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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): September 15, 1999
INTELLIQUEST INFORMATION GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 000-27680 74-2775377
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(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
1250 Capital of Texas Highway S., Building One, Suite 600, Austin, Texas 78746
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(Address of principal executive offices) (Zip Code)
(512) 329-0808
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(Registrant's telephone number, including area code)
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(former name or former address, if changed since last report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 15, 1999, pursuant to an Asset Purchase Agreement dated
as of July 22, 1999 (the "Agreement") between IntelliQuest Information Group,
Inc., a Delaware corporation ("IntelliQuest"), and Naviant Technology
Solutions, Inc., a Delaware corporation ("Naviant"), IntelliQuest sold its
IQ2.net division to Naviant for a total purchase price of $46.5 million in
cash (the "Disposition"). The total purchase price remains subject to
adjustment for specified increases or decreases in the net asset value of the
purchased business as reflected on a final balance sheet to be delivered
after the closing. Pending a determination of the adjustment amount (if any),
$2.0 million of the purchase price is being held in escrow.
The IQ2.net division provides electronic consumer registration
services and licenses data from various proprietary databases.
Prior to the Disposition, Charles Stryker, who was at the time
President of IQ2.net Operations, acquired shares of Naviant Series C
Preferred Stock. Mr. Stryker is now the President and Chief Executive Officer
of Naviant.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION.
The pro forma financial information required by this item 7(b) is
filed herewith as Exhibit 99.1 and is incorporated herein by reference to the
Unaudited Pro Forma Combined Financial Information included in said Exhibit.
(c) EXHIBITS.
The following exhibits are filed with this report:
99.1 Unaudited Pro Forma Combined Financial Information.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 30, 1999
INTELLIQUEST INFORMATION GROUP, INC.
By: /s/ Brian Sharples
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Name: Brian Sharples
Title: Chief Executive Officer
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Exhibit 99.1 - UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed financial statements give effect
to the disposition of IQ2.net. The pro forma condensed financial statements
are based on historical audited and unaudited interim financial statements of
IntelliQuest Information Group, Inc. and the estimates and assumptions set
forth below.
The attached pro forma statements cover the most current interim statements,
as of June 30, 1999, and a pro forma income statement and balance sheet are
presented. In addition, the most current audit financial statements dated
December 31, 1998, has been utilized as the basis for the full year pro forma
income statement. Pro forma adjustments are based upon preliminary estimates,
available information and certain assumptions that management deems
appropriate. The unaudited pro forma condensed financial information
presented herein is not necessarily indicative of the results of operations
or financial position that IntelliQuest Information Group, Inc. would have
obtained had such an event occurred at the beginning of the period, as
assumed, or of the future results of the company. The pro forma financial
statements should be read with the other financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year
ended, December 31, 1998 and Quarterly Reports on Form 10-Q for the six
months ended June 30, 1999.
On July 22, 1999, IntelliQuest Information Group, Inc., a Delaware
corporation (the "Company"), and Naviant Technology Solutions, Inc., a
Delaware corporation ("Naviant"), entered into an Asset Purchase Agreement
(the "Agreement"), pursuant to which the Company will sell its IQ2.net
division to Naviant for a total purchase price of $46.5 million in cash. The
total purchase price is subject to adjustment for specified increases or
decreases in the net asset value of the purchased business as reflected on a
final balance sheet to be delivered after the closing. The balance sheet
valuation date is August 31, 1999. Pending a determination of the adjustment
amount (if any), $2.0 million of the purchase price will be held in escrow.
The total purchase price remains subject to adjustment for specified
increases or decreases in the net asset value of the purchased business as
reflected on a final balance sheet to be delivered after the closing. Pending
a determination of the adjustment amount (if any), $2.0 million of the
purchase price is being held in escrow.
