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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): September 14, 2000
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LIFEMINDERS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State of Other Jurisdiction of Incorporation)
0-28133 52-19990403
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(Commission File Number) (IRS Employer
Identification No.)
13530 Dulles Technology Dr., Suite 500 Herndon, VA 20171
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(Address of Principal Executive Offices) (Zip Code)
(703) 707-8261
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(Registrant's Telephone Number, Including Area Code)
Not Applicable.
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2 IS AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS:
Item 2. Acquisition or Disposition of Assets
The purpose of this amendment is to amend Item 7 to provide certain financial
information with respect to the Merger (as defined below), which information was
impracticable to provide at the time the Registrant filed the Current Report on
Form 8-K dated August 31, 2000.
On August 2, 2000, LifeMinders, Inc., a Delaware corporation (the "Company"),
SRNI Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
the Company ("Acquisition Corp."), smartRay Network, Inc., a Delaware
corporation ("smartRay"), and the stockholders of smartRay (the "smartRay
Stockholders") entered into an Agreement and Plan of Merger, filed herewith,
pursuant to which Acquisition Corp. was merged with and into smartRay (the
"Merger") on August 31, 2000. In consideration for the Merger, the Company has
delivered to the smartRay Stockholders approximately $2,300,000 in cash and
1,252,198 shares of the Company's common stock, par value $0.01 per share (the
"Company Common Stock"), and assumed options that are exercisable to acquire a
total of 251,447 shares of the Company's Common Stock. The consideration paid to
the smartRay Stockholders was based on the Company's evaluation of the financial
condition, business operations and prospects of smartRay, and was negotiated in
an arms' length transaction among unrelated and unaffiliated (as defined under
Rule 144 promulgated by the Securities and Exchange Commission) parties. The
cash portion of the merger consideration was paid from the Company's working
capital. The Company will account for the transaction as a purchase business
combination.
ITEM 7 IS HEREBY AMENDED AND RESTATED IN ITS ENTIRETY AS FOLLOWS:
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
smartRay Network, Inc. Financial Statements as of December 31, 1999 and
for the period January 15, 1999 (date of inception) and Report Thereon is
attached hereto as Exhibit 99.1. The unaudited statements of operations
and cash flows for the six months ended June 30, 2000 and for the period
January 15, 1999 (date of inception) to June 30, 1999 are attached hereto
as Exhibit 99.2.
(b) Pro Forma Financial Information
The following pro forma financial information required pursuant to Article
11 of Regulation S-X previously omitted from the Company's 8-K filed on
September 15, 2000 is filed with this amendment:
Introduction to Unaudited Pro Forma Combined Financial Data.
Unaudited Pro Forma Combined Statement of Operations for the six months ended
June 30, 2000.
Unaudited Pro Forma Combined Statement of Operations for the year ended December
31, 1999.
Notes to Unaudited Pro Forma Combined Statement of Operations for the year ended
December 31, 1999 and the six months ended June 30, 2000.
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LIFEMINDERS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The pro forma financial information gives effect to the following transactions.
ACQUISITION OF WITI CORPORATION
On March 29, 2000, the Company acquired WITI Corporation (WITI) in a purchase
business combination for $30.5 million, consisting of $3.5 million in cash,
345,796 shares of the Company's common stock valued at $23.0 million (based on
the average price of the Company's common stock two days prior to, the day of
and two days subsequent to the announcement of the business combination), the
assumption of options that are exercisable to acquire 38,266 shares of the
Company's common stock with a fair value of $2.5 million (calculated using the
Black-Scholes option pricing model), the assumption of $1.3 million in
liabilities and approximately $156,000 in acquisition costs. Results of
operations for WITI have been included with those of the Company for periods
subsequent to the date of acquisition.
