<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-29495
---------
WORLD COMMERCE ONLINE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 52-2205697
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NUMBER)
9677 TRADEPORT DRIVE
ORLANDO, FLORIDA 32827
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
(407) 240-8999
(REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ]
NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON STOCK, PAR VALUE $.01 PER
SHARE, AS OF NOVEMBER 10, 2000: 16,283,646
THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS 19 PAGES, OF WHICH THIS IS PAGE 1.
1
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WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
INDEX
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS, AS OF SEPTEMBER 30,
2000 (UNAUDITED) AND DECEMBER 31, 1999 PAGE 3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999, AND FOR THE
PERIOD MARCH 30, 1994 (DATE OF INCEPTION) THROUGH
SEPTEMBER 30, 2000 (UNAUDITED) PAGE 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 AND FOR THE PERIOD
MARCH 30, 1994 (DATE OF INCEPTION) THROUGH SEPTEMBER 30,
2000 (UNAUDITED) PAGE 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 2000 AND 1999, AND FOR THE PERIOD
MARCH 30, 1994 (DATE OF INCEPTION) THROUGH SEPTEMBER 30,
2000 (UNAUDITED) PAGE 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) PAGE 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS PAGE 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK PAGE 16
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS PAGE 17
NONE
ITEM 2. CHANGES IN SECURITIES PAGE 17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES PAGE 17
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS PAGE 17
NONE
ITEM 5. OTHER INFORMATION PAGE 17
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K PAGE 18
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 2000 1999
------------ ------------
Current assets: (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 466,663 $ 10,553,021
Prepaid expenses and other current assets 764,096 232,754
Receivable from investors -- 3,785,000
------------ ------------
Total current assets 1,230,759 14,570,775
Property and equipment, net 19,635,709 6,477,743
Intangible assets, net 13,055,267 1,596,260
Other assets 44,666 24,238
------------ ------------
Total assets $ 33,966,401 $ 22,669,016
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities $ 6,419,618 $ 1,855,185
Accrued compensation and benefits 374,463 372,075
Capital lease obligation, current 323,242 71,611
Notes payable 6,000,120 --
------------ ------------
Total current liabilities 13,117,443 2,298,871
Long-term liabilities:
Capital lease obligation 413,909 91,927
Redeemable convertible preferred stock:
Preferred stock Series A, $0.001 par value; authorized 4,250,000 shares,
issued and outstanding 4,250,000 and 4,000,000 shares at September 30,
2000 and December 31, 1999, respectively, stated at liquidation value, net
of related costs 8,478,211 7,978,211
Preferred stock Series B, $0.001, par value; authorized 5,110,000 shares,
issued and outstanding 5,000,000 shares at September 30, 2000 and
December 31, 1999, stated at liquidation value, net of related costs 19,620,772 19,620,772
Preferred stock Series C, $0.001, par value; authorized 91,802 shares, issued and
outstanding 91,802 shares at September 30, 2000, net of stock subscription
receivable, liquidation value of $5,912,049 6,968,389 --
------------ ------------
Total redeemable convertible preferred stock 35,067,372 27,598,983
Stockholders' deficit:
Common stock, $0.001 par value; authorized 90,000,000 shares, issued and
outstanding 16,279,146 and 15,435,357 shares at September 30, 2000 and
December 31, 1999, respectively 16,279 15,435
Additional paid-in capital 62,422,534 43,175,872
Deferred stock-based compensation (3,618,239) (4,863,980)
Accumulated deficit (73,262,574) (45,602,372)
Stock subscription receivable (7,097) --
Treasury stock (9,563) --
Accumulated comprehensive loss (173,663) (45,720)
------------ ------------
Total stockholders' deficit (14,632,323) (7,320,765)
------------ ------------
Total liabilities and stockholders' deficit $ 33,966,401 $ 22,669,016
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE> 4
WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended
September 30,
------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Revenues:
Subscription revenue $ 7,795 $ 1,888
Transaction revenue 23,188 1,853
Advertising revenue 11,479 11,895
Implementation revenue 5,612 --
------------ ------------
Total revenues 48,074 15,636
------------ ------------
Costs and operating expenses:
Product and technology development 2,476,634 1,559,819
Sales and marketing 3,819,093 1,127,640
General and administrative 1,517,949 992,038
Depreciation and amortization 2,297,654 118,363
------------ ------------
Total costs and operating expenses 10,111,330 3,797,860
------------ ------------
Loss from operations (10,063,256) (3,782,224)
Net interest expense (355,767) (13,941)
Other non-operating expense (4,130) --
------------ ------------
Net loss $(10,423,153) $ (3,796,165)
============ ============
Basic and diluted net loss per common share (0.65) (0.25)
============ ============
Weighted average number of shares used in computing basic
and diluted net loss per common share 15,963,911 15,328,400
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE> 5
WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
For the Period
March 30, 1994
(Date of
Nine Months Inception)
Ended through
September 30, September 30,
------------------------------ ---------------
2000 1999 2000
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Subscription revenue $ 23,222 $ 1,888 $ 31,131
Transaction revenue 97,052 1,853 118,128
Advertising revenue 20,067 11,895 34,212
Implementation revenue 5,612 -- 45,885
Floral product revenue -- -- 350,130
Service revenues from related parties -- -- 342,396
------------ ------------ ------------
