,700 840,799 Prepaid expenses 22,269 Due from stockholder 6,000 ------------- Total current assets 1,121,956 Property and equipment, net of accumulated depreciation 373,513 Computer software development costs, net of accumulated amortization of $18,198 60,133 Other assets 268,297 ------------- Total assets $ 1,823,899 ============= Liabilities and stockholders' equity Current liabilities: Accounts payable $ 213,154 Accrued expenses 67,654 Current portion of long term debt 102,835 Current portion of capital lease obligation 62,683 Deferred rent 6,356 Dividends payable 45,000 ------------- Total current liabilities 497,682 Commitments and contingencies Stockholders' equity: Common stock ($0.01 par value, 25,000,000 shares authorized; 11,051,000 shares issued and outstanding) 110,510 Additional paid-in capital 1,557,938 Accumulated deficit (342,231) ------------- Total stockholders' equity 1,326,217 ------------- Total liabilities and stockholders' equity $1,823,899 =============
See accompanying notes. F-2 BuzzCompany.com Inc. Statement of Operations Year ended December 31, 1999 Revenues $ 2,881,119 Cost of revenues 1,513,021 -------------- Gross profit 1,368,098 Operating expenses: Sales and marketing expenses 526,251 Research and development 74,423 General and administrative expenses 1,264,769 -------------- Total operating expenses 1,865,443 Operating loss (497,345) Other income (expense): Interest income 15,972 Interest expense (7,315) -------------- Total other income 8,657 -------------- Net loss $ (488,688) ============== See accompanying notes. F-3 BuzzCompany.com Inc. Statement of Changes in Stockholders' Equity Year ended December 31, 1999
Common Stock ----------------------------------------- Additional Retained Issued and Paid-in Earnings Outstanding Amount Capital (Deficit) Total ---------------------------------------------------------------------------------------- Balance, December 31, 1998 7,800,000 $ 78,000 $ - $ 191,457 $ 269,457 Sale of common stock, net of issuance costs of $14,752 2,441,000 24,410 1,465,838 - 1,490,248 Issuance of stock for services 700,000 7,000 - - 7,000 Issuance of warrant to an investor - - 5,000 - 5,000 Issuance of options to consultants - - 87,100 - 87,100 Exercise of stock options 110,000 1,100 - - 1,100 Dividends - - - (45,000) (45,000) Net loss - - - (488,688) (488,688) ---------------------------------------------------------------------------------------- Balance, December 31, 1999 11,051,000 $110,510 $1,557,938 $(342,231) $1,326,217 ========================================================================================
See accompanying notes. F-4 BuzzCompany.com Inc. Statement of Cash Flows Year ended December 31, 1999 Cash flows from operating activities Net loss $ (488,688) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 59,338 Bad debt expense 60,700 Non cash stock option based compensation expense 87,100 Stock based compensation expense 7,000 Changes in operating assets and liabilities: Accounts receivable (601,706) Prepaid expenses (20,499) Other assets (257,803) Accounts payable 144,178 Accrued expenses (5,467) Deferred rent (11,646) ----------------- Net cash used in operating activities (1,027,493) ----------------- Cash flows from investing activities Purchase of property and equipment (251,996) Capitalization of computer software development costs (78,331) ----------------- Net cash used in investing activities (330,327) ----------------- Cash flows from financing activities Proceeds from long term debt 78,750 Principal payments on long term debt (17,244) Proceeds from capital lease obligation 63,389 Principal payments on capital lease obligation (7,171) Proceeds from issuance of common stock, net of issuance costs 1,485,348 Proceeds from issuance of stock warrant 5,000 ----------------- Net cash provided by financing activities 1,608,072 ----------------- Net increase in cash and cash equivalents 250,252 Cash and cash equivalents, beginning 2,636 ----------------- Cash and cash equivalents, ending $ 252,888 ================= Supplemental disclosure of cash flow information Noncash investing and financing activity: Accrued purchases of fixed assets $ 34,699 ================= Dividend payable $ 45,000 ================= Amounts due from shareholder in exchange for common stock $ 6,000 ================= Interest paid $ 7,315 ================= Income taxes paid $ 1,189 =================