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<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1999
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INTELLIQUEST IQ2.NET PRO FORMA PRO FORMA
INFORMATION ------- ADJUSTMENTS CONSOLIDATED
ASSETS GROUP ----------- ------------
------------
<S> <C> <C> <C> <C>
Current assets:
Cash $ 2,105 $ (201) $ 44,701 (A) (B) $ 46,605
Short term investments 27,643 - - 27,643
Accounts receivable, net 3,826 4,028 (4,028) (B) 3,826
Due from Affiliates/(Due to Parent) 12,019 (12,019) - -
Unbilled revenues 4,096 1,261 (1,261) (B) 4,096
Projects in process 2,645 73 (73) (B) 2,645
Prepaid expenses and other assets 3,100 586 (586) (B) 3,100
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Total current assets 55,434 (6,272) 38,753 87,915
Property and equipment, net 2,270 843 (843) (B) 2,270
License agreement, net - 7,218 (7,218) (B) -
Other assets 282 1,206 (1,206) (B) 282
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Total assets $ 57,986 $ 2,995 $ 29,486 $ 90,467
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LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 1,211 $ 1,345 $ (1,345) (B) $ 1,211
Accrued liabilities 1,963 596 10,437 (B) (C) (E) 12,996
Deferred revenues 3,122 192 (192) (B) 3,122
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Total current liabilities 6,296 2,133 8,900 17,329
Deferred rent and other 238 3 (3) (B) 238
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Total liabilities 6,534 2,136 8,897 17,567
Series A junior participating preferred
stock (Note 11) - - -
Stockholders equity:
Common stock, $0.0001 par value,
30,000,000 shares authorized,
8,603,000 shares issued and
outstanding, 720,000 shares
in treasury 1 - 1
Capital in excess of par value 54,133 - 54,133
Other (1) - (1)
Accumulated earnings (deficit) (2,681) 859 20,589 (C) (D) (E) 18,767
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Total stockholders equity 51,452 859 20,589 72,900
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Total liabilities and
stockholders equity $ 57,986 $ 2,995 $ 29,486 $ 90,467
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</TABLE>
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PRO FORMA CONDENSED BALANCE SHEET ADJUSTMENTS
(A) Received $44,500,000 in immediate funds per the sale of IQ2.net. Per the
agreement another $2,000,000 is being held in escrow subject to adjustment
for specified increases or decreases in the net asset value of the
purchased business as reflected on a final balance sheet to be delivered
after the closing
(B) Reflects the reduction of "Net Assets" purchased by Naviant Technology
Solutions, Inc.
(C) Includes fees of $1,130,000 for US Bancorp Piper Jaffray as they relate to
the IQ2.net asset sale to Naviant Technology Solutions, Inc.
(D) Reflects a gain of $31,622,000 associated with the sale IQ2.net before
federal or state income tax effects.
(E) Reflects the estimated federal and state income taxes attributed to the
sale of IQ2.net in the amount of $9,903,000. These amounts are based upon
the use of Net Operating Losses (NOL's) and are subject to review.
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<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
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INTELLIQUEST IQ2.NET PRO FORMA
INFORMATION ------- EXCLUDING
GROUP IQ2.NET
------------ ---------
<S> <C> <C> <C>
Revenues:
Continuous services $ 39,440 $ 17,032 $ 22,408
Other services 6,259 2,304 3,955
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Total revenue 45,699 19,336 26,363
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Operating expenses:
Cost of revenues 24,604 9,579 15,025
Sales, general and administrative 20,292 8,940 11,352
Product development 4,483 985 3,498
Depreciation and amortization 1,115 408 707
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Total operating expenses 50,527 19,912 30,582
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Operating loss (4,828) (576) (4,219)
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Gain on sale of Discontinued Operations 20,589 20,589
Other income (expense):
Interest income and other 1,404 - 1,404
Interest expense (1) - (1)
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Loss before income taxes (3,425) 20,013 17,773
Provision for (benefit from) income taxes (1,846) 87 (1,933)
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Net loss $ (1,579) $ 19,926 $ 19,706
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Basic net loss per share $ (0.19) N/A $ 2.37
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Diluted net loss per share $ (0.19) N/A $ 2.37
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Basic weighted average number of common and
common equivalent shares outstanding 8,311,000 N/A 8,311,000
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Diluted weighted average number of common and
common equivalent shares outstanding 8,311,000 N/A 8,311,000
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</TABLE>
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<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1999
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INTELLIQUEST IQ2.NET PRO FORMA
INFORMATION ------- EXCLUDING
GROUP IQ2.NET
------------ ---------
<S> <C> <C> <C>
Revenues:
Continuous services $ 16,184 $ 8,503 $ 7,681
Other services 4,098 792 3,306
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Total revenue 20,282 9,295 10,987
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Operating expenses:
Cost of revenues 10,787 4,817 5,970
Sales, general and administrative 10,921 5,130 5,791
Product development 874 184 690
Depreciation and amortization 758 220 538
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Total operating expenses 23,340 10,351 12,989
Operating loss (3,058) (1,056) (2,002)
Gain on sale of Discontinued Operations 20,589 20,589
Other income (expense):
Interest income and other 516 - 516
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Loss before income taxes (2,542) 19,533 19,103
Income tax benefit 1,279 466 813
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Net loss $ (1,263) $ 19,999 $ 19,916
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Basic net loss per share $ (0.16) N/A $ 2.53
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Diluted net loss per share $ (0.16) N/A $ 2.53
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Basic weighted average number of common and
common equivalent shares outstanding 7,870,000 N/A 7,870,000
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Diluted weighted average number of common and
common equivalent shares outstanding 7,870,000 N/A 7,870,000
===========================================
</TABLE>