Total revenues 145,953 15,636 921,882
------------ ------------ ------------
Costs and operating expenses:
Cost of floral product -- -- 308,749
Product and technology development 7,374,816 2,222,894 10,797,300
Sales and marketing 11,092,675 1,819,232 17,140,801
General and administrative 4,540,132 2,007,748 12,473,089
Depreciation and amortization 4,124,479 150,908 4,556,764
------------ ------------ ------------
Total costs and operating expenses 27,132,102 6,200,782 45,276,703
------------ ------------ ------------
Loss from operations (26,986,149) (6,185,146) (44,354,821)
Net interest expense (159,603) (59,360) (336,716)
Other non-operating expense (14,448) -- (71,035)
------------ ------------ ------------
Net loss $(27,160,200) $ (6,244,506) $(44,762,572)
Deemed dividend on redeemable convertible
preferred stock (500,000) (8,000,000)
------------ ------------
Net loss available to common stockholders $(27,660,200) $(14,244,506)
============ ============
Basic and diluted net loss per common share (1.77) (0.94)
============ ============
Weighted average number of shares used in
computing basic and diluted net loss per
common share 15,619,908 15,217,903
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE> 6
WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For the Period
March 30, 1994
(Date of
Inception)
Nine Months through
Ended September 30, September 30,
------------------------------ ---------------
2000 1999 2000
------------ ------------ ---------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(27,160,200) $ (6,244,506) $(44,762,572)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 4,124,479 150,908 4,556,764
Provision for doubtful accounts -- -- 40,322
Stock-based compensation 1,774,532 -- 3,874,958
Loss on retirement of property & equipment 17,553 -- 47,662
Loss on foreign currency translation -- -- 30,071
Professional fees paid through the issuance
of common stock and warrants 5,608,169 109,341 9,880,077
Interest paid through the issuance of warrants 293,498 -- 445,298
Change in operating assets & liabilities:
Prepaid expenses & other current assets (564,202) (1,808,209) (837,278)
Other assets (10,056) -- (34,294)
Accounts payable and accrued liabilities 3,144,479 5,159,199 4,908,253
Accrued compensation and benefits (185,123) (25,026) 186,952
------------ ------------ ------------
Net cash used in operating activities (12,956,871) (2,658,293) (21,663,787)
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale of property and equipment 520,075 -- 520,075
Purchase of property and equipment and software
development (7,513,122) (4,235,797) (13,261,836)
------------ ------------ ------------
Net cash used in investing activities (6,993,047) (4,235,797) (12,741,761)
------------ ------------ ------------
Cash flows from financing activities:
Issuance of common stock -- 195,000 1,127,500
Proceeds from exercise of stock options 84,997 -- 84,997
Issuance of redeemable convertible 4,285,000 7,498,211 25,732,983
preferred stock, net of related expenses
Purchase of treasury stock -- -- (20,000)
Proceeds from stockholder loans -- -- 132,693
Proceeds from notes payable 6,000,000 -- 6,000,000
Proceeds from other debt -- -- 2,445,545
Payments on stockholder loans (198,000) -- (267,293)
Payments on capital leases (289,073) (50,734) (344,850)
------------ ------------ ------------
Net cash provided by financing activities 9,882,924 7,642,477 34,891,575
------------ ------------ ------------
Effect of exchange rate on cash (19,364) 14,316 (19,364)
Net change in cash (10,086,358) 762,703 466,663
Cash and cash equivalents, beginning of period 10,553,021 42,335 --
------------ ------------ ------------
Cash and cash equivalents, end of period $ 466,663 $ 805,038 $ 466,663
============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE> 7
WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
For the Period
March 30,
1994 (Date
of Inception)
Nine Months through
Ended September 30, September 30,
------------------------------ ---------------
2000 1999 2000
---------- ----------- ----------
<S> <C> <C> <C>
Supplemental disclosure of cash flow information:
Net liabilities assumed in acquisition transactions $1,629,654 $ 189,000 $1,818,654
========== ========== ==========
Non-cash investing and financing:
Equipment acquired through capital leases $ 520,075 $ -- $1,037,743
========== ========== ==========
Software acquired through the issuance of a warrant $8,019,824 $ -- $8,019,824
========== ========== ==========
Issuance of common stock in connection with
acquisition transactions $3,995,567 $1,126,250 $5,121,817
========== ========== ==========
Issuance of Series C preferred stock in connection
with acquisition transaction, net of stock
subscription receivable $6,968,389 $ -- $6,968,389
========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
7
<PAGE> 8
WORLD COMMERCE ONLINE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL:
World Commerce Online, Inc. and its consolidated subsidiaries (the
"Company") is a provider of complete e-commerce business solutions
providing technology products and services to the global perishable
products industries. The Company provides its customers with access to
the Company's secure Internet-based trading systems and to
industry-specific Internet communities supplying comprehensive industry
data and information resources as well as communication tools.
The Company is in the development stage. Planned principal operations
have commenced but have not produced significant revenue. The Company
plans to generate revenues from its e-commerce business from these
primary sources: subscription fees, integration fees, advertising
revenue and transaction fees.
The Company has experienced operating losses since its inception.
Additional operating losses are anticipated for the foreseeable future
as the Company builds its revenue base while expanding its operations,
sales and marketing activities and product technology development.