See accompanying notes. F-5 BuzzCompany.com Inc. Notes to Financial Statements (continued) 1. Nature of Operations BuzzCompany.com Inc. (the "Company"), develops and markets Internet software and provides Internet computer consulting services throughout the world. The Company was previously doing business as IntraActive Software Corporation ("ISC") until its merger into BuzzCompany.com Inc. (a newly formed company under common control) in October 1999. ISC was incorporated in New Jersey in May 1996 and BuzzCompany.com, Inc. was incorporated in Delaware in September 1999. The merger has been treated as a reorganization as the entities were under common control. Therefore, the accompanying financial statements are presented as if the companies were combined for the full year. On May 10, 2000, the stockholders' entered into an agreement to merge the Company with Multex.com, Inc. ("Multex"). Pursuant to the Agreement and Plan of Merger, Multex acquired 100% of the Company in exchange for $500,000 in cash and 1,058,000 shares of Multex common stock. 2. Summary of Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with maturities of 90 days or less. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed on the straight-line method over the estimated useful lives of the related assets which range from 3 to 7 years. Major renewals and betterments are capitalized. Maintenance and repairs are expensed as incurred. When properties are retired or otherwise disposed of, related costs and accumulated depreciation are removed from the accounts. Software Development Costs The Company capitalizes internally generated software development costs in compliance with SFAS No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed." Capitalization of computer development costs begins upon the F-6 BuzzCompany.com Inc. Notes to Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) establishment of technological feasibility for the product. As of December 31, 1999, $78,331 of software development costs had been capitalized. Amortization Amortization is calculated using the straight-line method. Computer software development costs are being amortized over one year. Revenue Recognition Revenues for the year ended December 31, 1999 are primarily derived from internet computer consulting services. Revenue from these services are recognized over the period in which the services are performed. Other revenues are derived from software sales in accordance with Statement of Position ("SOP") 97-2, "Software Revenue Recognition." Revenues from software sales consist of the following: License Fees--Fees from licenses are recognized as revenue upon contract execution provided delivery has occurred, the fee is fixed or determinable and collectibility is probable. Support Agreements--The Company provides technical support and maintenance of its products. Revenues are recognized ratably over the life of the support agreement. Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the year ended December 31, 1999 was approximately $270,000. F-7 BuzzCompany.com Inc. Notes to Financial Statements (continued) 2. Summary of Significant Accounting Policies (continued) Software Research and Development Costs Research and development costs are charged to operations when incurred and are included in operating expenses. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Fair Value of Financial Instruments The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, accounts payable, and long term debt, approximates their fair values. Stock-Based Compensation The Company measures compensation expense related to the grant of stock options and stock-based awards to employees in accordance with the provisions of Accounting Principles Board ("APB") Opinion No. 25, under which compensation expense, if any, is generally based on the difference between the exercise price of an option, or the amount paid for the award and the market price or fair value of the underlying common stock at the date of the award. Stock-based compensation arrangements involving nonemployees are accounted for under SFAS No. 123, Accounting for Stock-Based Compensation, under which such arrangements are accounted for based on the fair value of the option or award. As required by SFAS No. 123, the Company discloses pro forma net loss information reflecting the effect of applying SFAS No. 123 fair value measurement to employee arrangements. F-8 BuzzCompany.com Inc. Notes to Financial Statements (continued) 3. Property and Equipment Property and equipment is summarized as follows: December 31, 1999 ------------ Computers and equipment $ 246,205 Purchased computer software 4,256 Office furniture and fixtures 59,044 Property under capitalized lease 71,915 Leasehold improvements 53,463 ------------ 434,883 Less accumulated depreciation (61,370) ------------ $ 373,513 ============ Depreciation expense charged to operations amounted to $41,140 for the year ended December 31, 1999. 