<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 23, 2000
(Date of earliest event reported: August 07, 2000)
Commission File Number: 000-25835
MYPOINTS.COM, INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-3255692
--------------------------------------------------------------------------------
(State of incorporation or organization) (IRS Employer I.D. No.)
100 California Street, 12th floor, San Francisco, California 94111
--------------------------------------------------------------------------------
(Address of principal executive offices)
(415) 676-3700
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
AMENDMENT NO. 1
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K,
originally filed with the Securities and Exchange Commission on August 21, 2000
reporting the acquisition by the registrant of Cybergold, Inc. ("Cybergold").
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 14, 2000, the Board of Directors of MyPoints.com, Inc. ("MyPoints"), a
Delaware corporation, approved the acquisition of Cybergold, Inc., a Delaware
corporation ("Cybergold"). Cybergold is a provider of online direct marketing
and advertising solutions. In connection with the acquisition, MyPoints,
Cybergold, and a wholly-owned subsidiary of MyPoints entered into an Agreement
and Plan of Reorganization dated as of April 14, 2000. The stockholders of
Cybergold approved the merger and the merger agreement at a special meeting of
stockholders held on August 3, 2000 in Oakland, California. In addition, at a
special meeting of stockholders held on August 3, 2000 in San Francisco,
California, MyPoints's stockholders approved the issuance of shares of
MyPoints's Common Stock in connection with the merger as required by the rules
of The Nasdaq Stock Market. The merger was completed on August 7, 2000. In
connection with the merger, Cybergold became a wholly-owned subsidiary of
MyPoints under the name Cybergold, Inc.
Under the merger agreement, each share of Cybergold's common stock that was
outstanding at the effective time of the merger was converted into the right to
receive 0.48 of a share of MyPoints's Common Stock. MyPoints issued
approximately 10.6 million shares of its Common Stock to former Cybergold
stockholders. The shares of MyPoints Common Stock issued in connection with the
merger were registered under the Securities Act of 1933 pursuant to a
Registration Statement on Form S-4 (File No. 333-39924). This registration
statement was declared effective on June 26, 2000. The merger is described in
greater detail in the registration statement.
In addition to the shares of MyPoints common stock issued in connection
with the merger, MyPoints assumed all outstanding options to purchase Cybergold
Common Stock that were outstanding at the effective time of the merger. These
options were converted into the right to acquire shares of MyPoints's common
stock, subject only to adjustments to maintain the economic equivalence of the
assumed options on the basis of the 0.48 exchange ratio in the merger.
MyPoints's acquisition of Cybergold was structured as a tax-free reorganization
under Section 368(a) of the Internal Revenue Code.
<PAGE> 3
ITEM 7 FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
(a) Financial Statements of Business Acquired
(i) The audited consolidated balance sheets of Cybergold as of December
31, 1998 and 1999, the audited consolidated statements of
operations, comprehensive income (loss), stockholders' equity and
cash flows of Cybergold for the years ended December 31, 1997, 1998
and 1999, the notes related thereto, and the Independent Auditors'
Reports thereon are set forth at pages F-28 through F-44 of the
joint proxy statement/prospectus contained in MyPoints's
registration statement on Form S-4 (File No. 333-39924). Such
financial statements, notes and reports set forth at such pages are
incorporated herein by reference.
(ii) The unaudited consolidated balance sheet of Cybergold as of June
30, 2000, the unaudited consolidated statements of operations and
cash flows of Cybergold for the six months ended June 30, 2000 and
June 30, 1999 and the notes related thereto are set forth below.
<PAGE> 4
Cybergold, Inc.
Six Months Ended June 30, 2000
Index to Financial Statements
Consolidated Balance Sheets at June 30, 2000 (unaudited) and December 31, 1999
Unaudited Consolidated Statements of Operations for the six months ended June
30, 2000 and June 30, 1999
Unaudited Consolidated Statements of Cash Flows for the six months ended June
30, 2000 and June 30, 1999
Notes to Unaudited Consolidated Financial Statements
<PAGE> 5
Cybergold, Inc.
Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 9,215 $ 17,265
Short-term investments 21,783 27,822
Accounts receivable, less allowance for
doubtful accounts of
$820 and $171, respectively 5,099 1,799
Prepaid expenses and other
current assets 368 709
-------- --------
Total current assets 36,465 47,595
Property and equipment, net 2,418 1,307
Intangible assets, net 178 317
Long-term investments 1,778 --
Deposits and other assets 148 134
-------- --------
Total assets $ 40,987 $ 49,353
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,496 $ 1,308
Current maturities of long-term
obligations 233 201
Members payable 3,422 2,201
Membership acquisition payable 922 625
Accrued liabilities 2,832 1,526
Deferred revenue 386 643
-------- --------
Total current liabilities 10,291 6,504
Long-term obligations, net of current
maturities 265 389
-------- --------
Total liabilities 10,556 6,893
-------- --------
Stockholders' Equity
Common stock 3 3
Additional paid-in capital 72,332 69,647
Deferred compensation (1,113) (1,313)
Retained deficit (40,675) (25,877)
Unrealized loss (116) --
-------- --------
Total stockholders' equity 30,431 42,460
-------- --------
Total liabilities and
stockholders' equity $ 40,987 $ 49,353
======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 6
Cybergold, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------
2000 1999
-------- --------
<S> <C> <C>
Revenues:
Transaction $ 5,505 $ 894
CMS and other 5,612 396
-------- --------
Total revenues 11,117 1,290
-------- --------
Cost of goods sold:
Transaction 2,441 423
CMS and other 144 184
-------- --------
Total costs of goods sold 2,585 607
-------- --------
Gross profit 8,532 683
-------- --------
Operating expenses:
Sales and marketing 12,796 2,533
Product development 3,880 1,149
General and administrative 5,196 827
itarget.com acquisition expenses 2,142 --
Amortization of deferred compensation 335 491
-------- --------
Total operating expenses 24,349 5,000
-------- --------
Loss from operations (15,817) (4,317)
Net other income 1,015 44
-------- --------
Net loss (14,802) (4,273)
Dividend attributable to preferred
stockholders -- (811)
-------- --------
Net loss attributable to common
stockholders (14,802) (5,084)
Other comprehensive loss (117) --
-------- --------
Comprehensive loss $(14,919) $ (5,084)
======== ========
Net loss per common share,
basic and diluted $ (0.71) $ (0.97)
======== ========
Weighted average common shares
outstanding, basic and diluted
20,896 5,228
======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 7
Cybergold, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the Six Months Ended June 30,
---------------------------------
2000 1999
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(14,802) $ (4,273)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 474 177
Amortization of deferred compensation 335 491
Imputed compensation -- 83
Revenues in exchange for equity instruments (778) --
Changes in assets and liabilities:
Accounts receivable (2,550) (43)
Prepaid expenses and other assets 341 (416)
Accounts payable 1,188 549
Members payable 1,221 407
Membership acquisition payable 297 296
Accrued liabilities 1,306 170
Deferred revenue (257) 69
-------- --------
Net cash used in operating activities (13,225) (2,490)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (1,585) (223)
Purchase of long-term investments (1,000) --
Proceeds from short-term investments 6,578 --
-------- --------
Net cash provided by (used in) investing
activities 3,993 (223)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of capital lease obligations (92) (73)
Payment of loan obligations -- (34)
Proceeds from equipment financing -- 215
Proceeds from issuance of preferred stock 327 8,000
Proceeds form issuance of common stock 227 --
Proceeds from exercise of stock options, net
of repurchases 720 36
-------- --------
Net cash provided by financing activities 1,182 8,144
-------- --------
Net increase (decrease) in cash and cash
equivalents $ (8,050) $ 5,431
CASH AND CASH EQUIVALENTS:
Balance at beginning of period $ 17,265 $ 3,181
-------- --------
Balance at end of period $ 9,215 $ 8,612
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 33 $ 26
======== ========
Non-cash transactions:
Barter revenues, net $ 802 $ --
======== ========
In March 2000, the Company issued approximately
1.83 million shares in exchange for the entire
capital stock of itarget.com in an acquisition
accounted for as a pooling.
