<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 2000
- --------------------------------------------------------------------------------
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): FEBRUARY 15, 2000
iTURF INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-25347 13-3963754
(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION
INCORPORATION) NUMBER)
435 HUDSON STREET
NEW YORK, NEW YORK 10014
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICERS) (ZIP CODE)
(212) 742-1640
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE>
This Current Report on Form 8-K/A amends and completes the Registrant's Current
Report on Form 8-K filed on February 25, 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Financial Statements of theSpark.com, Inc.
(i) Independent Auditors' Report
(ii) Balance Sheet as of October 31, 1999
(iii) Statement of Operations for the period from March 29, 1999
(date of inception) to October 31, 1999
(iv) Statement of Stockholders' Equity for the period from March
29, 1999 (date of inception) to October 31, 1999
(v) Statement of Cash Flows for the period from March 29, 1999
(date of inception) to October 31, 1999
(vi) Notes to Financial Statements
(b) UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(i) Unaudited Pro Forma Condensed Consolidated Balance Sheet as
of October 30, 1999
(ii) Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the thirty-nine weeks ended October 30, 1999
(iii) Notes to Unaudited Pro Forma Condensed Consolidated
Financial Information
(c) EXHIBITS
Exhibit 2.1* Agreement and Plan of Merger dated February 4,
2000, by and among iTurf Inc., iTurf Caveman
Acquisition Corporation, theSpark.com, Inc.
("Spark"), and the stockholders of Spark (the
"Merger Agreement")
Exhibit 23.1 Consent of Independent Auditors
- ------------
* Previously filed.
<PAGE>
THESPARK.COM, INC.
FINANCIAL STATEMENTS
FOR THE PERIOD FROM MARCH 29, 1999
(DATE OF INCEPTION) TO OCTOBER 31, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS:
Balance sheet 4
Statement of operations 5
Statement of stockholders' deficit 6
Statement of cash flows 7
Notes to financial statements 8-14
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
theSpark.com, Inc.
Cambridge, Massachusetts
We have audited the accompanying balance sheet of theSpark.com, Inc. as of
October 31, 1999 and the related statements of operations, stockholders' deficit
and cash flows for the period from March 29, 1999 (date of inception) to 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 theSpark.com, Inc. as of
October 31, 1999 and the results of its operations and its cash flows for the
period from March 29, 1999 (date of inception) to October 31, 1999 in conformity
with generally accepted accounting principles.
Boston, Massachusetts
January 7, 2000, except as to
Note 6 which is as of
February 15, 2000
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
CURRENT:
Cash $ 52,810
Accounts receivable 103,618
Prepaid expenses 1,963
- --------------------------------------------------------------------------------
Total current assets 158,391
- --------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT:
Furniture and fixtures 1,594
Computer equipment under capital leases 18,373
- --------------------------------------------------------------------------------
19,967
Less accumulated depreciation and amortization 4,365
- --------------------------------------------------------------------------------
Net property and equipment 15,602
- --------------------------------------------------------------------------------
DEPOSITS 2,078
- --------------------------------------------------------------------------------
$ 176,071
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
THESPARK.COM, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade $ 10,815
Accrued compensation 20,553
Accrued accounting fees 20,000
Other accrued expenses 29,560
Loan payable - stockholder (Note 3) 25,000
Current maturities of capital lease obligation (Note 4) 8,018
- --------------------------------------------------------------------------------
Total current liabilities 113,946
CAPITAL LEASE OBLIGATION, less current maturities (Note 4) 9,158
- --------------------------------------------------------------------------------
Total liabilities 123,104
- --------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Notes 4, 5 and 6)
SERIES A PREFERRED STOCK, AT STATED VALUE, 20,834 SHARES AUTHORIZED;
10,417 SHARES ISSUED AND OUTSTANDING (Note 5) 250,000
STOCKHOLDERS' DEFICIT (Note 5):
Common stock, $.01 par value, 200,000 shares authorized;
83,334 shares issued and outstanding 834
Additional paid-in capital 131,912
Accumulated deficit (329,779)
- --------------------------------------------------------------------------------
Total stockholders' deficit (197,033)
- --------------------------------------------------------------------------------
$ 176,071
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THESPARK.COM, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM MARCH 29, 1999
(DATE OF INCEPTION) TO OCTOBER 31, 1999
- --------------------------------------------------------------------------------
REVENUES $ 139,475
- --------------------------------------------------------------------------------
OPERATING EXPENSES:
