<PAGE>
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 (Date of earliest event reported): September 8, 2000
internet.com Corporation
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(Exact name of registrant as specified in its charter)
Delaware 000-26393 06-1542480
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
23 Old Kings Highway South
Darien, Connecticut 06820
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (203) 662-2800
N/A
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(Former name or former address, if changed since last report.)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 8, 2000, the Registrant consummated the acquisition of all of
the assets of ClickZ, Inc., a Massachusetts corporation ("ClickZ"), pursuant to
an Asset Purchase Agreement, dated September 8, 2000, by and among the
Registrant, ClickZ, Andrew R. Bourland and Ann M. Handley.
This transaction was initially reported by the Registrant in a Current
Report on Form 8-K filed on September 11, 2000. This Amendment is being filed to
amend Items 7(a) and 7(b) of such report in their entirety.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
The financial statements of ClickZ, Inc. and the report of Arthur
Andersen LLP, internet.com Corporation's independent public
accountants, relating to such financial statements are attached
hereto.
(b) PRO FORMA FINANCIAL INFORMATION:
The unaudited pro forma condensed consolidating financial
statements of internet.com Corporation attached hereto are not
necessarily indicative of the results that actually would have been
attained if the acquisition had been in effect on the dates
indicated or which may be attained in the future. Such statements
should be read in conjunction with the historical statements of
internet.com Corporation and ClickZ, Inc.
(c) EXHIBITS:
2.1 Asset Purchase Agreement, dated September 8, 2000, by and
among internet.com Corporation, ClickZ, Inc., Andrew R. Bourland
and Ann M. Handley*
99.1 Press release, dated September 11, 2000, of internet.com
Corporation*
--------------------
* Previously filed.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of ClickZ, Inc:
We have audited the accompanying balance sheet of ClickZ, Inc. (a
Massachusetts Corporation) as of December 31, 1999, and the related statements
of operations, changes in stockholders' equity 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 ClickZ, Inc. as of December
31, 1999, and the results of its operations and its cash flows for the year then
ended, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Stamford, Connecticut
November 13, 2000
<PAGE>
CLICKZ, INC.
BALANCE SHEETS
DECEMBER 31, 1999 AND JUNE 30, 2000
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
ASSETS 1999 2000
------------ ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $76,131 $119,612
Accounts receivable, net of allowances of $23,000
and $43,000, respectively 589,094 437,587
Prepaid expenses and other 30,725 91,072
-------- ---------
Total current assets 695,950 648,271
Property and equipment, net 55,164 112,970
-------- ---------
Total assets $751,114 $ 761,241
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $15,497 $254,160
Accrued expenses and other - 53,516
Deferred revenues - 98,794
-------- ---------
Total current liabilities 15,497 406,470
Commitments and contingencies - -
Stockholders' equity:
Common stock 100 100
Retained earnings 735,517 354,671
-------- ---------
Total stockholders' equity 735,617 354,771
-------- ---------
Total liabilities and stockholders' equity $751,114 $761,241
======== =========
</TABLE>
See notes to financial statements.
4
<PAGE>
CLICKZ, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, JUNE 30,
1999 2000
----------- --------------
(UNAUDITED)
<S> <C> <C>
Revenues $1,985,048 $2,662,091
Cost of revenues 614,494 1,335,822
---------- ----------
Gross profit 1,370,554 1,326,269
---------- ----------
Operating expenses:
Advertising, promotion and selling 153,731 449,836
General and administrative 408,780 473,978
Depreciation 10,538 18,075
Amortization 23,033 -
---------- ----------
Total operating expenses 596,082 941,889
---------- ----------
Operating income 774,472 384,380
Other income (expense), net 2,752 (694)
---------- ----------
Net income $ 777,224 $ 383,686
========== ==========
</TABLE>
See notes to financial statements.
5
<PAGE>
CLICKZ, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
COMMON STOCK TOTAL
------------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
-------- -------- ---------- -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1998 100 $ 100 $ 15,528 $ 15,628
Net income - - 777,224 777,224
Distributions to stockholders - - (57,235) (57,235)
------- ------- --------- ------------
Balance at December 31, 1999 100 100 735,517 735,617
Net income (unaudited) - - 383,686 383,686
Distributions to stockholders (unaudited) - - (764,532) (764,532)
------- ------- --------- ------------
Balance at June 30, 2000
(unaudited) 100 $ 100 $ 354,671 $ 354,771
======= ======= ========= ============
</TABLE>
See notes to financial statements.