In the six months ended June 30, 2000, warrants for 167,000 shares of common
stock were exercised in a cashless exchange for 162,000 shares of common stock.
In January 2000, itarget entered into a stock swap agreement with Quintel
Communications whereby Quintel issued 229,862 shares of its common stock to the
Company in exchange for 213,258 shares of the itarget Series B preferred stock.
See accompanying notes to financial statements.
</TABLE>
<PAGE> 8
CYBERGOLD, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The interim condensed consolidated financial statements of Cybergold, Inc. (the
Company) are unaudited and have been prepared in accordance with generally
accepted accounting principles for interim financial information. Accordingly,
they do not include all of the information required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such unaudited financial statements include all adjustments,
consisting of normal recurring adjustments, considered necessary for a fair
presentation of the Company's financial position as of June 30, 2000 and the
results of its operations and cash flows for the six months ended June 30, 2000
and 1999.
The unaudited interim condensed consolidated financial statements should be read
in conjunction with the Company's audited financial statements and the notes
thereto included in the MyPoints, Inc. Registration Statement on Form S-4 filed
with the Securities and Exchange Commission on June 23, 2000. The results of
operations for the six months ended June 30, 2000 are not necessarily indicative
of the results to be expected for any subsequent quarter or the entire year
ending December 31, 2000.
2. SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition and Cost of Revenues
The Company earns revenue from certain member transactions and from custom
marketing and other services. Transaction revenues are earned each time a member
earns or spends incentive rewards within the system and for micropayment
transactions. Transaction revenues are recognized as revenue upon completion of
the specific action related to the transaction fee. Custom marketing services
and other revenues include production and development fees received for
customization of marketing programs, fees received for delivering targeted
e-mail to the Company's members and fees received for other advertising and
marketing services. Revenue is recognized as these services are performed.
Prepayments by advertising or marketing clients for transaction fees or custom
marketing services are included in deferred revenue on the accompanying balance
sheets.
The cost of revenues associated with our transaction revenues represent cash
rewards paid to our members for completing transactions. The cost of revenues
associated with custom advertising and marketing services and other revenues
primarily consist of costs for production and development personnel and
independent contractors.
Any unpaid rewards due to members are recorded in members payable in the
accompanying balance sheets.
Also included in net revenues are revenues generated from exchanging lead
generation and advertising services for advertising services. Such transactions
are recorded at the lower of the estimated fair value of the advertisements
received or delivered whichever is more reliably measurable. Revenues from these
types of transactions are recognized when advertising or lead generation is
provided, and services received are charged to expense when used. For the six
months ended June 30, 2000 these revenues amounted to $ 802,000.
<PAGE> 9
During the six months ended June 30, 2000, the Company generated revenues in the
amount of $519,000 in exchange for equity instruments. Such transactions are
recorded at the estimated fair value of the advertisements delivered or the fair
value of the equity instruments received, whichever is more reliably measurable.
Short-term Investments
Short-term investments consist primarily of government and fixed-income
securities which the Company plans to hold to maturity. These investments are
reported at amortized cost in the accompanying balance sheets.
3. MERGER WITH iTARGET.COM
On March 29, 2000, the Company issued approximately 1.83 million shares of its
common stock for the entire common stock of itarget.com. This acquisition was
accounted for under the pooling-of-interests method of accounting. The financial
statements reflect this acquisition as if Cybergold, Inc. and itarget.com had
always been members of the same operating group. The financial statements are
combined and all significant intercompany amounts have been eliminated.
The separate results of operations of Cybergold, Inc. and itarget.com, Inc. for
periods prior to the merger are presented below (in thousands):
<TABLE>
<CAPTION>
CYBERGOLD, INC. iTARGET.COM, INC.