General and administrative 184,358
Contract labor 158,633
Legal fees 55,362
Web design 36,000
Depreciation expense 4,365
- --------------------------------------------------------------------------------
Total operating expenses 438,718
- --------------------------------------------------------------------------------
OPERATING LOSS (299,243)
INTEREST EXPENSE 2,177
- --------------------------------------------------------------------------------
NET LOSS $(301,420)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THESPARK.COM, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
(NOTE 5)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FROM MARCH 29, 1999 COMMON STOCK Additional Total
------------------- Paid-in Accumulated Stockholders'
(DATE OF INCEPTION) TO OCTOBER 31, 1999 Shares Amount Capital Deficit Deficit
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ISSUANCE OF COMMON STOCK TO
FOUNDERS 104,167 $ 1,042 $ 107,292 $ - $ 108,334
DEEMED DIVIDEND ON PREFERRED STOCK (Note 5) - - 24,579 (24,579) -
PURCHASE AND RETIREMENT TREASURY STOCK (20,833) (208) 41 (167)
PREFERRED STOCK CASH DIVIDENDS AT 8% - - - (3,780) (3,780)
NET LOSS - - - (301,420) (301,420)
- -----------------------------------------------------------------------------------------------------------------------
BALANCE, October 31, 1999 83,334 $ 834 $ 131,912 $(329,779) $ (197,033)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THESPARK.COM, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM MARCH 29, 1999
(DATE OF INCEPTION) TO OCTOBER 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(301,420)
Adjustments to reconcile net loss to net cash used for operating
activities:
Depreciation and amortization 4,365
Consulting services rendered in exchange for common stock 64,834
Changes in operating assets and liabilities:
Accounts receivable (103,618)
Prepaid expenses (1,963)
Accounts payable and accrued expenses 77,148
Deposits (2,078)
- ------------------------------------------------------------------------------------------
Net cash used for operating activities (262,732)
- ------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,594)
- ------------------------------------------------------------------------------------------
Net cash used for investing activities (1,594)
- ------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stockholder loan 25,000
Proceeds from issuance of common stock 43,500
Proceeds from issuance of preferred stock and warrants 250,000
Purchase of treasury stock (167)
Principal payments on capital lease obligation (1,197)
- ------------------------------------------------------------------------------------------
Net cash provided by financing activities 317,136
- ------------------------------------------------------------------------------------------
NET INCREASE IN CASH 52,810
CASH, beginning of period -
- ------------------------------------------------------------------------------------------
CASH, end of period $ 52,810
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest $ 2,177
</TABLE>
Non-cash investing and financing activities:
During the period ended October 31, 1999, the Company purchased $18,373 of
computer equipment through a capital lease transaction. Additionally, the
Company accrued dividends of $3,780 during the period ended October 31,
1999. The Company also issued 62,340 shares of common stock in exchange for
consulting services of $64,834.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
1. ORGANIZATION AND OPERATIONS
TheSpark.Com, Inc. (the "Company") was incorporated in Massachusetts on
March 29, 1999. The Company is an Internet based provider of entertaining
content, interactive features, and academic study guides for students and
young adults.
The Company is in its early stage of development, and as such, success of
future operations is subject to a number of risks. Principal among these
risks are the Company's limited operating history, history of losses, no
assurance of successful operations, competition from substitute services or
larger companies and dependence on key personnel. The Company has incurred
a net loss of $301,420 for the period from March 29, 1999 (date of
inception) to October 31, 1999 and has been primarily engaged in product
development. Through October 31, 1999, the Company has funded its operating
losses primarily through the private placement of equity securities and a
loan payable from a stockholder. The Company has recently been acquired by
a larger corporation which has agreed to finance the Company's operations
at least through February 15, 2000 (see Note 6).
2. SUMMARY OF ACCOUNTING POLICIES
FISCAL YEAR
The Company has a December 31 fiscal year end. The accompanying financial
statements were prepared for the interim period ended October 31, 1999.
REVENUE RECOGNITION
The Company recognizes revenue from various advertisements displayed on its
website and newsletters in the period earned.
ESTIMATES AND ASSUMPTIONS
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
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
<PAGE>
2. SUMMARY OF ACCOUNTING POLICIES (Continued)
CASH EQUIVALENTS
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Depreciation is computed using
the straight-line method over the assets' estimated useful lives of 2 to 5
years.
