<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K/A
AMENDMENT TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 27, 1999
COMPS.COM, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-25913 33-0645337
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9888 Carroll Centre Road, Suite 100, San Diego, 92126-4580
California
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code: (858) 578-3000
================================================================================
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
COMPS.COM, Inc. (the "Company") filed a Current Report on Form 8-K with the
Commission on September 13, 1999. At Item 7 of the report, the Company
indicated that it would file audited financial statements of the acquired
businesses and the Company's pro forma financial information at a later date.
That information follows.
(a) Financial Statements of Sendero Investments, Inc., Parramore, Inc.,
and The Commercial Broker's Network (A Joint Venture between ARA-D/FW, Inc. and
Sendero Investments, Inc.
Audited Financial Statements of Sendero Investments, Inc., as of and
for the year ended December 31, 1998, which include the following:
(i) Independent Auditors' Report
(ii) Balance Sheets
(iii) Statements of Operations
(iv) Statements of Changes in Stockholder's Equity (Deficit)
(v) Statements of Cash Flows
(vi) Notes to Financial Statements
Audited Financial Statements of Parramore, Inc. as of and for the year
ended December 31, 1998, which include the following:
(vii) Independent Auditors' Report
(viii) Balance Sheets
(ix) Statement of Operations and Changes in Retained Earnings
(x) Statements of Cash Flows
(xi) Notes to Financial Statements
Audited Financial Statements of The Commercial Broker's Network as of
December 31, 1998 and for the period from June 1, 1998 (inception) to
December 31, 1998, which include the following:
(xii) Independent Auditors' Report
(xiii) Balance Sheets
(xiv) Statements of Operations and Changes in Joint Venture Capital
(Deficit)
(xv) Statements of Cash Flows
(xvi) Notes to Financial Statements
<PAGE>
(b) Pro Forma Financial Statements.
Unaudited Pro Forma Condensed Financial Statements of COMPS.COM, Inc.
as of June 30, 1999 and December 31, 1998, which include the following:
(i) Introduction to Unaudited Pro Forma Condensed Financial
Statements
(ii) Unaudited Pro Forma Condensed Balance Sheet
(iii) Unaudited Pro Forma Condensed Statements of Operations
(iv) Notes to Unaudited Pro Forma Condensed Financial Statements
(c) Exhibits.
23.1 Consent of Independent Auditors, Sprouse & Winn, L.L.P.
<PAGE>
The Board of Directors
Sendero Investments, Inc.
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying balance sheet of Sendero Investments, Inc. (the
Company) as of December 31, 1998, and the related statements of operations,
changes in stockholder's equity (deficit), and cash flows for the year then
ended. 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 the Company as of December 31,
1998, and the results of its operations and cash flows for the year then ended
in conformity with generally accepted accounting principles.
/s/ SPROUSE & WINN, L.L.P.
October 8, 1999
F-1
<PAGE>
SENDERO INVESTMENTS, INC.
Balance Sheets
<TABLE>
<CAPTION>
Unaudited
--------
December 31, June 30,
1998 1999
-------- --------
<S> <C> <C>
Assets
Total assets $ -0- $ -0-
======== ========
Liabilities:
Total liabilities $ -0- $ -0-
-------- --------
Stockholder's equity
Common stock - No par value; 10,000 shares
authorized, 1,000 shares issued and outstanding 4,000 4,000
Additional paid in capital 28,148 28,148
Retained earnings (deficit) (32,148) (32,148)
-------- --------
Total stockholder's equity (deficit) -0- -0-
-------- --------
Total liabilities and stockholder's equity $ -0- $ -0-
======== ========
</TABLE>
See notes to financial statements
F-2
<PAGE>
SENDERO INVESTMENTS, INC.
Statements of Operations
<TABLE>
<CAPTION>
Unaudited
--------------------------------------------
December 31, Six Months Ended Six Months Ended
1998 June 30, 1998 June 30, 1999
------------- ------------- -------------
<S> <C> <C> <C>
Revenue $ -0- $ -0- $ -0-
Expenses -0- -0- -0-
------------- ------------- -------------
Net income $ -0- $ -0- $ -0-
------------- ------------- -------------
Earnings per share $ -0- $ -0- $ -0-
============= ============= =============
</TABLE>
See notes to financial statements
F-3
<PAGE>
SENDERO INVESTMENTS, INC.