--------------- -----------------
<S> <C> <C>
For the six months ended June 30, 1999
Revenues $ 1,277 $ 13
Net loss $ (3,950) $ (323)
For the six months ended June 30, 2000
Revenues $ 10,476 $ 641
Net loss $(11,061) $ (3,741)
</TABLE>
The results of Cybergold's operations subsequent to March 29,2000 reflect the
combined results of Cybergold and itarget.com.
4. BASIC AND DILUTED LOSS PER COMMON SHARE
Basic loss per share is computed by dividing the loss attributable to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted loss per common share reflects the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted into common stock. Common stock equivalents are excluded from the
computation in loss periods, as their effect would be antidilutive.
5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities and requires recognition of all derivatives as assets or
liabilities and measurement of those instruments at fair value. In June 1999,
the Financial Accounting Standards Board issued SFAS No. 137, "Accounting for
Derivative Instruments and Hedging Activities-Deferral of the Effective Date of
FASB Statement No. 133," which deferred the required date of adoption of SFAS
No. 133 for one year, to fiscal years beginning after June 15, 2000. The Company
is currently assessing the impact of these statements.
In December 1999, the SEC issued Staff Accounting Bulletin No. 101 ("SAB 101"),
"Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the
SEC's views in applying generally accepted accounting principles to revenue
recognition in financial statements. Management does not expect the adoption of
SAB 101 to have a material effect on the Company's operations or financial
position. The Company is required to adopt SAB 101 in the fourth quarter of
fiscal 2000.
In March 2000, the Financial Accounting Standards Board issued Interpretation
No. 44 ("FIN No. 44") "Accounting for Certain Transactions involving Stock
Compensation," an interpretation of APB No. 25. FIN No. 44 clarifies the
application of APB No. 25 for (a) the definition of employee for purposes of
applying APB No. 25, (b) the criteria for determining whether a plan qualifies
as a noncompensatory plan, (c) the accounting consequence of various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. FIN No. 44 is effective July 1, 2000, but certain conclusions cover
specific events that occur after either December 15, 1998, or January 12, 2000.
The Company believes the impact of FIN No. 44 will not have a material effect on
its financial position or results of operations.
<PAGE> 10
(b) Pro Forma Financial Information (unaudited)
The following unaudited pro forma condensed consolidated financial statements
are presented for illustrative purposes only and do not purport to be indicative
of the consolidated financial position and results of operations for future
periods or the results that actually would have been realized had the Company
and Cybergold been a consolidated company during the specified periods. The
unaudited pro forma condensed consolidated financial statements, including the
notes thereto, are qualified by reference to, and should be read in conjunction
with the historical consolidated financial statements and notes thereto of the
Company which were previously reported in the Company's 10-K filed with the
Securities and Exchange Commission on March 30, 2000.
The following unaudited pro forma condensed consolidated financial statements
are based on the respective historical audited consolidated financial statements
and the notes thereto of the Company and Cybergold after giving effect to the
acquisition of Cybergold using the purchase method of accounting and the
assumptions and adjustments described below. The purchase price was allocated to
the estimated fair value of the assets acquired and liabilities assumed. The
purchase price allocation is based on an independent appraisal and management
estimates.
The required pro forma unaudited financial information is set forth below.
