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UNITED STATES
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): November 3, 2000
----------------
INFORMATICA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
_______ 77-0333710
(Commission File Number) (I.R.S. Employer Identification No.)
3350 West Bayshore Road
Palo Alto, CA 94303
(Address of principal executive offices)
(650) 687-6200
(Registrant's telephone number, including area code)
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INFORMATION TO BE INCLUDED IN REPORT
The undersigned Registrant hereby amends Item 2 and Item 7 of its
Current Report on Form 8-K filed with the Securities and Exchange Commission
(the "Commission") on September 6, 2000 to file financial statements related
to acquisition of Zimba in a transaction accounted for as a purchase. The
financial statements set forth in Item 7 of this Form 8-KA were previously
filed with the Commission in the Registrant's Amendment No. 2 to Form S-3
(File No. 333-45304), which was filed on September 26, 2000.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 31, 2000, pursuant to the Agreement and Plan of Merger, dated
as of August 29, 2000, by and among Informatica Corporation (the "Registrant"),
I-2 Merger Corporation, a Delaware corporation ("Merger Sub") and Zimba, a
privately held California corporation ("Zimba") (the "Agreement"), the
Registrant completed the merger of Merger Sub, a wholly-owned subsidiary of the
Registrant, with and into Zimba, with Zimba being the surviving corporation of
the merger and becoming a wholly-owned subsidiary of the Registrant. The
transaction closed on August 31, 2000 and is being accounted for as a purchase
transaction. As consideration for the transaction, the Registrant issued 253,329
shares of the Registrant's common stock, $0.001 par value, in exchange for the
outstanding shares of capital stock of Zimba, subject to the withholding of 10%
of such shares in escrow in accordance with the terms of the Agreement. At the
effective time of the merger, all outstanding options and warrants to purchase
shares of Zimba capital stock were automatically converted into options and
warrants to purchase the Registrant's common stock based upon the conversion
ratio set forth in the Agreement with corresponding adjustment to their
respective exercise prices. The Registrant currently intends that Zimba's
business will continue to be operated in its current manner. Certain of the
assets of Zimba were used in the development of applications that provide mobile
professionals with real-time access to corporate and external information
through wireless devices, voice recognition technology and the Internet, and the
Registrant currently intends to use such assets in substantially the same
manner. The total value of consideration paid for the purchase transaction was
determined based on arm's length negotiations between the Registrant and Zimba,
which took into account Zimba's financial position, operating history, products,
intellectual property and other factors relating to Zimba's business and certain
income tax aspects of the transaction. There are no material relationships
between Zimba and either the Registrant or Merger Sub or any of their respective
affiliates or any director or officer of the Registrant or Merger Sub or any
affiliate of such director or officer.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
ZIMBA
(A DEVELOPMENT STAGE COMPANY)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Auditor......................................... 3
Balance Sheets........................................................ 4
Statements of Operations.............................................. 5
Statements of Stockholders' Equity.................................... 6
Statements of Cash Flows.............................................. 7
Notes to Financial Statements......................................... 8
</TABLE>
2
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REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Zimba
We have audited the accompanying balance sheets of Zimba (a development
stage company) as of December 31, 1998 and 1999, and the related statements of
operations, shareholders' equity and cash flows for the year ended December 31,
1999 and for the periods from June 24, 1998 (inception) through December 31,
1998 and 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 audits in accordance with auditing standards generally
accepted in the United States. 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 audits provide 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 Zimba at December 31, 1998
and 1999, and the results of its operations and its cash flows for the year
ended December 31, 1999 and for the periods from June 24, 1998 (inception)
through December 31, 1998 and 1999, in conformity with auditing standards
generally accepted in the United States
The accompanying financial statements have been prepared assuming that
Zimba will continue as a going concern. As more fully described in Note 1 to the
financial statements, the Company has incurred operating losses since its
inception which raises substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that may
result from the outcome of this uncertainty.