Statements of Changes in Stockholder's Equity (Deficit)
<TABLE>
<CAPTION>
Additional Retained
Common Paid in Earnings
Stock Capital (Deficit) Total
------ ------- -------- --------
<S> <C> <C> <C> <C>
Beginning balance, January 1, 1998 $4,000 $ -0- $(32,148) $(28,148)
Additional paid in capital contributed by stockholder -0- 28,148 -0- 28,148
Net income -0- -0- -0- -0-
------ ------- -------- --------
Ending balance, December 31, 1998 $4,000 $28,148 $(32,148) $ -0-
====== ======= ======== ========
Beginning balance, January 1, 1998 (unaudited) $4,000 $ -0- $(32,148) $(28,148)
Net income (unaudited) -0- -0- -0- -0-
------ ------- -------- --------
Ending balance, June 30, 1998 (unaudited) $4,000 $ -0- $(32,148) $(28,148)
====== ======= ======== ========
Beginning balance, January 1, 1999 (unaudited) $4,000 $28,148 $(32,148) $ -0-
Net income (unaudited) -0- -0- -0- -0-
------ ------- -------- --------
Ending balance, June 30, 1999 (unaudited) $4,000 $28,148 $(32,148) $ -0-
====== ======= ======== ========
</TABLE>
See notes to financial statements
F-4
<PAGE>
SENDERO INVESTMENTS, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Unaudited
------------------------------------
Six Months Six Months
December 31, Ended Ended
1998 June 30, 1998 June 30, 1999
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ -0- $ -0- $ -0-
------------- ------------ ------------
Net cash provided by operating activities -0- -0- -0-
------------- ------------ ------------
Net increase (decrease) in cash -0- -0- -0-
Cash, beginning of period -0- -0- -0-
------------- ------------ ------------
Cash, end of period $ -0- $ -0- $ -0-
============= ============ ============
</TABLE>
NON CASH TRANSACTIONS
- ---------------------
A note payable to a stockholder of $28,148 was converted to additional paid in
capital as of December 30, 1998.
F-5
<PAGE>
SENDRO INVESTMENTS, INC.
Notes to Financial Statements
(All information related to the six months ended June 30, 1998 and
June 30, 1999 is unaudited)
NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Sendero Investments, Inc. (the Company) was organized to own and
operate an information data service business.
REVENUE RECOGNITION
The Company prepares its financial statements on the accrual basis of
accounting whereby revenues and expenses are recognized in the period
earned or incurred.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and 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.
FEDERAL INCOME TAX
Effective August 28, 1991, the stockholder of the Company filed an
election that the Company is treated as an S corporation for Federal
income tax purposes. As such, the Company is not, in general,
subject to Federal income tax, but rather income and expenses are
passed through to the stockholder, who must report the income and
expenses on his own income tax return.
NOTE 2: RELATED PARTY TRANSACTIONS
The Company entered into an agreement with Parramore, Inc., d.b.a. The
Flick Report, an affiliated company. Parramore will provide
management and marketing services to a joint venture on behalf of the
Company in return for revenues generated by the joint venture.
Revenues and expenses associated with the joint venture are not
included in these financial statements.
NOTE 3: SUBSEQUENT EVENT
In August 1999, the sole stockholder entered into an agreement to sell
100 percent of the outstanding stock in Sendero Investments, Inc. to
another company.
F-6
<PAGE>
The Board of Directors
Parramore, Inc.
dba The Flick Report
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying balance sheet of Parramore, Inc. dba The Flick
Report (the Company) as of December 31, 1998, and the related statements of
operations and changes in retained earnings, and cash flows for the year then
ended. 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 the Company as of December 31,
1998 and the results of its operations and cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ SPROUSE & WINN, L.L.P.
September 10, 1999
F-7
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Balance Sheets
<TABLE>
<CAPTION>
Unaudited
--------
December 31, June 30,
1998 1999
-------- --------
<S> <C> <C>
Assets
Current assets:
Cash $ 41,943 $ 41,827
Accounts receivable, less allowance for doubtful 28,924 27,325
accounts (Note 2)
Prepaid expenses 3,678 3,678
Other assets 5,020 3,106
Note receivable (Note 3) 27,744 -0-
-------- --------
Total current assets 107,309 75,936
Property and equipment, net (Note 4) 27,594 30,756
Total assets $134,903 $106,692
======== ========
Liabilities:
Current liabilities:
Accounts payable $ 12,500 $ 11,392
Accrued expenses 42,511 32,710
Deferred revenue 11,868 13,872
Total current liabilities 66,879 57,974
-------- --------
Total liabilities 66,879 57,974
-------- --------
Stockholder's equity
Common stock - No par value; shares authorized
10,000, issued and outstanding 50 1,000 1,000
Retained earnings 67,024 47,718
-------- --------
Total stockholder's equity 68,024 48,718
-------- --------
Total liabilities and stockholder's equity $134,903 $106,692
======== ========
</TABLE>
See notes to financial statements
F-8
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Statements of Operations and
Changes in Retained Earnings
<TABLE>
<CAPTION>
Unaudited
------------------------------------------------
Year Ended Six Months Ended Six Months Ended