<PAGE> 11
PRO FORMA FINANCIAL INFORMATION
Table of Contents
Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of June 30, 2000
Unaudited Pro Forma Condensed Consolidated
Statement of Operation for the six months
ended June 30, 2000
Unaudited Pro Forma Condensed Consolidated
Statement of Operation for the year ended
December 31, 1999
Unaudited Notes to Pro Forma Condensed
Consolidated Financial Statements
<PAGE> 12
Unaudited Pro Forma Condensed Combined
Balance Sheet as of June 30, 2000
(In thousands)
<TABLE>
<CAPTION>
HISTORICAL
--------------------------- PRO FORMA
MYPOINTS CYBERGOLD ADJUSTMENTS COMBINED
--------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 108,461 $ 9,215 $ - $ 117,676
Short-term investments 21,783 - 21,783
Accounts receivable, net 18,966 5,099 - 24,065
Unbilled receivables, net 347 - 347
Notes and interest receivable 2,035 2,035
Deposits and prepaid expenses 1,842 368 - 2,210
Other current assets 1,008 - 1,008
--------- --------- --------- ---------
Total current assets 132,659 36,465 - 169,124
Intangible assets 20,150 178 (178)A 180,548
- 152,598 A
3,800 C
3,000 D
1,000 E
Restricted cash 2,509 - - 2,509
Property and equipment, net 12,107 2,418 - 14,525
Other assets 78 1,926 (1,000)E 1,004
--------- --------- --------- ---------
Total assets $ 167,503 $ 40,987 $ 159,220 $ 367,710
========= ========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable & accrued liabilities $ 13,168 $ 5,328 $ 3,000 C $ 21,496
Dividends payable 3,800 C 3,800
Notes payable, current portion 335 120 - 455
Obligations under capital leases, current portion 112 113 - 225
Other current liabilities - 922 - 922
Deferred revenue 2,497 386 - 2,883
Members payable 13,004 3,422 - 16,426
--------- --------- --------- ---------
Total current liabilities 29,116 10,291 6,800 46,207
Notes payable, less current portion 738 220 - 958
Obligations under capital leases, less current portion 42 45 - 87
Stockholders' equity:
Common stock 29 3 (3)A 40
11 A
Additional paid-in capital 221,980 72,332 (71,104)A 407,497
184,289 A
Deferred stock-based compensation (7,206) (1,113) (1,448) (9,767)
Unrealized loss on marketable securities - (116) - (116)
Accumulated deficit (77,196) (40,675) 40,675 A (77,196)
--------- --------- --------- ---------
Total stockholders' equity 137,607 30,431 152,420 320,458
--------- --------- --------- ---------
Total liabilities and stockholders' equity
$ 167,503 $ 40,987 $ 159,220 $ 367,710
========= ========= ========= =========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
<PAGE> 13
Unaudited Pro Forma Combined Statement of Operations
Year ended December 31, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
HISTORICAL
-------------------------- PRO FORMA
MYPOINTS CYBERGOLD ADJUSTMENTS COMBINED
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 24,140 $ 5,483 $ - $ 29,623
Cost of revenues 7,407 1,928 - 9,335
--------- --------- --------- ---------
Gross profit 16,733 3,555 - 20,288
--------- --------- --------- ---------
Operating expenses:
Technology costs 8,665 3,187 - 11,852
Sales and marketing expense 30,247 9,158 - 39,405
General and administrative expense 9,601 3,352 - 12,953
Amortization of intangible assets 3,116 - 53,466 B 56,582
Stock-based compensation 3,054 735 630 4,419
--------- --------- --------- ---------
Total operating expenses 54,683 16,432 54,096 125,211
--------- --------- --------- ---------
Operating loss (37,950) (12,877) (54,096) (104,923)
Interest income/(expense), net 494 740 - 1,234
--------- --------- --------- ---------
Net loss (37,456) (12,137) (54,096) (103,689)
--------- --------- --------- ---------
Dividend related to preferred stockholders (9,800) (1,571) (11,371)
--------- --------- --------- ---------
Net Loss attributable to common stockholders $ (47,256) $ (13,708) $ (54,096) (115,060)
========= ========= ========= =========
Basic and diluted net loss per share $ (3.53) $ (1.45) $ (4.79)
========= ========= =========
Weighted average shares - basic and diluted 13,397 9,464 10,636 A 24,033
========= ========= ========= =========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
<PAGE> 14
Unaudited Pro Forma Combined Statement of Operations
Six Months ended June 30, 2000
(In thousands, except per share data)
<TABLE>
