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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): APRIL 20, 2000
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AKAMAI TECHNOLOGIES, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-27275 04-3432319
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(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation or organization) Identification No.)
500 Technology Square, Cambridge, Massachusetts 02139
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(Address of principal executive offices) (Zip Code)
(617) 250-3000
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(Registrant's telephone number, including area code)
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The undersigned Registrant hereby amends Item 7(b) of its Current Report on
Form 8-K filed with the Securities and Exchange Commission on May 5, 2000, which
excluded certain financial statements which were not available at the time of
filing, to read in its entirety as follows:
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information.
Unaudited Pro Forma Combined Condensed Balance Sheet at
December 31, 1999
Unaudited Pro Forma Combined Condensed Statement of
Continuing Operations for the Year Ended December 31,
1999
Notes to Unaudited Pro Forma Combined Condensed
Financial Information
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 24, 2000 AKAMAI TECHNOLOGIES, INC.
/s/ Robert O. Ball III
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Robert O. Ball III
Vice President, General Counsel and
Secretary
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UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial information
gives effect to the acquisition by Akamai of INTERVU as well as the acquisition
of Network24. These transactions are being accounted for as purchases. The
unaudited pro forma combined condensed balance sheet is based on the individual
historical balance sheets of Akamai, INTERVU and Network24 and has been prepared
to reflect the acquisition by Akamai of INTERVU and Network24 at December 31,
1999. The unaudited pro forma combined condensed statement of continuing
operations is based on the individual historical statements of continuing
operations of Akamai, INTERVU and Network24, and combines the results of
continuing operations of Akamai, INTERVU and Network24 for the year ended
December 31, 1999 as if the acquisitions occurred on January 1, 1999.
The pro forma combined condensed financial information is presented for
illustrative purposes only and is not necessarily indicative of the financial
position or operating results that would have been achieved if the acquisitions
had been completed as of the beginning of the period presented, nor are they
necessarily indicative of the future financial position or operating results of
Akamai. The pro forma combined condensed financial information does not give
effect to any cost savings or restructuring and integration costs that may
result from the integration of Akamai's, INTERVU's and Network24's operations.
The costs related to restructuring and integration have not yet been determined
and Akamai expects to charge these costs to operations during the quarter
incurred.
Pursuant to Rule 11-02 of Regulation S-X, the unaudited pro forma combined
condensed financial information is based on continuing operations only and
excludes the results of extraordinary items.
The unaudited pro forma combined condensed financial information should be
read in conjunction with the audited financial statements and accompanying notes
of Akamai, INTERVU and Network24 included in Akamai's Registration Statement on
Form S-4 (File No. 333-31712), as amended, filed with the Securities and
Exchange Commission on March 3, 2000.
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UNAUDITED PRO FORMA COMBINED CONDENSED
BALANCE SHEET AT DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AKAMAI NETWORK24 INTERVU ADJUSTMENTS COMBINED
-------- --------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash, cash equivalents and
short-term investments...... $269,554 $ 3,260 $ 115,047 $ (12,494)(2) $ 375,367
Accounts receivable, net....... 1,588 223 5,373 -- 7,184
Prepaid expenses and other
current assets.............. 2,521 41 925 -- 3,487
-------- ------- -------- ---------- ----------
Total current assets... 273,663 3,524 121,345 (12,494) 386,038
Property and equipment........... 23,875 445 13,858 -- 38,178
Intangible assets, net........... 434 -- 1,156 194,516(2) 2,876,409
2,680,303(3)
Other assets..................... 2,843 -- 6,360 -- 9,203
-------- ------- -------- ---------- ----------
Total assets........... $300,815 $ 3,969 $142,719 $2,862,325 $3,309,828
======== ======= ======== ========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
expenses.................... $ 11,070 $ 302 $ 3,690 $ 29,500(4) $ 44,562
