<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 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): JANUARY 14, 2000
ASHFORD.COM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-27357 76-0617905
(STATE OF INCORPORATION) (COMMISSION FILE NO.) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
3800 BUFFALO SPEEDWAY, SUITE 400
HOUSTON, TEXAS 77098 77098
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 369-1300
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<PAGE> 2
This Form 8-K/A amends the following items, financial statements, exhibits or
other portions of the Current Report on Form 8-K filed with the Securities and
Exchange Commission on January 31, 2000, by Ashford.com, Inc. in connection with
the acquisition of Jasmin.com Corporation.
ITEM 7. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED AND EXHIBITS
<TABLE>
<S> <C>
(a) Financial Statements of Business Acquired
JASMIN.COM CORPORATION
FINANCIAL STATEMENTS:
Report of Independent Public Accountants F-1
Balance Sheets as of December 31, 1998 and 1999 F-2
Statements of Operations for the period from Inception (October 23, 1998) through December 31,
1998 and the year ended December 31, 1999 F-3
Statements of Stockholders' Equity for the period from Inception (October 23, 1998) through
December 31, 1998 and the year ended December 31, 1999 F-4
Statements of Cash Flows for the period from Inception (October 23, 1998) through December 31,
1998 and the year ended December 31, 1999 F-5
Notes to Financial Statements F-6
(b) Pro Forma Financial Information (unaudited)
ASHFORD.COM, INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (unaudited):
Introduction F-11
Pro Forma Consolidated Balance Sheet as of December 31, 1999 F-12
Pro Forma Consolidated Statement of Operations for the nine months ended December 31, 1999 F-13
Pro Forma Consolidated Statement of Operations for the period from Inception (March 6, 1998)
through March 31, 1999 F-14
Notes to Pro Forma Consolidated Financial Statements F-15
</TABLE>
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
*2.4 Agreement and Plan of Reorganization dated as of January
14, 2000 by and among the Company, Ashford-Jasmin Fragrance
Corporation and Jasmin.com Corporation
*99.1 Text of Press Release dated January 17, 2000
</TABLE>
* Previously filed
2
<PAGE> 3
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: March 29, 2000
ASHFORD.COM, INC.
By: /s/ DAVID F. GOW
-------------------------------
Name: David F. Gow
Title: Chief Financial Officer
3
<PAGE> 4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
of Jasmin.com Corporation:
We have audited the accompanying balance sheets of Jasmin.com Corporation (a
Delaware corporation) as of December 31, 1998 and 1999, and the related
statements of operations, stockholders' equity and cash flows for the period
from inception (October 23, 1998) through December 31, 1998, and for the year
ended December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Jasmin.com Corporation as of
December 31, 1998 and 1999, and the results of its operations and its cash flows
for the period from inception (October 23, 1998) through December 31, 1998, and
for the year ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
February 25, 2000
F-1
<PAGE> 5
JASMIN.COM CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
----------------------------
1998 1999
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,578 $ 305,940
Certificate of deposit -- 20,000
Accounts receivable -- 9,050
Receivable from affiliate -- 148,713
Inventories -- 657,104
Prepaids and other 4,300 114,774
----------- -----------
Total current assets 10,878 1,255,581
PROPERTY AND EQUIPMENT, net of accumulated depreciation
of $237,877 at December 31, 1999 -- 1,274,115
----------- -----------
Total assets $ 10,878 $ 2,529,696
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 4,349 $ 2,858,509
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Series A preferred stock, $.01 par value, 3,800,000 shares authorized,
1,000,000 shares issued and outstanding at December 31, 1999 -- 10,000
Common stock, $.01 par value, 6,000,000 shares authorized,
900,000 shares issued and outstanding at December 31, 1999 -- 9,000
Membership interests 24,000 --
Additional paid-in capital -- 5,451,000
Accumulated deficit (17,471) (5,798,813)
----------- -----------
Total stockholders' equity 6,529 (328,813)
----------- -----------
Total liabilities and stockholders' equity $ 10,878 $ 2,529,696
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE> 6
JASMIN.COM CORPORATION
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period From
Inception
(October 23, 1998)
to Year Ended
December 31, December 31,
1998 1999
----------- -----------
<S> <C> <C>
NET SALES $ 14,000 $ 546,300
