<PAGE> 1
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
December 9, 1999
-----------------------
Date of Report
(Date of earliest event
reported)
IMAGEX.COM, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Washington 0-78271 91-1727170
- ---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
10800 N.E. 8th Street, Suite 200
Bellevue, Washington 98004
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(425) 452-0011
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
This Amendment No. 1 to the Current Report on Form 8-K dated December 22,
1999 of ImageX.com, Inc. ("ImageX") relates to ImageX's completion of an
acquisition of 100% of Printbid.com, Inc., an Oregon corporation ("Printbid"),
pursuant to an Agreement and Plan of Merger dated November 17, 1999, as amended
November 30, 1999, among the Company, Orcas Acquisition Corp., an Oregon
corporation and wholly owned subsidiary of the Company, and Printbid (the
"Merger Agreement"). The purpose of this amendment is to amend Item 7 to provide
the financial statements of Printbid required by Item 7(a) of Form 8-K and the
pro forma audited financial information required by Item 7(b) of Form 8-K, which
information was impracticable to provide at the time ImageX filed the Current
Report on Form 8-K dated December 22, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
ImageX.com, Inc.
In our opinion, the accompanying balance sheet and the related statements
of operations, shareholders' equity (deficit) and cash flows present fairly, in
all material respects, the financial position of PrintBid.com, Inc. (a company
in the development stage) (the "Company"), at December 31, 1998 and the results
of its operations and its cash flows for the period from inception (June 10,
1998) to December 31, 1998 in conformity with accounting principles generally
accepted in the United States. 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 of these
statements in accordance with auditing standards generally accepted in the
United States which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
PORTLAND, OREGON
December 30, 1999
<PAGE> 3
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 84,038 $ 171,521
Prepaid expenses.......................................... 57,678 90,524
-------- -----------
Total current assets.............................. 141,716 262,045
Property and equipment, net............................... 8,124 100,231
-------- -----------
$149,840 $ 362,276
======== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable.......................................... $ 15,994 $ 131,408
Accrued liabilities....................................... 17,433
-------- -----------
Total current liabilities......................... 15,994 148,841
Other liabilities
Accrued interest.......................................... 1,200 24,607
Subordinated Convertible Notes, net of discount of $32,777
and $480,279 (unaudited), respectively................. 142,223 509,484
-------- -----------
Total liabilities................................. 159,417 682,932
-------- -----------
Commitments
Shareholders' equity (deficit)
Preferred stock, $.01 par value: 5,000,000 shares
authorized: no shares issued and outstanding...........
Common stock, $.01 par value: 10,000,000 shares
authorized: 2,065,000 and 1,898,334 (unaudited) shares
issued and outstanding, respectively................... 20,650 18,983
Additional paid-in capital................................ 338,934 3,823,267
Unearned compensation..................................... (5,133) (1,917,521)
Deficit accumulated during the development stage.......... (364,028) (2,245,385)
-------- -----------
Total shareholders' equity (deficit).............. (9,577) (320,656)
-------- -----------
Total liabilities and shareholders' equity
(deficit)...................................... $149,840 $ 362,276
======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
INCEPTION INCEPTION NINE MONTH
(JUNE 10, (JUNE 10, PERIOD
1998) TO 1998) TO ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, CUMULATIVE
1998 1998 1999 AMOUNTS(1)
------------ ------------- ------------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Operating Expenses
General and administrative........ $ 136,362 $ 74,918 $ 811,255 $ 947,617
Sales and marketing............... 24,549 21,834 188,892 213,441
Product development............... 198,735 196,140 204,957 403,692
Amortization of unearned
compensation................... 1,467 917 595,837 597,304
--------- --------- ----------- -----------
Loss from operations........... (361,113) (293,809) (1,800,941) (2,162,054)
--------- --------- ----------- -----------
Other income (expense)
Other income...................... 1,998 1,998
Interest income................... 89 89
Interest expense.................. (3,004) (82,414) (85,418)
--------- --------- ----------- -----------
Total other income (expense)... (2,915) (80,416) (83,331)
--------- --------- ----------- -----------
Net loss............................ $(364,028) $(293,809) $(1,881,357) $(2,245,385)
========= ========= =========== ===========
</TABLE>
- -------------------------
(1) From June 10, 1998 (date of inception) through September 30, 1999.