December 31, 1998 June 30, 1998 June 30, 1999
-------------------- --------------------- ---------------------
<S> <C> <C> <C>
Publication / subscription revenue $555,870 $264,733 $300,115
Cost of services 211,447 99,405 127,214
-------------------- --------------------- ---------------------
Gross profit 344,423 165,328 172,901
-------------------- --------------------- ---------------------
General & administrative expenses
Postage 10,833 5,272 2,917
Advertising 4,620 1,433 3,430
Marketing, general 15,274 9,749 1,620
Auto expense 11,911 1,768 2,595
Depreciation and amortization expense 4,849 2,144 3,770
Business meals and entertainment 4,205 2,005 3,011
Bad debts 10,415 460 635
Conventions / seminars 2,905 -0- -0-
Computer expenses 14,197 8,972 950
Dues and subscriptions 4,214 1,833 2,144
Insurance 13,670 6,407 8,775
Office expense & supplies 15,200 5,429 8,581
Accounting services 6,930 3,030 3,900
Legal & professional services 150 (4,570) (140)
Rent (Note 7) 14,916 5,500 6,750
Taxes 1,281 1,028 -0-
Telephone 9,725 4,091 3,050
Travel 5,206 3,520 -0-
Payroll processing fees 740 382 495
Utilities 2,263 854 953
Payroll & payroll taxes 170,864 80,405 134,083
Employee expenses 564 564 -0-
SEP expense (Note 6) 22,466 9,083 12,316
Miscellaneous expense 2,919 1,679 1,538
-------------------- --------------------- ---------------------
Total General and Administrative Expenses 350,317 151,038 201,373
-------------------- --------------------- ---------------------
Other income (expense) (Note 5) 14,018 3,581 9,166
-------------------- --------------------- ---------------------
Net income (loss) before income tax 8,124 17,871 (19,306)
Income tax expense - current 105 -0- -0-
Net income (loss) 8,019 17,871 (19,306)
Retained earnings, beginning 59,005 59,005 67,024
-------------------- --------------------- ---------------------
Retained earnings, ending $ 67,024 $ 76,876 $ 47,718
==================== ===================== =====================
Earnings (loss) per share $ 160 $ 357 $ (386)
==================== ===================== =====================
</TABLE>
See notes to financial statements
F-9
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Statements of Cash Flows
<TABLE>
<CAPTION>
Unaudited
---------------------------------------
December 31, Six Months Ended Six Months Ended
1998 June 30, 1998 June 30, 1999
--------------- ---------------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 8,019 $17,871 $(19,306)
Adjustments to reconcile change in net income to net cash
provided by operating activities:
Depreciation and amortization 4,849 2,144 3,770
Bad debt expense 10,415 460 635
Loss on sale / disposal of property 614 614 -0-
(Increase) decrease in assets:
Accounts receivable (1,945) (348) 966
Prepaid expenses (3,678) (1,983) -0-
Other assets (603) (269) 1,914
Increase (decrease) in liabilities:
Accounts payable (7,168) 3,345 (1,108)
Accrued expenses 32,819 20,159 (9,801)
Federal income tax payable (2,317) (2,317) -0-
Deferred revenue 432 1,558 2,003
--------------- ---------------- ----------------
Net cash provided (used) by operating activities 41,437 41,234 (20,927)
--------------- ---------------- ----------------
Cash flows from investing activities
Acquisition of property and equipment (19,110) (5,940) (6,933)
Proceeds from sales of property 225 225 -0-
Net change in notes receivable 14,030 -0- 27,744
--------------- ---------------- ----------------
Net cash provided (used) by investing activities (4,855) (5,715) 20,811
--------------- ---------------- ----------------
36,582 35,519 (116)
Net increase (decrease) in cash
Cash, beginning of period 5,361 5,361 41,943
--------------- ---------------- ----------------
Cash, end of period $ 41,943 $40,880 $ 41,827
=============== ================ ================
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 219 $ 42 $ -0-
=============== ================ ================
Taxes paid $ 3,600 $ 1,028 $ -0-
=============== ================ ================
</TABLE>
See notes to financial statements
F-10
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Notes to Financial Statements
(All information related to the six months ended June 30, 1998
and June 30, 1999 is unaudited)
NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
Parramore, Inc. dba The Flick Report (the Company) publishes The
Flick Report, which is a bi-monthly commercial real estate trade
journal for central Texas. It contains industry-related articles,
news, and information as well as listing and display advertisements
for real estate properties, companies, and vendors.
REVENUE RECOGNITION
The Company prepares its financial statements on the accrual basis of
accounting whereby revenues and expenses are recognized in the period
earned or incurred.
ACCOUNTS RECEIVABLE
The Company provides for uncollectible accounts receivable using the
allowance method of accounting for bad debts. Under this method of
accounting, a provision for uncollectible accounts is charged to
earnings. The allowance is increased or decreased based on past
collection history and management's evaluation of accounts
receivable. All amounts considered uncollectible are charged against
the allowance account and recoveries of previously charged off
accounts are added to the allowance.
PROPERTY AND EQUIPMENT
The Company capitalizes assets with a cost greater than $1,000.