COST OF SALES -- 483,891
----------- -----------
Gross profit 14,000 62,409
OPERATING EXPENSES:
Marketing and sales -- 3,331,418
General and administrative 31,471 2,330,588
Depreciation -- 237,877
----------- -----------
Total operating expenses 31,471 5,899,883
----------- -----------
Loss from operations (17,471) (5,837,474)
INTEREST INCOME -- 56,132
----------- -----------
Net loss $ (17,471) $(5,781,342)
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 7
JASMIN.COM CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Series A
Preferred Stock Common Stock
-------------------- --------------- Additional Total
Par Par Membership Paid-In Accumulated Stockholders'
Shares Value Shares Value Interests Capital Deficit Equity
-------- -------- ------ ----- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT INCEPTION,
October 23, 1998 -- $ -- -- $ -- $ -- $ -- $ -- $ --
Issuance of membership
interests for cash upon
formation on October 23,
1998 -- -- -- -- 24,000 -- -- 24,000
Net loss -- -- -- -- -- -- (17,471) (17,471)
--------- -------- ------- ------ -------- ----------- ----------- -----------
BALANCE, December 31, 1998 -- -- -- -- 24,000 -- (17,471) 6,529
Issuance of common stock
in exchange for membership
interests -- -- 900,000 9,000 (24,000) 15,000 -- --
Issuance of Series A preferred
stock in exchange for cash 1,000,000 10,000 -- -- -- 4,990,000 -- 5,000,000
Obligation to issue common
stock for services -- -- -- -- -- 446,000 -- 446,000
Net loss -- -- -- -- -- -- (5,781,342) (5,781,342)
--------- -------- ------- ------ -------- ----------- ----------- -----------
BALANCE, December 31, 1999 1,000,000 $ 10,000 900,000 $9,000 $ -- $ 5,451,000 $(5,798,813) $ (328,813)
========= ======== ======= ====== ======== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 8
JASMIN.COM CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period From
Inception
(October 23, 1998)
to Year Ended
December 31, December 31,
1998 1999
------------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (17,471) $(5,781,342)
Adjustments to reconcile net loss to net cash used in
operating activities-
Depreciation -- 237,877
Compensation expense related to obligation to issue common stock -- 446,000
Changes in assets and liabilities-
Accounts receivable -- (9,050)
Receivable from affiliate -- (148,713)
Inventories -- (657,104)
Prepaids and other (4,300) (110,474)
Accounts payable and accrued liabilities 4,349 2,854,160
----------- -----------
Net cash used in operating activities (17,422) (3,168,646)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment -- (1,511,992)
Certificate of deposit -- (20,000)
----------- -----------
Net cash used in investing activities -- (1,531,992)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of membership interests 24,000 --
Issuance of Series A preferred stock -- 5,000,000
----------- -----------
Net cash provided by financing activities 24,000 5,000,000
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 6,578 299,362
CASH AND CASH EQUIVALENTS:
Beginning of period -- 6,578
----------- -----------
End of period $ 6,578 $ 305,940
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 9
JASMIN.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. OPERATIONS AND
ORGANIZATION OF BUSINESS:
Background
Jasmin.com LLC was formed as a Delaware limited liability company on October 23,
1998 (Inception). Jasmin.com LLC was reorganized as a Delaware corporation on
April 8, 1999, and its name was changed to Jasmin.com Corporation (Jasmin.com or
the Company). The Company is engaged in the distribution of fine fragrances
through on-line Internet sales. The Company's specialized content includes an
on-line magazine dedicated to fragrances, a fragrance museum, a wide range of
fragrance brand offerings and a proprietary search engine that allows consumers
to search for fragrances according to a wide range of criteria. Jasmin.com also
offers custom-made fragrances from its own perfumer. Payment for substantially
all of Jasmin.com's sales are made through third-party credit cards.
The Company experienced negative cash flows from operations and incurred net
losses for the period from Inception through December 31, 1998, and for the year
ended December 31, 1999. The Company funded its activities primarily from equity
financings. The business activities in which Jasmin.com is engaged involve a
high degree of risk, and future success is dependent upon a number of factors
which include, among others, generating sufficient revenues, expanding and
maintaining a supply of products, successfully developing sales and marketing
operations and obtaining the capital resources to complete these activities.
There can be no assurance that the Company will attain successful operations.