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
COMMON STOCK ADDITIONAL DURING THE
------------------- PAID-IN UNEARNED DEVELOPMENT
SHARES AMOUNT CAPITAL COMPENSATION STAGE TOTAL
--------- ------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock to
founder......................... 660,000 $ 6,600 $ 6,600
Unearned compensation related to
issuance of common stock to
founder........................... 660,000 6,600 $ (6,600)
Amortization of unearned
compensation.................... 1,467 1,467
Issuance of common stock, subject
to repurchase, to advisors...... 330,000 3,300 $ 52,553 55,853
Issuance of common stock in
exchange for services........... 415,000 4,150 251,800 255,950
Issuance of common stock warrants
related to Series A convertible
debt............................ 34,581 34,581
Net loss.......................... $ (364,028) (364,028)
--------- ------- ---------- ----------- ----------- -----------
Balances at December 31, 1998..... 2,065,000 20,650 338,934 (5,133) (364,028) (9,577)
Repurchase of common stock
(unaudited)..................... (166,666) (1,667) (1,667)
Compensation expense related to
issuance of common stock options
to consultants (unaudited)...... 338,820 338,820
Issuance of common stock warrants
in exchange for services
(unaudited)..................... 32,854 32,854
Issuance of common stock warrants
related to Series A convertible
notes (unaudited)............... 516,746 516,746
Unearned compensation related to
issuance of common stock options
to employees (unaudited)........ 2,508,225 (2,508,225)
Amortization of unearned
compensation (unaudited)........ 595,837 595,837
Compensation related to common
stock, subject to repurchase,
issued to advisors
(unaudited)..................... 87,688 87,688
Net loss (unaudited).............. (1,881,357) (1,881,357)
--------- ------- ---------- ----------- ----------- -----------
Balances at September 30, 1999
(unaudited)..................... 1,898,334 $18,983 $3,823,267 $(1,917,521) $(2,245,385) $ (320,656)
========= ======= ========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
INCEPTION INCEPTION
(JUNE 10, (JUNE 10, NINE MONTH
1998) TO 1998) TO PERIOD ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, CUMULATIVE
1998 1998 1999 AMOUNTS(1)
------------ ------------- ------------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net loss.................................... $(364,028) $(293,809) $(1,881,357) $(2,245,385)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization......... 3,244 3,244
Amortization of discount on
convertible notes.................. 1,804 59,007 60,811
Non-cash compensation expense......... 60,620 33,532 1,022,345 1,082,965
Services exchanged for stock.......... 251,800 249,713 251,800
Services exchanged for convertible
notes.............................. 117,000 117,000
Services exchanged for common stock
warrants........................... 32,854 32,854
Change in operating assets and
liabilities........................ --
Prepaid expenses................... (32,678) (32,846) (65,524)
Accounts payable................... 15,994 6,602 115,414 131,408
Accrued liabilities................ 17,433 17,433
Accrued interest................... 1,200 23,407 24,607
--------- --------- ----------- -----------
Net cash used in operating
activities....................... (65,288) (3,962) (523,499) (588,787)
--------- --------- ----------- -----------
Cash flows from investing activities
Purchase of property and equipment........ (8,124) (95,351) (103,475)
--------- --------- ----------- -----------
Cash flows from financing activities
Proceeds from issuance of common stock.... 7,450 7,450 7,450
Proceeds from issuance of subordinated
convertible notes....................... 150,000 708,000 858,000
Repurchase of common stock................ (1,667) (1,667)
--------- --------- ----------- -----------
Net cash provided by financing
activities....................... 157,450 7,450 706,333 863,783
--------- --------- ----------- -----------
Net increase in cash and cash equivalents... 84,038 3,488 87,483 171,521
Cash and cash equivalents at beginning of
period.................................... 84,038 84,038
--------- --------- ----------- -----------
Cash and cash equivalents at end of
period.................................... $ 84,038 $ 3,488 $ 171,521 $ 255,559
========= ========= =========== ===========
Supplemental disclosures of cash flow
information:
Issuance of common stock warrants issued
in conjunction with convertible notes... $ 34,581 $ 516,746 $ 551,327
========= =========== ===========
Convertible notes issued in exchange for
services to be performed................ $ 25,000 $ 25,000
========= ===========
Deferred compensation..................... $ 6,600 $ 6,600 $ 2,508,225 $ 2,514,825
========= ========= =========== ===========
Issuance of common stock.................. $ 6,600 $ 6,600 $ 6,600
========= ========= ===========
Issuance of common stock warrants for
services to be performed................ $ 32,584 $ 32,584
=========== ===========
</TABLE>
- -------------------------
(1) From June 30, 1998 (date of inception) through September 30, 1999.