STOCK BASED COMPENSATION
The Company accounts for its stock-based employee compensation agreements
in accordance with the provisions of Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and complies with the
disclosure provisions of Statement of inancial Accounting Standards No.
123, "Accounting for Stock Based Compensation."
INCOME TAXES
The Company elected to be taxed under subchapter S of the Internal Revenue
Code whereby the stockholders are liable for individual Federal income
taxes on their respective shares of the Company's income. As of August 23,
1999, the Company issued a second class of stock (see Note 5) and ceased to
be treated as a subchapter S taxpayer. Accordingly, the Company will report
as a regular C corporation for tax purposes effective on August 24, 1999.
Deferred tax assets or liabilities are computed based on the differences
between the financial statement and income tax basis of assets and
liabilities using the enacted tax rates. The Company records a valuation
allowance against deferred tax assets unless it is more likely than not
that such assets will be realized in future periods. Deferred income tax
expenses or credits are based on changes in the assets or liabilities from
period to period.
<PAGE>
2. SUMMARY OF ACCOUNTING POLICIES (Continued)
INCOME TAXES (Continued)
The Company has incurred a net operating loss for Federal and state income
tax purposes of approximately $200,000 for the interim period from August
24, 1999 to October 31, 1999. The Company has a deferred tax asset at
October 31, 1999, which primarily consists of the benefit from the
Company's net operating loss of approximately $80,000. The Company has
established a valuation allowance equal in amount to the deferred tax
asset, as there is uncertainty about the recoverability of the deferred
tax asset.
The Company's year end Federal net operating loss will be subject to review
and possible adjustment by the Internal Revenue Service and may be limited
in the event of certain cumulative changes in the ownership interests of
significant stockholders in excess of 50%.
3. RELATED PARTY TRANSACTIONS
LOAN PAYABLE - STOCKHOLDER
The loan payable to a stockholder of $25,000 at October 31, 1999 is due on
demand and bears interest at 10% per annum.
CONSULTING SERVICES
During the period ended October 31, 1999, the Company incurred an expense
of $5,000 for financial advice and support services provided by a relative
of a Director.
<PAGE>
4. LEASE COMMITMENTS
The Company leases computer equipment under the terms of capital leases
which expire at various dates through 2002.
The future minimum lease payments under the capital lease and the net
present value of the future minimum lease payments at October 31, 1999, are
as follows:
<TABLE>
<CAPTION>
PERIOD ENDED OCTOBER 31, Amount
-----------------------------------------------------------------------
<S> <C>
2000 $ 9,375
2001 8,112
2002 1,648
-----------------------------------------------------------------------
Total minimum lease payments 19,135
Less amount representing interest 1,959
-----------------------------------------------------------------------
Present value minimum lease payment 17,176
Less current maturities 8,018
-----------------------------------------------------------------------
Long-term portion $ 9,158
-----------------------------------------------------------------------
-----------------------------------------------------------------------
</TABLE>
The Company leases furniture and its office facility under the terms of
operating leases which expire during 2000. Rent expense amounted to
approximately $4,150 for the period from March 29, 1999 (date of inception)
to October 31, 1999.
<PAGE>
5. STOCKHOLDERS' EQUITY
SERIES A PREFERRED STOCK
On August 23, 1999, the Company entered into a Securities Purchase
Agreement (the "Agreement") for the issuance of Series A Preferred Stock
(the "Preferred Stock"). Under the terms of the Agreement, the Company
issued 10,417 shares of Preferred Stock together with a warrant to purchase
up to 10,417 additional shares of Preferred Stock for an aggregate purchase
price of $250,000. The warrant entitles the holder of Preferred Stock the
right to purchase an additional of 10,417 shares of Preferred Stock as
follows:
(i) An initial 5,209 shares at $21.60 per share, and
(ii) An additional 5,208 shares at $43.20 per share.
The warrant expires on August 22, 2001 and is subject to certain
adjustments as defined in the warrant agreement. The fair value of the
warrant was calculated using the Black Scholes pricing model to be $24,579
and was accounted for as a deemed dividend on the preferred stock. The
holder of the Preferred Stock has not exercised its purchase warrant as of
January 7, 2000.
The holder of Preferred Stock also received a stock option purchase
warrant. Under such warrant, the holder of the Preferred Stock is entitled
to purchase one share of common stock of the Company at an exercise price
of $.01 per share, for every four shares of common stock issued upon
exercise of options granted by the Company to employees, Directors or
consultants of the Company pursuant to the Company's 1999 Stock Option
Plan.
