<PAGE> 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
December 9, 1998
Date of Report (Date of earliest event reported)
MESSAGEMEDIA, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
Delaware 000-21751 33-0612860
- ---------------------------- ------------------------ ----------------
<S> <C> <C>
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
</TABLE>
4104 Sorrento Valley Boulevard, Suite 200
San Diego, California 92121
(Address of principal executive offices)
(619) 410-3700
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of Email Publishing Inc.
On December 9, 1998, MessageMedia, Inc. (formerly First Virtual Holdings
Incorporated) (the "Company") completed its acquisition of Email Publishing
Inc., a Delaware corporation ("EPub"), pursuant to that Agreement and Plan of
Reorganization (the "EPub Reorganization Agreement"), dated as of August 20,
1998, among the Company, EPub, EPub Holdings, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company (the "EPub Merger Sub"), certain
stockholders of EPub, and Chase Manhattan Bank & Trust Company, N. A., as escrow
agent. The acquisition of EPub pursuant to the Reorganization Agreement was
approved by the stockholders of the Company at a special meeting of stockholders
the Company held on December 9, 1998. In the acquisition, the EPub Merger Sub
merged with and into EPub, EPub become a wholly-owned subsidiary of the Company
and the former stockholders of EPub received shares of the Company Common Stock
in exchange for their shares of EPub at the exchange ratio described below (the
"EPub Merger").
Pursuant to the EPub Reorganization Agreement, each share of common
stock and preferred stock of EPub ("EPub Capital Stock") outstanding immediately
prior to the Effective Time (as defined in the EPub Reorganization Agreement)
was converted into the right to receive approximately 2.1987 shares of the
Company Common Stock (the "Exchange Ratio"). In addition, all options and
warrants to purchase EPub Capital Stock outstanding immediately prior to the
Effective Time were assumed by the Company, subject only to adjustment to
maintain the economic equivalence of the assumed options and warrants on the
basis of the Exchange Ratio.
An aggregate of 6,000,000 shares of the Company Common Stock are
issuable pursuant to the EPub Merger in respect of the outstanding shares of
EPub Capital Stock, as well as the outstanding options and warrants to purchase
EPub Capital Stock which the Company assumed. All shares issued or to be issued
pursuant to the EPub Merger, other than the shares to be issued in respect of
the assumed options, were or will be issued in reliance on exemptions from
registration under the Securities Act of 1933, as amended (the "Securities
Act"). As a result, all shares of the Company Common Stock, other than the
shares to be issued in respect of the assumed options, are or will be subject to
restrictions on transfer under the applicable provisions of the Securities Act,
as well as certain contractual limitations on resale. Under the terms of the
EPub Merger, the Company has granted the former stockholders of EPub certain
rights to register under the Securities Act the shares of the Company Common
Stock received in connection with the EPub Merger.
Under the terms of the EPub Reorganization Agreement, twenty percent of
the shares of Company Common Stock issuable pursuant to the EPub Merger
(excluding shares issuable to Catalyst Infotech Development Fund, L.P.,
Grandhaven L.L.C., Hexagon Investments L.L.C., Labyrinth Enterprises L.L.C. and
Legacy Enterprises L.L.C.) will be held in escrow for a period of one year and
during that time may be used to satisfy certain indemnification obligations of
the former EPub stockholders, other than Catalyst Infotech Development Fund,
L.P., Grandhaven L.L.C., Hexagon Investments L.L.C., Labyrinth Enterprises
L.L.C. and Legacy Enterprises L.L.C.
The parties intend that the EPub Merger be treated as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended, and the Company will treat the EPub Merger as a "purchase" for
accounting purposes.
-1-
<PAGE> 3
The summary of the provisions of the EPub Reorganization Agreement set
forth above is qualified in its entirety by reference to the EPub Reorganization
Agreement, which is incorporated herein by reference to the Company's Current
Report on Form 8-K, as filed with the Securities and Exchange Commission (the
"Commission") on August 25, 1998.
Acquisition of Distributed Bits L.L.C.