4. Debt The Company has a line of credit at a bank in the amount of $100,000 with interest at 1% over the bank's prime rate. The line is secured by accounts receivable and specified equipment. The outstanding balance under the line was $77,500 at December 31, 1999. The Company paid the balance in full in May, 2000. The Company obtained an equipment loan on May 15, 1998 in the amount of $50,000. The loan is payable in 36 equal monthly installments of $1,596 and bears interest at 9.25%. The amount due on the loan as of December 31, 1999 was $25,335. The loan is collateralized by the assets of the Company and guaranteed by a stockholder. The Company repaid the loan in full in May, 2000. F-9 BuzzCompany.com Inc. Notes to Financial Statements (continued) 5. Commitments and Contingencies Operating Lease The Company conducted its operations in a leased facility under a noncancellable operating lease expiring on March 31, 2000. The lease required payment for real estate taxes, maintenance and other occupancy expenses and was subject to annual increases based on changes in The Consumer Price Index and was guaranteed by the majority stockholder of the Company. On January 7, 2000, the Company entered into a sublease for new operating facilities. Monthly rent will be $32,884 through June 1, 2003 and $34,450 thereafter through December 30, 2006. The lease calls for additional rent paid as a proportionate share of increases in real estate taxes and operating expenses and a $250,000 security deposit which was paid in December 1999. The future minimum lease payments under noncancellable operating leases with terms in excess of one year as of December 31, 1999 are as follows: 2000 $ 357,000 2001 364,000 2002 395,000 2003 404,000 2004 413,000 Thereafter 827,000 ---------- $2,760,000 ========== Rent expense for the year ended December 31, 1999 as $77,935. Capital Leases On December 21, 1999, the Company entered into a sales-leaseback arrangement. Under the arrangement, the Company sold computer equipment and office furniture and leased it back for a period of three years. In accordance with SFAS 28, Sale-Leaseback Transactions, the leaseback is in substance a financing arrangement since the lessee has retained continuing use of all of the assets and therefore is being accounted as a capital lease in accordance with SFAS 13, Accounting for Leases. This financing lease was paid in full in May 2000. F-10 BuzzCompany.com Inc. Notes to Financial Statements (continued) 5. Commitments and Contingencies (continued) In addition, the Company leases equipment which is accounted for as a capitalized lease. The following is a summary of property held under capital leases: Equipment $71,915 Less accumulated depreciation 3,703 -------------- $68,212 ============== The following is a schedule of future lease payments under the capitalized lease together with the present value of the net minimum lease payments as of December 31, 1999. Year ended December 31: 2000 78,368 Less amount representing interest 15,685 -------------- Present value of net minimum capital lease payments $62,683 ============== The interest rates are 12.4% and 16.76%. 6. Concentration of Credit Risk At December 31, 1999, the Company held all cash and cash equivalents in one bank. The Company derives all of its revenues from customers located within the United States. For the year ended December 31, 1999, two customers individually generated sales in excess of 10% of the Company's sales. Total sales for these two customers was $746,643 and $650,405 or 26% and 23%, respectively. The percentage of accounts receivable for these two customers was 18% and 47% at December 31, 1999. F-11 BuzzCompany.com Inc. Notes to Financial Statements (continued) 7. Stock Options On October 15, 1999, the Company amended its 1998 stock option plan and thereby established the 1999 stock Option Plan ("the Plan") and has authorized the grant of options to employees, directors, and consultants for up to 2,000,000 shares of the Company's common stock. All options issued and outstanding under the 1998 stock option plan have been transferred into the new plan as though they had always been issued under the new plan. For the year ended December 31, 1999 Options to purchase 705,850 shares of the Company's common stock were granted under the plan. Pro forma information regarding net loss is required by SFAS 123, and has been determined as if the Company had accounted for its employee stock options under the fair value method of that Statement. The fair value of the options was estimated at the date of grant using a minimum value method with the following assumptions: average risk-free interest rate ranging from 5.25% to 6.48%, dividend yield of 0% and average life of 5 years. Option valuation models require the input of highly subjective assumptions. Because changes in the input of subjective assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The effect of applying SFAS 123's fair value method to the Company's options results in a pro forma net loss of $492,771 for the year ended December 31, 1999. The weighted average fair value of options granted for the year ended December 31, 1999 was $0.06. F-12 BuzzCompany.com Inc. Notes to Financial Statements (continued) 7. Stock Options (continued) The following transactions occurred with respect to the Company's Plan during 1999: Weighted Number of Average Options Exercise Price -------------------------- Outstanding December 31, 1998 145,000 $ 0.01 Granted 705,850 0.22 Exercised - - Canceled 532,000 0.10 -------------------------- Outstanding December 31, 1999 318,850 $ 0.32 ========================== The following table summaries information concerning outstanding options at December 31, 1999:
