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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Amendment No. 1
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported) October 31, 2000
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INTERWOVEN, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 000-27389 77-0523543
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1195 West Fremont Avenue
Sunnyvale, California 94087
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 774-2000
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ITEM 2: Acquisition or Disposition of Assets
On November 13, 2000, Interwoven, Inc. ("Interwoven" or the "Company")
filed a Form 8-K to report its acquisitions of Ajuba Solutions, Inc. (formerly
known as Scriptics Corporation) ("Ajuba") and Metacode Technologies, Inc.
("Metacode"). Pursuant to Item 7 of Form 8-K, Interwoven indicated that it would
file certain financial information no later than the date required by Item 7 of
Form 8-K. This Amendment No. 1 to Form 8-K is filed to provide the required
financial information.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
-----------------------------------------
The financial statements of Ajuba and Metacode required by paragraph (a)(4)
of Item 7 of Form 8-K are included herein as exhibits 99.2, 99.3 and 99.4.
(b) Pro Forma Financial Information.
-------------------------------
The pro forma financial statements required by paragraphs (b)(2) and (a)(4)
of Item 7 of Form 8-K are included herein.
Unaudited pro forma combined balance sheet as of September 30, 2000
Unaudited pro forma combined statement of operations for the nine months
ended September 30, 2000 and twelve months ended December 31, 1999
Notes to unaudited pro forma combined financial statements
The following unaudited pro forma combined financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the combined financial position or results of operations for future periods or
the financial position or results of operations that actually would have been
realized had Interwoven, Ajuba and Metacode been a combined company during the
specified periods. The unaudited pro forma combined condensed financial
statements, including the related notes, are qualified in their entirety by
reference to, and should be read in conjunction with, the historical
consolidated financial statements and related notes thereto of Interwoven,
included in its Form 10-K and Form 10-Q, filed with the Securities and Exchange
Commission on March 30, 2000 and November 15, 2000, respectively, and Ajuba and
Metacode, included elsewhere in this Form 8-K/A.
The following unaudited pro forma combined financial statements give
effect to the merger between Interwoven, Ajuba and Metacode using the purchase
method of accounting. The pro forma combined financial statements are based on
the respective historical unaudited consolidated financial statements and
related notes of Interwoven, Ajuba and Metacode. The pro forma adjustments are
preliminary and based on management's estimates of the value of the tangible
and intangible assets acquired. In addition, management is continuing to
assess its integration plans, which may result in additional costs.
The pro forma combined balance sheet and statement of operations assume the
merger took place as of September 30, 2000 and January 1, 1999, respectively.
The pro forma financial statements combine Interwoven's unaudited consolidated
balance sheet as of September 30, 2000 with Ajuba's and Metacode's unaudited
balance sheet as of September 30, 2000 and Interwoven's audited statement of
operations for the twelve months ended December 31, 1999 and unaudited statement
of operations for the nine months ended September 30, 2000 with Ajuba's and
Metacode's audited statements of operations for the twelve months ended December
31, 1999 and unaudited statements of operations for the nine months ended
September 30, 2000.