Palo Alto, California
August 26, 2000
3
<PAGE> 4
ZIMBA
(A DEVELOPMENT STAGE COMPANY)
Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------ -----------
1998 1999 2000
--------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 37,081 $ 46,796 $ 715,602
Restricted cash.................................... -- 10,000 10,000
Prepaid expenses and other current assets.......... 16,759 7,413 14,314
--------- ----------- -----------
Total current assets................................. 53,840 64,209 739,916
Furniture and equipment, net......................... 65,734 177,661 307,326
Deposits and other assets............................ 2,940 27,630 33,734
--------- ----------- -----------
Total assets......................................... $ 122,514 $ 269,500 $ 1,080,976
========= =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities........... $ 23,682 $ 221,618 $ 371,734
Accrued compensation and related benefits.......... 26,435 192,947 369,477
Convertible notes payable to stockholders.......... 65,000 325,000 --
Note payable to stockholder........................ 9,143 -- --
Current portion of capital lease obligations....... 10,549 48,002 25,901
--------- ----------- -----------
Total current liabilities............................ 134,809 787,567 767,112
Capital lease obligations, less current portion...... 26,438 42,436 78,607
Commitments
Shareholders' equity:
Series A convertible preferred stock, no par value;
4,375,000 shares designated; none outstanding at
December 31, 1998; 4,374,996 issued and
outstanding at December 31, 1999 and June 30,
2000; aggregate liquidation preference of
$629,999........................................ -- 621,100 621,100
Series B convertible preferred stock, no par value;
12,000,000 shares designated; none outstanding
at December 31, 1998 and December 31, 1999;
6,005,391 shares issued and outstanding at June
30, 2000; aggregate liquidation preference of
$2,101,887...................................... -- -- 2,087,366
Common stock, no par value; 40,000,000 shares
authorized; 17,100,000, 13,038,750 and
13,520,375 shares issued and outstanding at
December 31, 1998, 1999 and June 30, 2000,
respectively.................................... 61,560 403,352 1,313,145
Deferred stock compensation........................ -- (249,886) (629,336)
Deficit accumulated during the development stage... (100,293) (1,335,069) (3,157,018)
--------- ----------- -----------
Total shareholders' equity........................... (38,733) (560,503) 235,257
--------- ----------- -----------
Total liabilities and shareholders' equity........... $ 122,514 $ 269,500 $ 1,080,976
========= =========== ===========
</TABLE>
See accompanying notes.
4
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
Statements of Operations
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JUNE 24, 1998 JUNE 24, 1998
(INCEPTION) (INCEPTION) SIX MONTHS ENDED
THROUGH YEAR ENDED THROUGH JUNE 30,
DECEMBER 31, DECEMBER 31, DECEMBER 31, -----------------------
1998 1999 1999 1999 2000
------------- ------------ ------------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Costs and expenses:
Product development......... $ 64,514 $ 765,715 $ 830,229 $ 232,071 $ 867,310
Sales and marketing......... 22,890 215,783 238,673 58,487 255,948
General and administrative
expenses................. 14,580 165,188 179,768 52,749 182,625
Amortization of deferred
stock compensation....... -- 73,088 73,088 19,513 516,647
--------- ----------- ----------- --------- -----------
Total costs and expenses and
loss from operations........ 101,984 1,219,774 1,321,758 362,820 1,822,530
Other income (expense)........ 1,691 (15,002) (13,311) (4,285) 581
--------- ----------- ----------- --------- -----------
Net loss...................... $(100,293) $(1,234,776) $(1,335,069) $(367,105) $(1,821,949)
========= =========== =========== ========= ===========
</TABLE>
See accompanying notes.
5
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
Statements of Shareholders' Equity
For the period from June 24, 1998 (inception) through June 30, 2000
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK DEFERRED
----------------------- ----------------------- STOCK-BASED ACCUMULATED
SHARES AMOUNT SHARES AMOUNT COMPENSATION DEFICIT TOTAL
---------- ---------- ---------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common stock at
$0.0036 per share to
founders....................... -- $ -- 17,100,000 $ 61,560 $ -- $ -- $ 61,560
Net loss and comprehensive
loss........................... -- -- -- -- -- (100,293) (100,293)
---------- ---------- ---------- ---------- --------- ----------- -----------
Balance at December 31, 1998....... -- -- 17,100,000 61,560 -- (100,293) (38,733)
Issuance of Series A preferred
stock in exchange for
conversion of notes payable.... 451,388 65,000 -- -- -- -- 65,000
Issuance of Series A preferred
stock, net of issuance costs... 3,923,608 556,100 -- -- -- -- 556,100
Repurchase of common stock....... -- -- (4,061,250) (14,621) -- -- (14,621)
Deferred stock compensation...... -- -- -- 322,974 (322,974) -- --
Issuance of warrant in connection
with consulting services....... -- -- -- 33,439 -- -- 33,439
Amortization of deferred stock
compensation................... -- -- -- -- 73,088 -- 73,088
Net loss and comprehensive
loss........................... -- -- -- -- -- (1,234,776) (1,234,776)
---------- ---------- ---------- ---------- --------- ----------- -----------
Balance at December 31, 1999....... 4,374,996 621,100 13,038,750 403,352 (249,886) (1,335,069) (560,503)
Exercise of stock options
(unaudited).................... -- -- 481,625 13,696 -- -- 13,696
Issuance of Series B preferred
stock in exchange for
conversion of notes payable
(unaudited).................... 2,456,946 859,931 -- -- -- -- 859,931
Issuance of Series B preferred
stock, net of issuance costs
(unaudited).................... 3,548,445 1,227,435 -- -- -- -- 1,227,435
Deferred stock compensation
(unaudited).................... -- -- -- 896,097 (896,097) -- --
Amortization of deferred stock
compensation (unaudited)....... -- -- -- -- 516,647 -- 516,647
Net loss and comprehensive loss
(unaudited).................... -- -- -- -- -- (1,821,949) (1,821,949)
---------- ---------- ---------- ---------- --------- ----------- -----------
Balance at June 30, 2000
(unaudited)...................... 10,380,387 $2,708,466 13,520,375 $1,313,145 $(629,336) $(3,157,018) $ 235,257
========== ========== ========== ========== ========= =========== ===========
</TABLE>
See accompanying notes.