The holder of Preferred Stock is entitled to receive cumulative dividends
payable at the rate of 8% per annum of the stated value. The shares of
Preferred Stock may be converted at any time, at the holder's option, into
shares of the Company's common stock. The Preferred Stock initially will be
convertible on a share for share basis into common stock, subject to
adjustment pursuant to the anti-dilution provisions described in the
Agreement. Each share will automatically convert into shares of common
stock pursuant to an initial public offering, which meets certain criteria.
<PAGE>
5. STOCKHOLDERS' EQUITY (Continued)
SERIES A PREFERRED STOCK (Continued)
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holder of the Preferred Stock shall
be entitled to receive the greater of (i) the stated value of the Preferred
Stock outstanding plus accrued and unpaid dividends, if any, or (ii) the
amount the holder would be entitled to receive if the holder had converted
such shares of the Preferred Stock into common stock immediately prior to
the effectiveness of the event giving rise to such payment, out of the
assets of the Company. The Preferred Stock will rank senior in liquidation
preference.
Preferred Stock redemption is mandatory upon the occurrence of a liquidity
event (e.g., merger or sale of assets). In the absence of a liquidity
event, redemption will be mandatory at the fifth anniversary of investment,
at a price equal to the greater of (i) the stated value of Preferred Stock
outstanding plus accrued and unpaid dividends, if any, or (ii) the fair
market value of the Preferred Stock.
Except as specified in the Agreement, the shares of Preferred Stock and the
common stock shall vote as a single class with each share of Preferred
Stock being entitled to a number of votes equal to the number of shares of
common stock into which it is then convertible.
Any time after six months following an initial public offering, holders
owing 50% or more of the aggregate of the shares of common stock into which
any shares of the Preferred Stock have been (or can be) converted shall
have the right to require the Company to prepare and file a registration
statement under the Securities Act covering such shares of common stock.
COMMON STOCK
The Company and its founding stockholders entered into a Stockholders
Agreement on May 14, 1999 providing for certain rights, obligations and
restrictions with respect to the sale, transfer, pledge or other
disposition of their shares of common stock of the Company.
<PAGE>
5. STOCKHOLDERS' EQUITY (Continued)
TREASURY STOCK TRANSACTION
On May 14, 1999, a Director agreed to sell to the Company 16,667 shares of
common stock at a price of $.01 per share upon his termination.
Additionally, such stockholder remained in possession of 4,167 shares of
common stock and 4,166 shares of his common stock was cancelled.
OPTION PLAN
In October 1999, the Company adopted the 1999 Stock Option/Stock Issuance
Plan (the "Plan"). The Plan provides for the issuance of incentive and
nonqualified stock options, awards of stock and opportunities to purchase
stock. The Plan provides for the granting of options or other stock awards
to purchase not more that 18,383 shares of common stock. The Board of
Directors will determine the exercise price of the options on the date of
grant. No options were granted through October 31, 1999.
In November 1999, the Company granted to employees the option to purchase
3,960 shares of the Company's common stock at an exercise price of $2.00
per share.
6. SUBSEQUENT EVENT
On February 15, 2000, the Company completed a merger with a publicly traded
internet corporation (the "Buyer"). Under the terms of the merger, each
share of the Company's capital stock issued and outstanding immediately
prior to the closing was converted into the right to receive shares of the
Buyer's common stock. The Agreement and Plan of Merger includes various
earnout and other provisions.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On February 15, 2000, iTurf Inc. ("iTurf") acquired theSpark.com, Inc. ("Spark")
in a transaction that will be accounted for under the purchase method of
accounting. The aggregate consideration paid consisted of 1,099,988 shares of
iTurf Class A common stock valued at approximately $14.2 million, or $12.9375
per share based on iTurf's closing share price on the business day prior to the
announcement of the transaction, and the right to receive additional shares and,
under certain circumstances, cash if certain performance goals related to
theSpark.com Web site are met in future periods.
The following unaudited condensed consolidated financial information sets forth
the consolidated financial position and consolidated results of operations of
iTurf and Spark as if the combination was consummated (i) on October 30, 1999
for the unaudited pro forma condensed consolidated balance sheet and (ii) as of
the beginning of the earliest period presented in the unaudited pro forma
condensed consolidated statement of operations. Accordingly, the assets acquired
and liabilities assumed have been recorded at their estimated fair values, which
are subject to further adjustment based on future events and future analysis.