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
PrintBid.com, Inc. (the Company) was incorporated in the State of Oregon on
June 10, 1998. The Company is developing an Internet-based site for the
business-to-business market in which businesses seeking printing services are
matched to printing service providers. In addition, the Company is developing an
auction site on the Internet for sales of paper and other printing supplies. The
business users will pay fees for such services and products. Through September
30, 1999, the Company has been in the development stage and is engaged
primarily in site development, recruiting personnel and raising capital.
The unaudited interim financial statements as of September 30, 1999 and for
the period from inception (June 10, 1998) to September 30, 1998 and the
nine-month period ended September 30, 1999 have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, they do not include all of the information and disclosures required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the nine-month period ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999.
On December 9, 1999, the Company merged with ImageX.com, Inc. (See note 8).
CASH AND CASH EQUIVALENTS
The Company generally considers all highly liquid debt instruments
purchased with original or remaining maturities of three months or less at the
date of purchase to be cash equivalents.
Cash and cash equivalents are invested in deposits with a major bank. The
Company has not experienced any losses on its deposit of cash and cash
equivalents. Management believes that the bank is financially sound and minimal
credit risk exists.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost and are depreciated using the
straight-line method over the estimated useful lives of the assets (see table
below). Gains and losses from the disposal of property and equipment are
reflected in the statement of operations in the year of disposition.
Expenditures for additions and improvements are capitalized and expenditures for
maintenance and repairs are charged to expense as incurred.
Estimated useful lives:
<TABLE>
<CAPTION>
ASSET CLASS SERVICE LIVES
----------- -------------
<S> <C>
Computers and telecommunications equipment.................. 5 years
Furniture and fixtures...................................... 7 years
Purchased software.......................................... 3 years
</TABLE>
<PAGE> 8
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CONVERTIBLE DEBT WITH WARRANTS
Convertible debt with detachable warrants is shown in the financial
statements net of the unamortized debt discount. Upon debt issuance, a discount
is recorded equivalent to the fair value of the warrants. The fair value of the
warrants is determined using the Black Scholes pricing model. The debt discount
is amortized using the effective interest method.
STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation related to employees
using the intrinsic value method prescribed in Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees. Compensation cost for
stock options, if any, is measured as the excess of the fair value of the
Company's stock at the date of grant over the amount an employee must pay to
acquire the stock and is recorded as compensation over the requisite vesting
periods. Restricted stock is recorded as compensation cost over the requisite
vesting periods based on the fair value on the date of grant. Fair value has
been estimated based on a number of factors, including, among other things,
appraisals by an outside valuation firm, equity transactions, and proposed
equity transactions with unrelated third parties.
Statement of Financial Accounting Standards (SFAS) No. 123 "Accounting for
Stock-Based Compensation" established accounting and disclosure requirements
using a fair-value-based method of accounting for stock-based compensation
plans. The Company has adopted the disclosure requirements of SFAS No. 123 with
respect to employee stock compensation. With respect to stock-based compensation
to non-employees, the Company has adopted the accounting and disclosure
requirements of SFAS No. 123. Stock issued for services is recorded at the fair
value of the services rendered or fair value of the stock at the date of grant
at whichever value is more readily determinable. Restricted stock is recorded as
compensation cost over the requisite vesting periods based on the estimated fair
value of the stock at each date the restriction lapses. Fair value for stock and
restricted stock issued to non-employees has been estimated based on a number of
factors, including, among other things, appraisals by an outside valuation firm,
equity transactions and proposed equity transactions with unrelated third
parties. The fair value of stock options issued to non-employees is determined
using the Black Scholes method and recorded as compensation over the requisite
vesting periods. For purposes of determining fair value of non-employee options,
the Company assumed no dividends, a risk-free interest rate of 5.20%, volatility
of 61.4%, and an expected life equivalent to the term of the options.
