<PAGE>
Register.com, Inc.
Unaudited Pro Forma Combined Financial Information
The following unaudited pro forma combined balance sheet reflects the combined
balance sheet of Register.com, Inc. ("Register" or the "Company") and
Afternic.com, Inc. ("Afternic"), adjusted to give effect to the transaction
pursuant to which Afternic merged with and into a wholly-owned subsidiary of
Register (the "transaction"). The unaudited pro forma combined balance sheet
assumes that the transaction occurred on June 30, 2000.
The following unaudited pro forma combined statement of operations for the year
ended December 31, 1999 presents the operating results of the Company as if the
transaction had occurred as of January 1, 1999. The following unaudited pro
forma combined statement of operations for the six months ended June 30, 2000
presents the operating results of the Company as if the transaction had occurred
as of January 1, 2000.
The pro forma adjustments are based upon available information and certain
assumptions that the Company currently believes are reasonable in the
circumstances. The Company's financial statements will reflect the effect of the
transaction only from September 15, 2000, the date the transaction was
consummated. The transaction has been accounted for using the purchase method of
accounting. Under purchase accounting, the total purchase cost of Afternic will
be allocated to the assets and liabilities acquired based on their relative fair
values as of the date the transactions is closed, with any excess of the total
purchase price over the fair value of the tangible assets acquired less the fair
value of the liabilities assumed recorded as intangible assets. The cost
allocations will be based on studies, which are not yet completed. Accordingly,
the final allocations may be different from the amounts reflected herein.
Although the final allocations may differ, the pro forma condensed combined
financial information reflects management's best estimate based on currently
available information.
The unaudited pro forma consolidated financial statements are derived from, and
should be read in conjunction with, Register's and Afternic's historical
financial statements and related notes. Afternic's audited financial statements
for the period from inception (September 10, 1999) through December 31, 1999 and
its unaudited financial statements for the six months ended June 30, 2000 are
set forth in Item 7 (a) to this Report. Register's audited financial statements
for the year ended December 31, 1999 are included in its final prospectus dated
March 2, 2000 in connection with its initial public offering of common stock and
its unaudited financial statements for the quarter ended June 30, 2000 are
included in its Form 10-Q, each of which is on file with the Securities and
Exchange Commission. The pro forma consolidated financial statements do not
purport to be indicative of the results of operations or financial position
which would have actually been reported had the transaction been consummated on
the dates indicated, or which may be reported in the future.
<PAGE>
Register.com, Inc.
Unaudited Pro Forma Combined Balance Sheet
June 30, 2000
<TABLE>
<CAPTION>
Historical
---------- Pro Forma
Register Afternic Adjustments Pro Forma
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and cash equivalents $148,332,164 $ 458,130 $ (111,878) A -
(10,300,000) B $138,378,416
Short-term investments 26,912,789 - - 26,912,789
Accounts receivable 6,259,784 74,200 - 6,333,984
Prepaid domain name registry fees 14,307,860 - - 14,307,860
Deferred tax asset 21,995,762 - - 21,995,762
Prepaid income taxes 1,608,000 - - 1,608,000
Other current assets 1,667,597 - - 1,667,597
------------ ----------- ------------ ------------
Total current assets 221,083,956 532,330 (10,411,878) 211,204,408
Fixed assets, net 7,296,257 90,436 - 7,386,693
Prepaid domain name registry fees, net of
current portion 5,476,523 - - 5,476,523
Other investments 2,500,000 - - 2,500,000
Goodwill and other intangibles, net 11,341,302 - 47,182,264 B 58,523,566
------------ ----------- ------------ ------------
Total assets $247,698,038 $ 622,766 $ 36,770,386 $285,091,190
============ =========== ============ ============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses $ 11,777,790 $ 2,769,085 $ (2,422,933) A $ 12,123,942
Income taxes payable - - - -
Deferred revenue, net 63,509,292 - - 63,509,292
Capital lease obligations, current portion - - - -
Other current liabilities 927,430 - - 927,430
------------ ----------- ------------ ------------
Total current liabilities 76,214,512 2,769,085 (2,422,933) 76,560,664
------------ ----------- ------------ ------------
Deferred revenue, net of current portion 24,029,534 - - 24,029,534
------------ ----------- ------------ ------------
Total Liabilities 100,244,046 2,769,085 (2,422,933) 100,590,198
------------ ----------- ------------ ------------
Commitments and contingencies
Stockholders' equity
Preferred stock - - - -
Common stock 3,199 12,792 (12,792) B
438 B 3,637
Additional paid-in capital 167,212,811 37,046,562 B 204,259,373
Unearned compensation (5,627,223) (5,627,223)
Accumulated deficit (14,134,795) (2,159,111) 2,159,111 B (14,134,795)
------------ ----------- ------------ ------------
Total stockholders' equity 147,453,992 (2,146,319) 39,193,319 184,500,992
------------ ----------- ------------ ------------
Total liabilities and stockholders' equity $247,698,038 $ 622,766 $ 36,770,386 $285,091,190
============ =========== ============ ============
</TABLE>
<PAGE>
Register.com, Inc.
