<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 March 31, 1999
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-25107
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EARTHWEB INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 13-3899472
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
3 Park Avenue, New York, New York 10016
(Address of Principal Executive Offices, including Zip Code)
Registrant's Telephone Number, Including Area Code: (212) 725-6550
----------------
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 [_]
As of May 12, 1999, the registrant had outstanding 9,356,082 shares of
common stock, $.01 par value.
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<PAGE>
EARTHWEB INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:..........................................
Condensed Consolidated Balance Sheets as of March 31, 1999 and
December 31, 1998................................................... 2
Condensed Consolidated Statements of Operations for the three months
ended March 31, 1999 and 1998....................................... 3
Condensed Consolidated Statements of Cash Flows for the three months
ended March 31, 1999 and 1998....................................... 4
Notes to Condensed Consolidated Financial Statements................. 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 10
Item 2. Changes in Securities and Use of Proceeds...................... 10
Item 3. Defaults Upon Senior Securities................................ 10
Item 4. Submission of Matters to a Vote of Security Holders............ 10
Item 5. Other Information.............................................. 10
Item 6. Exhibits and Reports on Form 8-K............................... 10
Signatures............................................................. 12
</TABLE>
2
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
EARTHWEB INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
unaudited in thousands
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------- ------------
<S> <C> <C>
ASSETS:
Current assets:
Cash and cash equivalents............................. $ 15,789 $ 25,292
Restricted cash....................................... 287 287
Accounts receivable, net.............................. 2,814 1,144
Prepaid expenses and other current assets............. 414 542
-------- --------
Total current assets................................ 19,304 27,265
Fixed assets, net..................................... 2,977 2,069
Intangible assets, net................................ 48,012 1,069
Other assets.......................................... 119 74
-------- --------
Total assets........................................ $ 70,412 $ 30,477
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable...................................... $ 2,119 $ 1,805
Accrued expenses...................................... 6,161 1,520
Other current liabilities............................. 5,542 234
Short-term portion of notes payable................... 723 --
-------- --------
Total current liabilities........................... 14,545 3,559
-------- --------
Convertible note payable, net of discount............... 4,492 --
Other liabilities....................................... 1,822 66
-------- --------
Total liabilities................................... 20,859 3,625
-------- --------
Commitments and contingencies........................... -- --
Stockholders' equity
Common stock, par value $.01; 21,750,000 authorized,
8,580,407 and 7,903,761 issued and outstanding....... 86 79
Additional paid in capital............................ 74,068 44,582
Unearned compensation................................. (306) (326)
Treasury stock, at cost 4,713 shares.................. (200) (200)
Accumulated deficit................................... (24,095) (17,283)
-------- --------
Total stockholders' equity............................ 49,553 26,852
-------- --------
Total liabilities and stockholders equity............. $ 70,412 $ 30,477
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
EARTHWEB INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
unaudited, in thousands except per share data
<TABLE>
<CAPTION>
Quarter ended
March 31,
----------------
1999 1998
------- -------
<S> <C> <C>
Revenues..................................................... $ 3,732 $ 308
Cost of revenues............................................. 1,479 395
------- -------
Gross profit (loss).......................................... 2,253 (87)
------- -------
Operating expenses:
Product development........................................ 736 246
Sales and marketing........................................ 5,188 333
General and administrative................................. 1,597 605
Depreciation............................................... 247 163
Amortization............................................... 1,531 70
------- -------
Total operating expenses................................. 9,299 1,417
------- -------
Loss from operations......................................... (7,046) (1,504)
Interest and other income, net............................... 234 47
------- -------
Net loss..................................................... $(6,812) $(1,457)
======= =======
Basic and diluted net loss per share......................... $ (0.82) $ (0.50)
======= =======
Weighted average shares of common stock used in computing
basic and