At September 30, 2000, the condensed consolidated financial statements
of the Company include the accounts of the Company and its consolidated
subsidiaries. The condensed consolidated financial statements of the
Company as of and for the three months and nine months ended September
30, 2000 have not been audited. In the opinion of management, the
unaudited condensed consolidated financial statements include all
adjustments and accruals (consisting of normal recurring adjustments)
necessary to present fairly the Company's consolidated financial
position at September 30, 2000 and the consolidated results of its
operations for the three months and nine months ended September 30,
2000 and 1999 and cash flows for the nine months ended September 30,
2000 and 1999. Results of interim periods are not necessarily
indicative of the results to be expected during the remainder of the
current year or for any future period. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
omitted or condensed. All significant intercompany accounts and
transactions have been eliminated in consolidation. The accounting
policies used in preparing these condensed consolidated financial
statements are the same as those described in the Company's
registration statement on Form 10, as amended, filed on June 8, 2000.
2. RECENT ACCOUNTING PRONOUNCEMENTS:
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, or SAB 101. This summarizes certain areas
of the Staff's views in applying generally accepted accounting
principles to revenue recognition in financial statements. The Company
believes that its current revenue recognition principles comply with
SAB 101.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments and hedging activities.
It requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. The Company, to date, has not engaged in
derivative and hedging activities, and accordingly does not believe
that the adoption of SFAS No. 133 will have a material impact on the
financial reporting and related disclosures of the Company. The Company
will adopt SFAS No. 133 as required by SFAS No. 137, "Deferral of the
Effective Date of the FASB Statement No. 133," in fiscal year 2001.
8
<PAGE> 9
3. NET LOSS PER SHARE:
Basic net loss per share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding during the period. Dilutive net loss per share is computed
using the weighted average number of common shares outstanding during
the period, plus the dilutive effect of common stock equivalents.
Common stock equivalent shares consist of convertible preferred stock,
stock options and warrants. For the three months and nine months ended
September 30, 2000, options to purchase approximately 3,400,000 shares
of common stock, preferred stock convertible into approximately
10,200,000 shares of common stock, warrants to purchase approximately
3,700,000 shares of common stock, and a warrant to purchase 110,000
shares of preferred stock convertible into 110,000 shares of common
stock were excluded from the calculation of earnings per share since
their inclusion would be antidilutive.
4. COMPREHENSIVE INCOME:
The Company has adopted Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income." Total comprehensive loss for
the three months and nine months ended September 30, 2000, includes net
loss of $10,423,153 and $27,160,200, respectively and other
comprehensive loss of $56,778 and $127,943, respectively. Total
comprehensive loss for the three months and nine months ended September
30, 1999, includes net loss of $3,796,165 and $6,244,506, respectively
and other comprehensive loss of $806. The Company's only item of other
comprehensive income is foreign currency translation adjustment that
has been reported separately within stockholders' deficit on the
condensed consolidated balance sheets.
5. ACQUISITION TRANSACTION:
On August 4, 2000, the Company acquired ProduceOnline.com, Inc.
("POL"). The Company acquired the entire equity interest in the
business for consideration that included 423,952 shares of common
stock, 91,802 shares of Series C redeemable convertible preferred
stock, convertible into 918,021 shares of Company common stock, and
approximately $2,000,000 in assumed liabilities and transaction costs.
In addition, the Company issued 372,995 shares of common stock to the
founding stockholders of POL that are subject to a repurchase option in
the event that stockholders terminate employment within 27 months
following the acquisition. The transaction has been accounted for as a
purchase and the estimated excess of the purchase price over the fair
value of the net assets acquired of approximately $12,500,000 has been
recorded as goodwill and is being amortized on a straight-line basis
over 36 months. The shares subject to the repurchase option are
accounted for as contingent consideration and are recorded as
additional cost of the acquisition at the fair value of the underlying
stock on the date the repurchase option expires. As of September 30,
2000, approximately $135,000 has been recorded as additional cost of
the acquisition related to the expiration of the repurchase option.
Operations of POL from August 1, 2000 though September 30, 2000 are
included in the accompanying condensed consolidated statements of
income.
The following unaudited pro forma financial information presents the
combined results of operations of the Company and POL, as if the
acquisition had occurred at January 1, 1999, after giving effect to
certain adjustments, including amortization of goodwill. The unaudited
pro forma amounts do not necessarily reflect the results of operations
as they would have been if the businesses had constituted a single
entity during the period and is not necessarily indicative of results
that may be obtained in the future.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue $ 48,074 $ 15,636 $ 149,306 $ 15,636
Net loss available to common
stockholders $(11,742,649) $ (5,006,910) $(36,237,301) $(17,555,229)
Basic and diluted net loss
per common share $ (0.70) $ (0.31) $ (2.21) $ (1.15)
</TABLE>
9
<PAGE> 10
6. STOCK OPTION PLAN:
The World Commerce Online, Inc. 1999 Stock Option Plan (the "Plan") was
adopted by the Company's stockholders in October 1999. In September
2000, the Company's Board of Directors approved an amendment to the
Plan to increase the number of shares of common stock available for
grant to 4 million from 3 million. This amendment is subject to
stockholder approval at the next stockholder meeting. As amended, the
Plan permits the Company to grant to employees, directors, officers,
and consultants of the Company and its subsidiaries: (i) incentive
stock options ("ISOs") and (ii) nonqualified stock options ("NSOs").
The Plan is administered by the Compensation Committee of the Board of
Directors, which also selects the individuals who receive grants under
the plan. As of September 30, 2000, the grants that had been made under
the Plan were NSOs and ISOs.
For the three months and nine months ended September 30, 2000, the
Company recognized approximately $550,000 and $1,540,000, respectively,
of stock-based compensation expense related to options and expects to
recognize approximately $3,600,000 over the remaining vesting period of
the options.