On December 11, 1998, the Company completed its acquisition of
Distributed Bits L.L.C., an Illinois limited liability company ("DBits"),
pursuant to that Agreement and Plan of Reorganization (the "DBits Reorganization
Agreement"), dated November 18, 1998, among the Company, DB Acquisition Corp., a
wholly-owned subsidiary of the Company (the "DB Merger Sub"), DBits, Derek
Scruggs, DBI L.L.C., Richard Angell as the Member Representative and Chase
Manhattan Bank & Trust Company, National Association. In the acquisition, DBits
was merged with and into the DB Merger Sub (the "DBits Merger") and the former
members of DBits received shares of the Company Common Stock and warrants for
the purchase of shares of Company Common Stock in exchange for all of their
membership interests in DBits. In addition, all options to purchase units of
membership interests in DBits outstanding immediately prior to the effective
time of the DBits Merger were assumed by the Company, subject only to adjustment
to maintain the economic equivalence of the assumed options.
An aggregate of 1,850,000 shares of the Company Common Stock are
issuable pursuant to the DBits Merger, in respect of the outstanding membership
interests in DBits, as well as the outstanding options to purchase membership
interests in DBits which the Company assumed. All shares issued or to be issued
pursuant to the DBits Merger, other than the shares to be issued in respect of
the assumed options, were or will be issued in reliance on exemptions from
registration under the Securities Act. As a result, all shares of the Company
Common Stock, other than the shares to be issued in respect of the assumed
options, are or will be subject to restrictions on transfer under the applicable
provisions of the Securities Act. Some of such shares will also be subject to
certain contractual limitations on resale. Under the terms of the DBits Merger,
the Company has granted the former members of DBits certain rights to register
under the Securities Act a number of shares of the Company Common Stock received
in connection with the DBits Merger.
Under the terms of the DBits Reorganization Agreement, twenty percent of
the shares of Company Common Stock issuable pursuant to the DBits Merger
(excluding shares issuable pursuant to warrants and assumed options) will be
held in escrow for a period of one year and during that time may be used to
satisfy certain indemnification obligations of the former DBits members.
The parties intend that the DBits Merger be treated as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended, and the Company will treat the DBits Merger as a "purchase" for
accounting purposes.
The summary of the provisions of the DBits Reorganization Agreement set
forth above is qualified in its entirety by reference to the DBits
Reorganization Agreement, which is incorporated herein by reference to the
Company's Current Report on Form 8-K, as filed with the Commission on November
30, 1998.
ITEM 5. OTHER EVENTS
On December 9, 1998, the Company (i) changed its name from "First
Virtual Holdings Incorporated" to "MessageMedia, Inc." and (ii) increased the
number of authorized shares of the Company Common Stock from 40,000,000 to
100,000,000 shares, by filing a certificate of amendment to the Company's
amended and restated certificate of incorporation with the Delaware Secretary of
State.
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<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Businesses Acquired
It is impracticable for the Company to provide the required financial
statements for the businesses acquired at the time of filing this report, but
the Company will file such required financial statements, to the extent required
pursuant to this item and Rule 3-05(b) of Regulation S-X, by amendment to this
report as soon as practicable, but not later than sixty days after this report
was required to be filed initially.
(b) Pro Forma Financial Information
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Unaudited Pro Forma Combined Condensed Financial Information of the
Company, Email Publishing Inc. and Distributed Bits L.L.C.
Unaudited Pro Forma Combined Condensed Balance Sheet as of
September 30, 1998 4
Unaudited Pro Forma Combined Statement of Operations for the
Nine Months Ended September 30, 1998 5
Unaudited Pro Forma Combined Statement of Operations for the
Year Ended December 31, 1997 6
Notes to Unaudited Pro Forma Financial Information 7
</TABLE>
(c) Exhibits
2.1 Agreement and Plan of Reorganization dated August 20, 1998 among
the Company, EPub Holdings, Inc., Email Publishing Inc., certain
stockholders of Email Publishing Inc. and Chase Manhattan Bank &
Trust Company, National Association(1).
2.2 Agreement and Plan of Reorganization dated November 18, 1998
among the Company, DB Acquisition Corp., Distributed Bits L.L.C.,
Derek Scruggs, DBI L.L.C. and Richard Angell as the Member
Representative and Chase Manhattan Bank & Trust Company, National
Association as Escrow Agent(2).
3.1 Certificate of Amendment to the Company's Amended and Restated
Certificate of Incorporation.
