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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 1998
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CONNECT, Inc.
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(Exact name of registrant as specified in charter)
Delaware
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(State or other jurisdiction of incorporation)
000-20873 943036611
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(Commission File Number) (IRS Employer Identification No.)
515 Ellis Street, Mountain View, California 94043
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 254-4000
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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Registrant is filing this Form 8-K solely for the purpose of disclosing
the effect of adoption of Financial Accounting Standards Board Statement No.
128, "Earnings per Share" (FAS 128) and Securities and Exchange Commission
Staff Accounting Bulletin No. 98 (SAB 98) relating to "Earnings Per Share" on
the Annual Report on Form 10-K for the fiscal year ended December 31, 1996
(the 1996 Form 10-K) and the related restatement of earnings per share
thereon, so that such information may be incorporated by reference into a
Registration Statement on Form S-3 to be filed after this Form 8-K is filed.
Restatement of selected data as it relates to the adoption of FAS 128,
"Earnings per Share" is attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Restatement of selected data as it relates to the adoption of FAS
128, "Earnings per Share".
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CONNECT, Inc.
(Registrant)
Dated: February 27, 1998 By: /s/ JOSEPH G. GIRATA
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Joseph G. Girata
Vice President of Finance and
Administration and Chief
Financial Officer
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EXHIBIT 99.1
In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings per Share" (FAS 128) which the Company adopted on December 31, 1997.
FAS 128 replaced the calculation of primary and fully diluted net income (loss)
per share with basic and diluted net income (loss) per share. Unlike primary
net income (loss) per share, basic net income (loss) per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted net
income (loss) per share is very similar to the previously reported fully diluted
net income (loss) per share.
In February 1998, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 98 ("SAB 98"). Under SAB 98, certain shares of convertible
preferred stock, options, and warrants to purchase common stock, issued at
prices substantially below the per share price sold in the Company's initial
public offering in August 1996, previously included in the computation of shares
outstanding pursuant to Staff Accounting Bulletin Nos. 55, 64, and 83 are now
excluded from the computation. Basic and diluted net loss per share for the
years ended December 31, 1994, 1995, and 1996 have been retroactively restated
to apply the requirements of SAB 98.
The pro forma basic and pro forma diluted net loss per share has been computed
as described above and also gives effect, even if antidilutive, to common
equivalent shares from convertible preferred stock that were automatically
converted to common stock upon the closing of the Company's initial public
offering, using the if-converted method.
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<CAPTION>
1994 1995 1996
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<S> <C> <C> <C>
Pro forma net loss per share as
previously reported in the Company's
Annual Report on Form 10-K for the
year ended December 31, 1996 (1) $ (3.97) $ (4.51)
Pro forma basic and diluted net loss per share
restated under FAS 128 and SAB 98 (1) $ (15.57) $ (4.81)
Net loss per share as previously reported
in the Company's Annual Report on Form
10-K for the year ended December 31, 1996 (1) $ (0.65) $ (5.17) $ (5.79)
Basic and diluted net loss per share restated
under FAS 128 and SAB 98 (1) $(28.47) $(186.04) $(11.06)
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(1) Previously reported and restated net loss per share and pro forma net loss
per share reflect retroactively the one-for-five reverse stock split that was
approved by the Company's stockholders in February 1998.