diluted net loss per share.................................. 8,290 2,925
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
EARTHWEB INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
unaudited, in thousands
<TABLE>
<CAPTION>
Three Months
ended March 31
----------------
1999 1998
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(6,812) $(1,457)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation.............................................. 247 163
Amortization.............................................. 1,531 70
Provision for doubtful accounts........................... 63 4
Charge related to issuance of stock options............... 20 --
Changes in operating assets and liabilities:
Accounts receivable....................................... (316) (61)
Prepaid expenses and other current assets................. 263 5
Other assets.............................................. (23) 4
Accounts payable and accrued expenses..................... 1,253 (283)
Other current liabilities................................. 441 42
------- -------
Net cash used in operating activities:...................... (3,333) (1,513)
------- -------
Cash flows from investing activities:
Purchase of fixed assets.................................. (408) (70)
Payments for acquisitions................................. (5,907) (217)
Restricted cash........................................... -- 73
------- -------
Net cash used in investing activities....................... (6,315) (214)
------- -------
Cash flows from financing activities:
Proceeds from issuance of common stock, net............... 145 --
------- -------
Net cash provided by financing activities................... 145 --
------- -------
Net change in cash and cash equivalents for the period...... (9,503) (1,727)
Cash and cash equivalents, beginning of period.............. 25,292 4,775
------- -------
Cash and cash equivalents, end of period.................... $15,789 $ 3,048
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
EARTHWEB INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for annual financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included. The results for the interim periods presented
are not necessarily indicative of the results that may be expected for any
future period. The following information should be read in conjunction with the
financial statements and notes thereto included in EarthWeb's annual report for
the year ended December 31, 1998.
2. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the condensed consolidated
financial statements and accompanying notes. Actual results could differ from
these estimates.
3. Acquisitions
In February 1999, EarthWeb Inc. (EarthWeb or the Company) completed the
acquisition of D&L Online, Inc. (D&L Online) which operates dice.com, a leading
online job posting service for information technology professionals. The total
purchase price was approximately $35.0 million. The consideration paid by
EarthWeb to acquire D&L Online consisted of (a) $7.0 million in cash, $4.0
million of which was paid at closing, with the balance payable over the next
year in two installments, (b) 577,778 shares of EarthWeb common stock, valued
at $26.0 million, based upon the average stock price of approximately $45.00
from January 26, 1999 through February 9, 1999 and (c) additional future
"earnout" payments, based on the performance of the surviving entity in the
merger and related businesses, in the form of EarthWeb common stock and/or cash
with an aggregate value of up to $12.0 million, of which such amounts are
payable over a period of 3 years based on achievement of certain revenue
targets. Under the terms of the agreement and a related escrow agreement, an
aggregate of 57,778 shares of such EarthWeb common stock will be held in escrow
for 18 months for the purpose of indemnifying the Company against certain
liabilities of dice.com and its stockholders. The amount of consideration paid
by EarthWeb was funded through the issuance of EarthWeb common stock and from
the proceeds of EarthWeb's initial public offering. Under the terms of the
agreement, all outstanding options to purchase D&L Online common stock were
converted into non- qualified options to purchase an aggregate of 36,667 shares
of EarthWeb common stock. The fair value of the options of approximately
$733,000 was determined using the Black-Scholes options pricing model. The
following assumptions were used in the options pricing model: stock price of
$45.00, exercise price of $32.05, term of three years, risk free rate of
interest of 5%, 50% volatility and a dividend yield of 0%.
D&L Online was a customer of EarthWeb prior to the acquisition, and as a
result post acquisition, all revenues from sales to D&L Online have been
eliminated in consolidation. For the period from February 2, 1999 (the date of
the acquisition) to March 31, 1999, D&L Online's revenues and net loss included
in the company's consolidated results of operations for the quarter ended March
31, 1999 totaled $2.0 million and $1.3 million, respectively.
The following unaudited pro forma summary presents consolidated results of
operations for the Company as if the acquisition of D&L Online had been
consummated on January 1, 1998. The unaudited pro forma
6
<PAGE>
information does not necessarily reflect the results that would have been
achieved, nor is it necessarily indicative of future consolidated results of
the Company.
