<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
AMENDMENT NO. 2
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 8, 2000
MetaCreations Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 0-27168 95-4102687
(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
498 Seventh Avenue, New York, NY 10018
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code # (212) 201-0800
N/A
(Former Name or Former Address, if Changed Since Last Report)
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MetaCreations Corporation (the "Registrant"), hereby files this Amendment No. 2
to its Current Report on Form 8-K, filed with the Commission on September 25,
2000, and supplies financial information on Viewpoint Digital, Inc.
("Viewpoint Digital") and pro forma financial information reflecting the
Registrant's acquisition of Viewpoint Digital on September 8, 2000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired:
The financial statements of Viewpoint Digital required to be set
forth herein are incorporated by reference to the Registrant's
Definitive 14A, filed with the Commission on October, 31, 2000.
(b) Pro Forma Financial Information:
The pro forma financial statements of the Registrant required to be set
forth herein are attached hereto as Annex A and are incorporated by
reference.
(c) Exhibits:
Exhibit Description
2.1 Stock Purchase Agreement, dated as of August 23, 2000, by and
between MetaCreations Corporation and Computer Associates
International Inc.*
2.2 Promissory Note, dated as of September 8, 2000, in the
principle amount of $15,000,000 between MetaCreations
Corporation, as the Obligor, and Computer Associates
International, Inc., as the Payee.**
2.3 Promissory Note, dated as of September 8, 2000, in the
principle amount of $15,000,000 between MetaCreations
Corporation, as the Obligor, and Computer Associates
International, Inc., as the Payee.**
* Previously filed as an exhibit to the Current Report on
Form 8-K.
** Previously filed as an exhibit to Amendment No. 1 to the
Current Report on Form 8-K.
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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.
METACREATIONS CORPORATION
Date: November 20, 2000 By: /s/ Robert E. Rice
------------------------------
Name: Robert E. Rice
Title: Chief Executive Officer
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EXHIBIT INDEX
The following exhibits are filed herewith.
Exhibit Description
2.1 Stock Purchase Agreement, dated as of August 23,
2000, by and between MetaCreations Corporation and
Computer Associates International, Inc.*
2.2 Promissory Note, dated as of September 8, 2000, in
the principle amount of $15,000,000 between
MetaCreations Corporation, as the Obligor, and
Computer Associates International, Inc., as the
Payee.**
2.3 Promissory Note, dated as of September 8, 2000, in
the principle amount of $15,000,000 between
MetaCreations Corporation, as the Obligor, and
Computer Associates International, Inc., as the
Payee.**
* Previously filed as an exhibit to the Current Report
on Form 8-K.
** Previously filed as an exhibit to Amendment No. 1 to
the Current Report on Form 8-K.
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Item 7(b) Pro Forma Financial Information
UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
The Unaudited Pro Forma Consolidated and Combined Balance Sheet as of June 30,
2000, gives effect to the Acquisition of Viewpoint Digital, Inc. ("Viewpoint
Digital"), as if the transaction had occurred on that date. The Unaudited Pro
Forma Consolidated and Combined Statement of Operations for the six months
ended June 30, 2000 and for the year ended December 31, 1999, give effect to
the Acquisition of Viewpoint Digital, as if the transaction had occurred on
January 1, 1999.
The Unaudited Pro Forma Consolidated and Combined Financial Statements have been
derived from, and should be read in conjunction with, (a) the historical
financial statements, including the notes thereto, of MetaCreations Corporation
(the "Company"), whose financial statements are included in the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, and its
Annual Report on Form 10-K/A for the year ended December 31, 1999, and (b) the
historical financial statements of Viewpoint Digital whose consolidated
financial statements are included in the Company's Definitive Proxy Statement
on Form DEF 14A, dated October 31, 2000.
The Pro Forma Consolidated and Combined Financial Statements are presented for
informational purposes only and are not necessarily indicative of the financial
position or results of operations that would have occurred had the acquisition
been consummated as of the dates indicated or of the future financial position
or future results of operations of the Company.
On September 8, 2000, the Company purchased all the outstanding capital stock
of Viewpoint Digital, a wholly-owned subsidiary of Computer Associates
International, Inc. ("Computer Associates"). Viewpoint Digital publishes what
the Company believes to be the worlds largest library of 3D digital content and
provides creative 3D services for entertainment, advertising, visual
simulation, computer based training and corporate communications applications.