The total purchase price of $30.5 million, including acquisition costs of
$156,000, was allocated to the assets acquired and liabilities assumed based on
their estimated fair value are as follows:
<TABLE>
<S> <C>
Tangible assets and liabilities............... $ 298,000
Assembled workforce........................... 260,000
Technology.................................... 3,190,000
Noncompete agreement.......................... 1,830,000
Patent........................................ 710,000
Goodwill...................................... 24,167,824
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$30,455,824
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</TABLE>
Tangible assets are depreciated over the estimated useful lives of the assets,
generally three to five years. Assembled workforce is amortized over the term of
the employment contracts, which is one year. All other intangibles, including
goodwill, are amortized over three years.
ACQUISITION OF SMARTRAY NETWORK, INC.
On August 2, 2000, LifeMinders, Inc., a Delaware corporation (the "Company"),
SRNI Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
the Company ("Acquisition Corp."), smartRay Network, Inc., a Delaware
corporation ("smartRay"), and the stockholders of smartRay (the "smartRay
Stockholders") entered into an Agreement and Plan of Merger, filed herewith,
pursuant to which Acquisition Corp. was merged with and into smartRay (the
"Merger") on August 31, 2000. In consideration for the Merger, the Company has
delivered to the smartRay Stockholders approximately $2,300,000 in cash and
1,252,198 shares of the Company's common stock, par value $0.01 per share (the
"Company Common Stock"), and assumed $0.5 million in liabilities and options
that are exercisable to acquire a total of 251,447 shares of the Company's
Common Stock. The consideration paid to the smartRay Stockholders was based on
the Company's evaluation of the financial condition, business operations and
prospects of smartRay, and was negotiated in an arms' length transaction among
unrelated and unaffiliated (as defined under Rule 144 promulgated by the
Securities and Exchange Commission) parties. The cash portion of the merger
consideration was paid from the Company's working capital. The Company will
account for the transaction as a purchase business combination.
The total purchase price of $32.5 million, including acquisition costs of
$296,000, was allocated to the assets acquired and liabilities assumed based on
their estimated fair value are as follows:
<TABLE>
<S> <C>
Tangible assets and liabilities............... $ 675,163
Assembled workforce........................... 770,000
Technology.................................... 4,000,000
Goodwill...................................... 24,424,839
Deferred compensation......................... 2,624,022
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$32,494,024
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</TABLE>
Tangible assets are depreciated over the estimated useful lives of the assets,
generally three to five years. Assembled workforce is amortized over one year.
Technology and goodwill are amortized over three years. Deferred compensation
is amortized over the remaining vesting period, which approximates 1 1/2 years.
The unaudited pro forma combined statement of operations for the year
ended December 31, 1999 assumes the transactions occurred on January 1, 1999.
The unaudited pro forma condensed combined statement of operations for the six
months ended June 30, 2000 assumes the transactions occurred on January 1, 1999.
The accounting policies of the Company, WITI and smartRay are substantially
comparable to the Company's.
We derived this information from the audited statements of operations of the
Company and smartRay for the year ended December 31, 1999 and for the period
January 15, 1999 (date of inception) to December 31, 1999, respectively, and of
WITI for the year ended September 30, 1999, and the unaudited statements of
operations of the Company and smartRay for the six months ended June 30, 2000
and of WITI for the three months ended December 31, 1999. A proforma balance
sheet as of June 30, 2000 is not presented, as both WITI and smartRay are
included in the September 30, 2000 balance sheet, which was included in the
Company's report Form 10-Q filed on November 14, 2000. This information is only
a summary and should be read in conjunction with the historical financial
statements and related notes contained elsewhere herein.
We are providing the unaudited pro forma condensed combined financial
information for illustrative purposes only. The companies may have performed
differently had they always been combined. You should not rely on the unaudited
pro forma condensed combined financial information as being indicative of the
historical results that would have been achieved had the companies always been
combined or the future results that the combined company will experience.
