<PAGE>
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 25, 2000 (November 24, 1999)
COMMERCE ONE, INC.
---------------
(Exact name of the Registrant as specified in its charter)
Delaware 333-76987 680322810
- -------------------------------------------------------------------------------
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
1600 Riviera Avenue, Suite 200
Walnut Creek, California 94596
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (925) 941-6022
Not Applicable
---------------------------------------------------------------
(Former name or former address, if changed since last report)
- -------------------------------------------------------------------------------
<PAGE>
The undersigned Registrant hereby amends the following item of its Current
Report on Form 8-K filed November 24, 1999 for the event of November 12, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following financial statements and exhibits are filed as part of
this report.
(a) FINANCIAL STATEMENTS OF COMMERCEBID.COM, INC.:
Included herein as Exhibit 99.1 to this Current Report on
Form 8-K/A is the balance sheet of CommerceBid.com, Inc. ("CommerceBid") as
of October 31, 1999, and the related statements of operations, shareholders'
equity, and cash flows for the period March 1, 1999 (inception) through
October 31, 1999.
(b) PRO FORMA FINANCIAL INFORMATION
(i) The following documents appear as Exhibit
99.2 to this Current Report on Form 8-K/A
and are incorporated herein by reference:
1) Unaudited Pro Forma Condensed
Combining Balance Sheet as of
September 30, 1999;
2) Unaudited Pro Form Condensed
Combining Statement of Operations
for the Nine Months Ended September
30, 1999; and
3) Notes to the Unaudited Pro Forma
Condensed Combining Financial
Information.
(c) EXHIBITS
2.1 Agreement and Plan of Merger and
Reorganization, dated as of November 4,
1999, by and among Commerce One, Inc., Eddie
Acquisition Corporation, CommerceBid.com,
Inc., and other related parties.(1)
27.1 Financial Data Schedules.
99.1 Audited Financial Statements of
CommerceBid.com, Inc.
99.2 Unaudited Pro Forma Condensed Combining
Financial Information.
- ------------------------------------
(1) Incorporated by reference to Exhibit 2 to
the Registrant's Form 8-K filed November 24,
1999.
-2-
<PAGE>
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.
COMMERCE ONE, INC.
Date: January 25, 2000 By: /s/ Robert M. Tarkoff
--------------------------------------
Robert M. Tarkoff
Vice President, General Counsel
and Secretary
-3-
<PAGE>
COMMERCE ONE, INC.
CURRENT REPORT ON FORM 8-K/A
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27.1 Financial Data Schedules
99.1 Audited Financial Statements of CommerceBid.com, Inc.
99.2 Unaudited Pro Forma Condensed Combining Financial Information.
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
FINANCIAL STATEMENTS OF COMMERCEBID.COM, INC. AND UNAUDITED PRO FORMA CONDENSED
COMBINING FINANCIAL INFORMATION OF COMMERCE ONE, INC.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> OTHER 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-START> MAR-01-1999 JAN-01-1999
<PERIOD-END> OCT-31-1999 SEP-30-1999
<CASH> 1,241 112,902
<SECURITIES> 0 0
<RECEIVABLES> 0 12,777
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 1,252 128,369
<PP&E> 214 5,898
<DEPRECIATION> (7) 0
<TOTAL-ASSETS> 1,547 369,585
<CURRENT-LIABILITIES> 184 31,574
<BONDS> 0 0
0 0
1,990 0
<COMMON> 915 419,801
<OTHER-SE> (637) (82,253)
<TOTAL-LIABILITY-AND-EQUITY> 1,547 369,585
<SALES> 0 0
<TOTAL-REVENUES> 0 16,669
<CGS> 0 0
<TOTAL-COSTS> 0 9,532
<OTHER-EXPENSES> 925 86,379
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 (1,826)
<INCOME-PRETAX> 0 (77,416)
<INCOME-TAX> 0 586
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (905) (78,002)
<EPS-BASIC> 0 (4.08)
<EPS-DILUTED> 0 (4.08)
</TABLE>
<PAGE>
Index to Financial Statements
of CommerceBid.com, Inc.