6
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
Statements of Cash Flows
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JUNE 24, 1998 JUNE 24, 1998 SIX MONTHS ENDED
(INCEPTION) YEAR ENDED (INCEPTION) JUNE 30,
THROUGH DECEMBER 31, DECEMBER 31, THROUGH DECEMBER 31, -----------------------
1998 1999 1999 1999 2000
-------------------- ------------ -------------------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net loss.................................. $(100,293) $(1,234,776) $(1,335,069) $(367,105) $(1,821,949)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization............ 4,535 49,338 53,873 14,490 40,187
Amortization of deferred stock
compensation........................... -- 73,088 73,088 19,513 516,647
Issuance of warrant in connection with
consulting services.................... -- 33,439 33,439 -- --
Changes in operating assets and
liabilities:
Prepaid expenses and other current
assets................................. (16,759) 9,346 (7,413) (3,466) (6,901)
Deposits and other assets................ (2,940) (24,690) (27,630) (4,250) (6,104)
Accounts payable and accrued
liabilities............................ 23,682 197,936 221,618 94,632 150,116
Accrued compensation and related
benefits............................... 26,435 166,512 192,947 66,916 176,530
--------- ----------- ----------- --------- -----------
Net cash used in operating activities..... (65,340) (729,807) (795,147) (179,270) (951,474)
INVESTING ACTIVITIES
Allocation to restricted cash............. -- (10,000) (10,000) -- --
Purchase of furniture and equipment....... (33,282) (97,264) (130,546) (74,913) (129,881)
--------- ----------- ----------- --------- -----------
Net cash used in investing activities..... (33,282) (107,264) (140,546) (74,913) (129,881)
FINANCING ACTIVITIES
Principal payments on capital lease
obligations.............................. -- (10,550) (10,550) (5,488) (25,901)
Proceeds from issuance of preferred stock,
net...................................... -- 556,100 556,100 479,400 1,227,435
Proceeds from issuance of common stock,
net...................................... 61,560 -- 61,560 -- 13,696
Repurchase of common stock................ -- (14,621) (14,621) -- --
Proceeds from issuance of note payable to
stockholder.............................. 9,143 20,000 29,143 20,000 --
Repayment of note payable to
stockholder.............................. -- (29,143) (29,143) -- --
Proceeds from issuance of convertible
notes to stockholders.................... 65,000 325,000 390,000 -- 534,931
--------- ----------- ----------- --------- -----------
Net cash provided by financing
activities............................... 135,703 846,786 982,489 493,912 1,750,161
--------- ----------- ----------- --------- -----------
Change in cash and cash equivalents....... 37,081 9,715 46,796 239,729 668,806
Cash and cash equivalents at beginning of
period................................... -- 37,081 -- 37,081 46,796
--------- ----------- ----------- --------- -----------
Cash and cash equivalents at end of
period................................... $ 37,081 $ 46,796 $ 46,796 $ 276,810 $ 715,602
========= =========== =========== ========= ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Furniture and equipment purchased under
capital lease obligation................. $ 36,987 $ 64,000 $ 100,988 $ 3,301 $ 39,971
========= =========== =========== ========= ===========
Issuance of preferred stock in exchange
for convertible notes payable............ $ -- $ 65,000 $ 65,000 $ 65,000 $ 859,931
========= =========== =========== ========= ===========
Issuance of warrant in connection with
consulting services...................... $ -- $ 33,438 $ 33,438 $ -- $ --
========= =========== =========== ========= ===========
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
Interest................................. $ 1,468 $ 19,299 $ 20,767 $ 3,181 $ 8,262
========= =========== =========== ========= ===========
</TABLE>
See accompanying notes.
7
<PAGE> 8
ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND DESCRIPTION OF BUSINESS
The Company was founded in California on June 24, 1998 (inception), as
GeoMastix LLC ("GeoMastix"). GeoMastix was incorporated in California on October
14, 1999, and on July 10, 1999, changed its name to Zimba (the "Company").
From inception through December 31, 1999, the Company has been in the
development stage, devoting substantially all of its efforts to research and
development of its technologies, acquisition of facilities and equipment and
raising capital. The Company is developing an application designed to provide
mobile professionals real-time access to corporate and external information via
wireless devices, voice recognition and the web. No revenues have been realized
through December 31, 1999.