PRODUCT DEVELOPMENT COSTS
Product development costs, including expenses incurred by the Company to
develop and enhance the Company's Internet site, are charged to expense as
incurred.
ADVERTISING
The Company expenses advertising costs at the first time the advertising
take place. Advertising costs for the period from inception (June 10, 1998) to
December 31, 1998, and the nine months ended September 30, 1999 (unaudited) were
$16,340 and $104,091, respectively.
<PAGE> 9
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
INCOME TAXES
The Company provides for deferred income taxes under the liability method.
Under this method, deferred tax assets and liabilities are determined based on
the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to affect taxable income. A valuation allowance is
recorded when it is more likely than not that the net deferred tax asset will
not be recovered.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's short-term financial instruments, including cash and cash
equivalents, and accounts payable are carried at cost. The Company's short-term
financial instruments approximate fair value due to their relatively short
maturities. The carrying value of the Company's long-term financial instruments
(convertible debt) approximate fair value as the interest rates approximate
current market rates of similar debt.
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 reported amounts of assets and liabilities, and the
disclosure of contingent assets and liabilities at the date of the financial
statements, and that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
In March 1998, the American Institute of Certified Public Accountants,
Accounting Standards Executive Committee issued Statement of Position 98-1,
Accounting for the Costs of Computer Software Developed or Obtained for Internal
Use. This Statement requires that once certain capitalization criteria have been
met, the direct costs of developing or obtaining computer software for internal
use be capitalized. The statement will be effective for fiscal years beginning
after December 15, 1998. Effective January 1, 1999, the Company adopted this
statement. As of September, 30, 1999, the Company had not capitalized any
internal costs (unaudited).
<PAGE> 10
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
Computer and telecommunication equipment............ $8,124 $ 42,475
Furniture and fixtures.............................. 46,000
Purchased software.................................. 15,000
------ --------
Total..................................... 8,124 103,475
Less: Accumulated depreciation...................... -- (3,244)
------ --------
$8,124 $100,231
====== ========
</TABLE>
3. OPERATING LEASE COMMITMENTS
At December 31, 1998, and September 30, 1999 (unaudited), the Company had
no lease commitments exceeding a term of one year.
4. INCOME TAXES
At September 30, 1999, the Company had accumulated net operating loss
carryforwards for tax purposes of approximately $1,380,000 (unaudited), which
will expire through 2019. Utilization of net operating loss carryforwards may be
subject to certain limitations under Section 382 of the Internal Revenue Code.
The Company also has Research & Experimentation credit carryforwards of
approximately $6,500 (audited) and $13,200 (unaudited) at December 31, 1998 and
September 30, 1999, respectively, which will expire beginning in 2018 through
2019.
Federal rate reconciliation:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
Federal income tax benefit at statutory rate................ (34)% (34)%
Change in valuation allowance............................... 34 34
--- ---
0% 0%
=== ===
</TABLE>
<PAGE> 11
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are approximately as follows:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1998 1999
------------ -------------
(UNAUDITED)
<S> <C> <C>
Deferred income tax assets:
Tax loss carryforwards.................................... $ 469,000
R&E Credit carryforwards.................................. $ 7,000 13,000
Amortization.............................................. 123,000 99,000
Deferred compensation..................................... 1,000 203,000
--------- ---------
131,000 784,000
Deferred income tax liabilities:
Depreciation.............................................. (5,000)
--------- ---------
131,000 779,000
Valuation allowance....................................... (131,000) (779,000)
--------- ---------
Net deferred tax assets................................... $ $
========= =========
</TABLE>
5. CONVERTIBLE NOTES AND WARRANTS
SERIES A SUBORDINATED CONVERTIBLE NOTES
In October 1998, the Board of Directors authorized the Company to issue up
to $1,000,000 in convertible debt (Series A). During 1998, the Company received
proceeds from various investors under these convertible debt agreements totaling
$150,000. In addition, the Company issued convertible debt totaling $25,000 in
exchange for services to be provided at a later date.
Under the same terms as the convertible debt issued in 1998, the Company
received an additional $708,000 in cash and $117,000 in services in exchange for
convertible debt during the first nine months of 1999 (unaudited).