Options Outstanding Options Exercisable - -------------------------------------------------------- --------------------------- Weighted Weighted Average Number of Weighted Average Remaining Stock Average Exercise Price Number Exercise Contractual Options Exercise Range Outstanding Price Life Exercisable Price - ------------------------------------------------------------------------------------- $ 0.01 164,500 $0.01 8.73 69,219 $0.01 $ 0.10 38,000 0.10 9.46 - - $ 0.77 - $ 1.00 116,350 0.84 9.87 - - ----------- ----------- 318,850 $0.32 9.52 69,219 $0.01 =========== ===========
The options outstanding primarily vest 25% after the first year of service and 25% over the remaining four years and expire ten years after the date of grant or 90 days following termination of employment with the Company. The Company issued two options, not under the Plan, to purchase a total of 110,000 shares of the Company's common stock to consultants in October 1999, and recorded compensation expense for the year ended December 31, 1999 of $87,100. These options vested immediately on the date of grant and were exercised by the consultants in December 1999. F-13 BuzzCompany.com Inc. Notes to Financial Statements (continued) 8. Stockholders' Equity On August 12, 1999, the Company entered into a Securities Purchase Agreement whereby the Company sold 1,941,000 shares of its $0.01 par value common stock for $1,500,000. Issuance costs related to the Securities Purchase Agreement for the year ended December 31, 1999 was $14,752. These securities have not been registered under the Securities Act of 1933. Pursuant to the Certificate of Ownership and Merger of ISC into BuzzCompany.com Inc. dated October 3, 1999, each share of common stock of ISC was converted into ten issued and outstanding shares of common stock, $0.01 par value, of BuzzCompany.com Inc. All amounts included in the financial statements give effect to the conversion of each share of ISC into ten shares of BuzzCompany.com, Inc. as a result of the merger of ISC into BuzzCompany.com Inc. Warrant Purchase Agreement On August 20, 1999, the Company issued a warrant to purchase 100,000 shares of common stock at $0.77 per share for $5,000 to an investor. The warrant is exercisable for two years and was issued at its fair market value. 9. Income Taxes InterActive Software Corporation (ISC), with the consent of its stockholders, had elected through July 12, 1999 to be taxed as an S Corporation pursuant to the Internal Revenue Code. As such, ISC was not subject to federal and certain state income taxes because the shareholders had included ISC's taxable income or loss in their individual income tax returns. On July 12, 1999 ISC revoked its S corporation status and elected instead to be taxed as a corporation for federal income tax purposes. Since ISC was not subject to federal and state income taxes for the period 1/1/99 - 7/12/99, no income tax provision was recorded. Effective July 13, 1999 ISC became taxed as a corporation, and thus became subject to federal, state and local income taxes. Further, on October 5, 1999, ISC merged with BuzzCompany.com Inc., a newly formed Delaware corporation. Because the combined group of ISC and BuzzCompany.com Inc. had a net operating loss for the period July 13, 1999 through December 31, 1999, no current tax provision has been recorded. F-14 BuzzCompany.com Inc. Notes to Financial Statements (continued) 9. Income Taxes (continued) Deferred income taxes represent the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following: 1999 ----------- Deferred tax liabilities: Accrual to cash adjustment $ 45,000 Depreciation 7,000 ----------- Total deferred tax liabilities 52,000 Deferred tax assets: Amortization 5,000 Bad debt 24,000 Other 4,000 Net operating loss 246,000 ----------- Total deferred tax assets 279,000 Valuation allowance for deferred tax assets 227,000 ----------- Net deferred tax asset recognized in the balance sheet $ - =========== At December 31, 1999 the Company had net operating loss carryfowards of approximately $600,000 for U.S. federal income tax purposes. These losses will expire in 