BASIS OF PRESENTATION
The Company has incurred operating losses to date and has an accumulated
deficit of $1,335,069 at December 31, 1999. The Company's activities have been
primarily financed through private placements of equity securities and capital
lease financing. The Company may need to raise additional capital through the
issuance of debt or equity securities to fund its operations. This financing may
not be available on terms satisfactory to the Company, if at all.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimated
INTERIM FINANCIAL INFORMATION
The interim financial information as of June 30, 2000 and for the six
months ended June 30, 1999 and 2000 is unaudited but includes all adjustments,
consisting only of normal recurring adjustments, that the Company considers
necessary for a fair presentation of its consolidated financial position at that
date and its consolidated results of operations and cash flows for those
periods. Operating results for the six months ended June 30, 2000 are not
necessarily indicative of results that may be expected for any future periods.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and highly liquid money market
investments with insignificant interest rate risk and original maturities from
the date of purchase of three months or less. Cash and cash equivalents are
stated at cost, which approximates their fair value.
FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of three years. Equipment under capital leases are amortized over
the shorter of the estimated useful life on the life of the lease.
8
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED) -- (CONTINUED)
ACCOUNTING FOR 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 employee stock options in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Employee Stock
Issued to Employees" ("APB 25") and, accordingly, recognizes no compensation for
the stock option grants to employees. The effect of applying the fair value
method under FASB 123 to the Company's stock options would result in pro forma
net losses that are not materially different from the historical amounts
reported.
SOFTWARE DEVELOPMENT COSTS
The Company accounts for software development costs in accordance with SFAS
No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed." The Company expenses all software development costs prior
to the Company's products attaining technological feasibility. Upon the
Company's products attaining technological feasibility, all development costs
will be capitalized until the general release of the product to customers. As of
December 31, 1999, the Company's product has not yet reached technological
feasibility. Accordingly, the Company has expensed all development costs to
date.
INCOME TAXES
The Company uses the liability method to account for income taxes as
required SFAS No. 109, "Accounting for Income Taxes." Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities. Deferred tax assets
and liabilities are measured using enacted tax rates and laws that will be in
effect when the differences are expected to reverse.
COMPREHENSIVE LOSS
There is no difference in the Company's historical net losses as reported
and the comprehensive net losses for all periods presented.
2. FURNITURE AND EQUIPMENT
Furniture and equipment consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------
1999 1998
-------- -------
<S> <C> <C>
Computer equipment and software............................. $216,325 $55,060
Furniture and fixtures...................................... 15,209 15,209
Less accumulated depreciation and amortization.............. (53,873) (4,535)
-------- -------
$177,661 $65,734
======== =======
</TABLE>
Depreciation and amortization expense on furniture and equipment was
approximately $4,535, $49,338 and $53,873 during the period from inception
through December 31, 1998, the year ended December 31, 1999 and period from
inception through December 31, 1999, respectively.
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED) -- (CONTINUED)
3. COMMITMENTS
The Company leases its facility under a month-to-month operating lease.
Capital lease obligations represent the present value of future rental payments
under capital lease agreements for equipment. The original cost of equipment
under capital leases was $112,200 and $37,410 at December 31, 1999 and 1998,
respectively. Accumulated depreciation related to such leased assets was $23,664
and $2,078 as of December 31, 1999 and 1998, respectively. Future minimum
payments under capital leases are as follows:
<TABLE>
<S> <C>
Year ending December 31,
2000................................................... $59,142
2001................................................... 48,547
2002................................................... 13,818
-------
121,507
Less amount representing interest........................... 31,069
-------
Present value of net minimum capital lease payments......... 90,438
Less current portion........................................ 48,002
-------
Long-term capital lease obligations......................... $42,436
=======
</TABLE>
Rent expense under operating lease arrangements for the period from
inception to December 31, 1998, the year ended December 31, 1999 and the period
from inception to December 31, 1999 totaled $4,511, $21,811 and $26,322,
respectively.
4. CONVERTIBLE NOTES PAYABLE
In October and November 1998, the Company issued convertible notes payable
to certain investors in exchange for $65,000 in cash. The notes bore interest of
5% per year and were convertible into shares of Series A preferred stock, at the
option of the payees and upon the sale of such shares by the Company. However,
no interest was payable by the Company in the event of conversion. The notes
payable were converted into 451,388 shares of Series A preferred stock in June
1999.
From October to December 1999, the Company issued convertible notes payable
to certain investors in exchange for $325,000 in cash. The notes bore interest
of 18% per year and were convertible into shares of Series B preferred stock at
$0.35 per share at the option of the payees and upon the sale of such shares by
the Company. The notes payable and accrued interest thereon were converted into
2,456,946 shares of the Company's Series B convertible preferred stock in
connection with the Company's sale of the preferred stock in May 2000.
5. SHAREHOLDERS' EQUITY
COMMON STOCK
Common Stock Issued to Founders
In November 1998, the Company issued 17,100,000 shares of common stock to
its founders at $0.0036 per share, which the Company determined to be the fair
value of the common stock upon the formation of the company. These common shares
are subject to repurchase rights which allow the Company to repurchase the
shares at $0.0036 per share in the event of termination of employment, and which
expire ratably over 4 years.