99.1 Press Release dated December 16, 1998.
- ------------
(1) Incorporated herein by reference to the Company's Current Report on Form
8-K, as filed with the Commission on August 25, 1998.
(2) Incorporated herein by reference to the Company's Current Report on Form
8-K, as filed with the Commission on November 30, 1998.
-3-
<PAGE> 5
FIRST VIRTUAL HOLDINGS INCORPORATED,
EMAIL PUBLISHING, INC. AND DISTRIBUTED BITS L.L.C.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
SEPTEMBER 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
PENDING PURCHASE TRANSACTIONS PRO FORMA ADJUSTMENTS
------------------------------------------------------------
FIRST VIRTUAL EMAIL DISTRIBUTED EMAIL DISTRIBUTED COMBINED
HOLDINGS PUBLISHING BITS PUBLISHING BITS PRO FORMA
---------------------------------------------------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 7,620,705 $ 92,303 $ (22,707) $ -- $ -- $ 7,690,301
Accounts receivable 85,842 194,036 -- -- -- 279,878
Notes receivable 100,000 -- -- -- -- 100,000
Prepaid expenses and other 405,115 13,167 34,196 -- -- 452,478
---------------------------------------------------------- ------------- -------------
Total current assets 8,211,662 299,506 11,489 -- -- 8,522,657
Furniture, equipment
& software, net 1,285,885 230,894 98,183 -- -- 1,614,962
Organization and other
costs, net 57,277 -- -- -- -- 57,277
Intangibles -- -- 18,415,277 (d) 5,326,761 (i) 24,492,038
-- 500,000 (f) 250,000 (i)
Other assets 42,263 10,389 1,500 -- -- 54,152
---------------------------------------------------------- ------------- -------------
Total assets $ 9,597,087 $ 540,789 $ 111,172 $18,915,277 $ 5,576,761 $ 34,741,086
========================================================== ============= =============
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable $ 671,879 $ 132,348 $ 82,144 $ 500,000 (f) $ 250,000 (j) $ 1,636,371
Accrued compensation
& related liabilities 146,294 -- 39,939 -- -- 186,233
Deferred revenue -- -- 36,000 -- -- 36,000
Accrued interest -- 4,002 -- -- -- 4,002
Other accrued liabilities 364,678 18,779 -- -- -- 383,457
Payable to First Virtual -- 100,000 -- -- -- 100,000
Payable on equipment -- 4,077 -- -- -- 4,077
Current portion, due to
stockholder 270,000 200,000 -- -- -- 470,000
Current portion, note
payable to bank -- 31,314 -- -- -- 31,314
Current portion, capital
lease obligations -- 35,200 14,053 -- -- 49,253
---------------------------------------------------------- ------------- -------------
Total current liabilities 1,452,851 525,720 172,136 500,000 250,000 2,900,707
Long term liabilities
Amount due to stockholder 125,000 -- -- -- -- 125,000
Note payable to bank -- 42,291 -- -- -- 42,291
Deferred rent -- 12,523 -- -- -- 12,523
Obligation under capital lease -- 38,602 32,272 -- -- 70,874
---------------------------------------------------------- ------------- -------------
Total long term liabilities 125,000 93,416 32,272 -- -- 250,688
Total liabilities 1,577,851 619,136 204,408 500,000 250,000 3,151,395
Stockholders' equity:
Preferred stock -- 632 -- (632)(a) -- --
Common stock 33,062 1,907 -- 632 (a) 1,350 (i) 34,970
(2,539)(b) -- --
5,583 (d) --
Members' equity -- -- 1,878,097 (1,878,097)(g) --
Additional paid in capital 46,034,536 1,240,295 -- 2,539 (b) 1,878,097 (g) 49,155,467
(694,811)(c) (1,927,223)(h) (2,622,034)
18,409,694 (d) 5,325,411 (i) 23,740,130
1,300,000 (e) 1,300,000
Warrants 1,080,828 -- -- -- -- 1,080,828
Deferred compensation (38,093) (626,370) (44,110) -- -- (708,573)
Accumulated deficit (39,091,097) (694,811) (1,927,223) 694,811 (c) 1,927,223 (h) (39,091,097)
(1,300,000)(e) (1,300,000)
---------------------------------------------------------- ------------- -------------
Total stockholders' equity 8,019,236 (78,347) (93,236) 18,415,277 5,326,761 31,589,691
---------------------------------------------------------- ------------- -------------
Total liabilities and
stockholders' equity $ 9,597,087 $ 540,789 $ 111,172 $18,915,277 $ 5,576,761 $ 34,741,086
========================================================== ============= =============
</TABLE>
See accompanying notes to unaudited pro forma
combined condensed financial statements.