On January 14, 2000, the Company, Ashford.com, Inc., and Ashford-Jasmin
Fragrance Corporation (Asford-Jasmin), a wholly owned subsidiary of Ashford.com,
Inc., executed an agreement and plan of reorganization (the Agreement) whereas
Jasmin.com was merged with and into Ashford-Jasmin with Ashford-Jasmin
continuing as the surviving corporation. Upon execution of the Agreement, the
aggregate purchase price for all of the preferred stock outstanding totaled
$4,537,973, including $738,902 cash and 330,354 shares of Ashford.com, Inc.'s
common stock with a fair value of $11.50 per share at the date of acquisition.
The Agreement also provides for the issuance of additional shares of
Ashford.com, Inc.'s common stock, not to exceed 736,514 shares to the preferred
and common stockholders, upon the resolution of certain authorized dealer
relationship contingencies as set forth in the Agreement.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States (GAAP) requires the Company's 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.
F-6
<PAGE> 10
Revenue Recognition
Revenue is recognized on sales of merchandise held for resale when the product
is sold and shipped. Revenues totaling $14,000 for the period from Inception
through December 31, 1998, reflect research fee revenue recognized as the
related services were provided. No such services were provided subsequent to
December 31, 1998.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and short-term, highly liquid
investments with original maturities of three months or less.
Certificate of Deposit
A certificate of deposit was issued to the Company in July 1999 for the purpose
of securing the Company's account with a bank. The certificate of deposit will
remain pledged to the bank until its final maturity in July 2000.
Inventories
Inventories consist of merchandise held for resale, principally fragrances and
fragrance bottles, and packaging supplies, and is stated at the lower of cost or
market. The Company uses the average cost method of determining cost of
inventory obtained directly from manufacturers. Inventories at December 31, 1998
and 1999, were composed of the following:
<TABLE>
<CAPTION>
1998 1999
-------- --------
<S> <C> <C>
Merchandise held for resale $ -- $309,453
Packaging supplies -- 347,651
-------- --------
$ -- $657,104
======== ========
</TABLE>
Web Site Costs
Costs incurred in connection with developing or obtaining software for internal
use are capitalized in accordance with Statement of Position 98-1, "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use."
Capitalized Web site development costs at December 31, 1999 primarily relate to
external direct costs incurred in developing and obtaining software utilized on
the Jasmin.com Web site.
Advertising Costs
The costs of advertising are expensed as incurred. For the period from Inception
through December 31, 1998, and for the year ended December 31, 1999, the Company
incurred advertising expense of $- and $2,550,000, respectively.
Start-Up Costs
In accordance with the American Institute of Certified Public Accountants'
Statement of Position (SOP) No. 98-5, "Reporting on the Costs of Start-up
Activities," the Company has expensed all start-up costs, including organization
costs, as incurred.
F-7
<PAGE> 11
Income Taxes
The Company is a C Corporation for U.S. federal income tax purposes and uses the
liability method in accounting for income taxes. Under this method, deferred
taxes are recorded based upon differences between the financial reporting and
tax bases of assets and liabilities and are measured using the enacted rates and
laws that will be in effect when the differences are expected to reverse. A
valuation allowance has been established where necessary to reduce deferred tax
assets to the amount more likely than not expected to be realized in future tax
returns.
Comprehensive Income
The Company has adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 130, "Reporting Comprehensive Income." SFAS No. 130
establishes standards for reporting comprehensive income and its components in
financial statements. Comprehensive income, as defined, includes all changes in
equity (net assets) during a period from nonowner sources. To date, the Company
has not engaged in transactions that are required to be reported in
comprehensive income.
Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation," establishes a fair
value-based method of accounting for stock-based compensation plans. The Company
has recorded as expense the fair value of all stock-based compensation that the
Company is obligated to issue to employees and third-party service providers.