Assets acquired before January 1, 1997 were capitalized if costs were
greater than $500. Depreciation is determined using the straight-
line method over the estimated useful lives of the property and
equipment. Estimated useful lives of property and equipment range
from five to seven years.
Impairment losses are recorded on long-lived assets used in
operations when indicators of impairment are present and undiscounted
cash flows estimated to be generated by those assets are less than
the assets' carrying amount. There is no impairment loss recorded in
these financial statements.
CONCENTRATION OF CREDIT RISK
Accounts receivable potentially expose the Company to concentrations
of credit risk as defined by Statement of Financial Accounting
Standard No. 105, Disclosure of Information about Financial
Instruments with Off-Balance Sheet Risk and Financial Instruments
with Concentrations of Credit Risk.
The Company provides credit in the normal course of business to
customers located in the Central Texas area. The Company maintains
allowances for potential credit losses.
F-11
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Notes to Financial Statements
(Continued)
(All information related to the six months ended June 30, 1998
and June 30, 1999 is unaudited)
NOTE 1: ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED REVENUE
The Company collects annual subscriptions for publications. The
portion of the subscriptions received prior to the end of the year
which are applicable to the subsequent year has been deferred and
will be recognized as revenue during such period as the subscriptions
are earned.
ADVERTISING
Advertising costs are expensed when incurred.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and 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.
FEDERAL INCOME TAX
The Company accounts for its income taxes in accordance with
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes. Deferred income taxes if any, 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.
NOTE 2: ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
1998
-------
Trade accounts receivable $38,152
Less allowance for doubtful accounts (9,228)
-------
Net Accounts Receivable $28,924
=======
F-12
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Notes to Financial Statements
(Continued)
(All information related to the six months ended June 30, 1998
and June 30, 1999 is unaudited)
NOTE 3: NOTE RECEIVABLE
Note receivable consists of a note due from the stockholder. Interest
is calculated at the applicable federal tax rate. The note receivable
was repaid during 1999.
NOTE 4: PROPERTY AND EQUIPMENT
Property and equipment at December 31, 1998 consists of the following:
1998
--------
Furniture and equipment $ 19,047
Computers and software 27,097
--------
Total property and equipment 46,144
Less accumulated depreciation and amortization (18,550)
--------
Net property and equipment $ 27,594
========
NOTE 5: OTHER INCOME (EXPENSE)
1998
-------
Other income $14,851
Gain (loss) on sale / disposal of property (614)
Interest expense (219)
-------
$14,018
=======
NOTE 6: RETIREMENT PLAN
On January 15, 1995 the Company established a defined contribution
plan. All employees who have attained the age of 21 and have
completed three years of credited service are eligible to participate
in the defined contribution plan. The Company contributes annually an
amount determined by the Board of Directors. Employer contributions
to the plan were $22,466 for 1998.
F-13
<PAGE>
PARRAMORE, INC.
dba THE FLICK REPORT
Notes to Financial Statements
(Continued)
(All information related to the six months ended June 30, 1998
and June 30, 1999 is unaudited)
NOTE 7: LEASE AGREEMENTS
The Company leases office space under an agreement that expires in
2000. The future minimum rental payments required under this non-
cancelable operating lease as of December 31, 1998 are as follows:
1999 $16,200
2000 12,150
-------
Total minimum payments $28,350
=======
Total rent expense for the year ended December 31, 1998 was $14,916.
NOTE 8: SUBSEQUENT EVENT
In August 1999, the sole stockholder entered into an agreement to sell
100 percent of the outstanding stock in Parramore, Inc. to another
company.
NOTE 9: RELATED PARTY TRANSACTIONS
The Company entered into an agreement with Sendero Investments, Inc.,
an affiliated company, to provide management and marketing services to
a joint venture on behalf of the affiliate in return for revenues
generated by the joint venture. Revenues and expenses associated with
the joint venture are included in the financial statements. Revenues
related to the joint venture were $75,551 for the year ended December
31, 1998.
The Company had a note receivable from the stockholder for $27,744 at
December 31, 1998.
F-14
<PAGE>
To the Partners of
The Commercial Broker's Network
INDEPENDENT AUDITORS' REPORT
----------------------------
We have audited the accompanying balance sheet of The Commercial Broker's
Network (a joint venture project) (Project) as of December 31, 1998, and the
related statements operations and changes in joint venture capital (deficit),
and cash flows for the period June 1, 1998 (inception) through December 31,
1998. These financial statements are the responsibility of the Project'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
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 of the financial statements 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 the Project as of December 31,
1998, and the results of its operations and cash flows for the period June 1,
1998 (inception) through December 31, 1998 in conformity with generally accepted
accounting principles.
/s/ SPROUSE & WINN, L.L.P.
