<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 15, 2000
--------------------------------
autobytel.com inc.
(Exact name of registrant as specified in its charter)
0-22239
(Commission File Number)
Delaware 33-0711569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
18872 MacArthur Boulevard
Irvine, California 92612
(Address of principal executive offices, with zip code)
(949) 225-4500
(Registrant's telephone number, including area code)
<PAGE> 2
The Registrant hereby amends its current Report on Form 8-K filed with the
Securities and Exchange Commission on February 24, 2000 to incorporate Item 7(a)
"Financial Statements of Businesses Acquired" and Item 7(b) "Pro Forma Financial
Information".
ITEM 2. ACQUISITION OF ASSETS
On February 15, 2000, autobytel.com inc. (the "Company") acquired
ownership of one hundred percent of the stock of A.I.N. Corporation, a
California corporation ("A.I.N."), the owner of CarSmart.com, through the
statutory merger of Autobytel Acquisition II Corp. (the "Merger Sub") and A.I.N.
The Company acquired all the outstanding stock of privately held A.I.N. for 1.8
million shares of Company common stock and $3 million in cash. The separate
existence of Merger Sub ceased and the Company became the sole shareholder of
A.I.N. The transaction was accomplished pursuant to an Agreement and Plan of
Merger dated October 14, 1999, as amended on January 25, 2000 and February 14,
2000.
A copy of each of the Agreement and Plan of Merger and the amendments
thereto is incorporated herein by reference from the Company's Current Report on
Form 8-K for an event dated February 15, 2000 (the "Form 8-K") and the foregoing
description of such documents is qualified in its entirety by reference to such
exhibits.
The press release filed as an exhibit to the Form 8-K and incorporated
herein by reference includes "safe harbor" language, pursuant to the Private
Securities Litigation Reform Act of 1995, indicating that certain statements
about the Company's business contained in the press release are
"forward-looking" rather than "historic".
<PAGE> 3
Item 7. Financial Statements, Pro Forma, Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of A.I.N. Corporation:
We have audited the accompanying balance sheets of A.I.N. Corporation (a
California corporation) as of December 31, 1999 and 1998, and the related
statements of operations, stockholders' deficit and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of A.I.N. Corporation as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States.
As more fully discussed in Note 5, the Company is a defendant in a lawsuit
claiming an ownership interest in the Company's CarSmart.com on-line business,
none of which has been provided for in the accompanying financial statements. It
is not possible to predict the outcome of this litigation.
San Francisco, California
March 10, 2000
<PAGE> 4
A.I.N. CORPORATION
BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND 1999
<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 60,059 $ 57,238
Accounts receivable, net of allowance for doubtful accounts
of $115,482 and $191,488, respectively 136,997 234,469
Prepaid expenses and other current assets 7,700 217,406
----------- -----------
Total current assets 204,756 509,113
PROPERTY AND EQUIPMENT, net 165,719 282,110
OTHER ASSETS 11,500 11,500
----------- -----------
Total assets $ 381,975 $ 802,723
=========== ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Borrowings under lines of credit $ 79,564 $ --
Accounts payable 515,762 871,065
Accrued liabilities 52,260 229,122
Accrued settlement liability 500,000 650,000
Deferred revenue 961,202 1,515,751
Current portion of notes payable 29,500 12,302
Current portion of notes payable to related party -- 109,000
Current portion of capital lease obligation 5,701 6,436
----------- -----------
Total current liabilities 2,143,989 3,393,676
----------- -----------
NOTES PAYABLE, net of current portion -- 63,155
CAPITAL LEASE OBLIGATION, net of current portion 9,212 1,508
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, no par value, 50,000 shares authorized, 5,000 shares
and 5,557 shares issued and outstanding, respectively 12,000 1,250,872
Notes receivable from stockholders -- (738,000)
Accumulated deficit (1,783,226) (3,168,488)
----------- -----------
Total stockholders' deficit (1,771,226) (2,655,616)
----------- -----------
Total liabilities and stockholders' deficit $ 381,975 $ 802,723
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 5
A.I.N. CORPORATION
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
REVENUE $ 3,052,604 $ 6,350,304
OPERATING EXPENSES:
Selling and marketing 1,533,997 3,917,587
Technology development 833,029 723,295