<TABLE>
<S> <C>
Report of Ernst & Young LLP, Independent Auditors.........................1
Financial Statements
Balance Sheet.............................................................2
Statement of Operations...................................................3
Statement of Shareholders' Equity ........................................4
Statement of Cash Flows...................................................5
Notes to Audited Financial Statements.....................................6
</TABLE>
<PAGE>
Report of Ernst and Young LLP, Independent Auditors
The Board of Directors
CommerceBid.com, Inc.
We have audited the accompanying balance sheet of CommerceBid.com, Inc. (a
development stage company) as of October 31, 1999, and the related statements of
operations, shareholders' equity, and cash flows for the period from March 1,
1999 (inception) through October 31, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CommerceBid.com, Inc. at
October 31, 1999, and the results of its operations and its cash flows for the
period from March 1, 1999 (inception) through October 31, 1999, in conformity
with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Walnut Creek, California
December 30, 1999
<PAGE>
CommerceBid.com, Inc.
(a development stage company)
Balance Sheet
October 31, 1999
<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,240,633
Other current assets 11,500
-----------
Total current assets 1,252,133
Property and equipment, net 207,162
Other assets 87,252
-----------
Total assets $ 1,546,547
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 184,250
-----------
Total current liabilities 184,250
Shareholders' equity:
Preferred stock, 20,000,000 shares authorized, issuable in series:
Series A convertible preferred stock, $0.0001 par value; 1,680,331 shares 1,989,593
designated; 1,639,379 shares issued and outstanding
(liquidation preference of $2,000,042)
Common stock, $0.001 par value; 80,000,000 shares authorized; 10,000,000 shares issued and 914,724
outstanding
Deferred stock compensation (636,863)
Deficit accumulated during the development stage (905,157)
-----------
Total shareholders' equity 1,362,297
-----------
Total liabilities and shareholders' equity $ 1,546,547
===========
</TABLE>
See accompanying notes.
2
<PAGE>
CommerceBid.com, Inc.
(a development stage company)
Statement of Operations
Period from March 1, 1999 (inception) through October 31, 1999
<TABLE>
<S> <C>
Revenues $ -
Cost and expenses:
Research and development 456,228
Sales and marketing 205,341
General and administrative 235,716
Amortization of deferred stock compensation 27,861
---------------------
Total cost and expenses 925,146
---------------------
Loss from operations (925,146)
---------------------
Interest income 19,989
---------------------
Net loss $ (905,157)
=====================
</TABLE>
See accompanying notes.
3
<PAGE>
CommerceBid.com, Inc.
(a development stage company)
Statement of Shareholders' Equity
Period from March 1, 1999 (inception) through October 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
PREFERRED STOCK COMMON STOCK DEFERRED DURING THE
--------------------------------------------- STOCK DEVELOPMENT
SHARES AMOUNT SHARES AMOUNT COMPENSATION STAGE TOTAL
---------- ---------- ---------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common
stock to founders - $ - 10,000,000 $ 250,000 $ - - $ 250,000
Issuance of Series A
convertible preferred
stock, net of issuance
costs of $10,449 1,639,379 1,989,593 - - - - 1,989,593
Deferred stock compensation - - - 664,724 (664,724) - -
Amortization of deferred
stock compensation - - - - 27,861 - 27,861
Net loss and comprehensive
loss - - - - - (905,157) (905,157)
---------- ---------- ---------- ---------- ---------- ---------- -----------
Balances at
October 31, 1999 1,639,379 $1,989,593 10,000,000 $ 914,724 $(636,863) $(905,157) $1,362,297
========== ========== ========== ========== ========== ========== ===========
</TABLE>
See accompanying notes.
4
<PAGE>
CommerceBid.com, Inc.
(a development stage company)
Statement of Cash Flows
Period from March 1, 1999 (inception) through October 31, 1999
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net loss $ (905,157)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 7,196
Amortization of deferred stock compensation 27,861
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities 184,250
Other (98,752)
-------------------
Net cash used in operating activities (784,602)
INVESTING ACTIVITIES
Purchase of property and equipment (214,358)
-------------------
Net cash used in investing activities (214,358)
FINANCING ACTIVITIES
Proceeds from issuance of common stock 250,000
Proceeds from issuance of preferred stock, net 1,989,593
-------------------
Net cash provided by financing activities 2,239,593
Increase in cash and cash equivalents 1,240,633
Cash and cash equivalents at beginning of period -
-------------------
Cash and cash equivalents at end of period $ 1,240,633
===================
</TABLE>
See accompanying notes.