10
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED) -- (CONTINUED)
The unvested shares fully and automatically vest in the event of a merger in
which the Company is not the surviving corporation or the sale of substantially
all of the Company's assets or stock. At December 31, 1999, 13,038,750 shares
were subject to such repurchase rights.
CONVERTIBLE 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 and Series B preferred stock, are entitled to
receive dividends at the rates of $0.0075 and $0.025 per annum on each
outstanding share of Series A and Series B preferred stock, respectively (as
adjusted for any stock dividends, combinations or splits with respect to such
shares). Dividends are payable in preference and priority to any payment of any
dividend on common stock of the Company. Such dividends are payable only when,
as and if declared by the Board of Directors, but only out of funds that are
legally available, and are noncumulative. No dividends have been declared or
paid through December 31, 1999.
Conversion
Each share of preferred stock, at the option of the holder, is convertible
into fully paid and nonassessable shares of common stock at the conversion rate.
The conversion rate of the Series A and Series B preferred stock is 1:1 subject
to antidilution adjustments. Additionally, conversion is automatic upon the
closing of a qualified public offering of common stock with gross proceeds of at
least $7,500,000.
Voting
The holder of each share of preferred stock is entitled to the number of
votes equal to the number of shares of common stock into which each share of
preferred stock can be converted.
Liquidation Rights
In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders of preferred stock are entitled to
receive, prior and in preference to any distribution of the assets of the
Company to the holders of common stock, by reason of their ownership, an amount
equal to the sum of $0.144 for each share of Series A preferred stock and $0.35
for each share of Series B preferred stock plus any declared but unpaid
dividends with respect to such shares. The remaining assets, if any, are to be
distributed ratably to the holders of common and preferred stock on an
as-if-converted to common stock basis until the holders of Series A and Series B
preferred stock have received an amount equal to twice the original Series A and
Series B conversion price per share, at which time the remaining assets legally
available for distribution will be paid on a pro rata basis to the holders of
common stock. If, upon the occurrence of a liquidation event, the assets and
funds distributed among the holders of the preferred stock are insufficient to
permit the payment to holders of the full preferential amount, then all assets
and funds of the Company legally available for distribution are to be
distributed ratably among the holders of Series A and Series B preferred stock
ratably, in proportion to the preferential amount each such holder is otherwise
entitled to receive.
11
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ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED) -- (CONTINUED)
STOCK OPTIONS
Under the Company's 1999 Stock Option Plan (the "Plan"), 6,390,000 shares
of common stock have been reserved for the issuance of incentive stock options
("ISOs") or non statutory stock options ("NSOs") to eligible participants. The
ISOs may be granted at a price per share not less than the fair market value at
the date of grant. However, options granted to a 10% shareholder will have an
exercise price of not less than 110% of the fair market value at the date of the
grant. The NSOs may be granted at a price per share not less than 85 percent of
the fair market value at the date of grant. Options granted to-date are
immediately exercisable, and unvested shares are subject to repurchase by the
Company at the original issuance price. Options and unvested shares granted
generally vest over a period of up to 4 years, with a maximum term of 10 years.
Upon termination of an option holder, the Company has the right to repurchase at
the original purchase price any issued and unvested shares of common stock. As
of December 31, 1999, no outstanding shares of common stock are subject to such
repurchase rights.
A summary of option activity under the Plan is as follows:
<TABLE>
<CAPTION>
OUTSTANDING OPTIONS
---------------------------
WEIGHTED-
AVERAGE
NUMBER OF EXERCISE PRICE
SHARES PER SHARE
--------- --------------
<S> <C> <C>
Outstanding as of December 31, 1998 -- $ --
Granted................................................... 1,581,000 $0.02
Cancelled................................................. (471,250) 0.02
--------- -----
Outstanding as of December 31, 1999......................... 1,109,750 0.02
Granted................................................... 1,625,000 0.04
Exercised................................................. (481,625) 0.03
Cancelled................................................. (280,000) 0.04
--------- -----
Outstanding as of June 30, 2000............................. 1,973,125 $0.03
========= =====
</TABLE>
As of December 31, 1999, options to purchase 5,280,250 shares of common
stock were available for future grant under the plan.
From January to June 2000, the Company granted options to purchase an
aggregate 175,000 shares of common stock at exercise prices from $0.04 to $0.08
per share, that were outside of the option plan. As of June 30, 1999, all of
these options were outstanding.
The following table summarizes outstanding and exercisable stock options as
of December 31, 1999:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING AND EXERCISABLE
-------------------------------------------
WEIGHTED-
AVERAGE WEIGHTED-
REMAINING AVERAGE
NUMBER OF CONTRACTUAL EXERCISE PRICE
PRICE SHARES LIFE (YEARS) PER SHARE
----- --------- ------------ --------------
<S> <C> <C> <C>
$0.01.......................................... 618,750 9.66 $0.01
$0.04.......................................... 491,000 9.04 0.04
--------- ----
1,109,750 9.66
========= ====
</TABLE>
12
<PAGE> 13
ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED) -- (CONTINUED)
The weighted average fair value at grant date of options granted to
employees during the year ended December 31, 1999 and the period from inception
through December 31, 1999 was $0.09.
