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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
JUNE 26, 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 June 25, 1998, First Virtual Holdings Incorporated (the "Company") issued a
press release announcing the closing of the previously announced investment in
the Company by SOFTBANK Holdings, Inc. and certain of its affiliates. The
Company also released today a pro forma condensed balance sheet as of May 31,
1998, which gives effect to the closing of SOFTBANK's investment and related
transactions. The pro forma balance sheet was prepared and released at the
request of the Nasdaq National Market. A copy of the pro forma condensed balance
sheet as of May 31, 1998, is attached to this Form 8-K and is incorporated
herein by this reference.
The pro forma condensed balance sheet is unaudited and does not take into
account any transactions or operating results after May 31, 1998, with the
exception of those transactions detailed in the pro forma condensed balance
sheet. There can be no assurance that the Company's balance sheet as of June 30,
1998, (to be filed with the Securities and Exchange Commission in the Company's
Form 10-Q for the quarter then ending) and in particular its accumulated deficit
and cash and cash equivalents, will not be materially different from the
information presented in the pro forma condensed balance sheet, since the
Company expects to incur a net loss during June 1998.
This information is provided solely for the purpose of complying with the
requirements delineated by Nasdaq. This information is not intended to be used
by the investing public.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following financial statements and exhibits are filed as part of this
report:
(a) Financial statements of the registrant:
Pro Forma Condensed Balance Sheet of the Company as of May 31, 1998.
(b) Exhibits in accordance with Item 601 of Regulation S-K:
Exhibits.
Exhibit Number Description
99.1 Press Release Dated June 25, 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: June 26, 1998 By: /s/ Keith S. Kendrick
----------------------------------
Keith S. Kendrick
President
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First Virtual Holdings Incorporated
Pro Forma Condensed Balance Sheet
The unaudited pro forma condensed balance sheet as of May 31, 1998, is
supplemental to the Company's historical financial statements and gives effect
to the following assumed transactions as if they took place on May 31, 1998.
These assumed transactions differ in several respects from the actual
transactions which occurred on June 25, 1998 and which are referred to in the
attached press release, due primarily to the accrual of additional interest on
existing Company indebtedness, and the Company's incurring additional
indebtedness, from May 31, 1998 through June 23, 1998. The additional
indebtedness and accrued interest was converted into Common Stock as part of the
aforementioned transactions. Where appropriate, the actual net proceeds to the
Company, debt canceled, and shares of Common Stock issued are indicated
parenthetically below.
1. The sale and issuance of 10,000,000 shares of Common Stock on June 25,
1998, for which the Company received net proceeds of $4,744,778
($4,438,422) and cancellation of $1,105,222 ($1,411,578) in debt.
2. The sale and issuance of 625,000 shares of Common Stock on June 25, 1998,
for which the Company received net proceeds of $750,000.
3. The conversion of $1,529,903 ($1,536,061) of debt into 2,549,838
(2,560,102) shares of Common Stock on June 25, 1998.
4. The release of a writ of attachment, pursuant to a civil lawsuit filed
against the Company in February 1998.
5. Stockholder approval of the issuance of 1,000 shares of the Company's
Series A Convertible Preferred Stock and its subsequent reclassification
from a mezzanine item to stockholders' equity on June 23, 1998.
6. Conversion of all 655 outstanding shares of Series A Convertible Preferred
Stock into 5,958,316 shares of Common Stock on June 25, 1998.
There can be no assurance that the Company's balance sheet as of June 30, 1998
(to be filed with the Securities and Exchange Commission in the Company's Form
10-Q for the quarter then ending) and in particular its accumulated deficit and
cash and cash equivalents, will not be materially different from the information
presented in the pro forma condensed balance sheet.