3. PROPERTY AND EQUIPMENT:
Property and equipment is stated at original cost and includes primarily
computer and office equipment and Web site costs. Depreciation is provided based
on the straight-line method over the estimated useful lives of the respective
assets. Repair and maintenance costs are charged to expense as incurred. The
Company had no property and equipment at December 31, 1998. Property and
equipment consisted of the following at December 31, 1999:
<TABLE>
<CAPTION>
Estimated
Useful Life
-----------
<S> <C> <C>
Furniture and fixtures 7 years $ 83,078
Computer and office equipment 5 years 375,254
Web site development 3 years 565,760
Web site license fees 3 years 487,900
-----------
1,511,992
Less- Accumulated depreciation 237,877
-----------
Property and equipment, net $ 1,274,115
===========
</TABLE>
4. STOCKHOLDERS' EQUITY:
Series A Preferred Stock
In May 1999, the Company entered into a stock purchase agreement with an
investor whereby the Company issued 1,000,000 shares of Series A preferred stock
in exchange for $5,000,000 in cash. The holder of the Series A preferred stock
is entitled to receive when, and if, declared by the board
F-8
<PAGE> 12
of directors from the surplus only, cash dividends at the rate of $0.30 per
share (as adjusted for stock splits, dividends, combinations and
reclassifications) per annum. The cash dividends on the Series A preferred stock
are cumulative and shall be payable before any dividends or distributions on
common stock shall be paid or set apart. No dividends have been declared on the
Series A preferred stock.
In the event of any liquidation, dissolution or winding up of the Company, the
holder of the Series A preferred stock is entitled to receive, prior and in
preference to any distribution to the holders of common stock, an amount per
share equal to $10.00, plus all accrued but unpaid dividends.
Each issued and outstanding share of Series A preferred stock is convertible, at
the option of the holder, at any time and from time to time without the payment
of additional consideration, into such number of fully paid and nonassessable
shares of common stock as is determined by dividing the product of the original
issue price per share of Series A preferred stock to be converted multiplied by
the number of shares of Series A preferred stock to be converted by the
conversion price per share at the time of conversion.
Common Stock
The holders of the common stock are entitled to receive dividends when and as
declared by the board of directors from the remaining surplus of the Company
after payment of the cumulative dividends and accrued dividends for the current
year related to the Series A preferred stock. Upon the liquidation, dissolution
or winding up of the Company, all of the remaining assets and funds of the
Company available for distribution after that required to be distributed to the
holders of Series A preferred stock shall be distributed among the holders of
common stock.
Stock Options
In May 1999, the Company adopted an incentive compensation plan (the 1999 Stock
Option Plan) which provides the ability to grant incentive stock options and
nonqualified stock options. The 1999 Stock Option Plan is administered by the
board of directors of the Company, which has the authority to determine the
option recipients, the number of shares subject to each option grant, the term
of the grants, the exercise price and the vesting schedule. The Company may
grant a total of 200,000 shares of options under the 1999 Stock Option Plan. No
options have been granted under this plan.
5. INCOME TAXES:
Differences between accounting rules and tax laws cause differences between the
bases of certain assets and liabilities for financial reporting and tax
purposes. The tax effects of these differences, to the extent they are
temporary, are recorded as deferred tax assets and liabilities.
As of December 31, 1999, the Company had a deferred tax asset consisting of the
tax effect of the net operating loss carryforward generated in 1999 of
approximately $1,900,000. Through April 8, 1999, the Company was a limited
liability company and therefore was not subject to income taxes. Due to the
uncertainty surrounding the realization of these assets, a valuation allowance
has been provided to fully offset the deferred tax assets. As of December 31,
1999, the Company had a net operating loss carryforward of approximately
$5,600,000, which may be used to offset taxable income in future years. The net
operating loss carryforward will begin to expire in 2015. A change in control,
as defined by federal income tax regulations, could significantly limit the
Company's ability to utilize its carryforwards.
6. RELATED-PARTY TRANSACTIONS:
During the year ended December 31, 1999, the Company entered into a fulfillment
agreement with the holder of the Series A preferred stock (the Holder), whereby
the Holder provides warehousing, packaging and shipping services to the Company
for a fee. The Holder also pays certain expenses on behalf of the Company and is
reimbursed by the Company. The amounts paid to the Holder for fulfillment
services and expense
F-9
<PAGE> 13
reimbursements for the year ended December 31, 1999, totaled approximately
$152,000 and $171,000, respectively. As of December 31, 1999, the Company had
also advanced the Holder $148,713 related to fulfillment activities. This amount
is reflected as a receivable from affiliate in the accompanying balance sheet
and was collected by the Company subsequent to year-end.