September 8, 1999
Austin, Texas
F-15
<PAGE>
THE COMMERCIAL BROKER'S NETWORK
Balance Sheets
<TABLE>
<CAPTION>
Unaudited
--------
December 31, June 30,
1998 1999
-------- --------
<S> <C> <C>
Assets
Current assets: $ 18,239
Cash $ 67,203
Accounts receivable -0- 2,088
-------- --------
Total current assets 18,239 69,291
-------- --------
Total assets $ 18,239 $ 69,291
======== ========
Liabilities
Current liabilities:
Sales tax payable $ 1,205 $ 8,932
Other liabilities -0- -0-
Deferred subscription revenue 36,607 78,067
-------- --------
Total current liabilities 37,812 86,999
-------- --------
Joint venture capital (Deficit) (19,573) (17,708)
-------- --------
Total liabilities and joint venture capital $ 18,239 $ 69,291
======== ========
</TABLE>
See accompanying notes to the financial statements
F-16
<PAGE>
THE COMMERCIAL BROKER'S NETWORK
Statements of Operations and
Changes in Joint Venture Capital (Deficit)
<TABLE>
<CAPTION>
Unaudited
--------------------------------------
Period From
Period From June June 1, 1998
1, 1998 (Inception) Six Months
(Inception) to To June 30, Ended
December 31, 1998 1998 June 30, 1999
-------------------- ---------------- -----------------
<S> <C> <C> <C>
Revenues
Subscription revenue $ 112,500 $6,572 $ 123,781
Interest income 610 -0- 703
Other income 35 -0- -0-
-------------------- ---------------- -----------------
Total revenue 113,145 6,572 124,484
-------------------- ---------------- -----------------
Expenses
Operational and administrative fees 3,540 80 6,158
Net income 109,605 6,492 118,326
Beginning joint venture capital (deficit) -0- -0- (19,573)
Distributions to joint venture partners (129,178) -0- (116,461)
-------------------- ---------------- -----------------
Ending joint venture capital (deficit) $ (19,573) $6,492 $ (17,708)
==================== ================ =================
</TABLE>
See accompanying notes to the financial statements
F-17
<PAGE>
THE COMMERICAL BROKER'S NETWORK
Statements of Cash Flows
<TABLE>
<CAPTION>
Unaudited
---------------------------------------
Period From June Period From
1, 1998 June 1, 1998 Six Months
(Inception) to (Inception) to Ended
December 31, 1998 June 30, 1998 June 30, 1999
------------------- ----------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income $ 109,605 $ 6,492 $ 118,326
Adjustments to reconcile net income to net cash
Provided by (used in) operating activities:
Increase in accounts receivable -0- (1,747) (2,088)
Increase in sales tax payable 1,205 1,147 7,727
Increase in other liabilities -0- 119 -0-
Increase in deferred subscription revenue 36,607 7,589 41,460
Net cash provided by operating activities 147,417 13,600 165,425
------------------- ----------------- ----------------
Cash flows from financing activities
Distributions to joint venture partners (129,178) -0- (116,461)
------------------- ----------------- ----------------
Net increase in cash 18,239 13,600 48,964
Cash, beginning of period -0- -0- 18,239
Cash, end of period $ 18,239 $13,600 $ 67,203
=================== ================= ================
</TABLE>
See accompanying notes to the financial statements
F-18
<PAGE>
COMMERCIAL BROKER'S NETWORK
Notes to Financial Statements
(All information related to the period from June 1, 1998 (Inception) to June 30,
1998 and the period from January 1,1999 to June 30, 1999 is unaudited)
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ENTITY
Commercial Broker's Network (Project) is a joint venture project
between ARA - HL, Inc. (a Texas Corporation) and Sendero
Investments, Inc. (a Texas Corporation).
DESCRIPTION OF BUSINESS
The joint venture project was formed specifically for the purpose of
developing, marketing and operating a real estate information
service and trade association referred to as The Commercial Broker's
Network. The term of this agreement is for three years unless
earlier termination is agreed upon by both parties in writing. ARA-
HL, Inc., at its own expense, shall perform all programming and
software development required for the Project's Internet online
information system. Sendero Investments, Inc., at its own expense,
performs all marketing, client development and administration needed
to build sales and support the business operations of the Project.
Sendero Investments, Inc. assigned its interest in the project to a
related entity, Parramore, Inc., on June 23, 1997. Both entities
shall contribute the use of their own hardware, software and office
overhead needed to develop the online system and business
development. The cost of services provided by ARA-HL, Inc. and
Sendero Investments, Inc. is borne by ARA-HL, Inc. and Sendero
Investments, Inc. and therefore is not reflected in these financial
statements. The entities must agree in a written agreement before
purchasing any additional services or products with the use of the
Project's assets. Net income and losses are shared equally.
BASIS OF ACCOUNTING
Revenue and expenses are recognized under the accrual method of
accounting. Revenue is recognized when earned and expenses are
recognized when incurred.
ESTIMATES
The preparation of the financial statements in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities. Actual results could differ from those estimates.