7. REDEEMABLE CONVERTIBLE PREFERRED STOCK:
In connection with the acquisition of POL, the Company issued 91,802
shares of Series C convertible preferred stock ("Series C"). The fair
value at the date of issuance was approximately $7,000,000, net of a
stock subscription receivable in the amount of approximately $400,000.
The holders of Series C are entitled, except in the election of
directors, to participate in the voting on all matters that are decided
by a shareholder vote. The holders of Series C are not as a matter of
right entitled to be paid or receive dividends or distributions. Series
C is convertible into common stock at any time at the holder's option,
at the then applicable conversion rate (1 share of Series C for 10
shares of common stock at the date of issuance) adjusted for certain
events including the issuance of common stock for consideration of less
than $4.00 per share. Series C is redeemable for cash at the holder's
option beginning June 30, 2003. Upon liquidation, holders of Series C
preferred stock are entitled to receive, out of funds then generally
available, $64.40 per share, plus any declared and unpaid dividends,
thereon. In addition to and after payment in full of all other amounts
payable to the holders of Series C, the holders of Series C will be
entitled to share in remaining available funds on an as if converted
basis with the holders of common stock.
8. NOTES PAYABLE:
In August and October 2000, the Company entered into two secured loan
agreements with Interprise Technology Partners, L.P., a stockholder of
the Company, in the amounts of $5,000,000 and $1,000,000, respectively.
The loans mature on February 14, 2001 and February 12, 2001,
respectively, and bear interest at a rate of 10% per annum. The loans
are secured by a pledge of all Company assets. In connection with these
notes payable, the Company issued two warrants representing the right
to purchase 1,406 and 370 shares, respectively, of Series D convertible
preferred stock or 112,500 and 29,630 shares, respectively, of common
stock. The fair value of the warrants based on a Black Scholes option
pricing model are approximately $235,000 and $59,000 respectively, and
have been recorded as interest expense during the three months and nine
months ended September 30, 2000.
<PAGE> 11
9. COMMITMENTS AND CONTINGENCIES:
As part of a software license agreement ("Agreement") with i2
Technologies, Inc. ("i2"), the Company agreed to pay i2 a royalty fee
equal to 5% of gross revenues with minimum royalty payments of
$500,000, $750,000 and $1,000,000, respectively, in each of the three
successive years after the launch date of the software which was
completed in September 2000. In addition, the Company has entered into
a three-year joint marketing agreement that requires the development of
a joint marketing plan between the companies to facilitate the
Company's "go to market" strategy. As payment for their marketing
efforts, i2 will receive a finder's fee for customer leads it provides
to the Company. The finder's fee is equal to 50% of the fees received
from a customer for use of the Company's solutions, less specific
deductions as outlined in the Agreement.
In December 1999, the Company entered into an agreement with
eCredit.com to integrate their Internet-based financial services
product into Floraplex(TM) for the Americas market segment for the
grower to wholesaler transactions providing Internet-based sourcing of
financial payment and credit services. The three-year agreement is
contingent upon the identification and selection of financial partners
acceptable to the Company to facilitate the payment system. As of
September 30, 2000, eCredit.com had not identified and selected a
financial partner that was accepted by the Company. Upon selection of
financial partners acceptable to the Company and satisfaction of the
implementation requirements, the Company is committed to specified
transaction levels in each of the three years beginning with fiscal
year 2000 at agreed-upon pricing levels. The minimum commitment
relative to fees per payment transactions processed in an annual period
is approximately $150,000 in 2000, $240,000 in 2001, and $650,000 in
2002.
The Company is, from time to time, party to certain litigation that
relates to matters arising in the ordinary course of business.
Management believes that such litigation is not expected to have a
material impact on the financial position or results of operations of
the Company.
10. BUSINESS SEGMENT INFORMATION:
As of and for the periods presented, the Company has primarily operated
in one business segment, providing electronic commerce business
solutions to the perishable products industries. During the three
months and nine months ended September 30, 2000, the Company derived
approximately $18,000 and $47,000, respectively, in revenues in the
United States and approximately $30,000 and $99,000, respectively, in
revenues in Holland. For the three months and nine months ended
September 30, 2000, the Company had one customer that exceeded 10%
of total revenues. During the three months and nine months ended
September 30, 1999, the Company derived approximately $14,000 in
revenues in the United States and approximately $2,000 in revenues in
Holland. For the three months and nine months ended September 30, 1999,
the Company had no customers that exceeded 10% of total revenues.
11. SUBSEQUENT EVENT:
In October 2000, the Company entered into two secured loan agreements
with two investors in the amounts of $1,000,000 and $500,000,
respectively. The loans mature on February 12, 2001, and bear interest
at a rate of 10% per annum. In connection with these loans the Company
issued warrants representing the right to purchase 370 and 185 shares,
respectively, of Series D redeemable convertible preferred stock or
29,630 and 14,815 shares, respectively of common stock.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The following discussion and analysis should be read in conjunction
with the condensed consolidated financial statements and the notes to those
statements that appear elsewhere in this Form 10-Q. The following discussion and
analysis contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ from those discussed in the
forward-looking statements. Factors that could cause or contribute to any
differences include, but are not limited to, the risks described in the
Company's registration statement on Form 10, as amended, filed on June 8, 2000,
with the Securities and Exchange Commission.