7. COMMITMENTS AND CONTINGENCIES:
Leases
Rent expense from Inception through December 31, 1998, and for the year ended
December 31, 1999, was $5,070 and $48,659, respectively.
The Company has entered into a lease for office space, which expires in 2004.
Future minimum lease payments relating to the noncancelable operating lease are
as follows:
<TABLE>
<S> <C>
For the year ending December 31-
2000 $ 60,000
2001 60,900
2002 62,727
2003 64,609
2004 32,782
---------
$ 281,018
=========
</TABLE>
Advertising Agreement
In April 1999, the Company entered into a four-month advertising and promotion
agreement for the period September 1, 1999, to December 31, 1999, with Giorgio
Beverly Hills, Inc. (GBH). The Company was obligated to spend $2.55 million on
advertising and marketing to support the fragrance product, BOSS HUGO BOSS,
which was expensed ratably over the period of the agreement. The parties agreed
that GBH would purchase the advertising, subject to reimbursement by Jasmin.com
Corporation on December 31, 1999. The Company obtained an extension of the
payment due date to January 31, 2000, from GBH. The amount was paid subsequent
to December 31, 1999.
F-10
<PAGE> 14
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF
ASHFORD.COM, INC. AND SUBSIDIARIES
Introduction
The accompanying unaudited pro forma consolidated financial statements
are presented to reflect the acquisition of Jasmin.com Corporation ("Jasmin") by
Ashford.com, Inc. (the "Company"). The acquisition has been accounted for using
the purchase method of accounting. The pro forma consolidated financial
statements are based upon the historical financial statements of the Company and
Jasmin.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of the results of the future operations of the Company.
The unaudited pro forma financial statements should be read in conjunction with
the notes thereto and the historical financial statements of Jasmin, included in
Item 7 (a) of this Form 8-K/A. In addition, reference should be made to the
historical financial statements of the Company included in the Company's Form
S-1 Registration Statement declared effective September 22, 1999, and included
in Form 10-Q for the nine months ended December 31, 1999, filed with the
Securities and Exchange Commission.
The following pro forma consolidated financial statements have been
prepared as if the acquisition had taken place on December 31, 1999, in the case
of the pro forma consolidated balance sheet, or as of the Company's Inception
(March 6, 1998) in the case of the pro forma consolidated statement of
operations for the nine months ended December 31, 1999 and the pro forma
consolidated statement of operations for the period from the Company's Inception
(March 6, 1998) through March 31, 1999.
As a result of differing year ends of the Company and Jasmin, results of
operations for dissimilar year ends have been combined. The Company's results of
operations for the period from Inception (March 6, 1998) through March 31, 1999
have been combined with Jasmin's results for the period from Inception (October
23, 1998) through December 31, 1998 and the period from January 1, 1999 through
March 31, 1999. The Company's results of operations for the nine months ended
December 31, 1999 have been combined with Jasmin's results for the same period.
F-11
<PAGE> 15
ASHFORD.COM, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL
-----------
ASHFORD.COM, PRO FORMA
INC. ADJUSTMENTS NOTE PRO FORMA
----------- ----------- ---- ---------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 60,296 $ (739) A $ 59,557
Certificate of deposit 100 20 A 120
Accounts receivable 7,915 7,915
Merchandise inventory 24,789 298 A 25,087
Prepaids and other 104,985 104,985
--------- --------- ---------
Total current assets 198,085 (421) 197,664
Property and equipment, net 5,050 780 A 5,830
Other assets 10,512 6,341 A 16,853
--------- --------- ---------
Total assets $ 213,647 $ 6,700 $ 220,347
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 6,137 $ 2,901 A $ 9,038
Other long-term liabilities 83 83
Commitments and contingencies
Stockholders' equity:
Common stock 45 45
Additional paid-in capital 256,718 3,799 A 260,517
Subscription receivable (780) (780)
Deferred compensation (16,522) (16,522)
Accumulated deficit (32,034) (32,034)
--------- --------- ---------
Total stockholders' equity 207,427 3,799 211,226
--------- --------- ---------
Total liabilities and stockholders' equity $ 213,647 $ 6,700 $ 220,347
========= ========= =========
</TABLE>
See notes to pro forma consolidated financial statements.