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<PAGE> 6
FIRST VIRTUAL HOLDINGS INCORPORATED,
EMAIL PUBLISHING, INC. AND DISTRIBUTED BITS L.L.C.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
PENDING PURCHASE TRANSACTIONS PRO FORMA ADJUSTMENTS
------------------------------------------------------------
FIRST VIRTUAL EMAIL DISTRIBUTED EMAIL DISTRIBUTED COMBINED
HOLDINGS PUBLISHING BITS PUBLISHING BITS PRO FORMA
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 844,926 $ 951,041 $ -- $ -- -- $ 1,795,967
Cost of revenues 44,830 -- -- -- -- 44,830
------------------------------------------------------------------------------------------
Gross profit 800,096 951,041 -- -- -- 1,751,137
Operating expenses
Marketing & sales 1,423,492 345,141 -- -- -- 1,768,633
Research, development,
& engineering 3,892,823 76,432 611,109 -- -- 4,580,364
General & administrative 2,781,554 861,869 575,300 -- -- 4,218,723
Restructuring charge 812,166 -- -- -- -- 812,166
Depreciation and amortization 1,145,357 -- -- 7,093,229(a) 2,091,285(c) 10,329,871
------------------------------------------------------------------------------------------
Total operating expenses 10,055,392 1,283,442 1,186,409 7,093,229 2,091,285 21,709,757
------------------------------------------------------------------------------------------
Loss from operations (9,255,296) (332,401) (1,186,409) (7,093,229) (2,091,285) (19,958,620)
Interest income 128,364 1,994 -- -- -- 130,358
Interest expense (68,155) (26,059) -- -- -- (94,214)
Other income -- 400 -- -- -- 400
------------------------------------------------------------------------------------------
Net loss (9,195,087) (356,066) (1,186,409) (7,093,229) (2,091,285) (19,922,076)
Preferred stock dividend (153,126) -- -- -- -- (153,126)
------------------------------------------------------------------------------------------
Net loss applicable
to common shares $(9,348,213) $ (356,066) $(1,186,409) $(7,093,229) $(2,091,285) $(20,075,202)
==========================================================================================
Net loss per share,
basic and diluted $ (0.52) $ (0.19) $ (0.80)
========================== ============
Shares used in per share
computation, basic and
diluted 18,125,810 1,906,503 3,676,182(b) 1,350,000(d) 25,058,495
</TABLE>
- ------------
(a) Adjustment to reflect the nine-month amortization of goodwill and other
intangibles based on the allocation of the assumed purchase price in the
September 30, 1998 pro forma balance sheet for Email Publishing, Inc.
(b) Adjustment to the average common shares outstanding for the elimination of
EPub's shares and the issuance of 5,582,685 shares of First Virtual common
stock.
(c) Adjustment to reflect the nine-month amortization of goodwill and other
intangibles based on the allocation of the assumed purchase price in the
September 30, 1998 pro forma balance sheet for Distributed Bits.
(d) Adjustment to the average common shares outstanding for the issuance of
1,350,000 shares of First Virtual common stock for all the equity interests
at Distributed Bits based on an assumed purchase price of $5,527,635 in
First Virtual common stock at a price of $3.65 per share.
The above pro forma combined statement of operations does not include a $1.3
million in-process technolgy charge to be recorded by First Virtual Holdings in
conjunction with the proposed merger for the estimated fair value of the
in-process technology of Email Publishing.
See accompanying notes to unaudited pro forma
combined condensed financial statements.
