-----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, PyTehCNmEG1vTXTN6SqR8gJ9xCbfpBTdTvsRUC9BFFu/4Kl6pK4pALTpVaTvWw+i FR7fhGbYGdRC+CwOv7nuog== 0000931731-99-000401.txt : 19991020 0000931731-99-000401.hdr.sgml : 19991020 ACCESSION NUMBER: 0000931731-99-000401 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991019 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL COURIER TECHNOLOGIES INC CENTRAL INDEX KEY: 0000774055 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 870461856 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20771 FILM NUMBER: 99730539 BUSINESS ADDRESS: STREET 1: 136 HEBER AVE P O BOX 8000 STREET 2: SUITE 204 CITY: PARK CITY STATE: UT ZIP: 84060 BUSINESS PHONE: 4356553617 MAIL ADDRESS: STREET 1: 136 HEBER AVE STREET 2: SUITE 204 CITY: PARK CITY STATE: UT ZIP: 84060 FORMER COMPANY: FORMER CONFORMED NAME: DATAMARK HOLDING INC DATE OF NAME CHANGE: 19950124 FORMER COMPANY: FORMER CONFORMED NAME: EXCHEQUER INC /DE/ DATE OF NAME CHANGE: 19950111 8-K 1 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): October 19, 1999 (October 5, 1999) Digital Courier Technologies, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-20771 87-0422824 - -------------------------------------------------------------------------------- (State or Other (Commission (IRS Employer Jurisdiction of Incorporation File Number) Identification No.) 136 Heber Avenue, Suite 204, Park City, Utah 84060 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (435) 655-3617 136 Heber Avenue, Suite 204, Park City, Utah 84060 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 1 Item 2. Acquisition or Disposition of Assets - --------------------------------------------- On October 5, 1999, Digital Courier Technologies, Inc. (the "Company") acquired 100% of the issued and outstanding capital stock of DataBank International Ltd., a St. Christopher and Nevis corporation, ("DataBank") (the "Exchange") pursuant to the terms of a Stock Purchase and Exchange Agreement by and among the Company, DataBank, and the stockholders of DataBank (the "Selling Stockholders"), dated August 13, 1999 (the "Exchange Agreement"). The Exchange was consummated following approval of the Exchange Agreement by the shareholders of the Company on October 5, 1999. Pursuant to the Exchange Agreement, the Company issued 16,600,000 shares of its common stock in exchange for all the issued and outstanding shares of DataBank. If DataBank meets certain performance criteria, as defined in the Exchange Agreement, the Company will be required to issue up to an additional 13,066,000 shares of common stock to the Selling Stockholders. The purchase price for DataBank was determined through arms-length negotiations between the parties. The Company financed the acquisition of DataBank through the issuance of shares of company common stock. Donald Marshall serves as President and a board member of the Company, and was also the Managing Director and a stockholder of DataBank. Mr. Marshall did not serve as an officer or board member of the Company when the Company negotiated and agreed to the Exchange or when the Company's Board of Directors approved the Exchange. Upon closing of the DataBank acquisition on October 5, 1999, Mr. Marshall received 1,200,000 restricted shares of company common stock, or approximately 3.4% of the total outstanding shares of company common stock. Pursuant to the terms of the Exchange Agreement, Mr. Marshall will enter into a two-year employment agreement, pursuant to which, among other things, he has agreed not to compete with the business of the Company or DataBank for two years after termination of his employment with the Company. The Company will pay Mr. Marshall an annual salary of $150,000. Except as set forth above, no material relationships exist between any of the Selling Stockholders and the Company or any of the Company's affiliates, directors, officers, or any associate of any director or officer of the Company. Item 7. Financial Statements and Exhibits - ------------------------------------------ (a) Financial statements of businesses acquired. Certain of the financial statements required pursuant to Rule 3-05 of Regulation S-X were previously reported in the Company's proxy statement filed pursuant to Section 14(a) of the Securities Exchange Act of 1934, as filed with the Securities and Exchange Commission on September 1, 1999, and pursuant to General Instruction B.3 of Form 8-K are not required to be additionally reported herein. 