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FIRST VIRTUAL HOLDINGS INCORPORATED
PRO FORMA CONDENSED BALANCE SHEET
MAY 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
------------------------------------------------------------------------ PRO FORMA
ACTUAL (1) (2) (3) (4) (5) (6) AS OF
MAY 31, SALE OF SALE OF CONVERSION RELEASE OF APPROVAL OF CONVERSION MAY 31,
ASSETS 1998 STOCK STOCK OF DEBT WRIT SERIES A OF SERIES A 1998
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Current assets
Cash and cash equivalents $ 174,207 4,744,778 $750,000 $ 1,525,968 $7,194,953
Restricted cash 1,525,968 (1,525,968) --
Accounts receivable 25,426 25,426
Prepaid expenses and other 251,612 251,612
--------- --------- -------- ----------- ----------
Total current assets 1,977,213 4,744,778 750,000 -- 7,471,991
Furniture, equipment and
software, net 1,552,808 1,552,808
Information technology,
net 8,645 8,645
Organization and other
costs, net 66,323 66,323
Other assets 139,763 139,763
--------- ---------- -------- ----------- ----------
TOTAL ASSETS $3,744,752 $4,744,778 $750,000 $ -- $9,239,530
========= ========== ======== =========== ==========
LIABILITIES & STOCKHOLDERS'
EQUITY
Current liabilities
Accounts payable $1,308,380 $1,308,380
Accrued compensation &
related liabilities 197,033 197,033
Accrued interest 329,903 (329,903) --
Deferred revenue 339,647 339,647
Other accrued liabilities 387,400 387,400
Current portion, due to
stockholder 2,535,222 (1,105,222) (1,200,000) 230,000
--------- ---------- ---------- ----------
Total current liabilities 5,097,585 (1,105,222) (1,529,903) 2,462,460
Amount due to stockholder 125,000 125,000
Series A convertible
preferred stock 4,093,749 (4,093,749) --
Stockholders equity
Series A convertible
preferred stock, $0.001
par value; 1,000 shares
authorized; 655 shares
outstanding at
May 31, 1998 1 (1) --
Preferred stock, 5,000,000
shares authorized, none
outstanding at
May 31, 1998 - --
Common stock, $0.001
par value; 40,000,000
shares authorized,
11,817,980 shares issued
and outstanding at
May 31, 1998
(30,951,134 pro forma,
unaudited) 11,818 10,000 625 2,550 5,958 30,951
Additional paid in capital 29,444,269 5,840,000 749,375 1,527,353 4,093,749 (5,957) 41,648,789
Warrants 1,080,828 1,080,828
Deferred compensation (239,634) (239,634)
Accumulated deficit (35,868,864) (35,868,864)
------------------------------------------------------------------------------------------------
Total stockholders' equity (5,571,582) 5,850,000 750,000 1,529,903 4,093,749 -- 6,652,070
------------------------------------------------------------------------------------------------
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $3,744,752 4,744,778 $750,000 $ -- $ -- $ -- $9,239,530
================================================================================================
</TABLE>
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
For more information, contact:
First Virtual Holdings Incorporated
Beth Mayfield, Director of Corporate Affairs
(619) 350-3507, [email protected]
FIRST VIRTUAL HOLDINGS COMPLETES SOFTBANK INVESTMENT AND ELECTS NEW DIRECTORS
SAN DIEGO, Calif., June 25, 1998 -- First Virtual Holdings Inc. (NASDAQ: FVHI),
a leader in advanced messaging systems for Internet commerce, today announced
the closing of the previously announced investment in the Company by SOFTBANK
Holdings Inc. and SOFTBANK Technology Ventures IV, L.P. (together, "SOFTBANK").
SOFTBANK is investing approximately $6.6 million in the Company, and is
purchasing approximately $5.8 million in First Virtual securities from existing
securities holders.
In a subsequent transaction, E*TRADE Group, Inc. has purchased from SOFTBANK
833,333 shares of the Company's common stock at a total purchase price of
$500,000, or $0.60 per share. After giving effect to SOFTBANK'S purchase and the
sale to E*TRADE Group, Inc., SOFTBANK owns approximately 18.5 million shares of
the Company's outstanding common stock and has the ability to designate a
majority of the members of the Company's Board of Directors.