-5-
<PAGE> 7
FIRST VIRTUAL HOLDINGS INCORPORATED,
EMAIL PUBLISHING, INC. AND DISTRIBUTED BITS L.L.C.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
PENDING PURCHASE TRANSACTIONS PRO FORMA ADJUSTMENTS
------------------------------------------------------------
FIRST VIRTUAL EMAIL DISTRIBUTED EMAIL DISTRIBUTED COMBINED
HOLDINGS PUBLISHING BITS PUBLISHING BITS PRO FORMA
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 1,450,598 $ 335,631 $ -- $ -- $ -- $ 1,786,229
Cost of revenues 270,416 -- -- -- -- 270,416
------------------------------------------------------------------------------------------
Gross profit 1,180,182 335,631 -- -- -- 1,515,813
Operating expenses
Marketing & sales 5,424,110 115,223 -- -- -- 5,539,333
Research, development,
& engineering 6,687,177 71,850 477,738 -- -- 7,236,765
General & administrative 4,377,688 415,932 121,170 -- -- 4,914,790
Depreciation and amortization 1,097,716 -- -- 9,457,639(a) 2,788,380(c) 13,343,735
------------------------------------------------------------------------------------------
Total operating expenses 17,586,691 603,005 598,908 9,457,639 2,788,380 31,034,623
Loss from operations (16,406,509) (267,374) (598,908) (9,457,639) (2,788,380) (29,518,810)
Interest income 554,587 -- -- -- -- 554,587
Interest expense (95,360) 2,849 -- -- -- (92,511)
------------------------------------------------------------------------------------------
Net loss (15,947,282) (264,525) (598,908) (9,457,639) (2,788,380) (29,056,734)
Dividend imputed on
preferred stock (1,250,000) -- -- -- -- (1,250,000)
------------------------------------------------------------------------------------------
Net loss applicable
to common shares $(17,197,282) $ (264,525) $ (598,908) $(9,457,639) $(2,788,380) $(30,306,734)
Net loss per share,
basic and diluted $ (1.94) $ (0.14) $ (1.92)
=========== ========== ============
Shares used in per share
computation, basic and
diluted 8,842,367 1,877,646 3,705,039(b) 1,350,000(d) 15,775,052
</TABLE>
- ------------
(a) Adjustment to reflect the twelve-month amortization of goodwill and other
intangibles based on the allocation of the assumed purchase price in the
September 30, 1998 pro forma balance sheet for Email Publishing, Inc.
(b) Adjustment to the average common shares outstanding for the elimination of
EPub's shares and the issuance of 5,582,685 shares of First Virtual common
stock.
(c) Adjustment to reflect the nine-month amortization of goodwill and other
intangibles based on the allocation of the assumed purchase price in the
September 30, 1998 pro forma balance sheet for Distributed Bits.
(d) Adjustment to the average common shares outstanding for the issuance of
1,350,000 shares of First Virtual common stock for all the equity interests
at Distributed Bits based on an assumed purchase price of $5,527,635 in
First Virtual common stock at a price of $3.65 per share.
The above pro forma combined statement of operations does not include a $1.3
million in-process technology charge to be recorded by First Virtual Holdings in
conjunction with the proposed merger for the estimated fair value of the
in-process technology of Email Publishing.
See accompanying notes to unaudited pro forma
combined condensed financial statements.
-6-
<PAGE> 8
FIRST VIRTUAL HOLDINGS INCORPORATED
EMAIL PUBLISHING, INC. AND DISTRIBUTED BITS L.L.C.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1.
The unaudited pro forma financial statements reflect the proposed and pending
acquisitions of Email Publishing, Inc. ("EPub") and Distributed Bits L.L.C.
("Dbits") for an aggregate purchase price of $26,290,935.
NOTE 2.
