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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
January 28, 1998
Date of Report (Date of earliest event reported)
FIRST VIRTUAL HOLDINGS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 000-21751 33-0612860
- ---------------------------- ------------------------ -------------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
11975 El Camino Real, Suite 300
San Diego, California 92130-2543
(Address of principal executive offices)
(619) 793-2700
(Registrant's telephone number, including area code)
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Item 5. Other Events
On January 28, 1998, First Virtual Holdings Incorporated issued a press release
announcing financial results for fiscal year 1997. A copy of that release is
attached as Exhibit 99.1 to this report.
Item 7. Financial Statements and Exhibits.
(c) Exhibits in accordance with Item 601 of Regulation S-K:
Exhibits.
99.1 Press Release dated January 28, 1998.
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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.
FIRST VIRTUAL HOLDINGS INCORPORATED
Dated: January 28, 1998 By: /s/ JOHN M. STACHOWIAK
-------------------------------------
John M. Stachowiak
Vice President, Finance &
Administration and Chief Financial
Officer
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER
99.1 Press Release dated January 28, 1998.
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EXHIBIT 99.1
First Virtual Holdings Inc. Announces Fourth-Quarter and Year-End Results
SAN DIEGO--(BUSINESS WIRE)--Jan. 28, 1998--First Virtual Holdings Inc.
(NASDAQ:FVHI), a leader in advanced marketing and customer service systems for
Internet commerce, Wednesday announced results for the quarter and year ended
Dec. 31, 1997. The company also commented on the progress made in the
development of the Interactive Messaging Platform and the market opportunity for
the company.
For the quarter ended Dec. 31, 1997, revenues were $339,000, an increase of 71
percent as compared with revenues of $198,000 in the fourth quarter of 1996. Net
loss for the fourth quarter of 1997 was $4.0 million, as compared with a net
loss of $4.7 million for the same quarter of 1996. For the year ended Dec. 31,
1997, revenues were $1,451,000, as compared with $696,000 for the year ended
Dec. 31, 1996. Net loss for 1997 was $15.9 million, as compared with a net loss
of $10.7 million for 1996.
For the quarter ended Dec. 31, 1997, net loss per common share was 59 cents
based on weighted average common shares outstanding of 8,885,236, as compared
with a net loss of 54 cents per share in the same quarter for 1996 based on
weighted average common shares outstanding of 8,769,491. For the year ended Dec.
31, 1997, net loss per common share was $1.94 based on weighted average common
shares outstanding of 8,842,367, as compared with a net loss of $1.25 per share
for 1996 based on weighted average common shares outstanding of 8,524,068. The
net loss per common share for the quarter and year ended Dec. 31, 1997, reflects
$1.25 million of imputed dividends related to the entire discounted conversion
terms of the Series A convertible preferred stock issued in October 1997.
Commenting on the performance of the fourth quarter, Keith Kendrick, president
of First Virtual Holdings, stated, "We made significant progress in focusing all
aspects of our business on the Interactive Messaging Platform (IMP).
Achievements included the initiation of IMP marketing programs, continued
progress in our IMP product development initiatives and a reduction in operating
expenses. We reduced our workforce by almost 25 percent, and implemented other
expense control measures to further reduce quarterly operating expenses as we
enter 1998. We also accelerated the development and the rollout of the IMP
applications and services that support relationship-based transactive messaging
using e-mail channels. These steps were taken in concert with our strategic
repositioning and communication efforts to address current market dynamics."
As stated in the Sept. 30, 1997, Form 10-Q report, the company will require
additional financing during 1998. If sufficient funds are not raised by the time
the company's Form 10-K for the year-end 1997 is filed, it is likely that the
company's audit report, when received, will contain an explanatory paragraph
describing the going-concern uncertainty.
"1997 was clearly a challenging one for First Virtual Holdings. Internet
commerce continued to evolve at unprecedented speed, standards emerged and the
competitive environment consolidated. However, during this period of rapid
change and technical innovation, our core competency in e-mail messaging has
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become more essential in the marketplace," said Lee Stein, chairman and chief
executive officer. "We believe that there is a significant market opportunity in
transactive e-mail systems for digital direct marketing, and we have therefore
adjusted our business strategy to extend beyond secure payment systems to
concentrate on developing and supporting an Interactive Messaging Platform. We
believe this integrated customer communications solution presents a compelling
value proposition to major corporations." Stein further commented, "To help
promote our strategy and rapidly build an organizational model to support it, we
realigned our management team and board of directors to include experts in
several aspects of direct marketing. We hope to commence offering this new
product portfolio during the first half of the year, and look forward to a very
exciting year."