The convertible notes accrue interest at 8% annually with interest and
principal due in a single payment two years after issuance. As of December 31,
1998, notes and accrued interest maturing in the year 2000 totaled approximately
$176,000. As of September 30, 1999, notes and accrued interest maturing in the
years 2000 and 2001 totaled approximately $186,000 and $839,000, respectively
(unaudited).
The convertible note agreements contain a conversion option, which entitles
the holder to convert the unpaid principal and interest into capital stock of
the same issue and at the same price as the first equity financing issue of $2
million or more. The option to convert expires on the maturity date of the note.
The Company may not redeem the notes prior to maturity. The convertible notes
are subordinate to the repayment rights of all other debtors, except other
subordinated note holders.
<PAGE> 12
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
WARRANTS
Each of the above convertible debt agreements were issued with warrants at
the ratio of $4 of debt per warrant totaling 43,750 warrants in 1998 (audited)
and 206,250 in the first nine months of 1999 (unaudited). These warrants are
exercisable at a variable rate equaling the lesser of $1 per share or the share
price of the first round of financing of $2 million dollars or more. The
warrants may be exercised any time after the $2 million financing is obtained
and expire ten years after the date of grant.
SERIES B SUBORDINATED CONVERTIBLE NOTES (UNAUDITED)
On August 27, 1999, the Board of Directors authorized the Company to issue
an additional $500,000 of convertible notes under the same terms as the Series A
convertible notes discussed above. As of September 30, 1999, the Company had
issued no Series B notes.
6. SHAREHOLDERS EQUITY (DEFICIT)
PREFERRED STOCK
Preferred stock may be issued in one or more series, each with such
designations, preferences, rights, qualifications, limitations and restrictions
as the Board of Directors of the Company may determine at the time of issuance.
Upon incorporation of the Company, the Company authorized issuance of 5,000,000
shares of preferred stock. As of December 31, 1998, no preferred stock had been
issued.
COMMON STOCK
Upon incorporation, the Company authorized 10,000,000 shares of common
stock. The Company reserved 250,000 and 125,000 shares of common stock for
issuance of warrants relating to the Series A and Series B convertible debt,
respectively.
COMMON STOCK ISSUED TO FOUNDER
In June of 1998, upon formation of the Company, the Founder received
1,320,000 shares in exchange for certain technology and know-how. Of the shares
issued, 660,000 were subject to repurchase for up to three years. These shares
have been recorded at fair value at the date of issuance and the amount
associated with the shares subject to repurchase has been deferred and is being
amortized over the restriction period. 513,300 and 348,300 (unaudited) shares
remain restricted at December 31, 1998 and September 30, 1999, respectively.
COMMON STOCK ISSUED TO ADVISORS
In June of 1998, 330,000 restricted shares were issued to outside advisors
to the Company. The Company may repurchase these shares at par value (.01) if
the advisory relationship is terminated during the restriction period.
Compensation costs associated with these shares, based on the fair value at the
date of grant, are being recognized as expense over the restriction period.
$52,553 and $87,688 was recognized from the date of inception to December 31,
1998 and for the nine months ended September 30, 1999, respectively. 265,833 and
42,501 (unaudited) shares remain restricted at December 31, 1998 and September
30, 1999, respectively.
<PAGE> 13
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
COMMON STOCK WARRANTS (UNAUDITED)
In addition to the warrants issued in conjunction with the convertible debt
discussed in Note 5, the Company issued 36,667 common stock warrants to a
related party on June 25, 1999 in exchange for services. These warrants have the
same terms as those issued in conjunction with the Series A convertible debt
discussed above, except that the warrants expire after three years.
STOCK OPTION PLAN (UNAUDITED)
In July 1999, the Company adopted the Stock Incentive Plan (the Plan). The
Plan provides for the granting of stock options to employees, officers,
directors and consultants of the Company. Options granted under the Plan may be
either incentive stock options or nonqualified stock options. Incentive stock
options (ISO) may be granted only to Company employees. Nonqualified stock
options (NSO) may be granted to Company employees, officers, directors and
consultants. Unless otherwise terminated in accordance with the provisions of
the Plan, the Plan will terminate when all shares available for issuance under
the Plan have been issued and all restrictions on such shares have lapsed or
upon termination by the Board of Directors. The Company has reserved 2,400,000
shares of common stock for issuance under the Plan.
