SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 20, 2000
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MERCHANTONLINE.COM, INC.
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(Exact name of registrant as specified in its charter)
Florida 0-22607 84-1233073
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
902 Clint Moore Road - Suite 114, Boca Raton, FL 33487
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 395-3585
1600 South Dixie Highway Boca Raton, FL 33432
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(Former name or former address, if changed since last report.)
Merchantonline.com, Inc., a Florida corporation, is filing this Amendment to its
Form 8-K/A dated June 30, 2000 in order to replace Item 7. (c) Pro Forma
Financial Information filed as an exhibit to such Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Pro Forma Financial Information.
The pro forma financial statements for the year ended October 31, 1999
and the six months ended April 30, 2000 are attached.
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.
MERCHANTONLINE.COM, INC.
Date: August 03, 2000 By: /s/ TAREK KIRSCHEN
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Tarek Kirschen, President
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PRO FORMA FINANCIAL INFORMATION
MERCHANTONLINE.COM, INC. AND WEB FINANCIAL SERVICES CORP.
PRO FORMA CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
INTRODUCTION TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
Effective April 19, 2000, MerchantOnline.com, Inc. (MOL), consummated an
agreement and plan of reorganization (the "Agreement") with Web Financial
Services Corporation (the Company), a development stage enterprise, and WFS
Acquisition Corp., a wholly-owned subsidiary of MerchantOnline.com, Inc. In
connection with the Agreement, WFS Acquisition Corporation merged with and into
Web Financial Services Corporation in a reverse triangular merger (the
"Merger"), with the Company the surviving corporation. Pursuant to the Merger,
MOL issued 2,500,000 shares of common stock in exchange for all of the
outstanding stock of the Company. Additionally, MOL agreed to issue additional
shares to the Company if on the first anniversary date of the transaction, the
fair value of the outstanding shares, as determined by the trading price of the
stock for a specific period of time, does not equal or exceed $10 per share.
The Merger was accounted for using the purchase method of accounting. The
purchase price ($25,882,053) consists of the cash paid ($140,000), a note
payable to shareholders ($280,000), the fair value of the shares issued, as
determined by an independent appraiser, adjusted by the guarantee on the share
price ($25,165,938) and the assumption of a note payable and other liabilities
($296,115). The purchase price has been allocated to fixed assets and deposits
($52,997) and "purchase price to be allocated" ($25,829,056).
The pro forma balance sheet and the pro forma adjustments described in the notes
to pro forma financial statements reflect the purchase price as "purchase price
to be allocated". The Company is currently in the process of evaluating the fair
values of assets acquired, including identifiable intangible assets, if any.
This amount is currently being amortized over a three-year period.
The unaudited pro forma condensed statement of operations for the year ended
October 31, 1999, combines the statements of operations of MerchantOnline.com,
Inc. for the year ended October 31, 1999 and of Web Financial Services
Corporation for the period from January 29, 1999 (inception) through December
31, 1999, and assumes the transaction occurred on November 1, 1998. The
unaudited pro forma condensed statement of operations for the six month period
ended April 30, 2000 combines the statements of operations of
MerchantOnline.com, Inc. for the six month period ended April 30, 2000 and of
Web Financial Services Corporation for the six-month period ended March 31, 2000
and assumes the transaction occurred on November 1, 1999. The fourth quarter of
fiscal year 1999 (October 31, 1999 to December 31, 1999) for Web Financial
Services Corporation was included in both the annual and the six-month period
presentations.
The unaudited pro forma condensed statements of operations do not purport to be
indicative of the results which would have actually have been obtained had such
transactions been completed as of the assumed dates and for the periods
presented or which may be obtained in the future.
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<PAGE>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Web Financial
Services
MerchantOnline.com, Corporation
Inc. Period from
January 29, 1999
Year ended through December Pro Forma
October 31, 1999 31, 1999 Adjustments Combined
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Revenues, net $ 204,106 $ -- $ 204,106
Costs of revenues 111,064 -- 111,064
Sales and marketing 1,296,774 -- 1,296,774
General and administrative 721,023 277,574 166,744(C) 1,165,341
Research and development costs -- 181,622 181,622
Depreciation and amortization 30,649 14,738 8,609,685(B) 8,655,072
Other expenses - settlement 455,000 -- 455,000
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Total costs and expenses 2,614,510 473,934 8,776,429 11,864,873
------------ ------------ ----------- ------------
Operating loss (2,410,404) (473,934) (8,776,429) (11,660,767)
Interest expense (29,924) (17,642) (47,566)
------------ ------------ ----------- ------------
Net loss $ (2,440,328) $ (491,576) $(8,776,429) $(11,708,333)
============ ============ =========== ============
Net loss per share - Basic and Diluted ($0.30)
Weighted average shares outstanding 38,946,498(D)
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
MerchantOnline.com, Web Financial
Inc. Services
Corporation
Six month Six month
period ended period ended Pro Forma
April 30, 2000 March 31, 2000 Adjustments Combined
(A)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues, net $ 97,770 $ -- $ -- $ 97,770
Costs of revenues 36,699 -- 36,699
General and administrative 2,616,636 242,969 83,372(C) 2,942,977
Depreciation and amortization 1,533,725 9,845 3,587,370(B) 5,130,940
----------- ----------- ----------- -----------
Total costs and expenses 4,187,060 252,814 3,670,742 8,110,616
----------- ----------- ----------- -----------
Operating loss (4,089,290) (252,814) (3,670,742) (8,012,846)
Interest expense (7,149) (16,876) (24,025)
----------- ----------- ----------- -----------
Net loss $(4,096,439) $ (269,690) $(3,670,742) $(8,036,871)
=========== =========== =========== ===========
Net loss per share - Basic and Diluted ($0.16)
Weighted average shares outstanding 48,954,757(D)
</TABLE>
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<PAGE>
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
UNAUDITED PRO FORMA ADJUSTMENTS
(A) The historical MerchantOnline.com, Inc. statement of operations at April 30,
2000 and for the six-months then ended, reflects a revision to the purchase
price and related amortization pertaining to MerchantOnline.com's April 19, 2000
acquisition of Web Financial Services Corporation, as previously filed on Form
8-K/A dated June 30, 2000. The purchase price has been increased from $8,086,154
to $25,882,053, and the related amortization expense for the six months ended
April 30, 2000 has increased from $224,615 to $717,474, to reflect a revision to
the Company's estimate of its obligation to issue additional shares if the fair
value of its price per share, as determined by the trading price for a specific
period of time, does not equal or exceed $10 per share. An amended Form 10-QSB
for the quarter ended April 30, 2000 has been filed to reflect such revision.
Descriptions of the adjustments included in the unaudited pro forma statements
of operations are as follows:
(B) Reflects the amortization of the "purchase price to be allocated" over a
three-year amortization period. The purchase price has been revised from the
Form 8-K/A dated June 30, 2000, to reflect a revision to the Company's estimate
of its obligation to issue additional shares if the fair value of its price per
share, as determined by the trading price for a specific period of time, does
not equal or exceed $10 per share. Actual amortization for future periods will
be dependent upon the final allocation of the purchase price, when completed, to
identifiable intangible assets and goodwill, if any, and the evaluation of
appropriate useful lives for such assets. The Company is currently in the
process of evaluating such allocations and useful lives.
(C) Reflects increase of compensation expense for key employees of Web Financial
Services Corporation based on new employment agreements entered into in
connection with the Merger.
(D) Reflects the weighted average number of shares outstanding for the year,
after giving effect to the Merger, calculated as the historical weighted average
common shares for MerchantOnline.com, Inc.
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