5
<PAGE>
CommerceBid.com, Inc.
(a development stage company)
Notes to Financial Statements
October 31, 1999
1. DESCRIPTION OF THE BUSINESS
CommerceBid.com, Inc. (the "Company") was incorporated in Delaware in March of
1999. The Company develops intranet, extranet and Internet-based e-commerce
solutions for exchanges. ChannelBid-TM-, the Company's first offering, is an
enterprise level Web-based software solution designed to provide corporations
with the tools needed to conduct dynamic exchanges, including both forward and
reverse auctions.
The Company is a development stage company, which has devoted substantially all
of its efforts to recruiting personnel to conduct research and product
development and sales and marketing and has not yet generated revenues from sale
of its products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 financial statements and accompanying notes.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original maturity of
three months or less to be cash and cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment consists of furniture, fixtures, computer and
telecommunication equipment, and leasehold improvements which are stated at
cost, less accumulated depreciation and amortization. Depreciation is provided
using the straight-line method over the estimated useful lives of the respective
assets, generally three to five years. Amortization of leasehold improvements is
determined using a straight-line method over the life of the lease.
6
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SOFTWARE DEVELOPMENT COSTS
The Company accounts for software development costs in accordance with Financial
Accounting Standards Board ("FASB") Statement No. 86, "Accounting for the Costs
of Computer Software to be Sold, Leased, or Otherwise Marketed" ("FASB 86"),
under which certain software development costs incurred subsequent to the
establishment of technological feasibility are capitalized and amortized over
the estimated lives of the related products. Technological feasibility is
established upon completion of a working model. As of October 31, 1999, costs
incurred subsequent to the establishment of technological feasibility have not
been significant and all software development costs have been charged to
research and development expense in the accompanying statement of operations.
STOCK-BASED COMPENSATION
The Company grants stock options for a fixed number of shares to employees with
an exercise price equal to the fair value of the shares at the date of grant.
The Company accounts for stock option grants under the intrinsic value method in
accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees." The effect of applying the fair value method to
the Company's stock options under Financial Accounting Standards Board Statement
No. 123 ("FAS 123"), "Accounting for Stock-Based Compensation," would result in
a pro forma net loss that is not materially different from the historical amount
reported.
3. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at October 31, 1999:
<TABLE>
<S> <C>
Computer equipment $ 141,460
Telecommunication equipment 34,722
Office furniture 34,793
Leasehold improvements 3,383
-------------------
214,358
Less accumulated depreciation and amortization (7,196)
-------------------
$ 207,162
===================
</TABLE>
7
<PAGE>
4. OPERATING LEASES COMMITMENTS
The Company leases certain property under non-cancelable operating lease
agreements. Future minimum payment commitments under operating lease agreements
are as follows:
<TABLE>
<CAPTION>
Year ending October 31:
<S> <C>
2000 $ 307,159
2001 318,753
2002 325,943
2003 337,980
2004 319,925
-------------------
$ 1,609,760
===================
</TABLE>
5. INCOME TAXES
There has been no provision for U.S. federal, U.S. state, or foreign income
taxes for any period as the Company has incurred operating losses in all periods
and for all jurisdictions.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The only component of the
Company's deferred tax asset at October 31, 1999 relates to net operating losses
of $350,919. Realization of deferred tax assets is dependent upon future
earnings, if any, the timing and amount of which are uncertain. Accordingly, the
net deferred tax assets have been fully offset by a valuation allowance.
The valuation allowance increased by $350,919 during the period from March 1,
1999 (inception) through October 31, 1999. As of October 31, 1999, the
Company had net operating loss carryforwards for federal income tax purposes
of approximately $877,000 which expire in 2019. The Company also had net
operating loss carryforwards for state income tax purposes of approximately
$877,000 expiring in 2007.