<TABLE>
<CAPTION>
Three months ended
-------------------
March 31, March 31,
1999 1998
--------- ---------
In thousands except
per share data
<S> <C> <C>
Revenues................................................ $ 4,669 $ 1,739
Net loss................................................ $(7,589) $(2,857)
Basic and diluted loss per share........................ $ (0.89) $ (0.82)
Weighted average of common stock outstanding............ 8,493 3,503
</TABLE>
Pro forma adjustments include: (i) amortization of goodwill and other
intangible assets over a weighted average of 4.5 years, (ii) tax effected
adjustment related to D&L Online's corporation distribution which was recorded
as compensation expense that will not be incurred in the future, and (iii)
adjustment of the weighted average shares of common stock outstanding used in
the calculation of earnings per share.
In February 1999, the Company acquired gocertify.com, which provides users
with information on technical certification programs. In March 1999, the
Company acquired substantially all the assets of The Perl Journal, a leading
technical publication for developers using the Perl programming language, and
the related Web site TPJ.com. The aggregate purchase price of both acquisitions
was $980,000, of which $750,000 is payable through March 2000 in the form of
common stock or cash. The consideration paid also consists of additional future
payments, based on performance, in the form of cash or common stock, with an
aggregate value of up to $500,000.
In March 1999, the Company acquired all the capital stock of MicroHouse for
approximately $9 million, subject to purchase price adjustments. In addition,
EarthWeb assumed $1.7 million in debt as part of the acquisition. The
consideration paid by EarthWeb to acquire all the capital stock of MicroHouse
consisted of (a) $1.6 million in cash, $1.0 million of which was paid at
closing, with $500,000 and $95,000 of the balance payable on July 19, 1999 and
April 1, 2000, respectively, (b) 50,856 shares of EarthWeb common stock
delivered at closing, valued at $2.2 million, based upon a stock price of
$43.14 of which 48,314 shares were delivered to the sellers and the balance
were delivered to Ascent Partners, Inc. as a fee in connection with the
acquisition and (c) promissory notes in an aggregate amount of $4,973,719
convertible into 126,475 shares of common stock on March 20, 2000
(collectively, the "Promissory Notes"). The beneficial conversion feature
related to the note payable of approximately $482,000 will be amortized over
the one year life of the note payable. Such purchase price was funded through
the issuance of EarthWeb common stock and the Promissory Notes, and from the
proceeds of EarthWeb's initial public offering.
Pro forma results of operations to reflect the acquisition of MicroHouse as
if it occurred on January 1, 1998 will be presented in the Company's Form 8-K/A
to be filed during May 1999.
These acquisitions have been accounted for using the purchase method of
accounting. The results of operations for each have been included with those of
the Company for periods subsequent to the date of each acquisition.
4. Subsequent Event
On May 7, 1999, the Company completed a secondary public offering of
1,300,000 shares of Common Stock at an offering price of $37.00 per share, of
which 750,000 shares were sold by the Company and 550,000 shares were sold by
selling stockholders. Net proceeds to the Company, net of issuance costs, were
approximately $24.8 million. The Company expects to use the net proceeds for
general corporate purposes, including expansion of sales and marketing
capabilities, possible strategic acquisitions or investments, international
expansions, technical upgrades of internal systems and working capital
requirements.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion of the financial condition and results of
operations of EarthWeb should be read in conjunction with the Management's
Discussion and Analysis of Financial Condition and Results of Operations and
the Consolidated Financial Statements and the Notes thereto included in the
Company's Annual Report for the year ended December 31, 1998, and the
supplemental consolidated financial statements and notes thereto contained in
the Company's current report on Form 8-K/A dated April 15, 1999, reflecting the
acquisition of D&L Online. This quarterly report on Form 10-Q contains forward-
looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward- looking statements involve risks and uncertainties and
actual results could differ materially from those discussed in the forward-
looking statements. All forward-looking statements and risk factors included in
this document are made as of the date hereof, based on information available to
EarthWeb as of the date thereof , and EarthWeb assumes no obligation to update
any forward-looking statement or risk factors.