OVERVIEW
We provide e-commerce business solutions for the global perishable
products industries including trading systems and supply chain management
software applications, industry-specific information resources and
Internet-based communication capabilities (collectively our "FreshPlex
Technologies(TM)"). Our technology products and services are offered as Private
Trading Communities, ("PTC") Branded Trading Communities ("BTC" ) and Global
Trading Communities ("GTC") (collectively, our "Trading Communities"). Our PTC's
and BTC's incorporate levels of customization and provide our customers with the
opportunity to utilize our business solutions to address their e-commerce and
business strategies, expand into new markets, optimize their brand and sustain
or advance their value to existing and prospective customers. Our Trading
Communities, including our GTC's Floraplex(TM), for the global floriculture
industry, and FreshPlex(TM), for the global produce industry, which we market to
supply chain participants and other affiliated businesses with an Internet
focus, deliver our customers' web-enabled procurement tools, including trading
systems and supply chain management software applications, and an
industry-specific Internet portal.
The revenue model for our PTC and BTC product offerings under a minimum
three year contractual commitment by the customer, include a down payment and
monthly fees for access to our FreshPlex Technologies (our "FreshPlex
Technologies fees") and monthly fees pursuant to a service level agreement
pertaining to maintenance and customer support (the "SLA fees"). In addition, we
offer our PTC customers integration and customization services quoted on a time
and materials basis to connect the customer's business systems to our FreshPlex
Technologies product suite. In August 2000 we executed our first PTC contract.
The three-year contract included our FreshPlex Technologies and SLA fees as well
as integration and customization work.
We are a development stage enterprise as defined in Statement of
Financial Accounting Standards ("SFAS") No. 7. Planned principal operations have
commenced but have not produced significant revenue to date.
RECENT DEVELOPMENTS
On October 2, 2000, we executed an agreement with Interprise Technology
Partners, L.P., ("ITP") a stockholder of the Company, to lead a private equity
offering of $20 million to $30 million in Series D redeemable convertible
preferred stock (the "Series D Offering"). The Series D Offering represents
50,000 to 75,000 shares of preferred stock convertible into 4.0 million to 6.0
million shares of common stock, respectively.
In October 2000 we executed seven BTC contracts. The three-year
contracts include our FreshPlex Technologies and SLA fees. We expect to begin to
recognize revenue on these contracts in the fourth quarter of 2000.
In October 2000 we entered into two secured loan agreements with
Vizcaya Investments, Inc. and Drax Holdings, LP in the amounts of $1 million and
$0.5 million, respectively. These loans mature on February 12, 2001, and bear
interest at a rate of 10% per annum. In connection with these loans, we issued
warrants representing the right to purchase 370 and 185 shares, respectively of
Series D redeemable convertible preferred stock or 29,630 and 14,815 shares,
respectively of common stock.
RESULTS OF OPERATIONS
The following is derived from our condensed consolidated financial
statements as of and for the three months ended September 30, 2000 and 1999.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2000 TO THREE MONTHS ENDED
SEPTEMBER 30, 1999
REVENUES. Revenue for the three months ended September 30, 2000 was
approximately $48,000 compared to $16,000 for the three months ended September
30, 1999, an increase of $32,000 or 200%. The increase resulted primarily from
increases in both subscription and transaction fee revenue of approximately
$6,000 and $21,000, respectively. For the three months ended September 30, 2000,
revenue was generated primarily from three sources: approximately $23,000, or
48% of total revenue, in transaction fees, approximately $11,000, or 23% of
total revenue, in advertising fees, and approximately $8,000, or 17% of total
revenue, in subscription fees. In addition, we recognized approximately $6,000,
or 12% of total revenue, in implementation fee revenue.
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PRODUCT AND TECHNOLOGY DEVELOPMENT. Product and technology development
expenses consist primarily of salaries and related personnel costs for our
internal development team including stock-based compensation costs, costs
related to the design, development, testing, deployment and enhancement of our
technology and our Web-server infrastructure including costs for third party
consultants and costs for customer support, hardware, maintenance, and training.
Product and technology development expenses for the three months ended September
30, 2000 were $2.5 million compared to $1.6 million for the three months ended
September 30, 1999, an increase of approximately $0.9 million. The primary
reason for this increase was an increase in employee headcount from an average
of 12 as of September 30, 1999 to an average of 44 as of September 30, 2000
which resulted in an increase of approximately $0.7 million, of which
approximately $0.04 million related to a non-cash charge for stock based
compensation. In addition, there was an increase in third party consulting
expense related to the development of FreshPlex(TM) of approximately $1.5
million of which approximately $0.6 million related to a non-cash charge for
amortization of warrants. This increase was offset by a $1.3 million decrease in
consulting expenses related to the development of Floraplex(TM), which was
substantially complete by December 31, 1999.
SALES AND MARKETING. Sales and marketing expenses consist primarily of
salaries and related personnel costs including stock-based compensation for our
sales and marketing organization and marketing costs for activities including
advertisements and trade shows. Sales and marketing expenses for the three
months ended September 30, 2000 were $3.8 million compared to $1.1 million for
the three months ended September 30, 1999, an increase of approximately $2.7
million. The primary reasons for this increase were a non-cash charge of
approximately $1.0 million related to the amortization of warrants issued to
third party consultants and a customer, and an increase in our global sales
force and marketing efforts of approximately $0.4 million. Additionally, our
sales and marketing department increased from an average of 37 employees as of
September 30, 1999 to an average of 53 employees as of September 30, 2000 which
resulted in an increase of approximately $1.3 million in salaries and wages
which includes a non-cash charge of approximately $0.4 million for stock based
compensation.
GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of salaries and related costs of operations and finance personnel
including stock-based compensation as well as costs for our operating
facilities, recruiting expenses, professional fees and telecommunication costs.