General and administrative 1,304,282 2,625,812
Settlement cost 500,000 150,000
Value of consulting services exchanged for equity -- 279,234
----------- -----------
4,171,308 7,695,928
----------- -----------
Loss from operations (1,118,704) (1,345,624)
INTEREST EXPENSE, net 11,542 35,886
----------- -----------
Loss before provision for income taxes (1,130,246) (1,381,510)
PROVISION FOR INCOME TAXES 26,778 3,752
----------- -----------
Net loss $(1,157,024) $(1,385,262)
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 6
A.I.N. CORPORATION
STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
<TABLE>
<CAPTION>
COMMON STOCK
----------------------- NOTES
RECEIVABLE
NUMBER FROM ACCUMULATED
OF SHARES AMOUNT STOCKHOLDERS DEFICIT TOTAL
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 5,000 $ 12,000 $ -- $ (626,202) $ (614,202)
Net loss -- -- -- (1,157,024) (1,157,024)
----- ---------- --------- ----------- -----------
BALANCE, DECEMBER 31, 1998 5,000 12,000 -- (1,783,226) (1,771,226)
Issuance of common stock for promissory notes 319 638,000 (638,000) -- --
Value assigned to common stock issued for
consulting services and promissory notes -- 68,624 -- -- 68,624
Exercise of stock option in exchange for a
promissory note 50 100,000 (100,000) -- --
Value assigned to a warrant issued in exchange
for consulting services -- 210,610 -- -- 210,610
Issuance of common stock for cash 50 100,000 -- -- 100,000
Value assigned to a warrant issued for an
extension of a note payable -- 45,638 -- -- 45,638
Exercise of warrant in exchange for reduction in
note payable 138 76,000 76,000
Net loss -- -- -- (1,385,262) (1,385,262)
----- ---------- --------- ----------- -----------
BALANCE, DECEMBER 31, 1999 5,557 $1,250,872 $(738,000) $(3,168,488) $(2,655,616)
===== ========== ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 7
A.I.N. CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1999
<TABLE>
<CAPTION>
1998 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,157,024) $(1,385,262)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation 54,913 115,124
Value of consulting services exchanged for equity -- 279,234
Changes in assets and liabilities:
Accounts receivable, net (132,741) (97,472)
Prepaid expenses and other current assets (7,400) (164,068)
Other assets (8,604) --
Accounts payable 343,007 355,303
Accrued liabilities 29,499 176,862
Accrued settlement liability 500,000 150,000
Deferred revenue 443,356 554,549
----------- -----------
Net cash provided by (used in) operating activities 65,006 (15,730)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (128,822) (231,515)
Collection of advance to stockholder 52,476 --
----------- -----------
Net cash used in investing activities (76,346) (231,515)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock -- 100,000
Proceeds from borrowings under lines of credit 51,000 --
Repayment of borrowings under lines of credit (14,255) (79,564)
Proceeds from notes payable -- 245,500
Repayment of notes payable (10,000) (14,543)
Payments under capital lease obligation (4,479) (6,969)
----------- -----------
Net cash provided by financing activities 22,266 244,424
----------- -----------
Net increase/(decrease) in cash 10,926 (2,821)
Cash at beginning of year 49,133 60,059
----------- -----------
Cash at end of year $ 60,059 $ 57,238
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ 11,542 $ 35,886
Cash paid for income taxes 26,778 3,752
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Acquisition of property and equipment under a capital lease 19,392 --
Forgiveness of advance to stockholder 203,613 --
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Issuance of common stock for promissory notes -- 738,000
Value assigned to common stock and a warrant issued in exchange for
consulting services -- 279,234
Value assigned to a warrant issued for an extension of a note payable -- 45,638
Value of warrant in exchange for reduction of note payable -- 76,000
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 8
A.I.N. CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
THE COMPANY
A.I.N. Corporation (the Company) was incorporated in California in March 1993.
The Company operates an Internet site (www.carsmart.com) providing automotive
information for vehicle purchasing and related consumer services. To date, the
Company has derived the majority of its revenues from fees paid by subscribing
dealerships located in the United States. Additionally, the Company derives
revenue from other related services including finance, insurance, and Web site
advertising. Until May 1998, the Company's dealership relations, including
contract management, billing and collection, was handled by an agent.