Utilization of the Company's net operating losses may be subject to substantial
annual limitation due to the ownership change limitations provided by the
Internal Revenue Code and similar state provisions. Such an annual limitation
could result in the expiration of the net operating loss before utilization.
8
<PAGE>
6. SHAREHOLDERS' EQUITY
PREFERRED STOCK
Under the Company's Articles of Incorporation, preferred stock is issuable in
series and the Board of Directors is authorized to determine the rights,
preferences, and terms of each series.
Dividends
The holders of Series A convertible preferred stock are entitled to receive
noncumulative annual dividends per share at the rate of $0.07 per annum when,
and if, declared by the Board of Directors. These dividends are in preference to
any declaration or payment of any dividends on common stock of the Company. No
dividend will be declared or paid or other distribution made with respect to any
series of preferred stock unless the Company pays a proportionate amount of the
dividend preference amount of each series of preferred stock then outstanding.
Conversion
Each share of Series A convertible preferred stock, at the option of the holder,
is convertible into the number of fully-paid and nonassessable shares of common
stock at the conversion rate. The initial conversion rate per share of the
Series A convertible preferred stock is 1 to 1. The conversion rates are subject
to antidilution adjustment. Each share of Series A convertible preferred stock
will automatically be converted into shares of common stock, based on the
then-effective conversion price, immediately upon the earlier of (i) the closing
of a firmly underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, for a total offering of
not less than $15,000,000, prior to the deduction of underwriting commissions
and expenses, or (ii) the date specified by written consent or agreement of the
holders of a majority of the then outstanding shares of Series A convertible
preferred stock.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of Series A convertible preferred
stock are entitled to receive, prior and in preference to any distribution of
any of the assets of the Company to the holders of common stock, by reason of
their ownership, an amount equal to the sum of $1.22 for each share of Series A
convertible preferred stock plus any declared but unpaid dividends with respect
to such shares. After payment of the full liquidation preference of the
preferred stockholders, any remaining assets of the Company legally available
are to be distributed ratably to the holders of common stock and preferred stock
on an as-if-converted-to-common-stock basis.
9
<PAGE>
6. SHAREHOLDERS' EQUITY (CONTINUED)
In the event of a sale of sixty-six and two-thirds percent or more of the
Company's outstanding common stock to any person or entity other than holder of
Series A preferred stock, where the consideration received in exchange for such
shares is in aggregate less than $75,000,000, the holders of the
Series A preferred stock are entitled to receive from the proceeds, prior and in
preference to any distribution of the proceeds to the holders of the common
stock by reason of their ownership thereof, an amount per share of Series A
preferred stock equal to $1.22. After the distribution of the preference set
forth above has been made, the holders of Series A preferred stock are entitled
to participate in the distribution of the remaining proceeds on an as-if
converted and pro-rata basis with the holders of the common stock based on their
percentage ownership.
Voting
The holders of Series A convertible preferred stock are entitled to the number
of votes equal to the number of shares of common stock into which each share of
Series A convertible preferred stock could be converted, and having voting
rights and powers equal to the voting right and power of the common stock.
STOCK OPTIONS
Under the Company's Stock Incentive Plan, adopted by the Company in May 1999,
1,500,000 shares of common stock have been reserved for the issuance of stock
purchase options to employees, officers, directors, consultants and entities.
The incentive stock options (ISOs) may be granted at a price per share not less
than the fair market value on the date of the grant. In the case of options
which do not constitute ISOs, the price per share should not be less than
eighty-five percent of the fair value of the stock at the time the option is
granted. The plan will be terminated and no further common stock may be granted
after 10 years from the date that the plan was adopted. Options granted under
the plan are exercisable over a maximum term of ten years from the date of grant
and generally vest over a period of three years.
10
<PAGE>
6. SHAREHOLDERS' EQUITY (CONTINUED)
A summary of the Company's stock option activity is set forth below:
<TABLE>
<CAPTION>
WEIGHTED-AVERAGE
NUMBER OF SHARES EXERCISE PRICE
PER SHARE
------------------- -----------------
<S> <C> <C>
Granted 150,000 $0.12
Exercised - -
Canceled - -
-------------------
Outstanding at October 31, 1999 150,000 $0.12
===================
Exercisable and vested at October 31, 1999 5,000 $0.12
===================
Available for grant under the Plan at October 31, 1999 1,350,000
===================
</TABLE>
At October 31, 1999, the weighted-average remaining contractual life of stock
options outstanding is 3.25 years and the range of exercise prices is $0.10 to
$0.12 per share.