SHARES RESERVED FOR FUTURE ISSUANCE
As of December 31, 1999, the Company has reserved 11,043,645 shares of
common stock for future issuance as follows:
<TABLE>
<S> <C>
Stock option plan........................................... 6,390,000
Common stock warrants....................................... 278,649
Series A convertible preferred stock........................ 4,374,996
----------
11,043,645
==========
</TABLE>
DEFERRED STOCK COMPENSATION
The Company recorded deferred stock compensation of $322,974 and $467,013
during the year ended December 31, 1999 and the six months ended June 30, 2000,
respectively, representing the difference between the exercise price and the
deemed fair value for financial accounting purposes of the Company's common
stock on the date the stock options were granted. This amount is 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 $73,088 for the year ended December 31, 1999 and the period from
inception to December 31, 1999, and $177,427 for the six months ended June 30,
2000.
The Company also recorded deferred stock compensation of $429,084 during
the six months ended June 30, 2000, relating to the issuance of consultant
options.
This amount was computed using the Black-Scholes option valuation model.
Unvested shares will be remeasured at each measurement date, as they are
variable awards, and the related amortization will be charged to operations over
the vesting periods of the individual stock options. Such amortization amounted
to $339,220 for the six months ended June 30, 2000.
COMMON STOCK WARRANTS
In July 1999, in connection with a consulting agreement, the Company issued
a warrant to purchase 278,649 shares of common stock at an exercise price of
$0.144 per share. The warrant is exercisable at any time until one year after an
initial public offering of the Company's common stock, or a merger with
acquisition by a public Company. The fair value of the warrant in the amount of
$33,438, was calculated using a Black-Scholes model with the following
assumptions: expected volatility of 100%, expected dividend yield of 0%,
expected life of 1 year and risk free interest rate of 5.5%, and has been
charged to operations in the year ended December 31, 1999. The warrant has not
been exercised or cancelled through December 31, 1999.
6. INCOME TAXES
No provision for income taxes was required for the periods from June 24,
1998 (inception) through June, 1999 because the Company was either an LLC or
S-corporation. As a result of this status, the shareholders of the Company
included the Company's income or loss in their federal and state income tax
returns.
No provision for income taxes was recorded for the period from June 1999 to
December 1999 as the Company has incurred operating losses.
13
<PAGE> 14
ZIMBA
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(INFORMATION AS OF JUNE 30, 2000 AND FOR THE SIX MONTHS ENDED
JUNE 30, 1999 AND 2000 IS UNAUDITED) -- (CONTINUED)
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 Company had deferred
tax assets of approximately $366,000 and $1,000 at December 31, 1999 and 1998,
respectively. Realization of the 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 $365,000 during the year ended December 31,
1999. Deferred tax assets relate primarily to net operating loss carryforwards.
As of December 31, 1999, the Company had net operating loss carryforwards
for federal and state income tax purposes each of approximately $787,000. The
net operating loss carryforwards expire in the years 2004 through 2019, if not
utilized.
Utilization of the Company's net operating loss carryforwards may be
subject to a substantial annual limitation due to the ownership change
limitations provided by the Internal Revenue Code, as amended, and similar state
provisions. Such an annual limitation could result in the expiration of the net
operating loss carryforwards before utilization.
7. SUBSEQUENT EVENTS (UNAUDITED)
In August 2000, the Company was acquired by Informatica Corporation, a
public company that provides e-business analytic solutions. No adjustments have
been made to the accompanying financial statements for the effects of the
potential merger or recorded financial position on the results of operations.
14
<PAGE> 15
(b) PRO FORMA FINANCIAL INFORMATION.
The selected unaudited pro forma condensed combined financial
information for the Registrant set forth below gives effect to the acquisition
of Zimba. The historical financial information set forth below has been derived
from, and is qualified by reference to, the consolidated financial information
of the Registrant and Zimba and should be read in conjunction with those
financial statements and the notes thereto included elsewhere herein. The
selected unaudited pro forma condensed combined balance sheet as of June 30,
2000 set forth below gives effect to the acquisition of Zimba as if it occurred
on that date. The selected unaudited pro forma condensed combined statements of
operations data for the year ended December 31, 1999 and the six months ended
June 30, 2000 set forth below give effect to the acquisition as if it occurred
on the first day of each of those periods under the purchase method of
accounting. The selected unaudited pro forma condensed combined financial
information reflects certain adjustments, including adjustments to reflect the
amortization of goodwill and other intangible assets resulting from the
acquisition. The information set forth below should be read in conjunction with
the audited historical financial statements of the Registrant and Zimba. The
selected unaudited pro forma condensed combined financial information does not
purport to represent what the consolidated results of operations or financial
condition of the Company would actually have been if the Zimba acquisition had
in fact occurred on such dates or the future consolidated results of operations
or financial condition of the Registrant.