2019. Additionally, net deferred tax assets of approximately $227,000 have been fully offset by a valuation allowance, due to the uncertainty of realizing such benefit. F-15 EX-99.3 4 0004.txt UNAUDITED PRO FORMA STATEMENT OF OPERATIONS Exhibit 99.3 ACQUISITION OF BUZZCOMPANY.COM INC. On May 10, 2000, Multex.com, Inc. ("Multex") completed its acquisition with BuzzCompany.com Inc. a Delaware Corporation ("Buzz") pursuant to an Agreement and Plan of Merger dated May 10, 2000 by and between Multex.com, Inc., Multex B Acquisition Corporation, a wholly-owned subsidiary of Multex ("Merger Sub"), and Buzz and the shareholders of Buzz. The acquisition was accomplished through the merger of Merger Sub with and into Buzz. Consideration payable by Multex was determined as a result of negotiation between Multex and Buzz. Consideration paid consisted of approximately 1,058,000 shares of common stock of Multex and approximately $500,000 in cash. Total purchase price for this acquisition was approximately $23.5 million. The difference between the fair market value of Buzz's net tangible assets and purchase price will be accounted for as goodwill and will be amortized over ten years, the expected benefit period. ACQUISITION OF SAGE ONLINE, INC. On March 22, 2000, Multex.com, Inc. ("Multex") completed its acquisition of Sage Online, Inc. a Pennsylvania Corporation ("Sage"), pursuant to an Agreement and Plan of Reorganization, dated March 13, 2000 by and between Multex.com, Inc., Multex A Acquisition Corp., a wholly-owned subsidiary of Multex ("Merger Sub"), and Sage and the shareholders of Sage. The acquisition was accomplished through the merger of Merger Sub with and into Sage. Consideration payable by Multex was determined as a result of negotiation between Multex and Sage. The consideration paid consisted of 354,183 shares of common stock of Multex and $6.0 million in cash. The total purchase price for this transaction was approximately $17.1 million. The difference between the fair market value of Sage's net tangible assets and the purchase price will be accounted for as goodwill and will be amortized over ten years, the expected benefit period. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The unaudited pro forma condensed consolidated statement of operations (the "Pro Forma Statements of Operations") for the year ended December 31, 1999 and the three months ended March 31, 2000 gives effect to the acquisitions of Buzz and Sage as if they had occurred on January 1, 1999. The pro forma statement of operations is based on historical results of operations of Multex, Buzz and Sage for the year ended December 31, 1999 and three months ended March 31, 2000. The unaudited pro forma condensed consolidated balance sheet (the "Pro Forma Balance Sheet") gives effect to the acquisition of Buzz as if it had occurred on March 31, 2000. The pro forma statement of operations and pro forma balance sheet and accompanying notes (the "Pro Forma Financial Information") should be read in conjunction with and are qualified by the historical financial statements of the Company, Buzz and Sage and notes thereto. These pro forma statements do not purport to be indicative of the consolidated results of operations or financial position which would have been achieved had the operations or financial position which would have been achieved had the transactions described above taken place at the dates indicated and should not be construed as representative of the Company's consolidated financial position or consolidated results of operations for any future date or period. 1 Multex.com, Inc. Unaudited Pro Forma Condensed Consolidated Balance Sheet March 31, 2000 (in thousands)
Multex.com, Inc. BuzzCompany.com Inc. Adjustments Pro Forma ---------------- --------------------- ----------- ---------- Assets Current assets: Cash and cash equivalents $4,310 $145 ($500) (a) $3,955 Marketable securities 42,900 - - 42,900 Accounts receivable, net 12,250 537 - 12,787 Other current assets 2,006 12 - 2,018 ------------ ---------- ---------- ------------ Total current assets 61,466 694 (500) 61,660 Property and equipment, net 20,638 462 - 21,100 Capitalized computer software, net - 44 - 44 Goodwill 16,987 - 23,004 (a) 39,991 Other 1,897 268 - 2,165 ------------ ---------- ---------- ------------- Total assets $100,988 $1,468 $22,504 $124,960 ============ ========== ========== ============ Liabilities and stockholders' equity Current liabilities: Accounts payable $2,762 $559 $226 $3,547 Accrued expenses 4,543 55 - 4,598 Long term debt - 99 - 99 Current portion of capital lease obligations 198 58 - 256 Deferred revenues 6,337 95 - 6,432 Dividend payable - 45 - 45 ------------ ---------- ---------- ------------- Total current liabilities 13,840 911 226 14,977 Capital lease obligations 159 - - 