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INTERWOVEN, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
September 30, 2000
(unaudited)
=========================================================================
Historical Pro forma
=========================================================================
Interwoven Ajuba Metacode Adjustments Combined
=========== ========= ========= ============== ========
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents.......................... $ 53,966 $ 1,620 $ 15 $ (6,166) (a) (d) $ 49,435
Short-term investments............................. 106,510 106,510
Accounts receivable, net .......................... 37,474 361 529 - 38,364
Prepaid expenses................................... 5,272 - 106 - 5,378
Other current assets............................... 1,763 75 - - 1,838
---------- ---------- --------- --------- ---------
Total current assets............................ 204,985 2,056 650 (6,166) 201,525
Investments........................................ 57,021 57,021
Property and equipment, net........................ 9,554 903 308 - 10,765
Intangible assets, net............................. 80,726 - - 183,916 (a) 264,642
Restricted cash.................................... 605 - - - 605
Other assets....................................... 689 199 - - 888
---------- ---------- --------- --------- ---------
Total Assets.................................... $ 353,580 $ 3,158 $ 958 $ 177,750 $ 535,446
========== ========== ========= ========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable................................... $ 2,828 $ 373 $ 473 $ - $ 3,674
Accrued liabilities................................ 25,629 518 1,046 3,706 (a) 30,899
Deferred revenue, current.......................... 26,828 374 321 - 27,523
Debt, current...................................... - 1,702 4,395 - 6,097
---------- ---------- --------- --------- ---------
Total current liabilities....................... 55,285 2,967 6,235 3,706 68,193
---------- ---------- --------- --------- ---------
Long term liabilities
Debt, long-term.................................... - 1,149 - - 1,149
Deferred revenue, long-term........................ - 258 258
---------- ---------- --------- --------- ---------
Total long term liabilities..................... - 1,149 258 - 1,407
---------- ---------- --------- --------- ---------
Mandatorily redeemable convertible preferred stock.. - - 12,857 (12,857) -
Stockholders' Equity:
Preferred stock..................................... - 10,346 - (10,346) -
Common Stock........................................ 24 499 27,445 (27,943) (a) 25
Additional paid-in capital.......................... 343,701 - - 191,350 (a) 535,051
Notes receivable from stockholders.................. (105) (329) (110) - (544)
Deferred stock-based compensation................... (7,208) - (12,881) (10,480) (a) (30,569)
Accumulated deficit................................. ( 38,117) (11,475) (32,846) 44,321 (a) (38,117)
---------- ---------- --------- --------- ---------
Total stockholders' equity...................... 298,295 (959) (18,392) 186,902 465,846
---------- ---------- --------- --------- ---------
Total Liabilities and Stockholders' Equity...... $ 353,580 $ 3,158 $ 958 $ 177,750 $ 535,446
========== ========== ========= ========= =========
</TABLE>
See notes to unaudited pro forma combined financial statements.
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INTERWOVEN. INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000
(unaudited)
-----------------------------------------------------------------
Historical Pro forma
----------------------------------- --------------------------
Interwoven Ajuba Metacode Adjustments Combined
----------- ------------ --------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Revenues:
License...................................................... $ 51,347 $ 612 $ 338 $ - $ 52,297
Services..................................................... 26,190 831 255 - 27,276
----------- ----------- --------- ------------ ---------
Total revenues............................................ 77,537 1,443 593 - 79,573
Cost of revenues:
License...................................................... 584 132 - - 716
Services..................................................... 24,172 769 415 - 25,356
----------- ----------- --------- ------------ ---------
Total cost of revenues.................................... 24,756 901 415 - 26,072
Gross profit.................................................. 52,781 542 178 - 53,501
Operating expenses:
Research and development..................................... 10,487 2,798 1,668 - 14,953
Sales and marketing.......................................... 45,130 1,881 1,109 - 48,120
General and administrative................................... 8,476 2,843 1,147 - 12,466
Amortization of deferred stock-based compensation............ 2,954 - 8,432 4,744 (b) 16,130
Amortization of acquired intangible assets................... 5,109 - - 43,769 (c) 48,878
Writeoff of in-process research & development................ 1,724 - - - 1,724
----------- ----------- --------- ------------ ---------
Total operating expenses.................................. 73,880 7,523 12,356 48,513 142,271
Loss from operations.......................................... (21,099) (6,980) (12,178) (48,513) (88,770)
Interest income and other income (expense), net............... 8,945 (213) (1,518) (266) (d) 6,948
----------- ----------- --------- ------------ ---------
Net loss...................................................... $ (12,154) $ (7,193) $(13,696) $ (48,779) $(81,822)
----------- ----------- --------- ------------ ---------
Basic and diluted net loss per share.......................... $ (0.13) $ (.88)
=========== =========
Shares used in computing basic and diluted net
loss per share............................................... 90,256 2,220 (e) 92,476
=========== ============ =========
</TABLE>
See notes to unaudited pro forma combined financial statements.