The pro forma condensed consolidated balance sheet and statements of operations
have been prepared by the management of iTurf. The following unaudited pro forma
condensed consolidated information is presented for illustration purposes only.
It is not necessarily indicative of the financial position or results of
operations which would actually have been reported had the combination been in
effect during those periods or which may be reported in the future. The
statements should be read in conjunction with iTurf's historical financial
statements and notes thereto included in filings with the SEC and Spark's
financial statements which have been included elsewhere in this report.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
OCTOBER 30, 1999
(in thousands)
<TABLE>
<CAPTION>
iTurf Spark Pro Forma
Historical Historical Adjustments Pro Forma
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 19,700 $ 53 $ 19,753
Marketable securities 48,482 48,482
Prepaid expenses and other current assets 4,717 105 4,822
---------------------------------------------------
Total current assets 72,899 158 73,057
PROPERTY & EQUIPMENT, NET 3,067 16 3,083
INTANGIBLE AND OTHER ASSEST 18,672 2 14,178 (a) 33,102
250 (b)
---------------------------------------------------
TOTAL ASSETS $ 94,638 $ 176 $ 14,428 $ 109,242
===================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and other current liabilities $ 3,728 $ 89 $ 250 (b) $ 4,067
Liabilities due affiliates 25 25
---------------------------------------------------
Total current liabilities 3,728 114 250 4,092
LONG-TERM LIABILITIES 9 9
PREFERRED STOCK 250 (250)(a) -
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock - Class A 64 1 (1)(a) 75
11 (a)
Common Stock - Class B 125 125
Additional paid-in capital 116,388 132 (132)(a) 130,608
14,220 (a)
Investment in common stock of dELiA's Inc. (17,734) (17,734)
Retained earnings (deficit) (7,933) (330) 330 (a) (7,933)
---------------------------------------------------
Total stockholders' equity (deficit) 90,910 (197) 14,428 105,141
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 94,638 $ 176 $ 14,428 $ 109,242
---------------------------------------------------
---------------------------------------------------
</TABLE>
See accompanying notes to unaudited pro forma condensed consolidated financial
information.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THIRTY-NINE WEEKS ENDED OCTOBER 30, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Spark Pro Forma
iTurf Historical Historical(i) Adjustments Pro Forma
<S> <C> <C> <C> <C>
NET REVENUES $ 10,868 $ 139 $ 11,007
COST OF REVENUES 5,622 5,622
---------------------------------------------------------------
GROSS PROFIT 5,246 139 5,385
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 15,096 438 15,534
GOODWILL AMORTIZATION 690 2,164 (c) 2,854
INTEREST EXPENSE (INCOME), NET (2,066) 2 15 (b) (2,049)
----------------------------------------------------------------
LOSS BEFORE INCOME TAXES (8,474) (301) (2,179) (10,954)
BENEFIT FOR INCOME TAXES (161) (161)
----------------------------------------------------------------
NET LOSS $ (8,313) $ (301) $ (2,179) $ (10,793)
================================================================
BASIC AND DILUTED NET LOSS
PER SHARE $ (0.51) $ (0.62)
================================================================
SHARES USED IN THE
CALCULATION OF BASIC AND
DILUTED NET LOSS PER SHARE 16,368 1,100 (a) 17,468
================================================================
</TABLE>
See accompanying notes to unaudited pro forma condensed consolidated financial
information.
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
I. ADJUSTMENTS
(a) To reflect iTurf's purchase of Spark for 1,099,988 shares of its Class
A common stock valued at $14.2 million, the related excess of the
purchase price paid over the estimated fair value of the net tangible
assets of $14.2 million and the elimination the components of Spark
preferred stock and stockholders' equity.
(b) To reflect estimated costs of the acquisition and the related interest
effect.
(c) To reflect the increase in amortization expense resulting from the
preliminary purchase price accounting treatment of the acquisition.
iTurf amortizes goodwill over five years.
II. OTHER ITEMS
(i) The Spark historical information is for the period from March 29, 1999
(date of inception) to October 31, 1999.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
Dated: March 14, 2000 iTurf Inc.
By: /s/ Stephen I. Kahn
-------------------
Stephen I. Kahn
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the registration
statement on From S-8 of iTurf Inc. (Registration No. 333-91837) of our report
dated January 7, 2000 with respect to the financial statements of theSpark.com,
Inc. which are contained in this Form 8-K/A of iTurf Inc.
BDO Seidman, LLP
Boston, Massachusetts
March 13, 2000