2 - -------------- ----------------------------------------------------------------- Exhibit 2.1 Unaudited DataBank International Ltd. Financial Statements - -------------- ----------------------------------------------------------------- - -------------- ----------------------------------------------------------------- (b) Pro forma financial information. - -------------- ----------------------------------------------------------------- Exhibit 2.2 Unaudited Pro Forma Condensed Consolidated Financial Data - -------------- ----------------------------------------------------------------- - -------------- ----------------------------------------------------------------- (c) Exhibits - -------------- ----------------------------------------------------------------- Exhibit 2.3 Stock Purchase and Exchange Agreement by and among Digital Courier Technologies, Inc., DataBank International Ltd. and the Selling Stockholders dated August 13, 1999, previously filed as Annex I to the Company's proxy statement pursuant to Section 14(a) of the securities Exchange Act of 1934, as filed with the Securities and Exchange Commission on September 1, 1999 and incorporated herein by reference. - -------------- ----------------------------------------------------------------- - -------------- ----------------------------------------------------------------- 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. DIGITAL COURIER TECHNOLOGIES, INC. Dated: October 19, 1999 By:/s/ Mitchell Edwards ----------------------------------------- Mitchell Edwards Chief Financial Officer 3 EXHIBIT 2.1 INDEX TO DATABANK INTERNATIONAL, LTD. FINANCIAL STATEMENTS Title of Documents Page No. - ------------------ -------- UNAUDITED FINANCIAL STATEMENTS - ------------------------------ Condensed Balance Sheet as of June 30, 1999 5 Condensed Statements of Operations for the Six Months Ended June 30, 1999 and 1998 6 Condensed Statements of Cash Flows for the Six Months Ended June 30, 1999 and 1998 7 Notes to Condensed Financial Statements 8 4 DATABANK INTERNATIONAL, LTD. CONDENSED BALANCE SHEETS AS OF JUNE 30, 1999 (Unaudited) ASSETS CURRENT ASSETS: Cash $ 454,288 Trade accounts receivable 426,554 ------------ Total current 880,842 ------------ PROPERTY AND EQUIPMENT: Computer and office equipment 156,753 Furniture, fixtures and leasehold improvements 51,233 ------------ 207,986 Less accumulated depreciation and amortization (21,220) ------------ Net property and equipment 186,766 ------------ $ 1,067,608 ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 81,606 ------------ Total current liabilities 81,606 ------------ STOCKHOLDERS' EQUITY: Common stock 1 Retained earnings 986,001 ------------ Total stockholders' equity 986,001 ------------ $ 1,067,608 ============ 5 DATABANK INTERNATIONAL, LTD. CONDENSED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND THE PERIOD FROM APRIL 2, 1998 (Date of Inception) THROUGH JUNE 30, 1998 (Unaudited) 1999 1998 ---------------------------- NET SALES $9,018,266 $ 31,704 COST OF SALES 4,780,302 14,676 ---------------------------- Gross margin 4,237,924 17,028 GENERAL AND ADMINISTRATIVE EXPENSES 1,072,634 85,000 ---------------------------- NET INCOME (LOSS) $3,165,290 $ (67,972) ============================ 6 DATABANK INTERNATIONAL, LTD. CONDENSED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited) Increase (Decrease) in Cash
1999 1998 ---------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,165,289 $ (67,972) Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 15,003 -- Changes in operating assets and liabilities Increase in accounts receivable (195,537) -- Decrease in prepaid expenses 1,000 -- Increase (decrease) in accounts payable (1,546,972) 85,000 Decrease in dividends payable (62,440) -- ---------------------------- Net cash provided from operating activities 1,376,343 17,028 ---------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (129,723) -- ---------------------------- Net cash used in investing activities (129,723) -- ---------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid (1,981,454) -- Proceeds from share issuance -- 1 ---------------------------- Net cash used by financing activities (1,981,454) 1 ---------------------------- NET INCREASE IN CASH (734,834) 17,029 CASH AT BEGINNING OF PERIOD 1,189,122 -- ---------------------------- CASH AT END OF PERIOD $ 454,288 $ 17,029 ============================