Accrued payroll and benefits... 3,614 71 1,145 -- 4,830
Deferred revenue............... 698 44 554 -- 1,296
Current portion of obligations
under capital lease and
equipment loan.............. 504 39 385 -- 928
Current portion of long-term
debt........................ 2,751 -- 60 -- 2,811
-------- ------- -------- ---------- ----------
Total current
liabilities.......... 18,637 456 5,834 29,500 54,427
Obligations under capital lease
and equipment loan............. 733 21 671 -- 1,425
-------- ------- -------- ---------- ----------
Total liabilities...... 19,370 477 6,505 29,500 55,852
-------- ------- -------- ---------- ----------
Preferred stock.................. -- 58 30,001 (30,059)(6) --
Common stock..................... 925 122 15 106(5) 1,031
(137)(6)
Addition paid-in capital......... 374,739 19,592 203,823 2,992,652(5) 3,367,391
(223,415)(6)
Notes receivable from officers
for stock...................... (5,907) (227) -- -- (6,134)
CNN prepaid advertising.......... -- -- (20,000) -- (20,000)
Deferred compensation and other
equity related charges......... (29,731) (12,931) (8,943) 21,874(6) (29,731)
Accumulated other comprehensive
loss........................... -- -- (99) 99(6) --
Accumulated deficit.............. (58,581) (3,122) (68,583) 71,705(6) (58,581)
-------- ------- -------- ---------- ----------
Total stockholders'
equity............... 281,445 3,492 136,214 2,832,825 3,253,976
-------- ------- -------- ---------- ----------
Total liabilities and
stockholders'
equity............... $300,815 $ 3,969 $142,719 $2,862,325 $3,309,828
======== ======= ======== ========== ==========
</TABLE>
See accompanying notes to the unaudited pro forma combined
condensed financial information.
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UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS
OF CONTINUING OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
AKAMAI NETWORK24 INTERVU ADJUSTMENTS COMBINED
---------- --------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Revenue........................ $ 3,986 $ 735 $ 11,834 $ -- $ 16,555
---------- ------- ---------- --------- ----------
Operating expenses:
Cost of service.............. 9,002 768 5,160 -- 14,930
Engineering and
development............... 11,749 463 10,094 (169)(7) 22,137
Sales, general and
administrative............ 29,668 2,270 26,745 (1,457)(7) 658,126
64,839(2)
536,061(3)
Charges associated with the
NBC Strategic Alliance
Agreement................. -- -- 17,194 -- 17,194
Equity related
compensation.............. 10,005 -- -- 1,626(7) 11,631
---------- ------- ---------- --------- ----------
Total operating
expenses........... 60,424 3,501 59,193 600,900 724,018
---------- ------- ---------- --------- ----------
Operating loss................. (56,438) (2,766) (47,359) (600,900) (707,463)
Interest income, net........... 2,269 62 3,968 -- 6,299
---------- ------- ---------- --------- ----------
Loss from continuing
operations................... $ (54,169) $(2,704) $ (43,391) $(600,900) $ (701,164)
========== ======= ========== ========= ==========
Loss from continuing operations
per common share(1):
Basic and diluted............ $ (1.80) $ (3.23) $ (17.21)
========== ========== ==========
Weighted average number of
common shares(1):
Basic and diluted............ 30,177,376 13,452,463 40,743,866
========== ========== ==========
</TABLE>
See accompanying notes to the unaudited pro forma combined
condensed financial information.
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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
A. PRO FORMA BASIS OF PRESENTATION AND ADJUSTMENTS
The following unaudited pro forma combined condensed financial information
assumes the acquisition by Akamai of INTERVU as well as the acquisition of
Network24 in transactions to be accounted for as purchases. The unaudited pro
forma combined condensed balance sheet is based on the individual balance sheets
of Akamai, INTERVU and Network24 and has been prepared to reflect the
acquisition by Akamai of INTERVU and Network24 at December 31, 1999. The
unaudited pro forma combined condensed statement of continuing operations is
based on the individual statements of continuing operations of Akamai, INTERVU
and Network24, and combines the results of continuing operations of Akamai,
INTERVU and Network24 for the year ended December 31, 1999 as if the
acquisitions occurred on January 1, 1999.
Pursuant to the merger agreement, upon completion of the merger, Akamai
expects to issue 9.9 million shares of its common stock in exchange for all
outstanding shares of INTERVU common stock and INTERVU preferred stock based on
an exchange ratio of 0.5957. In addition, Akamai will exchange options and
warrants exercisable for INTERVU common stock for options and warrants
exercisable for 2.1 million shares of Akamai common stock.