The Company's stockholders approved the SOFTBANK transaction at the Company's
Annual Meeting of Stockholders on June 23, 1998. Stockholders also elected a new
slate of directors, including Ronald D. Fisher (Vice Chairman, SOFTBANK
Holdings), Gary E. Rieschel (Senior Managing Director, SOFTBANK Technology
Ventures), Bradley A. Feld (Managing Director, SOFTBANK Technology Ventures),
Lee H. Stein (Founder of First Virtual ), and Pamela H. Patsley (CEO and
President, Paymentech, Inc.). The Board of Directors elected Mr. Fisher and Mr.
Feld as Co-Chairmen of the Board.
A by-product of the investment is a considerably simplified capital structure.
The Company now has only one class of outstanding stock and significantly
reduced debt.
"All of us at First Virtual Holdings are tremendously excited to be joining the
SOFTBANK team. This additional capital and our efforts to reduce operating costs
puts First Virtual in a strong position to move forward with our vision of
interactive messaging," said Keith S. Kendrick, President of First Virtual. "We
look forward to working with the new Board of Directors to create value for all
of our stockholders."
Bradley Feld commented, "SOFTBANK and its portfolio companies are the leading
providers of infrastructure services to the digital information industry
worldwide. Interactive messaging and other electronic mail services are becoming
a critical aspect of that infrastructure. Our investment in First Virtual
Holdings is an important step in realizing our vision of e-mail as a central
element of the digital economy."
Founded in 1994, First Virtual Holdings Incorporated is a leader in advanced
messaging 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.
SOFTBANK Holdings, Inc. is the holding company for all of SOFTBANK Corporation's
U.S.-based activities. Its major operating companies include Ziff-Davis,
Kingston Technology Company, SOFTBANK Services Group, SOFTBANK Content Services,
and UT Starcom. SOFTBANK is the largest stockholder of Yahoo! Inc.
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A leading branded provider of online investing services, E*TRADE has established
a popular destination Web site for self-directed investors. The company offers
independent investors the convenience and control of automated stock, options,
and mutual funds order placement at low commission rates, along with a suite of
value-added products and services that can be personalized, including portfolio
tracking, Java-based charting and quote applications, real-time market
commentary and analysis, news, and other information services.
Customers can access E*TRADE at http://www.etrade.com on the Internet as well as
through WebTV; via Prodigy; via AT&T Worldnet; via Microsoft Investor; by GO
ETRADE on CompuServe; with the keyword ETRADE on America Online; via personal
digital assistant; and via the TELE*MASTER interactive telephone system. E*TRADE
Securities, Inc., and its parent company E*TRADE Group, Inc., are headquartered
in Palo Alto, California.
E*TRADE is a registered trademark of the Company. TELE*MASTER is a trademark of
E*TRADE Securities, Inc. All other trademarks are properties of their respective
owners. The statements contained in this news release that are forward-looking
are based on current expectations that are subject to a number of uncertainties
and risks, and actual results may differ materially.
The uncertainties and risks include, but are not limited to, changes in market
activity, seasonality, the development of new products and services, the
enhancement of existing products and services, competitive pressures, system
failures, economic and political conditions, changes in consumer behavior, and
the introduction of competing products having technological and/or other
advantages. Further information about these matters can be found in the
information included in the annual report filed by the Company with the SEC on
Form 10-K and quarterly reports on Form 10-Q.
`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 of competitive products and pricing, governmental regulations, financial
projections, technological difficulties and/or other factors outside the control
of the company, which are detailed from time to time in the company's SEC
reports, including the report on Form 10-K for the year ended December 31,1997.
Readers are cautioned not to place undue reliance on these forward- looking
statements, which speak only as of the date hereof. The company 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.
First Virtual Holdings Inc. 11975 El Camino Real, Suite 300, San Diego,
California 92130. Tel: 619/793-2700; Fax: 619/793-2950; e-mail:
[email protected]; website: www.firstvirtual.com; effective June 29, 1998
First Virtual's new address will be: 4104 Sorrento Valley Blvd., Suite 200, San
Diego, CA 92121. Tel: 619/410-3700; Fax: 619/410/3701.
