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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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JUNE 28, 1999
Date of report (Date of earliest event reported)
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Commission File Number: 0-18108
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FINET.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or jurisdiction of
incorporation or organization)
3021 CITRUS CIRCLE, SUITE 150
WALNUT CREEK, CA 94598
(Address of principal executive office)
94-3115180
(IRS Employer Identification Number)
Telephone Number: (925) 988-6550
(Registrant's telephone number, including area code)
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Item 5. Other Events.
Private Placement
On June 28, 1999 FiNet.com, Inc. ("FiNet") announced the completion of
a $30 million private placement of approximately 7.7 million shares of
common stock at a price of $3.89 per share. The shares were not registered
under the Securities Act of 1933, as amended (the "Securities Act")
pursuant to the exemption contained in Section 4(2) thereof.
Supplemental Financial Information
On June 28, 1999 FiNet released certain supplementary fiscal 1999
third and fourth quarter unaudited financial information.
Item 7. Financial Statements and Exhibits.
4.1. Form of Common Stock Purchase Agreement between FiNet and
investors in the private placement concluded June 28, 1999.(1)
99.1. Press release regarding private placement and supplementary
information.
________________________________________________________
(1) Incorporated by reference to Exhibit 4.11 of the Registrant's Form S-1
filed on July 2, 1999 (Registration No. 333-82227).
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, THEREUNTO DULY AUTHORIZED.
FINET HOLDINGS CORPORATION
Date: JUNE 28, 1999
------------------------------------
GARY A. PALMER
EXECUTIVE VICE PRESIDENT -
CHIEF FINANCIAL OFFICER
News from Finet
Dan Rawitch Brian Bailey Kevin Theiss
FiNet.com, Inc. Rubenstein Assoc., Inc Rubenstein
Investor
Relations
925-906-5874 212-843-9258 212-843-8096
[email protected] [email protected] [email protected]
For immediate release
FiNET.COM COMPLETES OVER-SUBSCRIBED EQUITY FUNDING OF $30 MILLION AND
RELEASES SUPPLEMENTARY DATA
WALNUT CREEK, CA, June 28, 1999 - FiNet.com (NASDAQ: FNCM) today announced
the completion of a $30 million private placement of common stock to
European investors. The offering was increased from an originally
announced $20 million as a result of strong investor demand. The placement
consisted of approximately 7.7 million shares at a price of $3.89 per
share. Banco Espirito Santo de Investimento, S.A. (Espirito Santo
Financial Group), which raised $11.7 million for FiNet.com in a December
1998 private placement of common shares, was the placement agent. The
shares of common stock have not been registered under the Securities Act of
1933 and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
"We are pleased with the on-going support of BES Investimento, S.A.
and the strong investor interest in FiNet.com. This additional capital
will for the first time allow us to make the significant branding,
strategic marketing and technology investments required to build a dominant
brand and force in the rapidly growing on-line mortgage market," stated
FiNet.com Chairman and CEO Mark Korell. "We are committing an additional
$10 million to establish a leading brand name on the Internet. With our
corporate reorganization and business line consolidations now behind us, we
are enthusiastic about accelerating the nationwide expansion of our multi-
lender consumer and business-to-business channels through internal growth
and the proposed acquisition of an East-coast on-line lending firm."
FiNet.com also released supplementary fiscal 1999 third and fourth
quarter unaudited financial information in the new presentation format of
the annual financial information, including reporting by business segment.
This information was not available in time for release with the annual
financial results. Management has discontinued several business lines
which were not e-commerce based and does not believe past results are
indicative of future performance for the ongoing business lines. Moreover,
increases in mortgage interest rates over the past several months have had
a dampening effect on refinancing of existing mortgage loans, negatively
affecting loan applications and lending volume. Investors are encouraged to
read FiNet.com's annual report on Form 10-K when it becomes available.
"We are just beginning to see the results of our strategic
repositioning of FiNet.com to be an on-line mortgage services firm in both
the retail consumer and business-to-business sectors," added Mark Korell.
"We have recently implemented and announced several strategic marketing
agreements with leading Internet web sites, have several more in various
stages of implementation and are focused on further expansion of this key
marketing channel. The implemented agreements are resulting in a large
increase in the number of consumers visiting our web sites, with the
current quarter running well over the previous quarter. We are revamping
our operations and technology to convert more site visitors into loan
applicants, and we believe we can grow through the current interest rate
environment. On the business-to-business side, we just recently enhanced
our product offerings, revised our pricing strategies, implemented sales
training and are rapidly bringing on salespeople to support our nationwide
expansion. We expect to see the results of these initiatives begin to show
up in our fiscal 2000 second quarter, which starts August 1, 1999."
A telephone conference call hosted by Chairman & CEO Mark Korell will
be held Thursday, July 1, 1999 at 4:15 p.m. EDT, call-in number: (888)
813-7829, International call-in number: 212-346-6526. The conference call
will also be simulcast over the Internet at http: //www.vcall.com.
Listeners should go to the web site before the call and download necessary
audio software.