6
<PAGE>
CLICKZ, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, JUNE 30,
1999 2000
----------- --------------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income $777,224 $ 383,686
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 33,571 18,075
Provision for losses on accounts receivable 23,000 20,000
Changes in current assets and liabilities -
Accounts receivable (573,577) 131,507
Prepaid expenses and other (29,233) (60,347)
Accounts payable and accrued expenses (28,122) 292,178
Deferred revenues - 98,794
---------- ----------
Net cash provided by operating activities 202,863 883,893
---------- ----------
Cash flows from investing activities:
Additions to property and equipment (58,717) (75,880)
---------- ----------
Net cash used in investing activities (58,717) (75,880)
---------- ----------
Cash flows from financing activities:
Distributions to stockholders (57,235) (764,532)
Repayment of loan from stockholder (28,028) -
---------- ----------
Net cash used in financing activities (85,263) (764,532)
---------- ----------
Net change in cash and cash equivalents 58,883 43,481
Cash and cash equivalents, beginning of period 17,248 76,131
---------- ----------
Cash and cash equivalents, end of period $76,131 $119,612
========== ==========
</TABLE>
See notes to financial statements.
7
<PAGE>
CLICKZ, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
1. THE COMPANY
ClickZ, Inc. ("ClickZ") operates a network of Web sites and related Internet
media properties that offer commentary from industry insiders as well as
original case studies and insight on affiliate marketing, B2B ("business to
business") marketing, brand marketing, digital living, e-business reports,
e-commerce commentary, e-mail marketing and e-mail marketing case studies,
e-marketing statistics and strategies, media buying, planning and selling,
search engine optimization and small business advice. ClickZ's target audience
comprises media buyers and planners, Web and e-mail advertising firms, list
vendors and agencies, ad and commerce based publishers, and Web developers. In
addition to its network of Web sites and related Internet media properties,
ClickZ produces conferences that focus on online marketing and advertising.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION. ClickZ generates its revenues from two primary
sources: advertising revenues and conferences.
ADVERTISING REVENUES. Advertising revenue is recognized ratably in the
period the advertising is displayed, provided that no significant company
obligations remain and collection of the resulting receivable is probable.
Company obligations typically include guarantees of a minimum number of
advertising impressions, or times that an advertisement is viewed by users
of ClickZ's Web sites.
CLICKZ CONFERENCES. ClickZ conferences generate revenues from attendee
registrations, as well as from advertiser and vendor sponsorships.
Proceeds from the sale of attendee registrations and advertiser and vendor
sponsorships are deferred and recognized as revenue at the time the
conferences are held.
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS. 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 the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
CONCENTRATION OF CREDIT RISK. Financial instruments that potentially subject
ClickZ to a significant concentration of credit risk consist primarily of cash
and accounts receivable. ClickZ deposits the majority of its cash with a single
financial institution. ClickZ's accounts receivable as of December 31, 1999 and
June 30, 2000 are primarily from Internet-related businesses.
CASH AND CASH EQUIVALENTS. ClickZ considers all highly liquid investments
purchased with original maturities of three months or less to be cash
equivalents. At December 31, 1999 and June 30, 2000, ClickZ had no investments
with maturities greater than three months.
PROPERTY AND EQUIPMENT. Depreciation of computer equipment and software is
provided using the straight-line method over estimated useful lives ranging from
three to five years. Depreciation of furniture, fixtures and equipment is
provided using the straight-line method over estimated useful lives ranging from
five to ten years.
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<PAGE>
Maintenance and repair expenditures are charged to appropriate expense
accounts in the period incurred; replacements, renewals and betterments are
capitalized. Upon the sale or other disposition of property, the cost and
accumulated depreciation of such properties are eliminated from the accounts and
the gains or losses thereon are reflected in operations.
IMPAIRMENT OF LONG-LIVED ASSETS. Long-lived assets and certain identifiable
intangibles are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment loss is recognized when the sum of undiscounted
expected future cash flows is less than the carrying amount of such assets. The
measurement for such impairment loss is based on the fair value of the assets.
ADVERTISING EXPENSE. ClickZ expenses advertising costs as incurred.