The Company recorded deferred stock compensation of approximately $664,724
for the period from March 1, 1999 (inception) through October 31, 1999
representing the difference between the exercise price and the deemed fair
value of the Company's common stock on the grant date for certain of the
Company's stock options grated to employees. These amounts are being
amortized by charges to operations over the vesting periods of the individual
stock options using a graded vesting method. Such amortization amounted to
approximately $27,861 for the period from March 1, 1999 (inception) through
October 31, 1999.
PRO FORMA DISCLOSURES OF THE EFFECT OF STOCK-BASED COMPENSATION
Pro forma information regarding results of operations and net loss per share is
required by FAS 123, which also requires that the information be determined as
if the Company had accounted for its employee stock options under the fair value
method of FAS 123. The fair value for these options was estimated at the date of
grant using the minimum value method with the following weighted-average
assumptions: a risk-free interest rate of 5.0% for the period ended October 31,
1999, a volatility factor of the expected market price of 0.8, and no dividend
yield.
The option valuation models were developed for use in estimating the fair value
of traded options that have no vesting restrictions and are fully transferable.
In addition, option valuation models require the input of highly subjective
assumptions, including the expected life of the option. Because the Company's
employee stock options have characteristics significantly different from those
of traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of
its employee stock options.
11
<PAGE>
6. SHAREHOLDERS' EQUITY (CONTINUED)
The effect of applying the fair value method under FAS 123 to the Company's
stock options results in a pro forma net loss that is not materially different
from the historical amount reported.
The weighted-average fair value of options granted, which is the value assigned
to the options under FAS 123, ranged from $0.07 to $0.09 for options granted
during the period from March 1, 1999 (inception) through October 31, 1999.
7. IMPACT OF YEAR 2000 (UNAUDITED)
The Year 2000 issue relates to the use by many existing computer programs of
only two digits to identify a year in the date field. If not corrected, many
computer applications could fail or create erroneous results by or at the Year
2000. The Company recognizes the need to ensure that the potential Year 2000
software failures will not adversely impact its operations.
The Company believes that Year 2000 problems will not have a material adverse
effect on its results of operations or financial position. The Company has
determined that the current versions of its internally developed and purchased
software are Year 2000 compliant. The Company also believes that all of its
hardware systems and production equipment are Year 2000 compliant. To date, Year
2000 costs have been minimal and the Company believes that future costs will be
immaterial. However, there can be no assurance that the Company will not
experience serious, unanticipated negative consequences and/or material costs
caused by undetected errors or defects in the technology used in its internal
systems.
The Company does not have any contingency plans related to the Year 2000 problem
for the possibility that its systems or those of one or more of the third
parties may experience a significant disruption due to Year 2000 issues.
8. SUBSEQUENT EVENTS
On November 12, 1999, all of the Company's outstanding preferred and common
stock was acquired by Commerce One, Inc. Commerce One also assumed all
outstanding stock options of the Company. No adjustments to the recorded amounts
of assets or liabilities which may result from this transaction have been
included in the accompanying financial statements.
Outstanding Litigation
In January 2000, a complaint was filed against the Company in the Superior
Court of the State of California, County of Santa Clara. The complaint
seeks performance and/or substantial damages in connection with a proposed
stock purchase agreement for shares of the Company's preferred stock. The
Company has not responded to the complaint. The Company denies the
plaintiff's claims and intends to defend the action vigorously. However, an
unfavorable resolution could have a material adverse effect on the Company's
financial position, results of operations or cash flows.
12
<PAGE>
Exhibit 99.2
Commerce One, Inc.
Unaudited Pro Forma Condensed Combining Financial Information
The unaudited pro forma condensed combining financial information for
Commerce One, Inc. ("Commerce One") set forth below gives effect to the
acquisition of CommerceBid.com, Inc. ("CommerceBid"). The historical
financial information has been derived from, and is qualified by reference
to, the condensed consolidated financial information of Commerce One included
in its Form 10-Q for the quarterly period ended September 30, 1999, filed
with the Securities and Exchange Commission and the financial statements of
CommerceBid included elsewhere herein and should be read in conjunction with
such financial information and financial statements and the notes thereto.