Due to the nature of its business and its growth stage, the Company is subject
to a number of risk factors including, but not limited to, continuing operating
losses, limited liquidity, competition, dealer turnover, regulation of the
Internet industry and consumer acceptance of Internet commerce. The Company
incurred operating losses of $1,385,262 for the year ended December 31, 1999 and
has an accumulated deficit of $3,168,488 as of December 31, 1999. As discussed
in Note 10, subsequent to December 31, 1999, all outstanding common stock of the
Company was acquired by autobytel.com inc.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
CONCENTRATION OF CREDIT RISK
As of December 31, 1998 and 1999, no subscribing dealership accounted for
greater than 10% of accounts receivable or revenue. As of December 31, 1999, a
balance of consumer referral fee due from autobytel.com inc. was $32,792.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation issued to employees using
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees," and accordingly, pro forma disclosures required under the
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation" have been presented in Note 7.
REVENUE RECOGNITION
The majority of revenues to date have consisted of marketing fees paid by
subscribing dealerships. These marketing fees are composed of an initial fee, a
monthly fee, and an annual fee. The initial fee is recognized as revenue over
the term of the marketing agreement with the dealership, which ranges from one
to three years. The annual fee is recognized ratably over the service period of
12 months. The monthly fee is recognized in the period in which the service is
provided. If the marketing agreement is terminated early, any unamortized
portion of the initial or annual fee is recognized as revenue at that time.
Deferred revenue results from unamortized initial, annual and monthly fees.
<PAGE> 9
The consumer referral fee charged to autobytel.com inc. is recognized as revenue
in the period the consumer referrals are delivered.
The Company also charges annual and/or monthly fees for other related services.
The annual fee is recognized as revenue ratably over 12 months, whereas the
monthly fee is recognized in the period in which the service is provided.
SELLING AND MARKETING
Selling and marketing expenses primarily include the costs paid to develop the
Company's brand equity, and personnel and other costs associated with sales,
training and support of its dealer network.
TECHNOLOGY DEVELOPMENT
Technology development expense primarily includes personnel costs relating to
enhancing the features, content and functionality of the Company's Web site.
2. PROPERTY AND EQUIPMENT:
Property and equipment are stated at cost. Depreciation is provided using the
straight-line method over the estimated useful lives of the respective assets,
generally three years. Property and equipment consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
ASSET
1998 1999 LIVES
--------- --------- -------
<S> <C> <C> <C>
Computer equipment and software $ 178,440 $ 305,115 3 years
Furniture and fixtures 53,371 97,208 3 years
Trade show booth 49,650 110,653 3 years
--------- ---------
281,461 512,976
Less: Accumulated depreciation (115,742) (230,866)
--------- ---------
$ 165,719 $ 282,110
========= =========
</TABLE>
3. LINES OF CREDIT:
The Company had a line of credit with a bank until November 1999. The credit
limit of this line was $51,000. Borrowings under the line bore interest at the
bank's index rate plus 2.5% per annum (10.25% at December 31, 1998). Obligations
under the line were secured by substantially all assets of the Company and
guaranteed by a stockholder. As of December 31, 1998, the outstanding balance
under the line was $41,000, which was paid during 1999.
The Company also had a credit line with another bank until May 1999. The credit
limit of this line was $50,000. Borrowings under the line bore variable interest
(12.5% at December 31, 1998). Obligations under the line were not secured. As of
December 31, 1998, the outstanding balance was $38,564, which was paid during
1999.
<PAGE> 10
4. NOTES PAYABLE:
As of December 31, 1998 and 1999, the Company had the following notes payable:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1998 1999
-------- --------
<S> <C> <C>
Note payable to a related-party partnership $ -- $109,000
Note payable to bank -- 75,457
Other notes payable 29,500 --
-------- --------
29,500 184,457
Less: Current portion 29,500 121,302
-------- --------
Long-term portion $ -- $ 63,155
======== ========
</TABLE>
The note payable to a related-party partnership bears interest at 8.5% per annum
in arrears, payable monthly, and was originally due on September 28, 1999. The
original maturity date was extended by one year in exchange for issuance of a
warrant to purchase 13 shares of the Company's common stock (see Note 7). Under
the terms of the extension, the principal balance and all unpaid accrued
interest are due on the earlier of a change in control of the Company, and
September 28, 2000. On October 1, 1999, the related-party partnership exercised
its warrant to purchase 138 shares of common stock. The exercise of the warrant
was effected by reducing the outstanding balance of the note payable to the
related-party partnership (see Note 7). Obligations under the note are secured
by all personal property, general intangibles, accounts and other assets of the
Company. The partnership is affiliated with one of the Company's stockholders.