EarthWeb completed four acquisitions in the first quarter ended March 31,
1999. In February 1999, EarthWeb completed the acquisition of D&L Online, which
owns dice.com, a leading online job posting service for IT professionals, for
approximately $35 million in shares of common stock and cash (of which
approximately $3 million is payable through February 2000) with additional
future "earnout" payments of up to $12 million to be paid upon the achievement
of specified revenue targets. Gocertify.com, which provides users with
information on technical certification programs, was also acquired in February
1999. In March 1999, EarthWeb acquired substantially all of the assets of The
Perl Journal, a leading technical publication for developers using the Perl
programming language, and the related Web site TPJ.com. The aggregate purchase
price for gocertify.com and The Perl Journal was $980,000, of which $750,000 is
payable through March 2000 in the form of common stock or cash, with additional
consideration to be paid based upon future performance. In March 1999, EarthWeb
acquired all of the capital stock of MicroHouse, for approximately $9 million
in shares of common stock, convertible notes and cash, subject to adjustment.
In addition, EarthWeb assumed $1.7 million of debt as part of the acquisition.
These acquisitions have been accounted for using the purchase method of
accounting, and accordingly, the purchase price of each have been allocated to
assets acquired and liabilities assumed based on their respective fair values.
Intangible assets resulting from these acquisitions will be amortized on a
straight-line basis over a period of three to five years.
Results of Operations
Revenues. Revenues for the three months ended March 31, 1999 increased
1,112% to $3.7 million from $308,000 for the three months ended March 31, 1998.
The increase in revenues was primarily due to an increase in advertising
revenues of $3.1 million. Growth in advertising revenues was attributable to
the acquisition of D&L Online and an increase in volume of advertising sold.
The net impact on advertising revenues from the acquisition of D&L Online was
an increase of approximately $1.9 million. Advertising revenues including paid
listings, banners and sponsorships represented 92% of revenues for the quarter
ended March 31, 1999. For the quarter ended March 31, 1999, no advertiser,
accounted for more than 10% of revenues. Two customers accounted for
approximately 33% of revenues for the quarter ended March 31, 1998. Barter
transactions accounted for approximately 13% and 23% of revenues for the
quarters ended March 31, 1999 and 1998, respectively. For both periods, barter
advertising revenues primarily related to the exchange of advertisements,
tradeshow booths, and other promotional activities with other companies.
Results for the quarter include the operating results of D&L Online, from
February 2, 1999, and the operating results of MicroHouse, from March 19, 1999,
which are the respective dates each company was acquired by EarthWeb. All
transactions were accounted for as purchases.
Cost of Revenues. EarthWeb's cost of revenues consists primarily of employee
salaries and related expenses (including payroll taxes and benefits),
consulting fees, freelance writing costs, Internet access and hosting fees,
computer systems related expenses and content licensing fees required to
support and deliver
8
<PAGE>
EarthWeb's online services. Cost of revenues for the three months ended March
31, 1999 increased 274% to $1.5 million from $395,000 for the three months
ended March 31, 1998. The increase in cost of revenues was primarily
attributable to increased employee salaries and related expenses, consulting
fees, and freelance writing costs due to the expansion of EarthWeb's online
service offerings.
Product Development Expenses. EarthWeb's product development expenses
consist primarily of employee salaries and related expenses (including payroll
taxes and benefits), consulting fees and computer systems related expenses
required to support the development of new service offerings. Product
development expenses for the three months ended March 31, 1999 increased 199%
to $736,000 from $246,000 for the three months ended March 31, 1998. The
increase in product development expenses was primarily attributable to the
expansion of EarthWeb's online service offerings.
Sales and Marketing Expenses. Sales and marketing expenses consist primarily
of advertising (including expenses recorded for barter transactions), employee
salaries, commissions and related expenses (including payroll taxes and
benefits) of EarthWeb's sales force and marketing personnel, promotional
materials and trade show exhibition expenses. Sales and marketing expenses for
the three months ended March 31, 1999 increased 1,458% to $5.2 million from
$333,000 for the three months ended March 31, 1998. The increase was primarily
attributable to an increase in advertising expenses of approximately $2.9
million of which $886,000 relates to expenses of D&L Online. Additionally,
salaries, commissions and related costs increased approximately $1.1 million
due to the expansion of sales force of which $250,000 relates to D&L Online.