The unaudited pro forma condensed combining statement of operations data for
the nine months ended September 30, 1999 set forth below gives effect to the
acquisition as if it occurred on January 1, 1999. The unaudited pro forma
condensed combining balance sheet as of September 30, 1999 set forth below
gives effect to the acquisition of CommerceBid as if it occurred on that
date. The information set forth below should be read in conjunction with the
consolidated financial statements and notes thereto of Commerce One which are
included in its Form S-1 (No. 333-76987) and Form 10-Q for the quarterly
period ended September 30, 1999, filed with the Securities and Exchange
Commission. The unaudited pro forma condensed combining financial information
does not purport to represent what the consolidated results of operations or
financial condition of Commerce One would actually have been if the
CommerceBid acquisition had in fact occurred on such dates or the future
consolidated results of operations or financial condition of Commerce One.
<PAGE>
Commerce One, Inc.
Unaudited Pro Forma Condensed Combining Balance Sheet
September 30, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------------- --------------- ---------------
PRO FORMA PRO FORMA
COMMERCE ONE COMMERCEBID BUSINESS COMBINED
SEPTEMBER 30, OCTOBER 31, COMBINATION SEPTEMBER 30,
1999 1999 COMBINED ADJUSTMENTS 1999
----------------- --------------- ------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $116,161 $ 1,241 $117,402 (3) $ (4,500) $ 112,902
Accounts receivable, net 7,777 - 7,777 - 7,777
Note receivable from stockholder 5,000 - 5,000 - 5,000
Prepaid expenses and other current assets 2,679 11 2,690 - 2,690
----------------- --------------- ------------- --------------- ---------------
Total current assets 131,617 1,252 132,869 (4,500) 128,369
Property and equipment, net 5,691 207 5,898 - 5,898
Intangibles assets, net 16,021 - 16,021 (1)(3) 219,189 235,210
Other assets - 88 88 - 88
----------------- --------------- ------------- --------------- ---------------
Total assets $153,329 $ 1,547 $154,876 $214,689 $ 369,565
----------------- --------------- ------------- --------------- ---------------
----------------- --------------- ------------- --------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,469 $ 184 $ 2,653 $ - $ 2,653
Accrued compensation and related
expenses 2,775 - 2,775 - 2,775
Current portion of capital lease
obligation 315 - 315 - 315
Current portion of notes payable 388 - 388 - 388
Deferred revenue 20,014 - 20,014 - 20,014
Other current liabilities 2,939 - 2,939 (3) 2,490 5,429
----------------- --------------- ------------- --------------- ---------------
Total current liabilities 28,900 184 29,084 2,490 31,574
Capital lease obligations 56 - 56 - 56
Notes payable 387 - 387 - 387
Commitments
Stockholders' equity:
Common stock 199,902 915 200,817(1)(3)(5) 218,984 419,801
Convertible preferred stock - 1,990 1,990 (5) (1,990) -
Deferred stock compensation (2,051) (637) (2,688) (5) 637 (2,051)
Accumulated deficit (73,727) (905) (74,632) (1)(5) (5,432) (80,064)
Accumulated other comprehensive loss (138) - (138) - (138)
----------------- --------------- ------------- --------------- ---------------
Total stockholders' equity 123,986 1,363 125,349 212,199 337,548
----------------- --------------- ------------- --------------- ---------------
Total liabilities and stockholders' equity $153,329 $ 1,547 $154,876 $214,689 $ 369,565
----------------- --------------- ------------- --------------- ---------------
----------------- --------------- ------------- --------------- ---------------
</TABLE>
See accompanying notes to unaudited pro forma condensed
combining financial information.
2
<PAGE>
Unaudited Pro Forma Condensed Combining Statements of Operations
<TABLE>
<CAPTION>
Commerce One, Inc.