On February 10, 2000, Akamai issued 599,152 shares of Akamai common stock
in exchange for all outstanding shares of common and preferred stock of
Network24. Akamai also issued options exercisable for 136,877 shares of common
stock and warrants exercisable for 58,985 shares of common stock in replacement
of outstanding options and warrants for common stock of Network24.
B. PRO FORMA ADJUSTMENTS TO PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
1. The unaudited pro forma combined per share amounts are based on the pro
forma combined weighted average number of shares of Akamai common stock
which equals Akamai's weighted average number of shares of Akamai common
stock outstanding for the period plus 9.9 million shares of Akamai
common stock that are expected to be issued at the completion of the
acquisition of INTERVU and the 599,152 shares of Akamai common stock
issued in the acquisition of Network24. All potential common stock
equivalents of Akamai, INTERVU and Network24 have been excluded from the
calculation of pro forma loss from continuing operations per common
share as their inclusion would be anti-dilutive.
2. Akamai estimates the purchase price for Network24 to be approximately
$198.2 million based on the consideration paid to Network24 stockholders
including common stock, options, warrants and cash, plus acquisition
related expenses. For purposes of measuring the value of the
transaction, the value of the Akamai common stock issued was based on
the average closing price of Akamai's common stock three days before and
after the parties agreed to the terms of the acquisition and the terms
were announced. The value of options and warrants issued were estimated
using the Black Scholes valuation model. Akamai is currently in the
process of performing a full assessment of the fair value of the net
assets acquired. For the purposes of the preparation of the pro forma
combined condensed financial information, Akamai has allocated $3.7
million of the purchase price to tangible assets acquired and
liabilities assumed based on the book value as of December 31, 1999. The
remainder has been allocated to intangible assets which are expected to
include: completed technology, workforce, trademarks and goodwill. Based
on an estimated useful life of three years for such intangible assets,
the unaudited pro forma combined condensed financial information
includes an adjustment of $64.8 million for amortization expense. The
allocation of the purchase price to tangible and intangible assets, as
well as the related amortization expense may change materially as a
result of the completion of Akamai's evaluation of the fair value of the
net assets acquired.
3. Akamai estimates the purchase price for INTERVU to be approximately
$2.837 billion based on the consideration to be paid to INTERVU
stockholders including common stock, options and
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warrants, plus acquisition related expenses. For purposes of measuring
the value of the transaction, the value of the Akamai common stock
issued was based on the average closing price of Akamai's common stock
three days before and after the parties agreed to the terms of the
acquisition and the terms were announced. The value of options and
warrants to be issued were estimated using the Black Scholes valuation
model. Akamai is currently in the process of performing a full
assessment of the fair value of the net assets acquired. For the
purposes of the preparation of the pro forma combined condensed
financial information, Akamai has allocated $156.2 million of the
purchase price to tangible assets acquired and liabilities assumed based
on the book value as of December 31, 1999, including $20.0 million of
CNN prepaid advertising recorded as a component of stockholders' equity.
The remainder has been allocated to intangible assets which are expected
to include: completed technology, workforce, patents, trademarks and
goodwill. Based on an estimated useful life of three to five years for
such intangible assets, the unaudited pro forma combined condensed
financial information includes an adjustment of $536.1 million for
amortization expense. The allocation of the purchase price to tangible
and intangible assets, as well as the related amortization expense may
change materially as a result of the completion of Akamai's evaluation
of the fair value of the net assets acquired.
4. Increase in accrued expenses for estimated acquisition related expenses
of $27.9 million for INTERVU and $1.6 million for Network24.
5. Increase in stockholders' equity for the issuance of 599,152 shares of
Akamai common stock for the acquisition of Network24 and 9.9 million
shares of Akamai common stock expected to be issued at the completion of
the acquisition of INTERVU. As a result, the recorded value of Akamai
common stock and additional paid-in capital increased $6,000 and $184.1
million, respectively, for the acquisition of Network24 and $100,000 and
$2.809 billion, respectively, for the acquisition of INTERVU.
6. Elimination of Network24 and INTERVU equity accounts.
7. Certain reclassification, none of which affects loss from continuing
operations, have been made to the Network24 and INTERVU statements of
operations in the unaudited pro forma combined condensed statements of
continuing operations to classify equity related compensation on a
consistent basis.
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