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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 30, 1996
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Individual, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-27734 04-3036959
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
8 New England Executive Park W.
Burlington, Massachusetts 01803
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 273-6000
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Total number of sequentially numbered pages in this filing, including exhibits
thereto: 8
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Exhibit Index Located on Page 5
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Item 5. Other Events.
On May 30, 1996, Individual, Inc. ("Individual") entered into an
Agreement and Plan of Reorganization (the "Merger Agreement") with FL Merger
Corp., a Delaware corporation and wholly-owned subsidiary of Individual ("Merger
Sub"), FreeLoader, Inc., a Delaware corporation ("FreeLoader") and certain
stockholders of FreeLoader. Pursuant to the Merger Agreement and upon the
satisfaction of all closing conditions, Merger Sub will merge (the "Merger")
with and into FreeLoader, with FreeLoader to continue as the surviving
corporation.
Upon the closing of the Merger, each outstanding share of FreeLoader
Common Stock, $.001 par value per share, will be converted into the right to
receive .1305 shares of Individual Common Stock, $.01 par value per share. In
addition, effective upon the closing of the Merger, Individual will assume
FreeLoader's 1996 Stock Option Plan and all outstanding stock options
thereunder. As a result of the conversion of the FreeLoader Common Stock and
Individual's assumption of the FreeLoader stock options, Individual will issue
up to approximately 1.8 million shares of its Common Stock in the Merger
(including up to approximately 281,000 shares of Common Stock reserved for
issuance upon exercise of the assumed FreeLoader stock options). The Merger
Agreement provides that the transaction is to be accounted for as a purchase.
The closing of the Merger is subject to certain conditions, including approval
by FreeLoader's stockholders.
For additional information concerning the Merger, see the joint press
release of Individual and FreeLoader dated June 2, 1996, a copy of which is
attached to this Form 8-K as Exhibit 99.1 and incorporated herein by reference.
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Acquisitions, including Individual's acquisition of FreeLoader, involve
a number of potential risks, including difficulties in the assimilation of the
acquired company's operations, products and personnel, diversion of management's
resources, uncertainties associated with operating in new markets and working
with new employees and customers, and the potential loss of the acquired
company's key employees. In order for Individual to achieve anticipated
benefits from its acquisition of FreeLoader, Individual will need to integrate
FreeLoader's business and key employees with Individual's existing operations
and employees and to make significant expenditures for sales and marketing and
product development to further develop FreeLoader's business. No assurance can
be given that Individual will be successful in this regard. Moreover, even if
successfully integrated, the acquired Freeloader operations may not achieve
levels of revenues or productivity comparable to those achieved by Individual's
existing operations, or otherwise perform as expected.
Management may from time to time consider other acquisitions of assets
or businesses that it believes may enable Individual to acquire complementary
skills and capabilities, offer new products, expand its customer base or obtain
other competitive advantages. There can be no assurance that Individual will be
able to successfully identify suitable acquisition candidates or complete future
acquisitions. In order to finance such acquisitions, it may be necessary for
Individual to raise additional funds either through public or private
financings, including bank borrowings. Any financing, if available at all, may
be on terms which are not favorable to Individual. In addition, issuances of
Individual's equity securities for future acquisitions could result in dilution
to Individual's existing stockholders.
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There can also be no assurance that the FreeLoader acquisition and any
future acquisitions will not have a material adverse effect upon Individual's
business and results of operations.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit No. Description
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99.1 Joint Press Release of Individual and FreeLoader dated June 2,
1996
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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.
Individual, Inc.
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(Registrant)
Date: June 10, 1996 /s/ Robert L. Lentz
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Robert L. Lentz
Vice President and Chief Financial
Officer
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EXHIBIT INDEX
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Page Number in
Sequentially
Exhibit No. Description Numbered Copy
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99.1 Joint Press Release of Individual and FreeLoader dated June 6
2, 1996
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EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
For further information, contact:
Rich Vancil Michelle Goodall/Christine Gannon
Individual, Inc. Schwartz Communications, Inc.
(617) 273-6000 x403 (617) 431-0770
[email protected] [email protected]
Bennett Kleinberg
Edelman Public Relations Worldwide
(212) 704-8266
[email protected]
Individual, Inc., Announces Agreement to Acquire FreeLoader, Inc.
Offline Web Delivery Will Complement Individual's Internet-Based Customized News
Services
Burlington, Mass. -- June 2, 1996 -- Individual, Inc. (NASDAQ: INDV) a pioneer
and leading provider of customized news services, announced today that it has
entered a definitive agreement to acquire FreeLoader, Inc., the creator of the
first offline World Wide Web delivery service. The acquisition will provide end
users with two of the most exciting developments to emerge from the Internet in
recent months: personalized "intelligent-agent driven" news retrieval and
offline Web delivery.