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LifeMinders, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Six Months Ended June 30, 2000
<TABLE>
<CAPTION>
Pro forma Pro forma
LifeMinders, Inc. WITI SmartRay
1a 1b 1c Adjustments Total
----------------- --------------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Advertising $ 20,062,260 $ - $ - $ - $ 20,062,260
Opt-in 5,092,745 - - - 5,092,745
Consulting 519,866 449,055 - - 968,921
-------------- ------------ ------------ ----------- ------------
Total revenues 25,674,871 449,055 26,123,926
Cost of revenue 2,294,812 238,934 194,023 936,357 2a 3,664,126
-------------- ------------ ------------ ----------- ------------
Gross margin (loss) 23,380,059 210,121 (194,023) (936,357) 22,459,800
-------------- ------------ ------------ ----------- ------------
Operating expenses:
Sales and marketing 44,400,781 - 545,950 70,998 2b 45,017,729
Research and development 3,277,063 - 1,115,980 169,518 2b 4,562,561
General and administrative 6,915,197 313,407 418,938 15,342 2b 7,662,884
Depreciation and amortization 750,751 - - 686,502 2c 1,437,253
Amortization of goodwill 2,308,808 - - 5,998,950 2d 8,307,758
-------------- ------------ ------------ ----------- ------------
Total operating expenses 57,652,600 313,407 2,080,868 6,941,310 66,988,185
-------------- ------------ ------------ ----------- ------------
Loss from operations (34,272,541) (103,286) (2,274,891) (7,877,667) (44,528,385)
Interest income (expense), net 2,979,169 (14,504) 27,301 - 2,991,966
Loss from investment in unconsolidated
entities (25,173) - - - (25,173)
-------------- ------------ ------------ ----------- ------------
Net loss available to common
shareholders $(31,318,545) $(117,790) $ (2,247,590) $(7,877,667) $(41,561,592)
============== ============ ============ =========== ============
Basic and diluted net loss per common
share $(1.37) $ - $ - $ - $ (1.71)
============== ============ ============ =========== ============
Basic and diluted weighted average
common shares and common share
equivalents 22,850,821 - - 1,425,096 2e 24,275,917
============== ============ ============ =========== ============
</TABLE>
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LifeMinders, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 1999
<TABLE>
<CAPTION>
Pro forma Pro forma
LifeMinders, Inc. WITI smartRay Adjustments Total
1d 1e 1f
----------------- ----- -------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Advertising $ 9,446,149 $ - $ - $ - $ 9,446,149
Opt-in 4,573,336 - - - 4,573,336
Consulting - 990,314 - - 990,314
------------ --------- ----------- ------------ ------------
Total revenue 14,019,485 990,314 - - 15,009,799
------------ --------- ----------- ------------ ------------
Cost of revenue 991,023 492,823 42,290 2,404,380 3a 3,930,516
------------ --------- ----------- ------------ ------------
Gross margin (loss) 13,028,462 497,491 (42,290) (2,404,380) 11,079,283
------------ --------- ----------- ------------ ------------
Operating expenses:
Sales and marketing 38,647,902 109,585 127,736 141,996 3b 39,027,219
Research and development 1,963,483 255,834 659,166 339,036 3b 3,217,519
General and administrative 4,555,725 620,787 234,927 17,905,188 3b,3c 23,316,627
------------ --------- ----------- ------------ ------------
Total operating expenses 45,167,110 986,206 1,021,829 18,386,220 65,561,365
------------ --------- ----------- ------------ ------------
Loss from operations (32,138,648) (488,715) (1,064,119) (20,790,600) (54,482,082)
Interest income (expense), net 529,124 (50,262) 10,434 - 489,296
------------ --------- ----------- ------------ ------------
Net loss before income tax provision (31,609,524) (538,977) (1,053,685) (20,790,600) (53,992,786)
Income tax provision - (6,694) - - (6,694)
------------ --------- ----------- ------------ ------------
Net loss (31,609,524) (545,671) (1,053,685) (20,790,600) (53,999,480)
------------ --------- ----------- ------------ ------------
Accretion on mandatorily redeemable
Convertible preferred stock (1,155,417) - - - (1,155,417)
------------ --------- ----------- ------------ ------------
Net loss available to common shareholders $(32,764,941) $(545,671) $(1,053,685) $(20,790,600) $(55,154,897)
============ ========= =========== ============ ============
Basic and diluted net loss per common share $(6.26) $ - $ - $ - $(8.08)
============ ========= =========== ============ ============
Basic and diluted weighted average common