The purchase price of $19,151,000, excluding contingent consideration of
$30,000,000 in notes payable, consists of 715,000 shares valued at $8,938,000,
cash consideration of $10,000,000 and $213,000 in direct acquisition costs. The
purchase price in excess of the fair value of net tangible assets assumed of
$2,203,000, has been allocated as follows: $3,253,000 to a covenant not to
compete, $3,180,000 to work force, $1,558,000 to technology, $1,203,000 to
customer list, $963,000 to in-process research and development, $643,000 to
trade name and $6,148,000 to goodwill. Goodwill and other intangibles,
excluding in-process research and development, will be amortized over their
expected periods of benefit, which range from one and a half to four years.
In-process research and development was written off immediately. The
acquisition was accounted for as a purchase business combination for accounting
purposes.
The stock purchase agreement entered into for Viewpoint Digital requires the
payment of additional consideration contingent upon the achievement of certain
levels of future operating results (excluding amortization of goodwill and other
intangible assets) and employee retention, through 2002. The contingent
consideration consists of two promissory notes each in the amount of
$15,000,000. Payments under the promissory notes, if any, will increase goodwill
and other intangibles. The pro forma analysis for this acquisition excludes the
impact of the $30,000,000 of contingent consideration.
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METACREATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED BALANCE SHEET
AS OF JUNE 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
Pro Forma
Adjustments for
Viewpoint Acquisition of MetaCreations
MetaCreations Digital,Inc. Viewpoint Pro Forma
Historical Historical Digital, Inc. Combined
------------- ------------ -------------- -------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 20,510 $ 65 $ (10,000) A $ 10,575
Short-term investments 18,073 - - 18,073
Accounts receivable, net 7 1,375 - 1,382
Prepaid expenses 266 - - 266
Current assets of discontinued operations 10,328 - - 10,328
--------- -------- --------- --------
Total current assets 49,184 1,440 (10,000) 40,624
--------- -------- --------- --------
Goodwill and other intangibles 75 29,495 15,985 A 16,060
(29,495) B
Property and equipment, net 2,433 1,577 - 4,010
Other assets 173 - - 173
Non-current assets of discontinued operations 157 - - 157
--------- -------- --------- --------
Total assets $ 52,022 $ 32,512 $ (23,510) $ 61,024
========= ======== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,722 $ 814 $ - $ 2,536
Accrued expenses 1,584 - 213 A 1,797
Current liabilities of discontinued operations 968 - - 968
Provision for loss on disposal of
discontinued operations 211 - - 211
--------- -------- --------- --------
Total current liabilities 4,485 814 213 5,512
Other liabilities - 4,094 (4,094) C -
Deferred tax liabilities - 1,049 (1,049) D -
Mandatorily redeemable convertible
preferred stock of subsidiary 15,574 - - 15,574
Minority interest 10,399 - - 10,399
Stockholders' equity:
Preferred stock - - - -
Common stock 28 - 1 A 29
Paid-in capital 133,232 42,865 8,937 A 142,169
(42,865) E
Notes receivable from related parties (4,967) - - (4,967)
Deferred compensation (1,540) - - (1,540)
Accumulated deficit (105,189) (16,310) 16,310 E (106,152)
(963) A
--------- -------- --------- ---------
Total stockholders' equity 21,564 26,555 (18,580) 29,539
--------- -------- --------- --------
Total liabilities and stockholders' equity $ 52,022 $ 32,512 $ (23,510) $ 61,024
========= ======== ========= ========
</TABLE>
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METACREATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Pro Forma
Adjustments for
Viewpoint Acquisition of MetaCreations
MetaCreations Digital,Inc. Viewpoint Pro Forma
Historical Historical Digital, Inc. Combined
------------- ------------ --------------- -------------
<S> <C> <C> <C> <C>
Net revenues $ 317 $ 3,623 $ - $ 3,940
Cost of revenues - 1,509 - 1,509
--------- -------- ----------- ---------
Gross profit 317 2,114 - 2,431
--------- -------- ----------- ---------
Operating expenses:
Sales and marketing 10,114 1,642 - 11,756
Research and development 2,027 575 - 2,602
General and administrative 2,008 997 - 3,005
Amortization of goodwill and other intangibles 75 3,239 2,959 F 3,034
(3,239) B
Stock-based compensation 7,003 - - 7,003
--------- -------- ----------- ---------
Total operating expenses 21,227 6,453 (280) 27,400
--------- -------- ----------- ---------