Note payable to bank bears interest at 10.25% per annum and is due August 3,
2004. Principal and interest are payable monthly in 60 installments of $1,710
per month. Obligations under the note are secured by substantially all assets of
the Company and guaranteed by the Company's stockholder. Other notes payable
consist of amounts borrowed from individual creditors.
5. COMMITMENTS AND CONTINGENCIES:
OPERATING LEASES
The Company has an operating lease for its corporate office facilities that
expires in February 2003. At December 31, 1999, future minimum lease payments
are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
------------
<S> <C>
2000 $193,314
2001 197,105
2002 197,105
2003 65,701
--------
$653,225
========
</TABLE>
Rent expense was approximately $117,000 and $145,000 for the years ended
December 31, 1998 and 1999, respectively.
<PAGE> 11
CAPITAL LEASES
The Company has equipment purchased under a capital lease. At December 31, 1999,
future minimum lease payments are as follows:
<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31,
------------
<S> <C>
2000 $ 6,938
2001 3,474
-------
10,412
Less: Interest (2,468)
-------
Principal 7,944
Less: Current portion 6,436
-------
$ 1,508
=======
</TABLE>
LITIGATION
On May 8, 1998, the Company entered into a settlement agreement with a former
business agent. Under the agreement, the Company was to pay $500,000 or $750,000
plus interest based on the payment date. On February 15, 2000, $650,000 was paid
in full settlement of the dispute.
The Company was served a complaint on September 1, 1999, for breach of contract.
The plaintiff contends entitlement to a 49% ownership interest in the Company's
CarSmart.com on-line business based upon a purported agreement for the formation
of a company called CarSmart On-Line Services. As discussed in Note 10, the
Company was sold to autobytel.com inc. subsequent to December 31, 1999. As part
of the sale agreement the Company's shareholders have indemnified autobytel.com
inc. and funded an escrow account for such liability and other matters.
Currently, the magnitude of potential damages is not estimable. The outcome of
this case is currently unknown.
In the normal course of business, the Company is involved in other various legal
proceedings. Based upon the information presently available and upon the advice
of counsel, management believes that the ultimate resolution of any such
proceedings will not have a material adverse effect on the Company's financial
position, liquidity, or results of operations.
6. RETIREMENT ACCOUNT PLAN:
The Company has a retirement account plan. The plan covers all employees of the
Company. Under the plan, participating employees are allowed to contribute 1% to
100% of their pretax salaries up to a predetermined limit (set by the Internal
Revenue Services) for each plan year. The Company matches each employee's salary
deferral contribution dollar for dollar up to 3% of the employee's compensation.
The Company has made matching contributions of approximately $4,000 and $9,300
in the years ended December 31, 1998 and 1999, respectively.
7. STOCKHOLDERS' DEFICIT:
COMMON STOCK
In June 1999, the Company issued 319 shares of its common stock at $2,000 per
share to consultants in exchange for non-recourse promissory notes. The notes
bear interest at 5% per annum. The unpaid principal and accrued interest are due
on June 30, 2001 and are secured by the shares purchased.
Pursuant to the provisions of Emergency Issues Task Force 95-16, "Accounting for
Stock Compensation Arrangements with Employer Loan Features under APB Opinion
No. 25," the shares of common stock purchased
<PAGE> 12
in the above transactions are treated as stock options. Since the stock was
issued to consultants, such stock options were accounted for under the Statement
of Financial Accounting Standards No. 123 "Accounting for Stock Based
Compensation" (SFAS No. 123). The fair value of these stock options estimated on
the date of grant using the Black-Scholes option-pricing model was $68,624,
using the following assumptions: (i) no dividend yield, (ii) volatility of
effectively zero, (iii) risk-free interest rate of 5.69% and (iv) expected life
of two years. This amount was recorded as a consulting expense in the year ended
December 31, 1999.
As of February 15, 2000, upon the acquisition of the Company by autobytel.com
inc., these notes were cancelled.