Upon consummation of the proposed merger, First Virtual will acquire all of the
common stock and all outstanding rights to acquire shares of common stock of
EPub in exchange for 5,582,685 shares of First Virtual common stock and the
assumption by First Virtual of options and warrants to acquire up to
approximately 417,315 additional shares of First Virtual common stock at a
weighted average exercise price of $.04 per share. The purchase price is
calculated to be $20,763,300 based on the fair market value of $3.38 per share
of First Virtual common stock. The purchase price also includes estimated merger
costs of $500,000. The purchase price is subject to change based upon
anti-dilution rights of the EPub stockholders during the one year period
following the closing of the merger. In the event that First Virtual is required
to issue additional shares of First Virtual common stock during this period,
additional purchase price will be recorded. The purchase price was allocated as
follows based upon a valuation of the tangible and intangible assets, including
acquired technology and in-process technology, by an independent appraiser, as
well as management's best estimates:
<TABLE>
<S> <C>
Current assets acquired ................................. $ 299,506
Furniture, equipment and software ....................... 230,894
Other assets ............................................ 10,389
In-process technology ................................... 1,300,000
Developed technology .................................... 900,000
Goodwill ................................................ 18,015,277
Liabilities assumed ..................................... (619,136)
Deferred compensation ................................... 626,370
------------
$ 20,763,300
</TABLE>
The pro forma combined balance sheet includes the adjustments necessary as if
the proposed merger had occurred on September 30, 1998 and reflects the
allocation of the purchase price, issuance of First Virtual common stock and
elimination of EPub's equity accounts. These adjustments are summarized as
follows:
(a) Conversion of all outstanding preferred stock into common stock
(b) Elimination of existing EPub common stock
(c) Elimination of EPub's accumulated deficit
(d) Issuance of FV common stock (5,582,685 shares @ $.0001 par value) and
record the net assets and deferred compensation of EPub and excess purchase
price (goodwill and other intangibles)
(e) Write off of EPub's in-process technology (f) Accrue estimated merger costs
to be incurred by First Virtual
-7-
<PAGE> 9
NOTE 3.
First Virtual anticipates acquiring all equity interests, including options,
warrants or other purchase rights, if any, in Distributed Bits, in exchange for
1,350,000 shares of First Virtual common stock and warrants to purchase an
additional 250,000 shares of First Virtual common stock at an exercise price of
$6.00 per share and an additional 250,000 shares of First Virtual common stock
at $8.00 per share. The number of First Virtual shares to be issued is subject
to a reduction of 200,000 shares in lieu of cash consideration in the amount of
$250,000 at the option of Distributed Bits equity holders (the "Cash Election").
The purchase price is calculated to be $5,478,509 based on the fair market value
of $3.65 per share of First Virtual common stock. The purchase price also
includes estimated merger costs of $250,000 and the value of warrants of
$350,000. This purchase price will be allocated as follows, based upon
management's best estimates:
<TABLE>
<S> <C>
Current assets acquired ................................. $ 11,489
Furniture, equipment and software ....................... 98,183
Other assets ............................................ 1,500
Goodwill ................................................ 5,576,761
Liabilities assumed ..................................... (204,408)
Deferred compensation ................................... 44,110
-----------
$ 5,527,635
</TABLE>
The pro forma combined balance sheet includes the adjustments necessary as if
the pending acquisition had occurred on September 30, 1998 and reflects the
allocation of the purchase price, issuance of First Virtual common stock
(assuming the Distributed Bits equity holders do not exercise the Cash Election)
and elimination of Distributed Bits' equity accounts. These adjustments are
summarized as follows:
(g) Elimination of existing Distributed Bits members' capital
(h) Elimination of Distributed Bits accumulated deficit
(i) Issuance of FV common stock (1,350,000 shares @ $.0001 par value) and
record the net liabilities and deferred compensation of Distributed Bits
and excess purchase price (goodwill and other intangibles)
(j) Record estimated merger costs
NOTE 4.
The allocation of the purchase price was applied to the historical balance sheet
or historical statements of operations of First Virtual, EPub and Distributed
Bits to arrive at the pro forma combined balance sheet and statements of
operations. The developed technology and goodwill are amortized over their
estimated useful lives of two years due to the unusually rapid pace of
technological development of the Internet. It is not uncommon for a specific
technology product or service in the industry to become obsolete in a relatively
short period of time. Furthermore, the Internet, as an industry, is in its
infancy stage with rapidly shifting trends, technologies, consumer preferences
and competitive pressures. The management of EPub has indicated that the
technologies and business models developed by their company appear generally to
have a useful life of no more than one or two years before they require complete
redevelopment. It is anticipated that this rapid rate of change will continue in
the future. The technology currently under development, for which technological
feasibility has not been established and for which there are no future
alternative uses, will be written off at the date of acquisition. Based on an
initial review of Distributed Bits technologies and their planned business
models, First Virtual's management anticipates that it will be appropriate to
use a two year life for Distributed Bits' intangibles as well. In addition, both
EPub and Distributed Bits are operating in very competitive environments and
competitive advantages are often short lived. The pro forma combined statements
of operations for the year ended December 31, 1997 and the nine months ended
September 30, 1998 reflect amortization expense of $12,246,019 and $9,184,514,
respectively.