Nine months ended September 30, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL
---------------------------------------------------
COMMERCEBID
PERIOD FROM
COMMERCE ONE MARCH 1, 1999
NINE MONTHS (INCEPTION) PRO FORMA PRO FORMA NINE
ENDED THROUGH BUSINESS MONTHS ENDED
SEPTEMBER 30, OCTOBER 31, COMBINATION SEPTEMBER 30,
1999 1999 COMBINED ADJUSTMENTS 1999
------------------------------------ -------------- --------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
License fees $ 11,504 $ - $ 11,504 $ - $ 11,504
Services 5,165 - 5,165 - 5,165
------------------------------------ -------------- --------------------------------
Total revenues 16,669 - 16,669 - 16,669
Cost of revenues:
License fees 278 - 278 - 278
Services 9,254 - 9,254 - 9,254
------------------------------------ -------------- --------------------------------
Total cost of revenue 9,532 - 9,532 - 9,532
Gross profit 7,137 - 7,137 - 7,137
Operating expenses:
Sales and marketing 19,758 205 19,963 - 19,963
Product development 12,324 456 12,780 - 12,780
General and administrative 2,976 236 3,212 3,212
Purchased in-process research and
development 3,037 - 3,037 - 3,037
Amortization of deferred stock
compensation 1,778 28 1,806 - 1,806
Amortization of goodwill and
other intangible assets 2,977 - 2,977 (2) 42,604 45,581
------------------------------------ -------------- --------------------------------
Total operating expenses 42,850 925 43,775 42,604 86,379
------------------------------------ -------------- --------------------------------
Loss from operations (35,713) (925) (36,638) (42,604) (79,242)
Interest income, net 1,806 20 1,826 - 1,826
------------------------------------ -------------- --------------------------------
Net loss before income taxes (33,907) (905) (34,812) (42,604) (77,416)
Provision for income taxes 586 - 586 - 586
------------------------------------ -------------- --------------------------------
Net loss $(34,493) $ (905) $ (35,398) $ (42,604) $ (78,002)
==================================== ============== ================================
Basic and diluted net loss per share $ (1.88) $ (4.08)
-------------------
=================
Number of shares used in calculation of
basic and diluted net loss per
share (4) 18,332 19,095
=================== =================
</TABLE>
See accompanying notes to unaudited pro forma condensed
combining financial information.
3
<PAGE>
Commerce One, Inc.
Notes to Unaudited Pro Forma Condensed Combining Financial Information
Commerce One acquired CommerceBid on November 12, 1999 in a transaction
accounted for as a purchase. The total purchase cost was approximately
$226.9 million consisting of approximately 763,000 shares of Commerce One
common stock and the assumption of outstanding stock options with a fair
value of approximately $219.9 million, cash of $4.5 million and transaction
costs of $2.5 million.
Pro forma adjustments for the unaudited pro forma condensed combining balance
sheet as of September 30, 1999 and statement of operations for the nine
months ended September 30, 1999 are as follows:
1. To reflect the preliminary allocation of the purchase cost.
The total estimated purchase price for the acquisition has been
allocated on a preliminary basis to assets and liabilities based on
management's best estimates of their fair value with the excess
costs over the net assets acquired allocated to goodwill. The
preliminary allocation has resulted in a charge for purchased
in-process research and development estimated to be $6.3 million
and estimated goodwill and identified intangible assets of $219.2
million which amounts are being amortized over an average period of
four years.This allocation is subject to change pending a final
analysis of the value of the assets acquired and liabilities
assumed.
2. To reflect amortization of goodwill and other intangible assets
resulting from the acquisition.
The pro forma condensed combining statement of operations for the nine
months ended September 30, 1999 does not include a charge for in-process
research and development related to the acquisition of CommerceBid of
approximately $6.3 million since it is considered a non-recurring charge.
The charge will be recorded in the three month period ended December 31,
1999.
3. To reflect the acquisition of all of the outstanding stock of CommerceBid.
4. Basic and diluted net loss per share has been adjusted to reflect the
issuance of approximately 763,000 shares of Commerce One common stock, as
if these shares had been outstanding for the entire period presented.
Dilutive options and warrants are excluded from the computation as their
inclusion would be antidilutive.
5. To reflect the elimination of the historical shareholders' equity accounts
of CommerceBid.
4