General and administrative expenses for the three months ended September 30,
2000 were $1.5 million compared to $1.0 million for the three months ended
September 30, 1999, an increase of approximately $0.5 million. The primary
reasons for this increase were the hiring of personnel in all support
departments and the increase in professional services costs. Our headcount
increased from 16 as of September 30, 1999 to 25 as of September 30, 2000. This
resulted in an increase of approximately $0.2 million in salaries and wages
which includes a non-cash charge of approximately $0.1 million in stock-based
compensation. Management consulting fees increased approximately $0.2 million
and professional costs increased approximately $0.1 million for increased legal
and accounting fees associated with our public reporting requirements.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses
consist primarily of depreciation of property and equipment and amortization of
goodwill relating to acquisitions. Depreciation and amortization expenses for
the three months ended September 30, 2000 were $2.3 million compared to $0.1
million for the three months ended September 30, 1999, an increase of
approximately $2.2 million due to the amortization of goodwill recognized in
connection with our acquisitions of Fresh Products Network B.V. ("FPN") in
August 1999 and ProduceOnline.com, Inc. ("POL") in August 2000 of approximately
$0.7 million and depreciation for additions in property and equipment and
capitalized software development costs of approximately $1.5 million.
STOCK-BASED COMPENSATION. Stock-based compensation expenses consist of
the amortization of deferred stock compensation resulting from the grant of
stock options at exercise prices deemed to be less than the fair value of the
common stock on the grant date. At September 30, 2000, deferred stock
compensation, which is a component of stockholders' equity, was $3.6 million.
This amount is being amortized ratably over the vesting periods of the
applicable stock options, typically four years. We have recognized approximately
$0.5 million in stock-based compensation related to options for the three months
ended September 30, 2000. We expect to incur stock-based compensation expense of
at least $0.5 million for the remainder of 2000, $1.5 million in 2001, $1.4
million in 2002 and $0.2 million in 2003.
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COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2000 TO NINE MONTHS ENDED
SEPTEMBER 30, 1999
REVENUES. Revenue for the nine months ended September 30, 2000 was
approximately $146,000 compared to $16,000 for the nine months ended September
30, 1999, an increase of $130,000 or 813%. For the nine months ended September
30, 2000, revenue was generated primarily from three sources: approximately
$97,000, or 66% of total revenue, in transaction fees, approximately $20,000, or
14% of total revenue, in advertising fees, and approximately $23,000, or 16% of
total revenue, in subscription fees. In addition, we recognized approximately
$6,000, or 4% of total revenue, in implementation fee revenue.
PRODUCT AND TECHNOLOGY DEVELOPMENT. Product and technology development
expenses consist primarily of salaries and related personnel costs for our
internal development team including stock-based compensation costs, costs
related to the design, development, testing, deployment and enhancement of our
technology and our Web-server infrastructure including costs for third party
consultants and costs for customer support, hardware, maintenance, and training.
Product and technology development expenses for the nine months ended September
30, 2000 were $7.4 million compared to $2.2 million for the nine months ended
September 30, 1999, an increase of approximately $5.2 million. The primary
reasons for this increase were an increase in third party consulting expense of
approximately $3.2 million of which approximately $2.8 million related to a
non-cash charge for the issuance of warrants and an increase in employee
headcount from an average of 9 as of September 30, 1999 to an average of 37 as
of September 30, 2000 which resulted in an increase of approximately $1.5
million in salaries and employee recruiting expenses which includes a non-cash
charge of approximately $0.2 million related to stock based compensation. The
increase in head count also resulted in an increase of approximately $0.2
million in travel related expenses. In addition, there was an increase in
expenses of approximately $0.3 million related to the hosting of our
hardware/software infrastructure.
SALES AND MARKETING. Sales and marketing expenses consist primarily of
salaries and related personnel costs including stock-based compensation for our
sales and marketing organization and marketing costs for activities including
advertisements and trade shows. Sales and marketing expenses for the nine months
ended September 30, 2000 were $11.1 million compared to $1.8 million for the
nine months ended September 30, 1999, an increase of approximately $9.3 million.
The primary reasons for this increase were a non-cash charge of approximately
$2.9 million related to the amortization of warrants issued to third party
consultants and a customer, an increase in our global marketing efforts of
approximately $1.9 million and an increase of approximately $0.4 million related
to our participation in and travel to trade shows worldwide. Additionally, our
sales and marketing department increased from an average of 19 employees as of
September 30, 1999 to an average of 46 employees as of September 30, 2000 which
resulted in an increase of approximately $4.1 million which includes a non-cash
charge of approximately $1.4 million for stock based compensation and
approximately $0.2 million in related personnel costs and other operating costs.
GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of salaries and related costs of operations and finance personnel
including stock-based compensation as well as costs for our operating
facilities, recruiting expenses, professional fees and telecommunication costs.
General and administrative expenses for the nine months ended September 30, 2000
were $4.5 million compared to $2.0 million for the nine months ended September
30, 1999, an increase of approximately $2.5 million. The primary reasons for
this increase were the hiring of personnel in all support departments and the
increase in professional costs. Our headcount increased from an average of 8 as
of September 30, 1999 to an average of 23 as of September 30, 2000. This
resulted in an increase of approximately $1.0 million in salaries and wages,
which includes a non-cash charge of approximately $0.2 million in stock-based
compensation, and $0.6 million in related personnel costs and other operating
costs as mentioned above. Management consulting fees increased approximately
$0.3 million and professional costs increased approximately $0.2 million for
personnel recruitment fees and approximately $0.4 million for legal and
accounting costs associated with filing our registration statement on Form 10,
as amended, filed on June 8, 2000.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses
consist primarily of depreciation of property and equipment and amortization of
goodwill relating to acquisitions. Depreciation and amortization expenses for
the nine months ended September 30, 2000 were $4.1 million compared to $0.2
million for the nine months ended September 30, 1999, an increase of
approximately $3.9 million due to the amortization of goodwill recognized in
connection with our acquisitions of FPN in August 1999 and POL in August 2000 of
approximately $0.8 million and depreciation for additions in property and
equipment and capitalized software development costs of approximately $3.1
million. Also included is the acceleration of depreciation of
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approximately $0.6 million related to internally developed logistics software
that was replaced by licensed supply chain management software.