WEB SITE DEVELOPMENT COSTS. Web site development costs include expenses
incurred by ClickZ to develop, enhance, manage, monitor and operate its Web
sites. Web site development costs are expensed as incurred.
INCOME TAXES. ClickZ files federal and state income tax returns using the
cash basis of accounting. ClickZ has elected "S" Corporation status for federal
and state income tax reporting purposes. Accordingly, no federal or state income
taxes are provided for in the financial statements; federal and state taxable
income reported by ClickZ is included in the personal tax returns of the
stockholders.
RECENT ACCOUNTING PRONOUNCEMENTS. In June 1998, the Financial Accounting
Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities", subsequently amended by SFAS No. 137, to be effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. SFAS No. 133
requires that all derivative financial instruments, such as interest rate swap
contracts and foreign exchange contracts, be recognized in the financial
statements and measured at fair value regardless of the purpose or intent for
holding them. Changes in the fair value of derivative financial instruments are
either recognized periodically in income or stockholders' equity, depending on
whether the derivative is being used to hedge changes in fair value or cash
flows. The adoption of SFAS No. 133 is not expected to have a material effect on
ClickZ's financial statements.
In March 2000, the Emerging Issues Task Force reached a consensus on Issue
No. 00-2, "Accounting for Web Site Development Costs," ("EITF Issue No. 00-2")
to be applicable to all Web site development costs incurred for the quarter
beginning after June 30, 2000. The consensus states that for specific Web site
development costs, the accounting for such costs should be based generally on a
model consistent with AICPA Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use,"
("SOP 98-1"). Accordingly, certain Web site development costs which are
presently being expensed as incurred, will be capitalized and amortized. The
adoption of EITF Issue No. 00-2 is not expected to have a material effect on
ClickZ's financial statements.
3. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1999 2000
----------- ----------
(UNAUDITED)
<S> <C> <C>
Computer equipment and software $ 30,308 $ 106,188
Furniture, fixtures and equipment 39,861 39,861
----------- -----------
70,169 146,049
Less: Accumulated depreciation (15,005) (33,079)
----------- -----------
Property and equipment, net $ $55,164 $ 112,970
=========== ===========
</TABLE>
9
<PAGE>
4. COMMITMENTS AND CONTINGENCIES
ClickZ has entered into operating leases for each of its office facilities.
Future annual minimum lease payments under all operating leases are as
follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------
<S> <C>
2000 $ 37,812
2001 77,649
2002 57,102
2003 55,050
2004 41,288
Thereafter -
--------
$268,901
========
</TABLE>
5. SUBSEQUENT EVENT
On September 8, 2000, ClickZ entered into an asset purchase agreement with
internet.com Corporation. The consideration received in the acquisition
consisted of cash in the amount of $10.0 million and 211,382 shares of
internet.com's restricted common stock. An additional payment, based on future
performance measures, will be made at the end of the earnout period, consisting
of 50% cash and 50% restricted shares of internet.com's common stock.
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<PAGE>
INTERNET.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET (IN THOUSANDS)
JUNE 30, 2000
<TABLE>
<CAPTION>
INTERNET.COM
INTERNET.COM PRO FORMA CORPORATION
CORPORATION ADJUSTMENTS PRO FORMA
------------ ----------- ------------
ASSETS
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 85,878 $ (10,000)(1) $ 75,878
Accounts receivable, net 10,529 - 10,529
Prepaid expenses and other 1,107 - 1,107
---------- ---------- -----------
Total current assets 97,514 (10,000) 87,514
Property and equipment, net 4,752 - 4,752
Intangible assets, net 52,394 15,773 (2) 68,167
Investments and other assets 5,251 - 5,251
---------- ---------- -----------
Total assets $ 159,911 $ 5,773 $ 165,684
========== ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,634 $ - $ 2,634
Accrued expenses and other 6,744 - 6,744
Accrued Web site acquisition payments 4,539 - 4,539
---------- ---------- -----------
Total current liabilities 13,917 - 13,917
Accrued Web site acquisition payments 240 - 240
---------- ---------- -----------
Total liabilities 14,157 - 14,157
Total stockholders' equity 145,754 5,773 (3) 151,527
---------- ---------- -----------
Total liabilities and
stockholders' equity $ 159,911 $ 5,773 $ 165,684
========== ========== ===========
</TABLE>
See notes to the unaudited pro forma financial statements.