Management expects sales and marketing expenses to increase due to the
continuing growth of its sales force and its planned increase in advertising
and promotional activities.
General and Administrative Expenses. General and administrative expenses
consist primarily of employee salaries and related expenses (including payroll
taxes and benefits) for executive, administrative, and accounting personnel,
facility costs, recruiting fees, insurance costs and professional fees. General
and administrative expenses for the three months ended March 31, 1999 increased
164% to $1.6 million from $605,000 for the three months ended March 31, 1998.
The increase in general and administrative expenses was primarily attributable
to increased employee salaries and related expenses (including payroll taxes &
benefits) and professional fees. Management expects general and administrative
expenses to increase in future periods due to the growth of EarthWeb's
business.
Depreciation and Amortization. Depreciation and amortization consists
primarily of depreciation of property and equipment and amortization of
intangible assets related to acquisitions. Depreciation and amortization for
the three months ended March 31, 1999 increased 663% to $1.8 million from
$233,000 for the three months ended March 31, 1998. The increase was primarily
a result of the amortization of intangible assets from the acquisition of D&L
Online of $1.3 million and additional depreciation on property and equipment.
Interest and Other Income, Net. Interest and other income, net consists
primarily of interest earned on cash and cash equivalents. Interest and other
income, net for the three months ended March 31, 1999 increased 397% to
$234,000 from $47,000 for the three months ended March 31, 1998. The increase
was primarily the result of higher average cash balances during 1999, primarily
from the proceeds of EarthWeb's initial public offering in November 1998.
Income Taxes. No provision for federal and state income taxes has been
recorded as EarthWeb has incurred net operating losses through March 31, 1999.
Given EarthWeb's limited operating history, losses incurred to date and the
difficulty in accurately forecasting EarthWeb's future results, management does
not believe that the realization of the related deferred income tax assets
meets the criteria required by generally accepted accounting principles and,
accordingly, a full valuation allowance has been recorded.
Liquidity and Capital Resources
EarthWeb historically has satisfied its cash requirements primarily through
offerings of common stock and convertible preferred stock and lease financing.
9
<PAGE>
Net cash used in operating activities was $ 3.3 million for the three months
ended March 31, 1999 and $1.5 million for the three months ended March 31,
1998. Cash used in operating activities for 1999 resulted primarily from a net
loss of $6.8 million offset by amortization and depreciation and increases in
accounts payable and accrued expenses. Cash used in operating activities in
1998 was primarily attributable to a net loss of $1.5 million.
Net cash used in investing activities for the three months ended March 31,
1999 of $ 6.3 million was primarily attributable to acquisitions of $ 5.9
million. Net cash used in investing activities of $214,000 for 1998 was
primarily attributable to cash used for acquisitions and the purchase of fixed
assets.
Net cash from financing activities was $ 145,000 for the three months ended
March 31, 1999. On May 7, 1999, the Company completed a secondary public
offering of 1,300,000 shares of Common Stock at an offering price of $37.00 per
share, of which 750,000 shares were sold by the Company and 550,000 shares were
sold by selling stockholders. Net proceeds to the Company, net of issuance
costs, were approximately $24.8 million. The Company expects to use the net
proceeds for general corporate purposes, including expansion of sales and
marketing capabilities, possible strategic acquisitions or investments,
international expansion, technical upgrades of internal systems and working
capital requirements.
EarthWeb will record a one-time operating expense of approximately $775,000
in the second quarter of 1999, in connection with the April 1999 grant of stock
options to MicroHouse employees and the May 1999 public offering, in which
EarthWeb has agreed to pay certain underwriting discounts incurred in
connection with the sale of shares by certain employee selling shareholders.
EarthWeb will continue to evaluate possible acquisitions of, or investments
in, business products and technologies that are complementary to those of
EarthWeb, which may require the use of cash. Management believes that existing
cash balances, will be sufficient to meet anticipated cash requirements for at
least the next twelve months; however, EarthWeb may sell additional equity or
debt securities or obtain credit facilities. The sale of additional securities
could result in dilution to EarthWeb's stockholders.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
10
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PART II--OTHER INFORMATION
Item 1. Legal Proceedings
EarthWeb is not a party to any material legal proceedings.