DEFERRED SUBSCRIPTION REVENUE
Deferred subscription revenue consists of subscriptions purchased
for an extended period of time, which has yet to expire.
F-19
<PAGE>
COMMERICAL BROKER'S NETWORK
Notes to Financial Statements
(Continued)
(All information related to the period from June 1, 1998 (Inception) to June 30,
1998 and the period from January 1,1999 to June 30, 1999 is unaudited)
NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
CONCENTRATION OF BUSINESS RISK
The Project's service is generally only available for the greater
Austin, Texas area.
NOTE 2: SUBSEQUENT EVENTS
ARA - HL, Inc. assigned its interest in the Project to a related
entity, ARA - D/FW, Inc. Distributions will continue to be made to
ARA - HL, Inc.
The Project changed its partner distribution percentages to 55% to ARA
- HL, Inc. and 45% to Sendero Investments, Inc.
The joint venture partners have entered into an agreement to sell the
joint venture project.
F-20
<PAGE>
COMPS.COM, INC. AND SENDERO INVESTMENTS, INC., PARRAMORE, INC.,
AND THE COMMERCIAL BROKER'S NETWORK
Unaudited Pro Forma Condensed Financial Statements
The unaudited pro forma condensed balance sheet gives effect to the acquisitions
of Sendero Investments, Inc. ("Sendero"), Parramore, Inc. ("Parramore"), and The
Commercial Broker's Network ("CBN") as if they had occurred on June 30, 1999.
The unaudited pro forma condensed statements of operations give effect to the
acquisitions of Sendero, Parramore, and CBN using the purchase method of
accounting. The pro forma condensed statement of operations for the year ended
December 31, 1998 gives effect to the acquisitions as if they had occurred on
January 1, 1998 except for CBN which was formed in June 1, 1998. The pro forma
condensed statement of operations for the six months ended June 30, 1999 gives
effect to the acquisitions as if they had occurred on January 1, 1999.
The unaudited pro forma condensed statements of operations are presented for
illustrative purposes only and are not necessarily indicative of the results of
operations that would have actually been reported had the acquisitions of
Sendero, Parramore, and CBN occurred at the beginning of the applicable periods,
as assumed, nor is it necessarily indicative of the Company's future results of
operations. These unaudited pro forma condensed statements of operations do not
incorporate, nor do they assume, any benefits from cost savings or synergies of
operations resulting from the acquisition. They should be read in conjunction
with the historical financial statements and notes thereto of the respective
entities.
F-21
<PAGE>
PRO FORMA CONDENSED BALANCE SHEET
June 30, 1999
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
SENDERO
COMPS.COM, INVESTMENTS PARRAMORE PRO FORMA PRO
INC. INC. INC. CBN ADJUSTMENTS FORMA
-------- ---------- -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 58,439 $ - $ 42 $ 67 (843) $ 57,705
Accounts receivable 2,049 27 2 2,078
Prepaid expenses 462 7 469
-------- ---------- -------- ------- ------ --------
Total current assets 60,950 76 69 (843) 60,252
-------- ---------- -------- ------- ------ --------
Furniture and equipment, net 1,812 31 1,843
Intangible assets, net 6,107 2,549 8,656
Deposits and other assets 300 300
-------- ---------- -------- ------- ------ --------
Total assets $ 69,169 $ - $ 107 $ 69 $1,706 $71,051
======== ========== ======== ======= ====== ========
Current liabilities:
Accounts payable $ 1,856 $ - $ 11 $ - $ - $ 1,867
Accrued liabilities 1,108 33 9 121 1,271
Current portion of long-term debt 1,042 244 1,286
Current portion of capital lease obligations 32 32
Deferred subscription revenue 5,097 14 78 (41) 5,148
-------- ---------- -------- ------- ------ --------
Total current liabilities 9,135 58 87 324 9,604
Long-term debt, less current portion 2,474 1,413 3,887
Capital lease obligations, less
current portion 13 13
Deferred rent 67 67
-------- ---------- -------- ------- ------ --------
Total liabilities 11,689 58 87 1,737 13,571
Stockholders' equity (deficit)
Common stock 112 4 1 (5) 112
Additional paid-in capital 76,322 28 (28) 76,322
Warrants 514 514
Deferred compensation (3,877) (3,877)
Accumulated deficit (15,591) (32) 48 (18) 2 (15,591)
-------- ---------- -------- ------- ------ --------
Total stockholders' equity (deficit) 57,480 - 49 (18) (31) 57,480
-------- ---------- -------- ------- ------ --------
Total liabilities and stockholders'
equity (deficit) $ 69,169 $ - $ 107 $ 69 $1,706 $ 71,051
======== ========== ======== ======= ====== ========
</TABLE>
See accompanying notes to pro forma condensed financial statements.