11
<PAGE>
INTERNET.COM CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET
(IN THOUSANDS)
JUNE 30, 2000
The unaudited pro forma condensed consolidating balance sheet gives effect to
the following unaudited pro forma adjustments:
1. Adjustment reflects the amount of cash paid for the purchase of certain
assets of ClickZ, Inc.
2. Adjustments reflects management's preliminary allocation of the purchase
price for the assets of ClickZ, Inc. of $15,773 consisting of $10,000 in cash
and $5,773 in internet.com Corporation common stock, in accordance with the
purchase method of accounting.
3. Adjustment reflects the fair value of common stock paid for the purchase of
certain assets of ClickZ, Inc.
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<PAGE>
INTERNET.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
INTERNET.COM
CLICKZ, INTERNET.COM PRO FORMA CORPORATION
INC. CORPORATION(3) ADJUSTMENTS PRO FORMA
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 1,985 $ 16,085 $ - $ 18,070
Cost of revenues 614 8,366 - 8,980
--------- ------------ ------------ ------------
Gross profit 1,371 7,719 - 9,090
--------- ------------ ------------ ------------
Operating expenses:
Advertising, promotion and selling 154 7,545 - 7,699
General and administrative 409 4,434 - 4,843
Depreciation 11 673 - 684
Amortization 23 9,796 5,258(1) 15,077
Non-cash compensation charge - 7,975 - 7,975
--------- ------------ ------------ ------------
Total operating expenses 597 30,423 5,258 36,278
--------- ------------ ------------ ------------
Operating income (loss) 774 (22,704) (5,258) (27,188)
Other income (expense), net 3 688 (512)(2) 179
--------- ------------ ------------ ------------
Income (loss) before income taxes 777 (22,016) (5,770) (27,009)
Provision for income taxes - - - -
--------- ------------ ------------ ------------
Net income (loss) $ 777 $ (22,016) $ (5,770) $ (27,009)
========= ============ ============ ============
Basic and diluted net loss per
share $ (1.08) $ (1.31)
============ ============
Weighted average number common
shares outstanding 20,335 20,546
============ ============
</TABLE>
See notes to the unaudited pro forma financial statements.
(3) Represents the combined financial data of predecessor business and
internet.com
13
<PAGE>
INTERNET.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
INTERNET.COM
CLICKZ, INTERNET.COM PRO FORMA CORPORATION
INC. CORPORATION(3) ADJUSTMENTS PRO FORMA
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 2,662 $ 21,806 $ - $ 24,468
Cost of revenues 1,336 9,724 - 11,060
---------- ------------ ------------ -------------
Gross profit 1,326 12,082 - 13,408
---------- ------------ ------------ -------------
Operating expenses:
Advertising, promotion and selling 450 8,580 - 9,030
General and administrative 474 4,139 - 4,613
Depreciation 18 869 - 887
Amortization - 9,670 2,629 (1) 12,299
---------- ------------ ------------ -------------
Total operating expenses 942 23,258 2,629 26,829
---------- ------------ ------------ -------------
Operating (income) loss 384 (11,176) (2,629) (13,421)
Other income (expense), net (1) 2,591 (253)(2) 2,337
---------- ------------ ------------ -------------
Income (loss) before income taxes 383 (8,585) (2,882) (11,084)
Provision for income taxes - 99 - 99
---------- ------------ ------------ -------------
Net income (loss) $ 383 $ (8,684) $ (2,882) $ (11,183)
========== ============ ============ =============
Basic and diluted net loss per share $ (0.35) $ (0.44)
============ =============
Weighted average number common
shares outstanding 24,789 25,183
============ =============
</TABLE>
See notes to the unaudited pro forma financial statements.
14
<PAGE>
INTERNET.COM CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1999 AND
FOR THE SIX MONTHS ENDED JUNE 30, 2000
The unaudited pro forma condensed consolidating statements of operations give
effect to the following unaudited pro forma adjustments:
1. Adjustment reflects the additional amortization of goodwill of $15,773, which
is being amortized over three years.
2. Adjustment reflects the reduction in interest income related to the cash
expended in the purchase transaction.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act, of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNET.COM CORPORATION
Date: November 21, 2000 By: /s/ Christopher S. Cardell
------------------------------------
Christopher S. Cardell
President
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