<CAPTION>
HISTORICAL
------------------------ PRO FORMA
MYPOINTS CYBERGOLD ADJUSTMENTS COMBINED
-------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues $ 34,528 $ 11,117 $ - $ 45,645
Cost of revenue 8,543 2,585 - 11,128
-------- -------- -------- --------
Gross Profit 25,985 8,532 - 34,517
Operating expenses:
Technology costs 10,918 3,880 - 14,798
Sales and marketing expense 21,694 12,796 - 34,490
General and administrative expense 10,011 5,196 - 15,207
Amortization of intangible assets 2,419 - 26,733 B 29,152
itarget.com acquisition costs - 2,142 - 2,142
Stock-based compensation 2,200 335 441 2,976
-------- -------- -------- --------
Total operating expenses 47,242 24,349 27,174 98,765
-------- -------- -------- --------
Operating loss (21,257) (15,817) (27,174) (64,248)
Interest income/(expense), net 2,539 1,015 - 3,554
-------- -------- -------- --------
Net loss $(18,718) $(14,802) $(27,174) $(60,694)
======== ======== ======== ========
Basic and diluted net loss from continuing operations
per share $ (.67) $ (.71) $ (1.57)
======== ======== ========
Weighted average shares - basic and diluted 27,944 20,896 10,636 A 38,580
======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited pro forma combined financial statements.
<PAGE> 15
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
On April 14, 2000, MyPoints.com, Inc., ("MyPoints") entered into an agreement to
merge with Cybergold, Inc. ("Cybergold") in a transaction to be accounted for as
a purchase. The purchase price of the Cybergold acquisition is estimated to be
$184.3 million including the estimated value of the MyPoints shares and
estimated transaction costs of $2.5 million. The stockholders of Cybergold will
receive approximately 10,636,000 shares of MyPoints common stock. Additionally,
MyPoints will convert approximately 2,978,000 Cybergold options into
approximately 1,430,000 options to purchase MyPoints common stock. These
estimates are preliminary and the actual number of shares and stock options to
purchase shares will depend on the actual number outstanding as of the date of
the consummation of the merger.
The estimated value of the MyPoints common stock is approximately $16.29 per
share based on the average closing price of MyPoints's common stock for the five
day period including the date of the announcement of the signing of the merger
agreement and two days preceding and succeeding such date. The estimated value
of the options to purchase MyPoints common stock is approximately $5.98 per
share using the Black-Scholes model.
The preliminary purchase price allocation using balances as of June 30, 2000
including adjustments C through E related to the purchase, as described in Note
2, is summarized below (in thousands):
<TABLE>
<CAPTION>
Amount
------
<S> <C>
Fair value of tangible net assets acquired $ 22,454
Membership base 1,749
Existing technology 1,230
Workforce 3,722
Deferred compensation 1,448
Goodwill 153,697
--------
Total purchase price $184,300
========
</TABLE>
MyPoints expects to amortize the intangibles over their estimated useful lives
of 3 years.
NOTE 2 - PRO FORMA ADJUSTMENTS
A To reflect the acquisition of Cybergold intangible assets based on the
preliminary purchase price allocation described in Note 1.
B To reflect amortization of goodwill and other intangibles over their
estimated useful lives of three years, as if the acquisition occurred on
January 1, 1999 and January 1, 2000 for purposes of the Statement of
Operations for the year ended December 31, 1999 and the six months ended
June 30, 2000, respectively.
C To reflect the estimated dividend to be paid to the former Cybergold
shareholders in regards to the disposition of Magnacash.
D To reflect estimated severance costs of $400,000 and Cybergold
estimated acquisition costs of $2.6 million.
E To record investments at their estimated market value.
<PAGE> 16
SIGNATURE
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.
MYPOINTS.COM, INC.
By: /s/ John Steuart
---------------------------
John Steuart,
Senior Vice President,Finance
and Chief Financial Officer
<PAGE> 17
Exhibit Index
<TABLE>
<CAPTION>
No. Description
--- -----------
<S> <C>
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Singer Lewak Greenbaum and Goldstein LLP
</TABLE>