F-22
<PAGE>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999
(Unaudited)
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
SENDERO
COMPS.COM, INVESTMENTS PARRAMORE PRO FORMA PRO
INC. INC. INC. CBN ADJUSTMENTS FORMA
-------- ---------- -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ 7,400 $ - $ 300 $ 123 $ 7,823
Cost of revenues 3,728 127 3,855
-------- ---------- -------- ------- ------ --------
Gross profit 3,672 173 123 3,968
Operating expenses:
Selling, marketing and administrative 6,561 201 6 290 7,058
Product development 1,014 1,014
-------- ---------- -------- ------- ------ --------
Total operating expenses 7,575 201 6 290 8,072
Income (loss) from operations (3,903) (28) 117 (290) (4,104)
Other income (expense) (4) 9 1 (89) (83)
-------- ---------- -------- ------- ------ --------
Net income (loss) (3,907) (19) 118 (379) (4,187)
Dividend accretion on preferred stock (435) (435)
-------- ---------- -------- ------- ------ --------
Loss attributable to common stockholders,
basic and diluted $ (4,342) $ - $ (19) $ 118 $ (379) $ (4,622)
======== ========== ======== ======= ====== ========
Net loss per share attributable to common
stockholders, basic and diluted $ (0.72) $ (0.76)
======== ========
Shares used in computing net loss
attributable to common stockholders, basic
and diluted 6,057,459 6,057,459
========= =========
</TABLE>
See accompanying notes to pro forma condensed financial statements.
F-23
<PAGE>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
Year Ended December 31, 1998
(Unaudited)
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
SENDERO
COMPS.COM, INVESTMENTS PARRAMORE PRO FORMA PRO
INC. INC. INC. CBN ADJUSTMENTS FORMA
-------- ---------- -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ 12,900 $ - $ 555 $ 113 $ 13,568
Cost of revenues 5,768 211 3 5,982
--------- ---------- -------- ------- ------ --------
Gross profit 7,132 344 110 7,586
Operating expenses:
Selling, marketing and administrative 7,298 350 1 580 8,229
Product development 1,233 1,233
--------- ---------- -------- ------- ------ --------
Total operating expenses 8,531 350 1 580 9,462
Income (loss) from operations (1,399) (6) 109 (580) (1,876)
Other income (expense) (260) 14 (189) (435)
--------- ---------- -------- ------- ------ --------
Net income (loss) (1,659) 8 109 (769) (2,311)
Dividend accretion on preferred stock (454) (454)
--------- ---------- -------- ------- ------ --------
Loss attributable to common stockholders,
basic and diluted $ (2,113) $ - $ 8 $ 109 $ (769) $ (2,765)
========= ========== ======== ======= ====== ========
Net loss per share attributable to common
stockholders, basic and diluted $ (0.60) $ (0.79)
========= ========
Shares used in computing net loss
attributable to common
stockholders, basic and diluted 3,517,056 3,517,056
========= =========
</TABLE>
See accompanying notes to pro forma condensed financial statements.
F-24
<PAGE>
COMPS.COM, INC. AND SENDERO INVESTMENTS, INC., PARRAMORE, INC.,
AND THE COMMERCIAL BROKER'S NETWORK
Notes To Pro Forma Condensed Financial Statements
(Unaudited)
Note 1.
On August 27, 1999, COMPS.COM, Inc., a Delaware corporation ("COMPS"),
acquired 1) all of the outstanding stock of Sendero Investments, Inc., a Texas
corporation ("Sendero"), 2) all of the outstanding stock of Parramore, Inc., a
Texas corporation ("Parramore"), and 3) substantially all of the assets
pertaining to the operations of the Commercial Brokers Network business ("CBN")
of ARA-D/FW, Inc., a Texas corporation. The acquisitions were consummated on the
terms set forth in the respective Stock Purchase Agreements and Asset Purchase
Agreement dated August 27, 1999. Sendero is a party to a joint venture with
ARA-D/FW operating the CBN, a comprehensive, internet-delivered, interactive,
commercial real estate research and listings service subscribed to by members
involved in the commercial real estate business in Central Texas. Parramore is
in the business of publishing and selling The Flick Report, a bi-monthly central
Texas commercial real estate trade journal.
Under the terms of the Stock Purchase Agreement for Sendero, COMPS paid a
total of $629,748 at the closing, $223,058 of which was in cash and $406,690 of
which was in the form of a subordinated convertible note ("Sendero Note"). The
Sendero Note bears interest at 7% per annum payable monthly, matures in August
2003, and can only be converted into common stock of COMPS if COMPS defaults
under the terms of the Sendero Note. During the period in which a default
under the terms of the Sendero Note has not been cured, the number of shares of
COMPS common stock issuable upon such a conversion shall equal (i) the
outstanding balance of the principal and accrued interest of the Sendero Note at
the time of conversion, divided by (ii) the average of the closing prices of a
share of COMPS common stock on the Nasdaq National Market for thirty consecutive
trading days ending on the trading day immediately preceding the day of the
default event.