The purchase price is approximately $38 million which includes 1.8 million
shares of Individual common stock for all the outstanding stock of FreeLoader
and $2 million in cash. Included in the 1.8 million are 281,000 shares reserved
for exercise of FreeLoader stock options assumed by Individual. The acquisition
will be accounted for as a purchase and Individual expects that the amount
recognized as the excess of purchase price over net assets acquired will be
amortized through 1998. The agreement is expected to close before the end of
June 1996.
Under the terms of the agreement, FreeLoader will continue to operate as an
autonomous business unit of Individual, Inc. working to develop new technologies
for personalized offline news and information delivery. FreeLoader cofounders
Pincus and Paul will retain their current posts.
"This acquisition is about internetizing Individual and individualizing the
Internet. With the Freeloader software Individual and the entire web community
can dramatically change how information services are delivered on the Internet:
making this a pro-active rather than a passive experience," said Yosi Amram,
president and CEO of Individual.
Web users want information that is relevant to their interests, presented in a
way that is easy to set up, maintain and access. Individual expects that
FreeLoader's software will significantly enrich the process of retrieving and
accessing Web based information -- both for current Individual customers and for
the broader population of Web users. In addition to providing benefits to
Internet consumers, the Individual and FreeLoader combination will enable
Information Providers to enhance their Web based publishing and to generate new
sources of revenue. FreeLoader's offline delivery provides the opportunity for
Information Providers to turn casual Web surfers into regular, repeat customers.
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"As the growth of the Internet and agent-based services accelerates, the name-
of-the-game is aggressive user growth. Freeloader helps us achieve this
important strategic objective," added Amram.
Individual's proprietary information-gathering technology allows readers to
receive news that is customized from a daily story flow of 20,000 news items
from over 630 different publishers, including newswires, newspapers, magazines
and newsletters. Subscribers can receive their personalized news on a single-
user or enterprise-wide basis with delivery via fax, e-mail, groupware,
corporate intranets or on the World Wide Web.
FreeLoader's offline downloading service "surfs the Web while you sleep,"
collecting information from pre-selected Web sites at user-defined intervals and
storing it on users' hard disk drives for retrieval at any time. This process
virtually eliminates the waiting time associated with retrieving and viewing
Web-based multimedia content, such as high-resolution graphics, videos and audio
files. FreeLoader's dynamic, interactive screen saver makes the presentation
and access of web content fast and easy.
When integrated, Individual's and FreeLoader's technologies will have the
capability of delivering user-defined news and information directly from the Web
offline to each customer. In addition, FreeLoader's technology will enhance
Individual's text-oriented news delivery with personalized audio and video news
content.
"Since our launch last month, tens of thousands of users have downloaded
FreeLoader," said Mark Pincus, president and CEO of FreeLoader, Inc. "We've
also built momentum by partnering with approximately 30 Web sites that offer our
software, including ZDNet, Yahoo!, Excite, Infoseek, Hotwired and USA Today.
Combining forces with Individual, however, is by far the most significant
validation to date of the impact that offline Web delivery will have on the
future of the Internet."
"The number of distribution partners and the acceptance of the product achieved
by FreeLoader since its recent introduction is very exciting. Although we are
not expecting any significant revenue contribution in 1996, we believe that the
foundation will be in place for accelerated revenue contribution in 1997 and
beyond. FreeLoader will aggressively continue to expand their marketing,
distribution and product development, and plans to increase their personnel
headcount from approximately 40 to over 75 by the end of 1996," added Amram.
Founded in October, 1995 and based in Washington, D.C., FreeLoader, Inc.
(http://www.freeloader.com) is the creator of the world's first offline World
Wide Web delivery service. The company's self-titled software and service is an
advertiser-supported, user-friendly software application which retrieves Web
sites and stores them on an end-user's hard disk for later viewing. Version 1.0
of the FreeLoader software was released in May 1996 following a three-month beta
test. FreeLoader received equity financing from SOFTBANK Corporation's venture
capital arm. SOFTVEN, and Euclid Partners.
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Founded in 1989, Individual, Inc., is a leading provider of customized news to
business professionals worldwide. Through its proprietary knowledge processing
system, Individual intelligently connects content publishers with subscribers.
Its interactive, customized news services include First!, for corporate
workgroups and enterprises, HeadsUp and Physician's NewScan for single
subscribers, and NewsPage (http://www.newspage.com) and BookWire
(http://www.bookwire.com) on the World Wide Web. The Company received the
Breakout Company of the Year award from the Information Industry Association for
1995. Individual has established alliances with many prominent industry leaders
including Gartner Group, Lotus, Knight-Ridder, Microsoft Corp., NETCOM On-Line
Communication Services, Netscape Communications Corp., and Toshiba. The company
is headquartered in Burlington, Mass., with offices in Burlingame, Calif.; New
York City; Tokyo; and the United Kingdom.
Certain of the above statements are forward looking statements that involve
risks and uncertainties. Actual results could differ materially as a result of
a variety of factors, including competitive developments, and risk factors
listed from time to time in the Company's SEC reports.
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First!, HeadsUp, Physician's NewScan, NewsPage and BookWire are trademarks of
Individual, Inc.
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