For each option granted, the Board of Directors shall determine the number
of shares, the option price, the period of the option, the time or times at
which the option may be exercised and whether the option is an ISO or NSO, at
the date of grant. The first options were granted in July 1999 with vesting
periods up to 3 years, at exercise prices from $.01 to $.15. As of September 30,
1999, options totaling 1,203,650 shares had been granted and approximately
250,000 options had vested.
7. RELATED PARTY TRANSACTIONS
The Company purchased management consulting services from a consulting firm
owned by a significant shareholder of the Company. These consulting services for
the period from inception (June 10, 1998) to December 31, 1998 totaled $15,000.
The Company also purchased computer equipment from a shareholder of the Company
totaling $2,893.
In June 1999, as discussed in note 6, the Company issued 36,667 warrants to
a significant shareholder in exchange for consulting services.
In August 1999, the Company issued Series A convertible notes totaling
$50,000 with 12,500 detachable warrants to a shareholder in exchange for online
advertising. The Company also issued Series A convertible notes totaling $48,000
with 12,000 detachable warrants to two shareholders during May and August 1999
in exchange for cash. These notes, totaling $146,000 plus accrued interest, are
due two years after issuance, unless converted to stock in accordance with the
Series A subordinated convertible note agreement.
<PAGE> 14
PRINTBID.COM, INC.
(A COMPANY IN THE DEVELOPMENT STAGE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. SUBSEQUENT EVENTS
On December 9, 1999, the Company merged with ImageX.com, Inc. (ImageX). The
merger will be accounted for as a pooling of interests. Each share of the
Company's common stock issued and outstanding prior to the merger was converted
to a defined number of shares of ImageX stock as calculated per the merger
agreement. Immediately prior to the closing of the merger the convertible notes
were converted to a defined number of shares of the Company's common stock and
subsequently exchanged for ImageX stock on the same basis as other shares of
common stock. Each outstanding option or warrant to purchase shares of the
Company's common stock was assumed by ImageX to constitute an option or warrant
to purchase ImageX common stock with the same terms as were applicable to the
original option or warrant.
<PAGE> 15
(b) PRO FORMA FINANCIAL INFORMATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated balance sheet has been prepared to
reflect the acquisition of Printbid.com, Inc. using the pooling-of-interests
method, at September 30, 1999. The unaudited pro forma consolidated statements
of operations is based on individual historical results of operations of
ImageX.com and subsidiaries and PrintBid for the year ended December 31, 1998
and for the nine months ended September 30, 1999, after giving effect to the
acquisition of PrintBid as if the acquisition had occurred at the beginning of
each of the periods presented.
The unaudited pro forma consolidated financial statements should be read in
conjunction with the historical financial statements and notes thereto of
ImageX.com and PrintBid. The pro forma consolidated financial statements are
presented for illustrative purposes only and are not necessarily indicative of
results of operations that would have actually occurred had the acquisition of
PrintBid been effected on the dates assumed.
<PAGE> 16
IMAGEX.COM, INC.