WARRANTS
In June 1999, the Company issued a warrant to purchase 125 shares of common
stock at $400 per share to a consultant for services rendered. The warrant is
exercisable from July 1, 1999 through June 30, 2004. The fair value of the
warrant estimated on the date of issuance using the Black-Scholes option-pricing
model is $210,610, using the following assumptions: (i) no dividend yield, (ii)
volatility of effectively zero, (iii) risk-free interest rate of 4.77% and (iv)
expected life of five years. This amount was recorded as a consulting expense in
the year ended December 31, 1999. This warrant was exercised in October 1999
(see Note 4.). The exercise price of the warrant was paid by reducing the
outstanding balance of the note payable to a partnership affiliated with the
consultant by $50,000.
In September 1999, the Company issued a warrant to purchase 13 shares of common
stock at $2,000 per share to a partnership in exchange for extension of the due
date of an outstanding note payable (see Note 4). The warrant is exercisable
from September 28, 1999 through September 28, 2004. The fair value of the
warrant estimated on the date of issuance using the Black-Scholes option-pricing
model is $45,638, using the following assumptions: (i) no dividend yield, (ii)
volatility of effectively zero, (iii) risk-free interest rate of 4.81% and (iv)
expected life of five years. This amount was recorded as a deferred loan cost as
of December 31, 1999 and will be amortized over the extension period of one
year. This warrant was exercised in October 1999. The exercise price of the
warrant was paid by reducing the outstanding balance of the note payable to the
partnership by $26,000.
STOCK OPTION
In July 1999, the Company entered into a stock option agreement under which it
granted a stock option to purchase 50 shares of common stock at $2,000 per share
to an employee. The option was immediately exercisable and was exercised on July
15, 1999. The Company received a promissory note from the employee for the
exercise price. The note bears interest at 5% per annum. The principal and
accrued interest are due July 15, 2001 and are secured by the purchased shares
as well as other assets of the employee. Pursuant to the provisions of the stock
option agreement, in the event the employee proposes to sell, pledge or
otherwise transfer any of the shares, the Company had the right of first refusal
to reacquire the shares. Such right expired upon consummation of the acquisition
of the Company by autobytel.com inc.
The fair value of the stock option estimated on the date of issuance using the
Black-Scholes option-pricing model is $424 per share using the following
assumptions: (i) no dividend yield, (ii) volatility of effectively zero, (iii)
risk-free interest rate of 4.77% and (iv) expected life of five years. Had
compensation cost for the Company's stock-based compensation been determined
consistent with SFAS No. 123, the Company's net loss for the year ended December
31, 1999 would have been approximately $1,403,000.
8. INCOME TAXES:
The Company accounts for income taxes using the asset and liability method.
Under this method, deferred income tax assets and liabilities are determined
based on the differences between the financial reporting and tax bases of assets
and liabilities and are measured using the currently enacted tax rates and laws.
As of December 31, 1999, the Company has a net deferred tax asset of
approximately $884,000, which is fully reserved.
Provision for income taxes primarily represents cash paid for income taxes. As
of December 31, 1999, the Company has net operating loss carryforwards of
approximately $478,000 to offset future taxable income. Such
<PAGE> 13
carryforwards will expire in various years through 2019; however, they are
subject to limitations upon the acquisition of the Company by autobytel.com inc.
9. RELATED PARTY TRANSACTIONS:
In the year ended December 31, 1998, the Company subsidized a purchase of a
vehicle by a stockholder for approximately $26,000. The amount was recorded as a
compensation expense.
As of December 31, 1998, the Company forgave the advance to a stockholder of
$203,613. The amount was recorded as a compensation expense in the year ended
December 31, 1998.
10. SUBSEQUENT EVENT:
AGREEMENT OF MERGER
On February 15, 2000, autobytel.com inc. acquired all of the outstanding stock
of the Company for 1.8 million shares of autobytel.com inc. common stock and
$3,000,000 in cash.
<PAGE> 14
(b) Pro Forma Financial Information
The following pro forma balance sheet reflects the acquisition by the Company of
all of the outstanding shares of A.I.N. Corporation as if it had occurred on
December 31, 1999. The following pro forma statement of operations for the year
ended December 31, 1999 reflects the acquisition by the Company of all of the
outstanding shares of A.I.N. Corporation as if it had occurred on January 1,
1999. The pro forma financial information does not purport to represent what the
Company's consolidated results of operations would have been if the acquisition
had in fact occurred on this date, nor does it purport to indicate the Company's
future consolidated financial position or future consolidated results of
operations. The pro forma adjustments are based on currently available
information and certain assumptions that the Company's management believes are
reasonable.
AUTOBYTEL.COM INC.