159 Deferred rent 2,662 34 - 2,696 Other liabilities 24 - - 24 ------------- ---------- --------- ------------ Total long term liabilities 2,845 34 - 2,879 Preferred Stock, $.01 par value, 5,000,000 shares, none issued and outstanding at March 31, 2000 - - - - Common stock, $.01 par value 292 111 (100) (a) 303 Additional paid-in capital 157,992 1,483 22,378 (a) 181,853 Accumulated deficit (62,218) (1,071) - (63,289) Deferred equity consideration (11,720) - - (11,720) Accumulated other comprehensive loss (43) - - (43) ---------- ---------- --------- ------------ Total stockholders' equity 84,303 523 22,278 107,104 Total liabilities and stockholders' equity $100,988 $1,468 $22,504 $124,960 ========== ========== ========= ============
2 Multex.com, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations Three Months Ended March 31, 2000 (in thousands)
Sage Oneline, Inc Pro Forma Multex.com, Inc. Sage Online, Inc. BuzzCompany.com Inc. Adjustments --------------- ----------------- --------------------- -------------- Revenues $16,083 $253 $905 $ - Cost of revenues 3,968 1,114 587 - ------------- -------------- ---------------- ----------- Gross profit 12,115 (861) 318 - Operating expenses: Sales and marketing 6,240 3 143 - Research & development 2,255 - - - General and administrative 6,347 98 982 431(b) ------------- -------------- ---------------- ----------- Total operating expenses 14,842 101 1,125 431 ------------- -------------- ---------------- ------------ Loss from operations (2,727) (962) (807) (431) Other income (expense) Interest income 710 - 1 - Interest expense (13) (24) (4) - ------------- -------------- ---------------- ------------ Loss from continuing operations before income tax expense (2,030) (986) (810) (431) Income taxes (47) - - - ------------- -------------- ---------------- ------------ Net loss ($2,077) ($986) ($810) ($431) ============== ============== ================ ============ Earnings (loss) per commom share-basic and diluted: Net loss ($0.07) - - - ============== ============== ================ ============== Number of shares used in computed basic and diluted loss per share 28,297 - - 354 ============== ============== ================ ==============
BuzzCompany.com Inc. Pro Forma Pro Forma Adjustments Combined --------------- --------------- Revenues $ - $17,241 Cost of revenues - 5,669 ------------- ------------- Gross profit - 11,572 Sales and marketing - 6,386 Research & development - 2,255 General and administrative 575 (b) 8,433 ------------ ------------- Total operating expenses 575 17,074 ------------ ------------- Other income (expense) (575) (5,502) Interest income - 711 Interest expense - (41) ------------ ------------- Loss from continuing operations before income tax expense (575) (4,832) Income taxes - (47) ------------ -------------- Net loss ($575) ($4,879) ============= ============== Earnings (loss) per common share - basic Net loss - ($0.16) ============ ============== Number of shares used in computed basic and diluted loss per share 1,058 29,709 ============ ==============
3 Multex.com. Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations Year ened December 31, 1999 (in thousands)
Multex.com, Inc. Sage Online, Inc. BuzzCompany.com Inc. ---------------- ---------------- -------------------- Revenues $40,850 $746 $2,881 Cost of revenues 10,569 970 1,513 ---------------- ----------- ------------ Gross profit 30,281 (224) 1,368 Operating expenses: Sales and marketing 26,379 28 526 Research & development 6,301 - 74 General and administrative 18,414 218 1,265 ---------------- ----------- ------------ Total operating expenses 51,094 246 1,865 ---------------- ----------- ------------ Loss from operations (20,813) (470) (497) Other income (expense) Acquisition expenses (5,713) - - Interest expense (114) (18) (8) Interest and investment income 2,359 - 16 ---------------- ----------- ------------ Loss from continuing operations before tax expense (24,281) (488) (489) Income taxes 1,030 - - ---------------- ----------- ------------ Loss from operations (25,311) (488) (489) Discontinued operations Income (loss) from discontinued operations 106 - - Gain on sale of discontinued operations, net of taxes 226 - - ---------------- ----------- ------------ 332 - - ---------------- ----------- ------------ Net loss (24,979) (488) (489) ---------------- ----------- ------------ Redeemable preferred stock dividends 1,188 - - ---------------- ----------- ------------ Net loss attributable to common stockholders' ($26,167) ($488) ($489) ================ =========== ============ Earnings (loss) per common share - basic and diluted: Continuing operations, net of redeemable preferred stock dividends ($1.17) - - ================ =========== ============ Discontinued operations $0.01 - - ================ =========== ============ Net loss ($1.15) - - ================ =========== ============ Number of shares used in computing basic and diluted loss per share 22,688 - - ================ =========== ============