Unaudited Pro Forma Combined Statement of Operations
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Historical
------------------------- Pro Forma
Register Afternic Adjustments Pro Forma
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Net Revenues $ 9,644,552 $ - $ - $ 9,644,552
Cost of revenues 3,082,499 - - 3,082,499
----------- ---------- ------------ ------------
Gross Profit 6,562,053 - - 6,562,053
----------- ---------- ------------ ------------
Operating costs and expenses
Sales and marketing 7,149,693 152,097 - 7,301,790
Research and development 1,767,158 640,429 - 2,407,587
General and administrative (exclusive of
non-cash compensation) 2,380,190 177,890 - 2,558,080
Non-cash compensation 4,929,200 - - 4,929,200
Amortization of goodwill and other intangibles - - 11,795,566 C 11,795,566
----------- ---------- ------------ ------------
Total operating costs and expenses 16,226,241 970,416 11,795,566 28,992,223
----------- ---------- ------------ ------------
Loss from operations (9,664,188) (970,416) (11,795,566) (22,430,170)
Other income (expenses), net 887,270 31 (618,000) D 269,301
----------- ---------- ------------ ------------
Net loss $(8,776,918) $ (970,385) $(12,413,566) $(22,160,869)
=========== ========== ============ ============
Basic and diluted net loss per share $ (0.46) $ (0.94)
=========== ============
Weighted average shares used in basic and
diluted earnings net loss per share 19,117,027 23,495,316
=========== ============
Supplemental pro forma basic and diluted net
loss per share* $ (0.40) $ (0.84)
=========== ============
Weighted average shares used in supplemental pro
forma basic and diluted net loss per share* 22,112,252 26,490,541
=========== ============
</TABLE>
* The supplemental pro forma basic and diluted net loss per share assumes the
conversion of Register's Exchangeable Preferred Stock and Series A Convertible
Preferred Stock, which occurred automatically upon Register's initial public
offering on March 2, 2000, at the date of original issuance.
<PAGE>
Register.com, Inc.
Unaudited Pro Forma Combined Statement of Operations
For the Six Months Ended June 30, 2000
<TABLE>
<CAPTION>
Historical
------------------------- Pro Forma
Register Afternic Adjustments Pro Forma
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net Revenues $32,667,756 $ 195,172 $ - $ 32,862,928
Cost of revenues 9,387,700 209,716 - 9,597,416
----------- ----------- ----------- ------------
Gross Profit 23,280,056 (14,544) - 23,265,512
----------- ----------- ----------- ------------
Operating costs and expenses
Sales and marketing 22,153,387 524,796 - 22,678,183
Research and development 1,954,097 423,158 - 2,377,255
General and administrative (exclusive of
non-cash compensation) 3,342,079 226,434 - 3,568,513
Non-cash compensation 1,290,093 - - 1,290,093
Amortization of goodwill and other intangibles 298,455 - 5,897,783 C 6,196,238
----------- ----------- ----------- ------------
Total operating costs and expenses 29,038,111 1,174,388 5,897,783 36,110,282
----------- ----------- ----------- ------------
Loss from operations (5,758,055) (1,188,932) (5,897,783) (12,844,770)
Other income (expenses), net 3,775,031 206 (309,000) D 3,466,237
----------- ----------- ----------- ------------
Net loss $(1,983,024) $(1,188,726) $(6,206,783) $ (9,378,533)
=========== =========== =========== ============
Basic and diluted net loss per share $ (0.07) $ (0.29)
=========== ============
Weighted average shares used in basic and
diluted net loss per share 27,901,444 32,279,733
=========== ============
Supplemental pro forma basic and diluted net
loss per share* $ (0.07) $ (0.28)
=========== ============
Weighted average shares used in supplemental pro
forma basic and diluted net loss per share* 29,526,406 33,904,695
=========== ============
</TABLE>
* The supplemental pro forma basic and diluted net loss per share assumes the
conversion of Register's Exchangeable Preferred Stock and Series A Convertible
Preferred Stock, which occurred automatically upon Register's initial public
offering on March 2, 2000, at the date of original issuance.
<PAGE>
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(UNAUDITED)
Effective September 15, 2000, the Company acquired 100% of the outstanding
shares of common stock of Afternic, in exchange for $10,000,000 in cash and
4,378,289 shares of its common stock, through a merger of Afternic with and into
a wholly-owned subsidiary of the Company (the "transaction"), a portion of which
consideration was used to satisfy existing obligations of Afternic. The Company
has valued the shares of its common stock on the date of acquisition at
approximately $8.46 per share. The following adjustments were made to give
effect to the transaction:
A. Entry gives effect to the assumption of the liabilities of Afternic, with the
exception of deposits payable which represent amounts transferred to Afternic
by the buyers of the domain name registrations that will be transferred to
the sellers when the rights to the domain name registration are transferred,
by the former shareholders of Afternic, and the reduction of cash balances in
excess of the deposits payable balance.
B. Entry gives effect to the elimination of the historical equity accounts of
Afternic and the recording of the purchase price of $10,000,000 in cash,
4,378,289 shares of Register's common stock in connection with the
acquisition and estimated expenses of approximately $300,000.
C. Entry gives effect to the amortization of goodwill and other intangibles
recorded in connection with the transaction, based upon an estimated
amortization period of 48 months.
D. Entry gives effect to the reduction in interest income for the cash portion
of the purchase price, assuming an effective interest rate of 6% per annum,
which represents the short-term interest earned on the Company's investment
balances.