Founded in 1994, First Virtual Holdings Inc. (NASDAQ:FVHI) is a leader in
advanced marketing and customer service systems for Internet commerce. The
company pioneered secure online payment systems and now focuses on supplying an
integrated system for relationship-based transactive messaging using standard
e-mail. First Virtual maintains its headquarters in San Diego, as well as a data
center in Dallas. The company has strategic relationships with First Data Corp.,
Paymentech Inc. and GE Capital Corp. First Virtual Holdings Inc., 11975 El
Camino Real, Suite 300, San Diego, CA 92130. Tel: 619/793-2700; fax:
619/793-2950; e-mail: [email protected]; Web site:
http://www.firstvirtual.com.
Statements in this document that are not strictly historical are
"forward-looking" statements within the meaning of the Safe Harbor provisions of
the federal securities laws. Such forward-looking statements reflect the
company's current expectations. There can be no assurance that the company's
actual performance will meet the company's current expectations. Investors are
strongly encouraged to review the documents the company files from time to time
with the Securities and Exchange Commission, specifically the company's initial
public offering prospectus and Forms 10-K and 10-Q. These documents contain and
identify important factors that could cause actual results to differ materially
from those contained in any projections or forward-looking statements.
[See Attached Financial Tables]
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FIRST VIRTUAL HOLDINGS INCORPORATED
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
-------------------------- ------------------------------
<S> <C> <C> <C> <C>
Revenues ....................................... $ 338,693 $ 197,604 $ 1,450,598 $ 695,866
Cost of services ............................... 52,754 47,104 270,416 265,900
Gross margin ................................... 285,939 150,500 1,180,182 429,966
Operating expenses:
Marketing and sales ......................... 1,408,871 1,091,539 5,424,110 1,836,545
Research and development .................... 1,810,866 2,325,286 6,687,177 4,652,582
General and administrative .................. 841,527 1,275,445 4,377,688 4,237,637
-------------------------------------------------------------
Total operating expenses ....................... 4,061,264 4,692,270 16,488,975 10,726,764
-------------------------------------------------------------
EBITDA ......................................... (3,775,325) (4,541,770) (15,308,793) (10,296,798)
Depreciation & amortization .................... 275,815 226,743 1,097,716 524,125
-------------------------------------------------------------
Loss from operations ........................... (4,051,140) (4,768,513) (16,406,509) (10,820,923)
Interest income (expense), net ................. 76,794 58,886 459,227 130,983
-------------------------------------------------------------
Net loss ....................................... $(3,974,346) $(4,709,627) $(15,947,282) $(10,689,940)
Dividends imputed on preferred stock ........... (1,250,000) -- (1,250,000) --
-------------------------------------------------------------
Net loss applicable to common shares ........... $(5,224,346) $(4,709,627) $(17,197,282) $(10,689,940)
=============================================================
Net loss per common share computation,
basic and diluted ........................... $ (0.59) $ (0.54) $ (1.94) $ (1.25)
Shares used in per common share computation,
basic and diluted ........................... 8,885,236 8,769,491 8,842,367 8,524,068
</TABLE>
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FIRST VIRTUAL HOLDINGS INCORPORATED
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
1997 1996
----------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................ $6,331,059 $17,127,971
Short-term investment, available-for-sale ........ 0 200,000
Accounts receivable .............................. 207,985 88,278
Prepaid expenses and other ....................... 418,615 83,840
----------------------------
Total current assets ................................ 6,957,659 17,500,089
Furniture and equipment, net ........................ 1,859,048 1,964,635
Information technology, net ......................... 19,845 59,226
Organization and other costs, net ................... 77,630 105,798
Deposits and other .................................. 133,907 62,809
----------------------------
Total assets .................................... $9,048,089 $19,692,557
============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................. $1,440,224 $ 1,626,198
Accrued compensation and related liabilities ..... 370,741 372,739
Accrued interest ................................. 289,903 196,340
Deferred revenue ................................. 537,790 64,683
Current portion, amounts due to stockholders ..... 1,530,000 400,000
Other accrued liabilities ........................ 601,300 576,077
----------------------------
Total current liabilities ........................... 4,769,958 3,236,037
Amount due to stockholder ........................... 162,500 312,500
Notes payable to stockholders ....................... -- 1,200,000
Total stockholders' equity .......................... 4,115,631 14,944,020
----------------------------
Total liabilities and stockholders' equity ...... $9,048,089 $19,692,557
============================
</TABLE>
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CONTACT: First Virtual Holdings, San Diego
John Stachowiak, 619/350-3540, [email protected]
Todd Savitt, 619/350-3539, [email protected]