STOCK-BASED COMPENSATION. Stock-based compensation expenses consist of
the amortization of deferred stock compensation resulting from the grant of
stock options at exercise prices deemed to be less than the fair value of the
common stock on the grant date. We have recognized approximately $1.5 million in
stock-based compensation related to options during the nine months ended
September 30, 2000. We expect to incur stock-based compensation expense of at
least $0.5 million for the remainder of 2000, $1.5 million in 2001, $1.4 million
in 2002 and $0.2 million in 2003.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, or SAB 101. This summarizes certain areas of the
Staff's views in applying generally accepted accounting principles to revenue
recognition in financial statements. The Company believes that its current
revenue recognition principles comply with SAB 101.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments and hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value. We
have not, to date, engaged in derivative and hedging activities, and accordingly
do not believe that the adoption of SFAS No. 133 will have a material impact on
our financial reporting and related disclosures of the Company. We will adopt
SFAS No. 133 as required by SFAS No. 137, "Deferral of the Effective Date of the
FASB Statement No. 133," in fiscal year 2001.
LIQUIDITY AND CAPITAL RESOURCES
From inception, we have financed our operations through private sales
of our common stock and redeemable convertible preferred stock and short-term
notes payable.
Net cash used in operating activities was approximately $13.0 million
for the nine months ended September 30, 2000 and $2.7 million for the nine
months ended September 30, 1999. This use of cash was primarily due to our net
losses in each of those periods. For the nine months ended September 30, 2000,
the net loss was offset by an increase in accounts payable and accrued
liabilities, a non-cash stock-based compensation charge of $1.8 million, a
non-cash charge of $5.9 million for the issuance and amortization of warrants
related to professional services and interest expense, and an increase in
depreciation and amortization expense of $4.0 million.
Net cash used in investing activities was approximately $7.0 million
for the nine months ended September 30, 2000 and $4.2 million for the nine
months ended September 30, 1999. The increase for the nine months ended
September 30, 2000, was primarily due to the acquisition of technology
equipment and the capitalization of software development costs.
Net cash provided by financing activities was approximately $9.9
million for the nine months ended September 30, 2000 and $7.6 million for the
nine months ended September 30, 1999. The increase for the nine months ended
September 30, 2000, was due to the receipt of proceeds of $6.0 million from
notes payable incurred in the three months ended September 30, 2000. This amount
was offset by a decrease in 2000, relative to 1999 in the amounts received from
investors related to the sale of redeemable convertible preferred stock.
On August 14, 2000, we entered into a secured loan agreement with ITP
in the amount of $5 million. The loan matures on February 14, 2001, and bears
interest at a rate of 10% per annum. In addition, we issued a warrant
representing the right to purchase 1,406 shares of Series D redeemable
convertible preferred stock or 112,500 shares of common stock. Also, on
September 29, 2000, we received funding on an additional $1,000,000 secured loan
from ITP. The loan matures on February 12, 2001 and bears interest at a rate of
10% per annum. In connection
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with this loan, we issued a warrant representing the right to purchase 370
shares of Series D redeemable convertible preferred stock or 29,630 shares of
common stock.
We expect to continue to incur losses and to utilize cash in our
operations for the foreseeable future. We believe that our current cash and cash
equivalents and expected cash from operations and additional borrowings should
be sufficient to meet our anticipated requirements for our operations until
additional funds can be raised. In addition to the Series D Offering we may need
to raise additional funds in 2001, including through equity offerings, in order
to fully implement our strategy.
If cash generated from operations is insufficient to satisfy our
liquidity requirements, we may seek to sell additional equity or debt securities
in 2001. If additional funds are raised in 2001 through the issuance of debt
securities, these securities could have rights, preferences and privileges
senior to those accruing to holders of our common stock, and the terms of this
debt could impose restrictions on our operations. The sale of the Series D
Offering will and any future additional equity or debt securities could result
in additional dilution to our stockholders. We cannot be certain that additional
financing will be available in amounts or on terms acceptable to us, if at all.
If we are unable to obtain additional financing, we may be required to reduce
the scope of our planned technology or product development and sales and
marketing efforts, which could adversely impact our business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
To date, our results of operations have not been impacted materially by
inflation in the United States, Holland or in the countries that comprise Latin
America. Approximately 63% and 68%, respectively, of our revenues generated in
the three and nine months ended September 30, 2000, were denominated in Dutch
guilders. We estimate that a 10% change in the Dutch guilder as compared to the
U.S. dollar would have changed the reported loss by approximately $0.2 million
and $0.3 million, respectively, for the three months and nine months ended
September 30, 2000. This quantitative measure has inherent limitations because
it does not take into account the changes in customer purchasing patterns or any
adjustment to our financing or operating strategies in response to such a change
in rates.