PRO FORMA COMBINED BALANCE SHEET
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
A.I.N. Pro Forma Pro Forma
autobytel.com inc. Corporation Adjustments Combined
------------------ ----------- ----------- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 85,457 $ 57 $ (4,452)(A) $ 81,062
Accounts receivable, net 4,593 235 (33)(B) 4,795
Prepaid expenses and other current assets 2,819 217 -- 3,036
--------- ------- -------- ---------
Total current assets 92,869 509 (4,485) 88,893
Property and equipment, net 1,630 282 -- 1,912
Other assets 373 12 -- 385
Goodwill -- -- 24,633 (C) 24,633
--------- ------- -------- ---------
Total assets $ 94,872 $ 803 $ 20,148 $ 115,823
========= ======= ======== =========
Current liabilities:
Accounts payable $ 4,277 $ 871 $ (33)(B) $ 5,115
Accrued expenses 6,772 229 -- 7,001
Deferred revenues 6,147 1,516 (1,516)(D) 6,147
Customer deposits 716 -- -- 716
Other current liabilities 201 128 -- 329
--------- ------- -------- ---------
Total current liabilities 18,113 2,744 (1,549) 19,308
Deferred rent 53 1 -- 54
Other liabilities -- 63 -- 63
--------- ------- -------- ---------
Total liabilities 18,166 2,808 (1,549) 19,425
Stockholders' equity:
Common stock 18 -- 2 (A) 20
Warrants 1,332 -- -- 1,332
Additional paid-in capital 141,957 -- 19,690 (A) 161,647
Cumulative translation adjustment (8) -- -- (8)
Accumulated deficit (66,593) (2,005) 2,005 (66,593)
--------- ------- -------- ---------
Total stockholders' equity 76,706 (2,005) 21,697 96,398
--------- ------- -------- ---------
Total liabilities and stockholders' equity $ 94,872 $ 803 $ 20,148 $ 115,823
========= ======= ======== =========
</TABLE>
<PAGE> 15
AUTOBYTEL.COM INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(Unaudited)
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
A.I.N. Pro Forma Pro Forma
autobytel.com inc. Corporation Adjustments Combined
------------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 40,298 $ 6,350 $(1,528)(E) $ 45,120
Operating expenses:
Sales and marketing 44,176 3,918 (639)(F) 47,455
Product and technology development 14,262 723 -- 14,985
General and administrative 8,595 3,055 -- 11,650
Goodwill amortization -- -- 1,643 (G) 1,643
-------- ------- ------- -----------
Total operating expenses 67,033 7,696 1,004 75,733
-------- ------- ------- -----------
Loss from operations (26,735) (1,346) (2,532) (30,613)
Other income (expense), net 3,468 (36) -- 3,432
-------- ------- ------- -----------
Loss before provision for income taxes (23,267) (1,382) (2,532) (27,181)
-------- ------- ------- -----------
Provision for income taxes 53 3 -- 56
-------- ------- ------- -----------
Net loss $(23,320) $(1,385) $(2,532) $ (27,237)
======== ======= ======= ===========
Basic and diluted net loss per share $ (1.55)
===========
Shares used in computing basic and diluted net loss per share 17,566,406 (H)
===========
</TABLE>
NOTES TO PRO FORMA COMBINED BALANCE SHEET AND STATEMENT OF OPERATIONS
The following adjustments were applied to the autobytel.com inc. historical
financial statements and those of A.I.N. Corporation to arrive at the pro forma
financial information.
(A) On February 15, 2000, the Company acquired all of the outstanding
shares of stock of A.I.N. Corporation for $3,000 in cash and 1.8
million shares of the Company's common stock valued at $19,692. The
acquisition has been accounted for using the purchase method of
accounting. The purchase price has been allocated to the tangible and
intangible assets acquired and liabilities assumed on the basis of
their respective fair values on the acquisition date. The fair value of
net assets acquired was determined based upon management's estimate.
The allocation of the purchase price is summarized below:
<TABLE>
<S> <C>
Goodwill $23,181
Accounts receivable 235
Property and equipment, net 282
Other assets 286
Current liabilities (1,228)
Other liabilities (64)
-------
Total purchase price $22,692
=======
</TABLE>
The goodwill reflected in the accompanying pro forma balance sheet of
$24,633 is comprised of $23,181, the purchase price allocated as noted
above, and acquisition costs of $1,452.