7 DATABANK INTERNATIONAL, LIMITED NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - INTERIM CONDENSED FINANCIAL STATEMENTS The accompanying interim condensed financial statements as of June 30, 1999 and for the six months ended June 30, 1999 and for the period from April 2, 1998 (date of inception) through June 30, 1998 are unaudited. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation have been included. The financial statements are condensed and, therefore, do not include all disclosures normally required by generally accepted accounting principles. These financial statements should be read in conjunction with the Company's annual financial statements for the period April 2, 1998 through December 31, 1998, included in Digital Courier Technologies, Inc.'s proxy statement for the Special Meeting of Stockholders held on October 5, 1999. The results of operations for the six months ended June 30, 1999 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 1999. 8 EX-2.2 2 PLAN OF ACQUISITION, REORGANIZATION, ETC. EXHIBIT 2.2 DIGITAL COURIER TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA RELATING TO THE ACQUISITION OF DATABANK INTERNATIONAL, LTD. The following unaudited pro forma condensed consolidated financial data is based upon the historical consolidated financial statements of Digital Courier Technologies, Inc. and subsidiaries ("DCTI") as adjusted to give effect to the issuance of common stock in connection with the merger of the Company with Databank International, Ltd. ("DataBank") as if the transaction had occurred on June 30, 1999, for purposes of the unaudited pro forma condensed consolidated balance sheet and July 1, 1998 for purposes of the unaudited pro forma condensed consolidated statement of operations for the year ended June 30, 1999. The pro forma adjustments are based upon information set out in this document and its attachments and information from the Company's books and records that management of the Company believes are reasonable and accurate. The unaudited pro forma condensed consolidated balance sheet as of June 30, 1999 and the unaudited pro forma condensed consolidated statement of operations for the year ended June 30, 1999, are not necessarily indicative of the results of operations of DCTI, or its financial position, had the sale actually occurred on June 30, 1999 or July 1, 1998. The unaudited pro forma adjustments are described in the accompanying notes to unaudited pro forma condensed consolidated financial data. This unaudited pro forma condensed consolidated financial data should be read in conjunction with the consolidated financial statements of DCTI and the related notes thereto, and the financial statements of DataBank and the related notes thereto, included in DCTI's proxy statement for the Special Meeting of Stockholders held on October 5, 1999 and DCTI's annual report for the year ended June 30, 1999 filed on Form 10-K. 9 DIGITAL COURIER TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET As Of June 30, 1999
Historical Historical Pro Forma Digital Courier DataBank Adjustments Pro Forma --------------------------------------------------- ------------- CURRENT ASSETS: Cash $ 2,381,356 $ 454,288 $ -- $ 2,835,644 Trade accounts receivable, net 650,096 426,554 -- 1,076,650 Other receivables 800,000 -- -- 800,000 Prepaid software lease 903,456 -- -- 903,456 Prepaid advertising 458,772 -- -- 458,772 Receivable from officer 56,000 -- -- 56,000 Prepaid expenses and other current assets 196,658 -- -- 194,658 --------------------------------------------------- ------------- Total current assets 5,444,338 880,842 -- 6,325,180 --------------------------------------------------- ------------- PROPERTY AND EQUIPMENT: Computer and office equipment 6,314,571 156,753 -- 6,471,324 Furniture, fixtures and leasehold improvements 998,199 51,233 -- 1,049,432 --------------------------------------------------- ------------- 7,312,770 207,986 -- 7,520,756 Less accumulated depreciation and amortization (3,604,888) (21,220) -- (3,626,108) --------------------------------------------------- ------------- Net property and equipment 3,707,882 186,766 -- 3,894,648 --------------------------------------------------- ------------- GOODWILL, net 30,927,702 -- 96,538,998 (b) 127,466,700 PREPAID SOFTWARE LICENSE, net of current portion 3,387,960 -- -- 3,387,960 OTHER ASSETS 3,907,865 -- -- 3,907,865 --------------------------------------------------- ------------- Total assets $ 47,375,747 $ 1,067,608 $ 96,538,998 $ 144,982,353 =================================================== ============= CURRENT LIABILITIES: Notes payable $ 2,210,614 $ -- $ -- $ 2,210,614 Current portion of capital lease obligations 1,102,084 -- -- 1,102,084 Accounts payable 330,510 81,606 -- 412,116 Accrued rental payments for vacated facilities 34,200 -- -- 34,200 Other accrued liabilities 1,689,968 -- -- 1,689,968 --------------------------------------------------- ------------- Total current liabilities 5,367,376 81,606 -- 5,448,982 --------------------------------------------------- ------------- CAPITAL LEASE OBLIGATIONS, net of current portion 432,704 -- -- 432,704 --------------------------------------------------- ------------- STOCKHOLDERS' EQUITY: Preferred stock 3,600,000 -- -- 3,600,000 Common stock 1,856 1 (1) (a) -- -- -- 1,660 (b) 3,516 Additional paid in capital 72,759,439 -- 97,523,340 (b) 170,282,779 Warrants outstanding 1,363,100 -- -- 1,363,100 Stock subscription receivable (12,000) -- -- (12,000) Accumulated earnings (deficit) (36,136,728) 986,001 (986,001) (a) (36,136,728) --------------------------------------------------- ------------- Total stockholders' equity 41,575,667 986,002 96,538,998 139,100,667 --------------------------------------------------- ------------- Total liabilities and stockholders' $ 47,375,747 $ 1,067,608 $ 96,538,998 $ 144,982,353 =================================================== =============
10 DIGITAL COURIER TECHNOLOGIES, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended June 30, 1999
Historical Digital Historical Pro Forma Courier DataBank Adjustments Pro Forma ------------------------------------------------ ------------ NET SALES $ 3,970,641 $ 12,677,946 $ -- $ 16,648,587 COST OF SALES 2,562,371 7,234,287 -- 9,796,658 ------------------------------------------------ ------------ Gross margin 1,408,270 5,443,659 -- 6,851,929 ------------------------------------------------ ------------ OPERATING EXPENSES: General and administrative 3,273,641 1,208,231 -- 4,481,872 Depreciation and amortization 4,389,763 -- 19,307,800 (c) 23,697,563 Acquired in-process research and Development 3,700,000 -- -- 3,700,000 Research and development 1,906,893 -- -- 1,906,893 AOL agreement 5,558,137 -- -- 5,558,137 Selling 3,248,092 -- -- 3,248,092 ------------------------------------------------ ------------ Total operating expenses 22,076,526 1,208,231 19,307,800 42,592,557 ------------------------------------------------ ------------ PROFIT (LOSS) FROM OPERATIONS (20,668,256) 4,235,428 (19,307,800) (35,740,628) ------------------------------------------------ ------------ OTHER INCOME (EXPENSE): Interest and other income 63,846 -- -- 63,846 Interest and other expense (760,303) -- -- (760,303) ------------------------------------------------ ------------ Other income, net (696,457) -- -- (696,457) ------------------------------------------------ ------------ LOSS FROM CONTINUING OPERATIONS $(21,364,713) $ 4,235,428 $(19,307,800) $(36,437,085) ================================================ ============ LOSS FROM CONTINUING OPERATIONS PER COMMON SHARE (Basic and Diluted): $ (1.63) -- -- $ (1.23) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Basic and Diluted) 13,130,216 -- 16,600,000 (d) 29,730,216
11 DIGITAL COURIER TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA DESCRIPTION OF THE TRANSACTION - ------------------------------ These financial statements assume that DCTI acquired 100% of DataBank's common stock as described herein. (1) BASIS OF PRESENTATION The accompanying unaudited pro forma condensed consolidated balance sheet has been prepared assuming that the acquisition of DataBank occurred on June 30, 1999. The unaudited pro forma condensed consolidated statements of operations has been prepared assuming that the acquisition had occurred on July 1, 1998, the first day of the Company's most recent fiscal year. (2) PRO FORMA ADJUSTMENTS (a) Adjustment to eliminate equity of DataBank International, Ltd. (b) Adjustment to record the initial issuance of 16,600,000 shares of common stock to acquire DataBank at June 30, 1999, pro forma date of acquisition and resultant goodwill as follows: Total shares issued 16,600,000 Average price for common stock $5.875 -------------------- Total purchase price $97,525,000 Less: Assets acquired (1,067,608) Add: Liabilities assumed 81,606 -------------------- Goodwill $96,538,998 ==================== (c) Adjustment to record goodwill amortization on $96,538,998 over a five year life for 1 year. ($96,538,998 x 20% = $19,307,800). (d) Adjustment to record increase in common stock outstanding for loss per share calculations as follows: Shares issued to acquire DataBank 16,600,000 12 -----END PRIVACY-ENHANCED MESSAGE-----