PRO FORMA CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1997 1998 1999
------------ ------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 186 $ 967 $27,427
Accounts receivable (net of allowance for doubtful
accounts of $15 and $140 at December 31, 1998 and
September 30, 1999, respectively)....................... 19 234 3,319
Inventories............................................... 723
Prepaid expenses.......................................... 58 1,051
------- -------- -------
Total current assets............................... 205 1,259 32,520
Restricted cash............................................. 25 25
Property and equipment, net................................. 694 1,140 5,273
Goodwill, net............................................... 2,266
Other assets................................................ 39 45 2,028
------- -------- -------
Total assets....................................... $ 938 $ 2,469 $42,112
======= ======== =======
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK
AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of notes payable.......................... $ 300 $ 453
Line of credit payable.................................... 96
Accounts payable.......................................... 450 762 $ 3,151
Accrued liabilities....................................... 71 241 1,211
------- -------- -------
Total current liabilities.......................... 821 1,552 4,362
Notes payable, net of current portion....................... 300 454 534
------- -------- -------
Total liabilities.................................. 1,121 2,006 4,896
------- -------- -------
Commitments
Series B mandatorily redeemable convertible preferred stock,
$0.01 par value; 3,500,000 shares authorized, issued and
outstanding; aggregate liquidation preference of $3,500... 3,459 3,459
Series C mandatorily redeemable convertible preferred stock,
$0.01 par value; 4,040,000 shares authorized, 4,000,000
issued and outstanding; aggregate liquidation preference
of $6,000................................................. 5,109
Series D mandatorily redeemable convertible preferred stock,
$0.01 par value; 1,925,000 shares authorized, 1,385,493
issued and outstanding, respectively; aggregate
liquidation preference of $2,771.......................... 2,635
Series E mandatorily redeemable convertible preferred stock,
$0.01 par value; 11,904,762 shares authorized
Value ascribed to mandatorily redeemable convertible
preferred stock warrants.................................. 147
------- --------
Total mandatorily redeemable convertible preferred
stock............................................ 3,459 11,350
------- --------
Shareholders' equity (deficit):
Preferred stock, 30,000,000 shares authorized:
Series A convertible preferred stock, $0.01 par value;
1,500,000 shares authorized, issued and outstanding;
aggregate liquidation preference of $1,500............. 15 15
Common stock, $0.01 par value; 70,000,000 shares
authorized; 1,200,000, 2,081,974 and 17,135,885 shares
issued and outstanding at December 31, 1997 and 1998 and
September 30, 1999, respectively........................ 12 21 171
Additional paid-in capital................................ 392 4,263 65,945
Unearned compensation..................................... (1,961) (3,012)
Notes receivable from shareholders (including $20 from a
director)............................................... (28) (228) (220)
Accumulated deficit....................................... (4,033) (12,997) (25,668)
------- -------- -------
Total shareholders' equity (deficit)............... (3,642) (10,887) 37,216
------- -------- -------
Total liabilities, mandatorily redeemable convertible
preferred stock and shareholders' equity (deficit)........ $ 938 $ 2,469 $42,112
======= ======== =======
</TABLE>
<PAGE> 17
IMAGEX.COM, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
--------------------------- -------------------------
1996 1997 1998 1998 1999
------- ------- ------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues............................... $ 79 $ 87 $ 968 $ 614 $ 6,646
Cost of sales.......................... 99 100 998 657 4,986
------- ------- ------- ------- --------
Gross profit (loss)............... (20) (13) (30) (43) 1,660
------- ------- ------- ------- --------
Operating expenses:
General and administrative........... 146 1,285 3,549 2,309 6,550
Sales and marketing.................. 1,018 2,207 1,763 3,967
Product development.................. 300 1,316 2,750 2,080 2,256
Amortization of unearned
compensation...................... 380 135 1,542
------- ------- ------- ------- --------
Total operating expenses..... 446 3,619 8,886 6,287 14,315
------- ------- ------- ------- --------
Loss from operations......... (466) (3,632) (8,916) (6,330) (12,655)
Other income:
Interest income (expense), net....... 3 62 (48) (39) (16)
------- ------- ------- ------- --------
Net loss..................... $ (463) $(3,570) $(8,964) $(6,369) $(12,671)
======= ======= ======= ======= ========
Basic and diluted net loss per share... $(13.60) $(14.14) $(12.25) $ (9.67) $ (3.67)
======= ======= ======= ======= ========
</TABLE>
<PAGE> 18
(c) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
2.1 Agreement and Plan of Merger dated November 17, 1999 among
ImageX.com, Inc., Orcas Acquisition Corp. and Printbid.com,
Inc.*
2.2 First Amendment to Agreement and Plan of Merger dated November
30, 1999, among ImageX.com, Inc., Orcas Acquisition Corp. and
Printbid.com, Inc.*
</TABLE>
* Previously filed.
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
IMAGEX.COM, INC.
Dated: February 7, 2000 By: /s/ Robin L. Krueger
---------------------------------
Robin L. Krueger
Chief Financial Officer
<PAGE> 20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
2.1 Agreement and Plan of Merger dated November 17, 1999 among
ImageX.com, Inc., Orcas Acquisition Corp. and Printbid.com,
Inc.*
2.2 First Amendment to Agreement and Plan of Merger dated November
30, 1999, among ImageX.com, Inc., Orcas Acquisition Corp. and
Printbid.com, Inc.*
</TABLE>
* Previously filed.