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INTERWOVEN, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Twelve Months Ended December 31, 1999
----------------------------------------------------------------------
Historical Pro forma
-------------------------------------- -----------------------------
Interwoven Ajuba Metacode Adjustments Combined
------------ ----------- ----------- ------------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
License............................................... $ 10,706 $ 915 $ 29 $ - $ 11,650
Services.............................................. 6,100 1,671 50 - 7,821
------------ ----------- ----------- ------------ ----------
Total revenues................................... 16,806 2,586 79 - 19,471
Cost of revenues:
License............................................... 181 693 - - 874
Services.............................................. 6,576 158 55 - 6,789
------------ ----------- ----------- ------------ ----------
Total cost of revenues........................... 6,757 851 55 - 7,663
Gross profit........................................... 10,049 1,735 24 - 11,808
Operating expenses:
Research and development.............................. 4,199 2,038 985 - 7,222
Sales and marketing................................... 15,582 2,377 559 - 18,518
General and administrative............................ 3,220 1,062 2,358 - 6,640
Amortization of deferred stock-based compensation..... 3,687 - 4,562 12,167 (b) 20,416
Amortization of acquired intangible assets............ 377 - - 53,495 (c) 53,872
Writeoff of in-process research & development......... - - - - -
------------ ----------- ----------- ------------ ----------
Total operating expenses......................... 27,065 5,477 8,464 65,662 106,668
Loss from operations................................... (17,016) (3,742) (8,440) (65,662) (94,860)
Interest income and other income (expense), net........ 1,361 89 (46) (354) (d) 1,050
------------ ----------- ----------- ------------ ----------
Net loss............................................... $ (15,655) $ (3,653) $ (8,486) $ (66,016) $ (93,810)
============ =========== =========== ============ ==========
Accretion of mandatorily redeemable convertible
preferred stock....................................... (13,227) (13,227)
------------ ----------
Net loss attributable to common stockholders........... $ (28,882) $ (107,037)
============ ==========
Basic and diluted net loss per share................... $ (0.24) $ (1.58)
------------ ----------
Shares used in computing basic and diluted net loss
per share............................................. 65,336 2,220 (e) 67,556
------------ ------------ ----------
</TABLE>
See notes to unaudited pro forma combined financial statements.
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INTERWOVEN, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
On October 31, 2000, Interwoven acquired all of the outstanding capital
stock of Ajuba Solutions, Inc. in exchange for approximately 180,000 shares of
Interwoven common stock. In addition, Interwoven issued options to purchase a
total of approximately 109,000 shares of Interwoven common stock in exchange for
all issued and outstanding Ajuba options and agreed to pay Interwoven common
stock upon the exercise of such assumed options. Interwoven also loaned
approximately $2.0 million to Ajuba in connection with the acquisition.
Under purchase accounting, the total purchase price was allocated to
Ajuba's assets and liabilities based on their relative fair values with any
excess purchase price being allocated to intangibles and goodwill. The fair
value of Ajuba's assets and liabilities were estimated by examining expected
future cash flows.
The amounts and components of the purchase price along with the allocation
of the purchase price to assets acquired were as follows (in thousands):
Net cash..................................................... $ 650
Common stock................................................. 21,061
Fair value of Ajuba stock options assumed.................... 2,094
Transaction costs............................................ 1,105
--------
Total purchase price....................................... $ 24,910
========
Book value of tangible assets of Ajuba ...................... $ 2,073
Assumed liabilities ......................................... (4,376)
Acquired workforce........................................... 1,480
Goodwill..................................................... 25,733
--------
Net assets acquired........................................ $ 24,910
========
On November 1, 2000, Interwoven acquired all of the outstanding capital
stock of Metacode Technologies, Inc. in exchange for approximately 930,000
shares of Interwoven common stock. In addition, Interwoven issued options to
purchase a total of 457,000 shares of Interwoven common stock in exchange for
all issued and outstanding Metacode options and agreed to pay Interwoven common
stock upon the exercise of such assumed options. Interwoven also loaned
approximately $9.0 million to Metacode in connection with the acquisition.