F-12
<PAGE> 16
ASHFORD.COM, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
-----------
ASHFORD.COM, JASMIN.COM PRO FORMA
INC. CORPORATION ADJUSTMENTS NOTE PRO FORMA
-------- ----------- ----------- ---- ----------
<S> <C> <C> <C> <C> <C>
Net sales $ 28,127 $ 546 $ (300) B $ 28,373
Cost of sales 23,118 484 23,602
-------- -------- -------- ------
Gross profit 5,009 62 (300) 4,771
Operating expenses:
Marketing and sales 24,148 3,331 (300) B 27,179
General and administrative 8,220 2,239 10,459
Depreciation and amortization 2,284 238 (238) C
202 D 2,486
Amortization of deferred compensation 3,015 3,015
-------- -------- -------- --------
Total operating expenses 37,667 5,808 (336) 43,139
-------- -------- -------- --------
Loss from operations (32,658) (5,746) 36 (38,368)
Interest income (expense), net 1,888 56 1,944
-------- -------- -------- --------
Net loss $(30,770) $ (5,690) $ 36 $(36,424)
======== ======== ======== ========
Net loss per share, basic and diluted $ (1.45) $ (1.69)
======== ========
Shares used to compute net loss per share,
basic and diluted 21,275 21,605
======== ========
</TABLE>
See notes to pro forma consolidated financial statements.
F-13
<PAGE> 17
ASHFORD.COM, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE PERIOD FROM INCEPTION (MARCH 6, 1998) THROUGH MARCH 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL
------------
ASHFORD.COM, JASMIN.COM
INC. CORPORATION PRO FORMA
------------ ----------- ---------
<S> <C> <C> <C>
Net sales $ 5,938 $ 14 $ 5,952
Cost of sales 5,110 -- 5,110
-------- -------- --------
Gross profit 828 14 842
Operating expenses:
Marketing and sales 1,013 -- 1,013
General and administrative 1,038 122 1,160
Depreciation and amortization 48 -- 48
-------- -------- --------
Total operating expenses 2,099 122 2,221
-------- -------- --------
Loss from operations (1,271) (108) (1,379)
Interest income (expense), net 7 -- 7
-------- -------- --------
Net loss $ (1,264) $ (108) $ (1,372)
======== ======== ========
Net loss per share, basic and diluted $ (0.12) $ (0.13)
======== ========
Shares used to compute net loss per share,
basic and diluted 10,397 10,727
======== ========
</TABLE>
See notes to pro forma consolidated financial statements.
F-14
<PAGE> 18
ASHFORD.COM, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA ADJUSTMENTS
A. Reflects the consummation of the acquisition and the related purchase
accounting entries. Consideration paid totaled $4.5 million, including $739,000
cash and 330,354 shares of the Company's common stock with a fair value of
$11.50 at the date of acquisition. The purchase price was allocated in
accordance with APB 16 as follows (in thousands):
<TABLE>
<S> <C>
Fixed assets $ 780
Intangible assets 6,341
Net working capital items (2,583)
-------
Total consideration paid $ 4,538
=======
</TABLE>
The purchase price allocation has been based on preliminary estimates of
fair value and is subject to adjustment as additional information becomes
available and is evaluated. The allocation does not include the issuance of
additional shares of Ashford.com, Inc.'s common stock, not to exceed 736,514
shares, upon the resolution of certain dealer relationship contingencies as set
forth in the purchase agreement. Fixed assets relate primarily to computer
equipment and software costs and will be depreciated using the straight-line
method over a weighted average useful life of 2 years. Intangible assets
resulting from the acquisition relate to the Jasmin Internet domain name,
related trademarks, customer lists and direct brand relationships and will be
amortized using the straight-line method over an expected useful life of 2
years.
B. Reflects the elimination of advertising revenue paid by Jasmin to the
Company during December 1999.
C. Reflects the elimination of historical Jasmin depreciation and
amortization expense.
D. Reflects pro forma depreciation and amortization expense based on the
purchase price of the Jasmin assets by the Company. Pro forma depreciation and
amortization commences July 1999 which is consistent with the period Jasmin's
assets were placed into service.
F-15
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
*2.4 Agreement and Plan of Reorganization dated as of January 14, 2000
by and among the Company, Ashford-Jasmin Fragrance Corporation and
Jasmin.com Corporation
*99.1 Text of Press Release dated January 17, 2000
</TABLE>
* Previously filed.