<TABLE>
<CAPTION>
Page
<S> <C>
Selected Unaudited Pro Forma Condensed Combined Balance Sheet.............. 16
Selected Unaudited Pro Forma Condensed Combined Statement of Operations
for the Year Ended December 31, 1999....................................... 17
Selected Unaudited Pro Forma Condensed Combined Statement of Operations
for the Six Months Ended June 30, 2000..................................... 18
Notes to Selected Unaudited Pro Forma Condensed Combined Financial
Information.............................................................. 19
</TABLE>
15
<PAGE> 16
INFORMATICA CORPORATION
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
-------------------------------- ----------------------
BUSINESS
COMBINATION
INFORMATICA ZIMBA COMBINED ADJUSTMENTS COMBINED
----------- ------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........ $ 31,831 $ 716 $ 32,547 $ -- $ 32,547
Restricted cash.................. 8,116 10 8,126 -- 8,126
Accounts receivable, net......... 18,141 -- 18,141 -- 18,141
Prepaid expenses and other
current assets................ 2,376 14 2,390 -- 2,390
-------- ------- -------- ------- --------
Total current assets.......... 60,464 740 61,204 -- 61,204
Restricted cash, less current
portion.......................... 12,166 -- 12,166 -- 12,166
Property and equipment, net........ 3,871 307 4,178 -- 4,178
Goodwill and other intangible
assets........................... 34,415 -- 34,415(1)(3) 19,750 54,165
Other assets....................... 1,272 34 1,306 -- 1,306
-------- ------- -------- ------- --------
Total assets.................. $112,188 $ 1,081 $113,269 $19,750 $133,019
======== ======= ======== ======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities................... $ 14,598 $ 372 $ 14,970(3) $ 302 $ 15,272
Accrued compensation and related
benefits...................... 6,089 369 6,458 -- 6,458
Income taxes payable............. 1,608 -- 1,608 -- 1,608
Current portion of capital lease
obligations................... 142 26 168 -- 168
Deferred revenue................. 15,324 -- 15,324 -- 15,324
-------- ------- -------- ------- --------
Total current liabilities..... 37,761 767 38,528 302 38,830
Capital lease obligations, less
current portion.................. 42 79 121 -- 121
Stockholders' equity:
Convertible preferred stock...... -- 2,708 2,708(1)(5) (2,708) --
Common stock..................... 105,685 1,313 106,998(1)(3)(5) 23,487 130,485
Deferred stock-based
compensation.................. (3,592) (629) (4,221)(5) 629 (3,592)
Accumulated deficit.............. (27,387) (3,157) (30,544)(1)(5) (1,960) (32,504)
Accumulated other comprehensive
income........................ (321) -- (321) -- (321)
-------- ------- -------- ------- --------
Total stockholders' equity.... 74,385 235 74,620 19,448 94,068
-------- ------- -------- ------- --------
Total liabilities and
stockholders' equity........ $112,188 $ 1,081 $113,269 $19,750 $133,019
======== ======= ======== ======= ========
</TABLE>
See accompanying notes to selected unaudited pro forma condensed combined
financial information.
16
<PAGE> 17
INFORMATICA CORPORATION
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
-------------------------------- ----------------------
BUSINESS
COMBINATION
INFORMATICA ZIMBA COMBINED ADJUSTMENTS COMBINED
----------- ------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues:
License................................ $41,184 $ -- $41,184 $ -- $41,184
Services............................... 21,195 -- 21,195 -- 21,195
------- ------- ------- ------- -------
Total revenues...................... 62,379 -- 62,379 -- 62,379
Costs of revenues:
License................................ 686 -- 686 $ -- 686
Services............................... 10,310 -- 10,310 -- 10,310
------- ------- ------- ------- -------
Total cost of revenues.............. 10,996 -- 10,996 -- 10,996
------- ------- ------- ------- -------
Gross profit........................... 51,383 -- 51,383 51,383
Operating expenses:
Research and development............... 11,843 766 12,609 -- 12,609
Sales and marketing.................... 33,613 216 33,829 -- 33,829
General and administrative............. 5,012 165 5,177 -- 5,177
Merger-related costs................... 2,082 -- 2,082 -- 2,082
Amortization of stock-based
compensation........................ 742 73 815 -- 815
Amortization of goodwill and other
intangible assets................... -- -- --(2) 6,648 6,648
------- ------- ------- ------- -------
Total operating expenses............ 53,292 1,220 54,512 6,648 61,160
Income (loss) from operations............ (1,909) (1,220) (3,129) (6,648) (9,777)
Interest income (expense), net........... 1,238 (15) 1,223 1,223
------- ------- ------- ------- -------
Loss before income taxes................. (671) $(1,235) $(1,906) $(6,648) $(8,554)
Income tax provision..................... 824 -- 824 -- 824
------- ------- ------- ------- -------
Net loss................................. $(1,495) (1,235) (2,730) (6,648) (9,378)
======= ======= ======= ======= =======
Basic and diluted net loss per
share(4)............................... $ (0.06) $ (0.39)
======= =======
Number of shares used in calculation of
net loss per share(4).................. 23,783 253 24,036
======= ======= =======
</TABLE>
See accompanying notes to selected unaudited pro forma condensed combined
financial information.