Under the terms of the Stock Purchase Agreement for Parramore, COMPS paid a
total of $980,560 at the closing, $347,316 of which was in cash and $633,244 of
which was in the form of a subordinated convertible note ("Parramore Note").
The Parramore Note bears interest at 7% per annum payable monthly, matures in
August 2003, and can only be converted into common stock of COMPS if COMPS
defaults under the terms of the Parramore Note. During the period in which a
default under the terms of the Parramore Note has not been cured, the number of
shares of COMPS common stock issuable upon such a conversion shall equal (i) the
outstanding balance of the principal and accrued interest of the Parramore Note
at the time of conversion, divided by (ii) the average of the closing prices of
a share of COMPS common stock on the Nasdaq National Market for thirty
consecutive trading days ending on the trading day immediately preceding the day
of the default event.
Under the terms of the Asset Purchase Agreement for ARA-D/FW, Inc., COMPS
paid a total of $889,692 (plus the assumption of certain liabilities not to
exceed $100,000) at the closing, $272,626 of which was in cash and $617,066 of
which was in the form of two subordinated convertible notes ("Notes") in the
amounts of $497,066 and $120,000. The note in the amount of $497,066 bears
interest at 8% per annum payable monthly, requires semi-annual installments of
principal of $62,133, and matures in August 2003. The note in the amount of
$120,000 bears interest at 8% per annum and is due in two equal payments of
principal plus accrued interest in February 2000 and August 2000. The Notes can
only be converted into common stock of COMPS if COMPS defaults under the terms
of the Notes. During the period in which a default under the terms of the Notes
has not been cured, the number of shares of COMPS common stock issuable upon
such a conversion shall equal (i) the outstanding balance of the principal and
accrued interest of the Notes at the time of conversion, divided by (ii) the
average of the closing prices of a share of COMPS common stock on the Nasdaq
National Market for thirty consecutive trading days ending on the trading day
immediately preceding the day of the default event.
The total purchase price of $2,748,000, including acquisition costs of
$121,000 assumption of deferred subscription revenue of $66,700 plus assumption
of other liabilities of $60,400 was allocated, based upon management's best
estimate of expected future results of the acquired assets, as follows:
Current assets $ 164,400
Furniture and equipment 29,500
Other assets 3,000
Intangible assets 2,551,800
----------
$2,748,800
==========
F-25
<PAGE>
COMPS.COM, INC. AND SENDERO INVESTMENTS, INC., PARRAMORE, INC.,
AND THE COMMERCIAL BROKER'S NETWORK
Notes To Pro Forma Condensed Financial Statements (Continued)
(Unaudited)
The intangible assets are being amortized over estimated useful lives ranging
from three to five years.
Note 2.
The following are explanations of the adjustments reflected on the pro forma
condensed financial statements.
Pro Forma Condensed Balance Sheet as of June 30, 1999
-----------------------------------------------------
Adjustments reflect the acquisitions of Sendero, Parramore, and CBN for
cash of $843,000, accrued liabilities for acquisition expenses of $121,000,
assumption of liability for deferred subscription revenue of $50,000, and
notes payable of $1,657,000. These adjustments result in the recording of
intangible assets of $2,549,000 as of June 30, 1999.
Pro Forma Condensed Statement of Operations for the Six Months Ended
--------------------------------------------------------------------
June 30, 1999
-------------
Adjustments reflect amortization of intangible assets acquired as a result
of the acquisitions of $290,000 and interest expense of $89,000 on the notes
payable issued in the acquisitions and assumed interest expense on the cash
outlay of $843,000 at 8% as the Company did not have the available cash at the
beginning of the six month period presented.
Pro Forma Condensed Statement of Operations for the Year Ended
--------------------------------------------------------------
December 31, 1998
-----------------
Adjustments reflect amortization of intangible assets acquired as a result
of the acquisitions of $580,000 and interest expense of $189,000 on the notes
payable issued in the acquisitions and assumed interest expense on the cash
outlay of $843,000 at 8% as the Company did not have the available cash at the
beginning of the year presented.
F-26
<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 hereunto duly authorized.
COMPS.COM, Inc.
Date: November 10, 1999 /s/ Karen Goodrum
------------------
(Karen Goodrum)
Vice President, Chief Financial Officer
(Principal Financial and Accounting
Officer)
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the incorporation by reference in the Registration Statement (form
S-8) pertaining to the 1999 Stock Incentive Plan and 1999 Employee Stock
Purchase Plan of COMPS.COM, Inc. of our reports dated October 8, 1999, September
10, 1999, and September 8, 1999, with the respect to the financial statements of
Sendero Investments, Inc., Parramore, Inc. dba The Flick Report, and The
Commercial Broker's Network (A Joint Venture Project) included in COMPS.COM,
Inc.'s Current Report (form 8-K/A) dated August 27, 1999.
/s/ SPROUSE & WINN, L.L.P.
November 9, 1999
Austin, Texas