Sage Online, Inc. BuzzCompany.com Inc Pro Forma Pro Forma Pro Forma Adjustments Adjustments Combined ----------------- ---------------- ------------------ Revenues $ - $ - $44,477 Cost of revenues - 13,052 ---------------- ----------------- ------------------ Gross profit - - 31,425 Operating expenses: Sales and marketing - - 26,933 Research & development - - 6,375 General and administrative 1,725 (b) 2,300 (b) 23,922 ---------------- ----------------- ------------------ Total operating expenses 1,725 2,300 57,230 ---------------- ----------------- ------------------ Loss from operations (1,725) (2,300) (25,805) Other income (expense) Acquisition expenses - - (5,713) Interest expense - - (140) Interest and investment income - - 2,375 ---------------- ----------------- ------------------ Loss from continuing operations before tax expense) (1,725) (2,300) (29,283) Income taxes - - 1,030 ---------------- ----------------- ------------------ Loss from operations (1,725) (2,300) (30,313) Discontinued operations Income (loss) from discontinued operations - - 106 Gain on sale of discontinued operations, net of taxes - - 226 ---------------- ----------------- ------------------ - - 332 ---------------- ----------------- ------------------ Net loss (1,725) (2,300) (29,981) ---------------- ----------------- ------------------ Redeemable preferred stock dividends - - 1,188 ---------------- ----------------- ------------------ Net loss attributable to common stockholders' ($1,725) ($2,300) ($31,169) ================ ================= ================== Earnings (loss) per common share - basic and diluted: Continuing operations, net of redeemable preferred stock dividends - - ($1.31) ================ ================= ================== Discontinued operations - - $0.01 ================ ================= ================== Net loss - - ($1.29) ================ ================= ================== Number of shares used in computing basic and diluted loss per share 354 1,058 24,100 ================ ================= ==================
4 PRO FORMA ADJUSTMENTS AND ASSUMPTIONS (a) On May 10, 2000, Multex.com, Inc. ("Multex") acquired BuzzCompany.com Inc. ("Buzz") for approximately $23.5 million including acquisition costs pursuant to the Agreement and Plan of Merger dated May 10, 2000 (the "Buzz Merger Agreement), among Multex, Buzz and stockholders of Buzz. Pursuant to the terms of the Buzz Merger Agreement, Buzz merged with and into Multex and became a wholly-owned subsidiary of Multex. The acquisition will be accounted for as a purchase business combination. The consideration payable by Multex in connection with the acquisition of Buzz consisted of the following: (in thousands) 1,058,000 shares of Multex common stock valued at $21.55 per share $22,800 Cash paid 500 Acquisition costs 226 ------------------ Total consideration $23,526 ================== The following represents the allocation of the purchase price over the historical net book value of the acquired assets and liabilities of Buzz at March 31, 2000, and is for illustrative pro forma purposes only. Actual fair values have been based on financial information as of the acquisition date (May 10, 2000), which are not expected to be significantly different from the historical net book value of the acquired assets and liabilities. Assuming the transaction occurred on March 31, 2000, the allocation would have been as follows: (in thousands) Assets acquired: Cash and cash equivalents $ 145 Accounts receivable, net 537 Prepaid expenses and other current assets 12 Property and equipment 505 Other assets 268 Goodwill 23,004 ------- 24,471 Liabilities assumed (945) -------- $ 23,526 ======== This allocation is preliminary and may be subject to change upon evaluation of the fair value of Buzz's acquired assets and liabilities as of the acquisition date as well as the potential identification of certain intangible assets. The Pro Forma adjustment reconciles the historical balance sheet of Buzz at March 31, 2000 to the allocated purchase price assuming the transaction had occurred on March 31, 2000. (b) Goodwill for Buzz and Sage will be amortized over a period of 10 years, the expected period of benefit. The pro forma adjustment to the pro forma statement of operations reflects twelve months of amortization expense for the year ended December 31, 1999, assuming the transaction occurred on January 1, 1999. The pro forma adjustment to the pro forma statement of operations reflects three months of amortization expense for the three months ended March 31, 2000. 5 -----END PRIVACY-ENHANCED MESSAGE-----