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<PAGE> 10
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.
MESSAGEMEDIA, INC.
Dated: December 23, 1998 By: /s/ Keith Kendrick
--------------------------
Keith Kendrick
President
<PAGE> 11
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- --------------------------------------------------------------
2.1 Agreement and Plan of Reorganization dated August 20, 1998
among the Company, EPub Holdings, Inc., Email Publishing Inc.,
certain stockholders of Email Publishing Inc. and Chase
Manhattan Bank & Trust Company, National Association(1).
2.2 Agreement and Plan of Reorganization dated November 18, 1998
among the Company, DB Acquisition Corp., Distributed Bits
L.L.C., Derek Scruggs and DBI L.L.C. as the Member
Representative and Chase Manhattan Bank & Trust Company,
National Association(2).
3.1 Certificate of Amendment to the Company's Amended and Restated
Certificate of Incorporation.
99.1 Press Release dated December 16, 1998.
- ------------
(1) Incorporated herein by reference to the Company's Current Report on Form
8-K, as filed with the Commission on August 25, 1998.
(2) Incorporated herein by reference to the Company's Current Report on Form
8-K, as filed with the Commission on November 30, 1998.
<PAGE> 1
EXHIBIT 3.1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "FIRST VIRTUAL HOLDINGS INCORPORATED", CHANGING ITS NAME FROM "FIRST
VIRTUAL HOLDINGS INCORPORATED" TO "MESSAGEMEDIA, INC.,", FILED IN THIS OFFICE ON
THE NINTH DAY OF DECEMBER, A.D. 1998, AT 5 o'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ EDWARD J. FREEL
(SEAL) ----------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 9451927
DATE: 12-10-98
<PAGE> 2
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL HOLDINGS INCORPORATED
FIRST VIRTUAL HOLDINGS INCORPORATED, a Delaware corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "Company"), does hereby certify.
FIRST: That the Board of Directors of the Company adopted a resolution
proposing and declaring advisable the following amendment to the Amended and
Restated Certificate of Incorporation of the Company.
RESOLVED: That ARTICLE ONE of the Company's Amended and Restated
Certificate of Incorporation be, and it hereby is, amended and restated to read
in its entirety as follows:
"The name of this corporation is MessageMedia, Inc."
RESOLVED: That the first and second sentences of ARTICLE FOURTH of the
Company's Amended and Restated Certificate of Incorporation be, and it hereby
is, amended and restated to read in its entirety as follows:
"A. The total number of shares which the Corporation shall have
authority to issue is one hundred five million (105,000,000) shares of
capital stock.
B. Of such authorized shares, one hundred million (100,000,000)
shares shall be designated "Common Stock" and have a par value of $.001."
SECOND: That this Amendment has been duly approved and adopted by the
stockholders of the Company in accordance with the provisions of Section 242 of
the General Corporation Law of the State of Delaware.
THIRD: That this Amendment has been duly approved and adopted by the
directors of the Company in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware.
<PAGE> 3
IN WITNESS WHEREOF, FIRST VIRTUAL HOLDINGS INCORPORATED has caused this
Certificate to be signed by Keith Kendrick, its President this 9th day of
December, 1998.
FIRST VIRTUAL HOLDINGS INCORPORATED
BY: /s/ KEITH J. Kendrick
-----------------------------------
Keith Kendrick, President
ATTEST:
By: /s/ LEWIS SILVERBERG
---------------------
Lewis Silverberg
<PAGE> 1
EXHIBIT 99.1
MessageMedia Inc. Formed to Deliver Integrated E-mail
Solutions for Internet Commerce
SAN DIEGO--(BUSINESS WIRE)--Dec. 16, 1998--
SOFTBANK Company Merges First Virtual Holdings, Email Publishing and
Distributed Bits
Reflecting its focus on advanced e-mail systems and services for electronic
commerce, First Virtual Holdings Inc. today unveiled a new corporate name and
stock symbol, and announced the consummation of two strategic acquisitions.