Loss from operations (20,910) (4,339) 280 (24,969)
Other income 987 - - 987
--------- -------- ----------- ---------
Loss before benefit for income taxes (19,923) (4,339) 280 (23,982)
Benefit for income taxes - (791) 791 G -
--------- -------- ----------- ---------
Loss before minority interest (19,923) (3,548) (511) (23,982)
Minority interest in loss of subsidiary 3,327 - - 3,327
--------- -------- ----------- ---------
Net loss from continuing operations $ (16,596) $ (3,548) $ (511) $ (20,655)
========= ======== =========== =========
Net loss per common share from continuing
operations - basic and diluted $ (0.61) $ (0.74)
========= =========
Weighted average number of shares
outstanding - basic and diluted 27,216 715 A 27,931
========= =========== =========
</TABLE>
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METACREATIONS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Pro Forma
Adjustments for
Viewpoint Acquisition of MetaCreations
Metacreations Digital, Inc. Viewpoint Pro Forma
Historical Historical Digital, Inc. Combined
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Net revenues $ 3,093 $ 8,284 $ -- $ 11,377
Cost of revenues -- 3,187 -- 3,187
--------- -------- --------- ---------
Gross profit 3,093 5,097 -- 8,190
Operating expenses:
Sales and marketing 2,567 3,230 -- 5,797
Research and development 2,816 1,250 -- 4,066
General and administrative 3,913 2,832 -- 6,745
Amortization of goodwill and other intangibles 152 6,478 5,917 F 6,069
(6,478) B
Stock-based compensation 6,081 -- -- 6,081
--------- -------- --------- ---------
Total operating expenses 15,529 13,790 (561) 28,758
--------- -------- --------- ---------
Loss from operations (12,436) (8,693) 561 (20,568)
Other income 2,286 -- -- 2,286
--------- -------- --------- ---------
Loss before provision (benefit)
for income taxes (10,150) (8,693) 561 (18,282)
Provision (benefit) for income taxes 5,481 (2,121) 2,121 G 5,481
--------- -------- --------- ---------
Loss before minority interest (15,631) (6,572) (1,560) (23,763)
Minority interest in loss of subsidiary 1,048 -- -- 1,048
--------- -------- --------- ---------
Net loss from continuing operations $ (14,583) $ (6,572) $ (1,560) $ (22,715)
========= ======== ========= =========
Net loss per common share from continuing
operations-basic and diluted $ (0.59) $ (0.90)
========= =========
Weighted average number of shares
outstanding-basic and diluted $ 24,581 $ 715 A $ 25,296
========= ========= =========
</TABLE>
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METACREATIONS CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED
FINANCIAL STATEMENTS
A. Represents the acquisition of all of the issued and outstanding stock of
Viewpoint Digital for consideration consisting of $10,000,000 in
cash and the issuance of 715,000 shares of the Company's common stock for
total consideration of $19,151,000, inclusive of transaction costs of
$213,000. The purchase price in excess of the fair value of net tangible
assets assumed of $2,203,000, has been allocated as follows: $3,253,000
to a covenant not to compete, $3,180,000 to work force, $1,558,000 to
technology, $1,203,000 to customer list, $963,000 to in-process
research and development, $643,000 to trade name and $6,148,000 to
goodwill. Goodwill and other intangibles, excluding in-process research
and development, will be amortized over their expected periods of benefit,
which range from one and a half to four years.
B. Represents the elimination of Viewpoint Digital's historical goodwill and
other intangibles and the related amortization expense.
C. Represents the elimination of Viewpoint Digital's historical other
liabilities, which consist of an amount due to Computer Associates.
D. Represents the elimination of Viewpoint Digital's historical net deferred
tax liabilities, as such liabilities will not be payable by the Company.
E. Represents the elimination of Viewpoint Digital's historical stockholder's
equity.
F. To record amortization expense due to $15,985,000 of goodwill and other
intangibles generated from the Viewpoint Digital acquisition, assuming
amortization periods ranging from one and a half to four years,
excluding in-process research and development.
G. Represents the elimination of Viewpoint Digital's historical tax benefits.
The benefits would not have been realized on a pro forma basis due to
the Company's operating losses.
H. The unaudited pro forma consolidated and combined statements of operations
do not include the immediate write off of in-process research and
development, since it is considered a non-recurring charge.