It is likely that a significant percentage of our revenues will
continue to be denominated in foreign currencies, specifically the Dutch guilder
or the Euro. As a result, our revenues may be impacted by fluctuations in these
currencies and the value of these currencies relative to the U.S. dollar. In
addition, a portion of our monetary assets and liabilities and our accounts
payable and operating expenses are denominated in foreign currencies. Therefore,
we are exposed to foreign currency exchange risks. We have not tried to reduce
our exposure to exchange rate fluctuations by using hedging transactions.
However, we may choose to do so in the future. We may not be able to do this
successfully. Accordingly, we may experience economic loss and a negative impact
on earnings and equity as a result of foreign currency exchange rate
fluctuations.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Not applicable.
(b) Not applicable.
(c) On July 3, 2000, we sold 2,000 shares of common stock, at a purchase
price of $2 per share, pursuant to the exercise of an option to
purchase such shares by John R. Daniel.
On July 23, 2000, we sold 500 shares of common stock, at a purchase
price of $2 per share, 1250 shares of common stock, at a purchase price
of $5.38 per share, and 500 shares of common stock, at a purchase price
of $8 per share, pursuant to the exercises of options to purchase such
shares by Joshua Hilt.
On August 4, 2000, we issued 796,947 shares of common stock and 91,802
shares of Series C preferred stock, at a fair value of $8.05 per
share, in connection with our acquisition of ProduceOnline.com, Inc.
The issuance of these securities was deemed exempt from registration
under the Securities Act in reliance upon Section 4(2) thereof as a
transaction by an issuer not involving any public offering.
On August 14, 2000, in connection with a loan payable, we granted to
Interprise Technology Partners LP warrants representing the right to
purchase 1,406 shares of Series D convertible preferred stock or
112,500 shares of common stock. The warrant had a fair market value
(based on the closing price on the day before the date of grant of our
common stock on the OTC Bulletin) on the date of grant of $787,500.
The issuance of these securities was deemed exempt from registration
under the Securities Act in reliance upon Section 4(2) thereof as a
transaction by an issuer not involving any public offering.
On September 13, 2000, we sold 5,000 shares of common stock, at a
purchase price of $2 per share, pursuant to the exercise of an option
to purchase such shares by Michael Wilk.
On September 21, 2000, we sold 2,000 shares of common stock, at a
purchase price of $2 per share, pursuant to the exercise of an option
to purchase such shares by John R. Daniel.
On September 22, 2000, we sold 2,000 shares of common stock, at a
purchase price of $2 per share, pursuant to the exercise of an option
to purchase such shares by John R. Daniel.
On September 27, 2000, we sold 4,000 shares of common stock, at a
purchase price of $2 per share, pursuant to the exercise of an option
to purchase such shares by Michael Davis.
In our opinion, the sale or issuance of the above securities was
deemed to be exempt from registration under the Securities Act in
reliance upon Rule 701 of the Securities Act, except as otherwise
noted for securities issued in reliance upon Section 4(2), as
transactions by an issuer not involving any public offering. The
recipients of securities in each such transaction represented their
intentions to acquire the securities for investment only and not with
a view to or for sale in connection with any distribution thereof, and
appropriate legends were fixed to the share certificates issued in
such transactions. All recipients had an opportunity to ask questions
about us and had adequate access to information about us. No sales of
securities involved the use of an underwriter and no commissions were
paid in connection with the sale or issuance of any securities.
(d) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit
Number Description of Exhibit
------- ----------------------
4.1 Warrant in favor of Interprise Technology Partners LP,
dated August 14, 2000 (filed as an exhibit to our
Form 8-K filed on August 22, 2000).
10.1 Loan and Pledge Agreement by and among World Commerce
Online, Inc. and Interprise Technology Partners LP,
dated August 14, 2000 (filed as an exhibit to our
Form 8-K filed on August 22, 2000).
10.2 Senior Secured Promissory Note in favor of Interprise
Technology Partners LP, dated August 14, 2000 (filed as
an exhibit to our Form 8-K filed on August 22, 2000).
27.1 Financial Data Schedule
(b) REPORTS ON FORM 8-K
On August 22, 2000, the Company filed a report on Form 8-K, pursuant to
Items 2 and 7 of such Form, regarding its acquisition of
ProduceOnline.com, Inc. and Item 5 of such Form, regarding its loan
agreement and warrant agreement with Interprise Technology Partners LP.
On October 20, 2000, the Company filed an amended report on Form 8-K/A,
pursuant to Item 7, paragraph (a)(4), of such Form, to provide the
financial information required by this item for the acquisition of
ProduceOnline.com, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORLD COMMERCE ONLINE, INC.
(Registrant)
Date: November 14, 2000 /s/ Michael W. Poole
-------------------------------------
Michael W. Poole
Chief Executive Officer and
Vice Chairman of the Board of Directors
/s/ Mark E. Patten
-------------------------------------
Mark E. Patten
Chief Financial Officer and
Executive Vice President
(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------- ----------------------
4.1 Warrant in favor of Interprise Technology Partners LP,
dated August 14, 2000 (filed as an exhibit to our
Form 8-K filed on August 22, 2000).
10.1 Loan and Pledge Agreement by and among World Commerce
Online, Inc. and Interprise Technology Partners LP,
dated August 14, 2000 (filed as an exhibit to our
Form 8-K filed on August 22, 2000).
10.2 Senior Secured Promissory Note in favor of Interprise
Technology Partners LP, dated August 14, 2000 (filed
as an exhibit to our Form 8-K filed on August 22,
2000).
27.1 Financial Data Schedule