About FiNet.com
FiNet.com, Inc., ``America's Home Finance Network'' including its wholly
owned subsidiaries (the ``Company''), is a leading provider of e-commerce
home financing services that facilitates home ownership through a variety
of technology-based products and automated services for consumers and
mortgage broker businesses. The Company offers automated financing
solutions directly to consumers through its www.interloan.com on-line home
financing web site and to mortgage broker businesses through Monument
Mortgage. Other public companies in the e-commerce lending sector include E-
LOAN (Nasdaq: EELN) and Rock Financial (Nasdaq: RCCK).
Safe Harbor
Certain statements in this press release, including statements
regarding the anticipated development and expansion of the Company's
business, and the intent, belief or current expectations of the Company,
its directors or its officers, are ``forward-looking'' statements (as such
term is defined in the Private Securities Litigation Reform Act of 1995).
Because such statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements.
<TABLE>
FiNET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL 1999
(unaudited)
(Dollars and amounts in thousands - except per share amounts)
<CAPTION>
Total FiNet.com Ongoing Businesses
------------------ ------------------
Fourth Third Fourth Third
Quarter Quarter Quarter Quarter
------- ------- ------ -------
<S> <C> <C> <C> <C>
Revenues $ 2,034 $ 4,812 $ 1,742 $ 3,063
Cost of Revenues* 6,674 13,631 4,546 3,256
------ ------ ------ ------
Gross Profit (4,640) (8,819) (2,804) (193)
Operating Expenses* 7,558 7,404 5,601 3,390
------ ------ ------ ------
Loss from Operations (12,198) (16,223) (8,405) (3,583)
Other Expenses:
Other interest expense (78) 811 (91) 699
------ ------ ------ ------
Loss Before Income
Taxes (12,120) (17,034) (8,314) (4,282)
Income tax expense 5 - 6 -
------ ------ ------ ------
Net Loss (12,125) (17,034) (8,320) (4,282)
In-substance
preferred dividend 61 644 61 644
------ ------ ------ ------
Net Loss for
Common Shareholders $(12,186) $(17,678) $(8,381) $(4,926)
====== ====== ====== ======
Basic and diluted
net loss per
common share $(0.16) $(0.37) $(0.11) $(.10)
Shares used in computing
basic and diluted
share data 75,157 47,885 75,157 47,885
</TABLE>
* Indirect production expenses are included in Cost of revenues in the
current presentation, but were included in Operating expenses in the prior
presentation of third quarter results.
<TABLE>
FiNET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
BUSINESS SEGMENTS
FISCAL 1999
(unaudited, $000's)
<CAPTION>
ONGOING BUSINESSES ONLY
-----------------------
Consumer Segment Business Segment
------------------ ------------------
Fourth Third Fourth Third
Quarter Quarter Quarter Quarter
------- ------- ------ -------
<S> <C> <C> <C> <C>
Revenues $ 741 $ 581 $ 1,001 $ 2,482
Cost of Revenues* 1,135 908 3,411 2,348
------ ------ ------ ------
Gross Profit (394) (327) (2,410) 134
</TABLE>
* Indirect production expenses are included in Cost of revenues in the
current presentation, but were included in Operating expenses in the prior
presentation of third quarter results.
<TABLE>
FiNet.com, Inc.
Fiscal 1999 Supplementary Data
(unaudited)
Ongoing Businesses
------------------
<CAPTION>
Loan Volume Fourth Quarter Third Quarter
----------- -------------- -------------
Consumer Segment
----------------
<S> <C> <C>
Number of loans 397 375
Amount of loans $76.7 million $72.0 million
Refinance loans 90% 90%
California loans 95% 94%
Business Segment
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Number of loans 859 1,174
Amount of loans $135.4 million $182.4 million
Refinance loans 68% 78%
California loans 93% 89%
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Discontinued Businesses
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Number of loans 6 353
Amount of loans $0.5 million $35.4 million
Refinance loans 78% 67%
California loans 0% 26%
# # #
FiNet.com Quarterly E-Commerce Activity
Fiscal Year 1999
</TABLE>
<TABLE>
Interloan.com:
<S>
<C> <C>
3rd Qtr. 4th Qtr.
Number of unique visitors 38,914
94,254
Number of applications N/A 437
Number of closed loans 210 202
Percentage of closed loans 0.54% 0.21%
Note: unique visitors are user sessions non-inclusive of pages viewed
(i.e. hits)
Example: one user can tally upwards of 10 hits during one unique user
session.
iQualify.com:
<S>
<C> <C>
3rd Qtr. 4th Qtr.
Number of unique visitors 25,466
72,204
Number of paid underwriting decisions 328
743
Number that proceeded to select a lender 148
350
Percentage of paid underwriting decisions 0.58%
0.48%
Note: unique visitors are user sessions non-inclusive of pages viewed
(i.e. hits)
Example: one user can tally upwards of 10 hits during one unique user
session.
Monument Mortgage:
<S>
<C> <C>
3rd Qtr. 4th Qtr.
Number submissions 1,647 1,349
Number of loans closed 1,217
916
Number of online loans closed 625 536
Percentage of online loans closed 51%
59%
SOURCE: FiNet.com
</TABLE>