Item 2. Changes in Securities and Use of Proceeds
On May 7, 1999, the Securities and Exchange Commission declared effective
the Company's Registration Statement on Form S-1 (File No. 333-75771). Pursuant
to this Registration Statement. the Company completed a secondary public
offering of 1,300,000 shares of its Common Stock at a secondary public offering
price of $37.00 per share (the "Offering"). The Offering was managed by JP
Morgan & Co., Bear Stearns & Co. Inc., Volpe Brown Whelan & Company and Wit
Capital Corporation. Proceeds to the Company, net of offering costs, from the
offering totaled approximately $24.8 million. In connection with the sale of
shares by certain employee selling stockholders, EarthWeb agreed to pay
approximately $275,000 of underwriting discounts (and income taxes incurred in
connection with such reimbursements). The Company expects to use the net
proceeds for general corporate purposes, including expansion of sales and
marketing capabilities, possible strategic acquisitions or investments,
international expansions, technical upgrades of internal systems and working
capital requirements.
On February 2, 1999, EarthWeb completed the acquisition of D&L Online, for
aggregate consideration of $35 million including 577,778 shares of common stock
to the stockholders of D&L Online. Additional consideration for the acquisition
included future payments, based on the performance of D&L Online, in the form
of EarthWeb's common stock or cash, at EarthWeb's option, with an aggregate
value of up to $12 million. This transaction was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended, regarding
transactions by an issuer not involving a public offering.
On March 19, 1999, EarthWeb completed the acquisition of MicroHouse
International, for aggregate consideration including 50,856 shares of common
stock and a convertible promissory note in the original principal amount of
$4,973,719, which is convertible into 126,475 shares of common stock on March
20, 2000. This transaction was exempt from registration pursuant to Section
4(2) of the Securities Act of 1993, as amended, regarding transactions by an
issuer not involving a public offering.
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable.
11
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Item 6. Exhibits and Reports on Form 8-K
a) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
2.2 Securities Purchase Agreement among the Registrant, MicroHouse
International, Inc. and Steve Anderson, Doug Anderson, Robert
Anderson and Ascent Partners, incorporated by reference to Exhibit
2.1 of Registrant's Current Report on Form 8-K dated March 12,
1999.
4.5 Registration Rights Agreement dated as of March 19, 1999 between
Registrant, Steve Anderson, Doug Anderson, Robert Anderson and
Ascent Partners, Incorporated by reference to Exhibit 4.1 to the
Registrant's Current Report on Form 8-K dated March 12, 1999.
4.6 Zero Coupon Convertible Promissory Note dated as of March 19,
1999, of Registrant in favor of Steve Anderson, incorporated by
reference to Exhibit 4.2 to the Registrant's Current Report on
Form 8-K dated March 12, 1999.
4.7 Zero Coupon Convertible Promissory Note dated as of March 19,
1999, of Registrant in favor of Doug Anderson, incorporated by
reference to Exhibit 4.3 to the Registrant's Current Report on
Form 8-K dated March 12, 1999.
4.8 Zero Coupon Convertible Promissory Note dated as of March 19,
1999, of Registrant in favor of Robert Anderson, incorporated by
reference to Exhibit 4.4 to the Registrant's Current Report on
Form 8-K dated March 12, 1999.
27 Financial Data Schedule.
</TABLE>
b) Reports on Form 8-K.
A report on Form 8-K was filed on February 16, 1999, disclosing the purchase
by EarthWeb of D&L Online, and March 26, 1999, disclosing the purchase by
EarthWeb of MicroHouse, International.
12
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SIGNATURES
Pursuant to the requirements of section 13 or 15(d) 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, in the city of New
York, state of New York, on May 14, 1999.
EARTHWEB INC.
By: /s/ Jack D. Hidary
___________________________________
Jack D. Hidary
President and Chief Executive
Officer
By: /s/ Irene Math
___________________________________
Irene Math
Senior Vice President,
Finance (Principal Financial
and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities on May 14, 1999.
13