shares and common share equivalents 5,230,826 - - 1,597,994 3d 6,828,820
============ ========= =========== ============ ============
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. HISTORICAL FINANCIAL INFORMATION
1a. Represents the historical statement of operations of the Company for
the six months ended June 30, 2000
1b. Represents the historical statement of operations of WITI for the
period October 1 - December 31, 1999
1c. Represents the historical statement of operations of smartRay for the
period January 1 - June 30, 2000
1d. Represents the historical statement of operations of the Company for
the year ended December 31, 1999
1e. Represents the historical statement of operations of WITI for the
fiscal year ended September 30, 1999
1f. Represents the historical statement of operations of smartRay for the
period January 15, 1999 (date of inception) to December 31, 1999
2. PROFORMA ADJUSTMENTS - JUNE 30, 2000
The pro forma adjustments to the unaudited pro forma condensed combined
statement of operations for the six months ended June 30, 2000 are as follows:
2a. Adjustment for $0.9 million for amortization over three years of an
intangible asset associated with technology acquired in the WITI and
smartRay acquisitions
2b. Adjustment for $0.3 million for amortization over 18 months of
deferred compensation resulting from the assumption of smartRay's
option program upon acquisition
2c. Adjustment of $0.7 million for amortization over one to three years
of intangible assets associated with assembled workforce, noncompete
agreement, and patent acquired in the WITI acquisition and assembled
workforce acquired in the smartRay acquisition.
2d. Adjustment of $6.0 million for amortization over three years of the
excess purchase price over identifiable intangible assets acquired in
the WITI and smartRay acquisitions.
2e. Adjustments to the weighted average shares of common stock
outstanding used in computing basic and diluted net loss per share to
reflect the issuance of 1,597,994 shares of common stock in
connection with the acquisitions of WITI and smartRay
3. PROFORMA ADJUSTMENTS - DECEMBER 31, 1999
The pro forma adjustments to the unaudited pro forma condensed combined
statement of operations for the year ended December 31, 1999 are as follows:
3a. Adjustment for $2.4 million for amortization over three years of an
intangible asset associated with technology acquired in the WITI and
smartRay acquisitions
3b. Adjustment for $0.5 million for amortization over 18 months of
deferred compensation resulting from the assumption of smartRay's
option program upon acquisition
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3c. Adjustment of $17.9 million for amortization over one to three years
of excess purchase price and identifiable intangible assets acquired
in the WITI and smartRay acquisitions.
3d. Adjustments to the weighted average shares of common stock
outstanding used in computing basic and diluted net loss per share to
reflect the issuance of 1,597,994 shares of common stock in
connection with the acquisitions of WITI and smartRay
(c) Exhibits.
Exhibit No. Description
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2.1* Agreement and Plan of Merger dated August 31, 2000
23.1 Consent of PricewaterhouseCoopers LLP
99.1 smartRay Network, Inc. Financial Statements for the period
January 15, 1999 (date of inception) to December 31, 1999
and Report of Independent Accountants
99.2 Unaudited smartRay Network, Inc. Statements of Operations and
Cash Flows for the six months ended June 30, 2000 and for the
period January 15, 1999 (date of inception) to December 31, 1999
* Previously filed.
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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 hereunto duly authorized.
LIFEMINDERS, INC.
Dated: November 14, 2000 By: /s/ Joseph S. Grabias
_______________________
Joseph S. Grabias
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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2.1* Agreement and Plan of Merger dated August 31, 2000
23.1 Consent of PricewaterhouseCoopers LLP
99.1 smartRay Network, Inc. Financial Statements for the period
January 15, 1999 (date of inception) to December 31, 1999
and Report of Independent Accountants
99.2 Unaudited smartRay Network, Inc. Statements of Operations
for the six months ended June 30, 2000 for the period
January 15, 1999 (date of inception) to December 31, 1999
* Previously filed.
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