<PAGE> 16
(B) Reflects the elimination of the amount due to A.I.N. Corporation from
the Company as of December 31, 1999.
(C) Reflects the preliminary purchase price allocation, including $3,000 in
cash and 1.8 million shares of the Company's common stock valued at
$19,692. The amounts included in the pro forma balance sheet have been
recorded at management's estimate of their fair market value. There are
certain liabilities of A.I.N. Corporation that were not assumed in the
acquisition, and accordingly, they have been eliminated in the
accompanying pro forma balance sheet.
(D) Reflects the reversal of certain fees received by A.I.N Corporation
prior to the acquisition date on one to three year contracts due to the
application of the purchase method of accounting.
(E) Reflects the reversal of $889 of revenue due to the impact of the
purchase method of accounting upon certain fees received by A.I.N
Corporation prior to the acquisition date on one to three year
contracts and the elimination of $639 of 1999 marketing revenue due to
A.I.N. Corporation from the Company.
(F) Reflects the elimination of 1999 marketing costs of the Company due to
A.I.N. Corporation.
(G) Reflects the amortization of goodwill based on the preliminary purchase
price allocation (as noted in footnote (A) to the pro forma balance
sheet) using a 15 year amortization period.
(H) Reflects the issuance of 1.8 million shares of common stock of the
Company in conjunction with the acquisition of A.I.N. Corporation at
the beginning of the period presented.
(c) Exhibits
<TABLE>
<S> <C>
2.1 Agreement and Plan of Merger dated October 14, 1999 among
autobytel.com inc. (the "Company"), Autobytel Acquisition II
Corp. ("Merger Sub"), A.I.N. Corporation ("A.I.N.") and the
shareholders of A.I.N. (filed as Exhibit 2.1 to the Current
Report on Form 8-K filed on February 24, 2000 with the Securities
and Exchange Commission (the "Form 8-K") and incorporated herein
by reference).
2.2 Amendment to Agreement and Plan of Merger dated January 25, 2000
among the Company, Merger Sub, A.I.N. and the shareholders of
A.I.N. (filed as Exhibit 2.2 to the Form 8-K and incorporated
herein by reference).
2.3 2nd Amendment to Agreement and Plan of Merger dated February 14,
2000 among the Company, Merger Sub, A.I.N. and the shareholders
of A.I.N. (filed as Exhibit 2.3 to the Form 8-K and incorporated
herein by reference).
23 Consent of Independent Auditors
99.1 Press release dated February 16, 2000 (filed as Exhibit 99.1 to
the Form 8-K and incorporated herein by reference).
</TABLE>
All of the schedules have been omitted pursuant to Item 601(b) (2) of Regulation
S-K. The Company hereby agrees to furnish supplementally a copy of any omitted
schedule to the Securities and Exchange Commission upon request.
<PAGE> 17
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 thereunto duly authorized.
autobytel.com inc.
Date: April 28, 2000 By: /s/ Hoshi Printer
------------------------------------
Hoshi Printer
Senior Vice President and
Chief Financial Officer
<PAGE> 18
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
2.1 Agreement and Plan of Merger dated October 14, 1999 among
autobytel.com inc. (the "Company"), Autobytel Acquisition
II Corp. ("Merger Sub"), A.I.N. Corporation ("A.I.N.") and
the shareholders of A.I.N. (filed as Exhibit 2.1 to the
Current Report on Form 8-K filed on February 24, 2000 with
the Securities and Exchange Commission (the "Form 8-K")
and incorporated herein by reference).
2.2 Amendment to Agreement and Plan of Merger dated January
25, 2000 among the Company, Merger Sub, A.I.N. and the
shareholders of A.I.N. (filed as Exhibit 2.2 to the Form
8-K and incorporated herein by reference).
2.3 2nd Amendment to Agreement and Plan of Merger dated
February 14, 2000 among the Company, Merger Sub, A.I.N.
and the shareholders of A.I.N. (filed as Exhibit 2.3 to
the Form 8-K and incorporated herein by reference).
23 Consent of Independent Auditors
99.1 Press release dated February 16, 2000 (filed as Exhibit
99.1 to the Form 8-K and incorporated herein by
reference).
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 8-K, into the Company's previously filed
Registration Statements File No. 333-90045, File No.333-77943, and File No.
333-33038 on Form S-8.
/s/ Arthur Andersen LLP
San Francisco, California,
April 27, 2000