17
<PAGE> 18
INFORMATICA CORPORATION
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
-------------------------------- ----------------------
BUSINESS
COMBINATION
INFORMATICA ZIMBA COMBINED ADJUSTMENTS COMBINED
----------- ------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Revenues
License.................................. $38,569 $ -- $ 38,569 $ -- $38,569
Services................................. 21,269 -- 21,269 -- 21,269
------- ------- -------- ------- -------
Total revenues......................... 59,838 -- 59,838 -- 59,838
Cost of revenues:
License.................................. 793 -- 793 -- 793
Service.................................. 11,207 -- 11,207 -- 11,207
------- ------- -------- ------- -------
Total cost of revenues................. 12,000 -- 12,000 -- 12,000
------- ------- -------- ------- -------
Gross profit............................... 47,838 -- 47,838 47,838
Operating expenses:
Research and Development................. 9,876 867 10,743 -- 10,743
Sales and marketing...................... 30,101 256 30,357 -- 30,357
General and administrative............... 4,311 183 4,494 -- 4,494
Amortization of stock-based
compensation........................... 529 517 1,046 -- 1,046
Amortization of goodwill and other
intangible assets...................... 4,172 -- 4,172 -- 4,172
Purchased in-process research and
development............................ 2,199 -- 2,199(2) 3,324 5,523
------- ------- -------- ------- -------
Total operating expenses............... 51,188 1,823 53,011 3,324 56,335
------- ------- -------- ------- -------
Loss from operations....................... (3,350) (1,823) (5,173) (3,324) (8,497)
Interest income (expense), net............. 722 1 723 -- 723
------- ------- -------- ------- -------
Loss before income taxes................... $(2,628) $(1,822) $ (4,450) $(3,324) $(7,774)
======= ======= ======== ======= =======
Income tax provision....................... 875 -- 875 -- 875
------- ------- -------- ------- -------
Net loss................................... (3,503) (1,822) (5,325) (3,324) (8,649)
======= ======= ======== ======= =======
Basic and diluted net loss per share(3).... $ (0.10) $ (0.26)
======= =======
Number of shares used in calculation of net
loss per share(3)........................ 33,517 253 33,770
======= ======= =======
</TABLE>
See accompanying notes to selected unaudited pro forma condensed combined
financial information.
18
<PAGE> 19
NOTES TO SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION
Informatica acquired Zimba on August 31, 2000 in a transaction accounted
for as a purchase. The total purchase cost was approximately $26 million
consisting of 253,329 shares of Informatica common stock, (with a fair value of
approximately $23.8 million,) the assumption of outstanding stock options with a
fair value of approximately $1 million, assumed liabilities of approximately
$0.9 million and transaction costs of approximately $0.3 million.
Pro forma adjustments for the unaudited pro forma condensed combined
balance sheet as of June 30, 2000 and statements of operations for the year
ended December 31, 1999 and the six months ended June 30, 2000 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
$5.1 million and estimated goodwill and identified intangible assets of
$19.8 million which are being amortized over two to three years.
2. To reflect amortization of goodwill and other intangible assets resulting
from the acquisition.
The pro forma condensed combined statements of operations for the year
ended December 31, 1999 and the six months ended June 30, 2000 does not
include the purchased research and development related charge of
approximately $5.1 million since it is considered a non-recurring charge.
3. To reflect the acquisition of all of the outstanding stock of Zimba.
4. Basic and diluted net loss per share has been adjusted to reflect the
issuance of 253,329 shares of Informatica common stock, as if these shares
had been outstanding for the entire period. Dilutive options and warrants
are excluded from the computation as their effect is antidilutive.
5. To reflect the elimination of the historical stockholder's equity accounts
of Zimba.
(c) EXHIBITS.
The Exhibit Index appearing on page 21 is incorporated herein by reference.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned hereunto duly authorized.
INFORMATICA CORPORATION
(the Registrant)
By: /s/ Gaurav S. Dhillon
---------------------------------
Gaurav S. Dhillon
Chief Executive Officer, Secretary and
Director
Dated: November 3, 2000
20
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<S> <C>
Exhibit 2.1* Agreement and Plan of Merger dated as August 29, 2000
by and among Informatica Corporation, a Delaware
corporation, I-2 Merger Corporation, a Delaware
corporation and Zimba, a California corporation.
Exhibit 23.1 Consent of Ernst & Young LLP, Independent Auditors
Exhibit 99.1* Press Release dated August 29, 2000
</TABLE>
* Previously filed as exhibits to Form 8-K dated September 6, 2000 filed
with the Commission on September 6, 2000 regarding the acquisition of
Zimba.
21