Under purchase accounting, the total purchase price was allocated to
Metacode's assets and liabilities based on their relative fair values with any
excess purchase price being allocated to intangibles and goodwill. The fair
value of intangibles and goodwill related to the acquisition were estimated by
examining replacement cost and present value of discounted cash flows.
The amounts and components of the purchase price along with the allocation
of the purchase price to assets acquired were as follows (in thousands):
Net cash........................................................ $ 5,250
Common stock.................................................... 114,049
Fair value of Metacode stock options assumed.................... 30,613
Transaction costs............................................... 2,601
--------
Total purchase price........................................ $152,513
========
Book value of net tangible assets of Metacode................... $ 5,206
Assumed liabilities............................................. (566)
Acquired workforce.............................................. 1,700
Completed Technology ........................................... 2,600
Writeoff of In-process Research and Development ................ 100
Goodwill........................................................ 143,473
--------
Net assets acquired............................................. $152,513
========
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INTERWOVEN, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
As the Company recorded approximately $175.0 million in intangible assets
related to the acquisitions, amortization charges of these intangibles is
expected to be $9.7 million in the fourth quarter of 2000 and $14.6 million in
the first quarter of 2001, respectively.
As the Company recorded a deferred compensation liability of $23.3
million related to the assumption of the acquired companies options and the
exchange of Interwoven shares for Ajuba shares, amortization expenses related
to these items is expected to be $3.0 million in the fourth quarter of 2000
and the first quarter of 2001, respectively.
The unaudited pro forma combined balance sheet and unaudited statements of
operations give effect to the merger as if it had occurred at the beginning of
the period presented.
All share and per share amounts have been adjusted to reflect the two for
one stock split effected December 29, 2000.
The following adjustments have been reflected in the unaudited pro forma
combined balance sheet and statements of operations:
(a) To record cash paid, common stock and options issued to common and
preferred stockholders of the acquired companies, and record applicable
purchase accounting entries.
(b) To reflect the year to date adjustment related to amortization of
deferred stock based compensation.
(c) Adjustment to record the amortization of goodwill and intangible
assets resulting from the allocation of the Ajuba and Metacode purchase price.
The pro forma adjustment assumes goodwill and other intangible assets will be
amortized on a straight-line basis over the following estimated lives:
Ajuba Metacode
------- ----------
Acquired workforce................................. 2 years 3 years
Completed Technology............................... n/a 4 years
Goodwill........................................... 3 years 4 years
(d) To eliminate interest income earned by Interwoven on cash paid at the
date of the merger assuming a 6% interest rate which approximates the Company's
actual weighted average rate of return during the periods presented.
(e) To reflect the shares issued as consideration for the merger based on
the calculated exchange price of $51.125 per share, and $52.34 per share for
the Ajuba and Metacode acquisitions, respectively.
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(c) Exhibits.
The following exhibits are filed with this current report on Form 8-K/A
Exhibit No. Exhibit Description
----------- -------------------
2.1* Agreement and Plan of Merger dated October 19, 2000 among
Interwoven, Inc., AJ Acquisition Corp. and Ajuba Solutions,
Inc.
2.2* Agreement and Plan of Merger dated October 20, 2000 among
Interwoven, Inc., Melon Acquisition Corporation and Metacode
Technologies, Inc.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of PriceWaterhouseCoopers LLP, Independent Accountants.
99.1* Press release dated October 20, 2000.
99.2 Financial statements of Scriptics Corporation for the twelve
months ended December 31, 1999
99.3 Unaudited financial statements of Ajuba Solutions, Inc. for the
nine months ended September 30, 2000
99.4 Financial statements of Metacode, Inc.
__________
*Previously filed
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SIGNATURE
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.
Dated: January 16, 2001
INTERWOVEN, INC.
By: /s/ David M. Allen
------------------------------
David M. Allen
Senior Vice President, Chief Financial
Officer and Secretary
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