Now called "MessageMedia Inc.," the company consolidates First Virtual Holdings
Inc., Email Publishing Inc. and Distributed Bits, L.L.C. Effective as of the
opening of business on Thursday, Dec. 17, 1998, MessageMedia's Common Stock will
trade on the Nasdaq National Market under the new stock symbol "MAIL," replacing
the company's current stock symbol "FVHI." SOFTBANK Holdings Inc. and its
affiliates own approximately 56% percent of the outstanding common stock of
MessageMedia.
"The launch of MessageMedia represents the culmination of an 18-month period of
decisive actions designed to properly position the company as the leading
provider of electronic messaging solutions," said Bradley Feld, co-chairman and
general partner with SOFTBANK Technology Ventures.
"Our combined roster now includes more than 60 leading customers, GeoCities,
Intuit, CMP Media and Bertelsmann."
First Virtual Holdings pioneered secure electronic payment systems using
Internet e-mail, and realigned its business model over the past two years to
concentrate on developing a system for relationship-based transactive messaging
using its patented innovations in e-mail technologies. Its Interactive Messaging
Center is emerging as the first integrated system to fully harness e-mail as a
comprehensive one-to-one sales and service channel.
Email Publishing's technology and services help customers manage the
complexities of large-scale e-mail content delivery and subscriber management,
and the company established itself as a leading provider of message delivery and
e-mail subscription management services.
Distributed Bits developed an inbound e-mail management system that helps
companies manage large volumes of incoming e-mail inquiries
<PAGE> 2
initiated by customers.
"MessageMedia is the only company to deliver a comprehensive suite of products
and services that effectively manage large-scale interactive e-mail," said Keith
S. Kendrick, president of MessageMedia.
"The number of e-mail addresses is expected to reach 200 million by mid 1999,
and we believe we have the most robust solution for companies that wish to build
lasting, value-based relationships with that population. Our systems are
designed to dramatically improve service levels while at the same time
introducing new marketing opportunities and reducing the cost of interacting
with large numbers of customers."
About MessageMedia Inc.
MessageMedia (Nasdaq:*!MAIL!*) (formerly (Nasdaq:*!FVHI!*)), a member of the
SOFTBANK family of companies, is the leader in advanced messaging systems and
services for Internet commerce. The company offers a seamless solution for
relationship-based transactive communications using Internet e-mail.
MessageMedia's portfolio includes more than 60 customers from the financial
services, publishing, direct marketing and e-commerce industries. The company
maintains offices in San Diego, and Boulder, Colo.
About SOFTBANK Holdings Inc.
SOFTBANK Holdings Inc. is the holding company for all of SOFTBANK
Corp.'s U.S.-based activities. Its major operating companies include
Ziff-Davis (NYSE:ZD), Kingston Technology Company, SOFTBANK Content
Services, and UTStarcom. SOFTBANK is the largest shareholder of Yahoo!,
The Rights Exchange, GeoCities (Nasdaq:GCTY), CyberCash (Nasdaq:CYCH),
and E-LOAN.
SOFTBANK and its affiliates own approximately 56% of the outstanding common
stock of MessageMedia Inc. (Nasdaq:MAIL). In addition, through affiliated
venture funds in the U.S. and Japan, the SOFTBANK Group has made more than 70
investments in Internet companies.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act. With
the exception of the historical information contained in this release, the
matters described herein contain forward-looking statements that involve risk
and uncertainties. These risk factors include, but are not limited to, the
impact
<PAGE> 3
of competitive products and pricing, governmental regulations, financial
projections, technological difficulties, and/or other factors outside the
control of MessageMedia, which are detailed from time to time in First
Virtual/MessageMedia's SEC reports, including the report on Form 10-K for the
year ended Dec. 31, 1997. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof.
MessageMedia undertakes no obligation to release publicly the result of any
revisions to these forward-looking statements that may be made to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
MessageMedia Inc.
4104 Sorrento Valley Blvd., Suite 200, San Diego, CA 92121
Phone: 619/410-3700, Fax: 619/410-3701 www.messagemedia.com
Investor Relations inquiries should be sent to
[email protected]
CONTACT: MessageMedia Inc.
Beth Mayfield, 619/410-3759
[email protected]
or
Benjamin Group
Kristi Melani, 408/559-6090
[email protected]
