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): April 7, 2000
FINANCIALWEB.COM, INC.
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(Exact Name of Registrant as Specified in Charter)
NEVADA 000-25799 93-1202428
(State or Other Jurisdiction (Commission file (I.R.S. Employer
of Incorporation) number) Identification No.)
201 PARK PLACE
SUITE 321
ALTAMONTE SPRINGS, FLORIDA 32701
(Address of Principal Executive Offices)
(407) 834-4443
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
CLOSING OF PRIVATE OFFERING OF COMMON STOCK
Through March 31, 2000, FinancialWeb.com, Inc. (the "Company") has closed
two portions of a $12,000,000 private offering. The Company raised $7,914,622 in
cash from the sale of 2,638,207 shares of common stock, par value $.001 per
share, of the Company (the "Common Stock") at $3.00 per share (the "Closings").
The private offering remains open until the earlier of up to $12,000,000 of
Common Stock is sold or May 15, 2000, unless extended by the Company.
Net proceeds to the Company from the Closings were $6,763,627 after paying
commissions, consulting fees and offering expenses. The Company used $505,685 of
the net proceeds to repay $500,000 of short-term bridge loans made to the
Company in December 1999 and January 2000. The Company also used $166,449 of the
net proceeds to repay $150,436 in principal amount under a promissory note due
in December 1999. In addition, the Company used $208,698 of the net proceeds to
repurchase 154,591 shares of Common Stock at $1.35 per share from Mr. Kevin
Lichtman, the former chief executive officer of the Company, pursuant to his
separation agreement with the Company. Those shares were returned to the status
of authorized but unissued shares. The Company has reserved $936,103 of the net
proceeds to repurchase an additional 693,409 shares at $1.35 per share from
Mr. Lichtman pursuant to his separation agreement. The Company is currently in
discussions with Mr. Lichtman about reducing the number of shares to be
repurchased, but no agreement has been reached to date. The balance of
$4,946,692 of the net proceeds is to be used for working capital, capital
expenditures and other general corporate purposes.
FINANCIAL RESTRUCTURING OF CONVERTIBLE NOTES
On January 18, 2000, the Company completed a financial restructuring with
the holders of $2.3 million of outstanding one year convertible promissory notes
(the "Notes"). As a result of the restructuring, the Notes were exchanged
effective November 10, 1999 for 815,488 shares of restricted, non-voting Series
A Convertible Preferred Stock that is convertible into 815,488 shares of Common
Stock of the Company. A Form of the Certificate of Designations, Preferences and
Rights for the Series A Convertible Preferred Stock and Form of Conversion
Notice are filed as Exhibits to this report.
CONVERSION OF OUTSTANDING PROMISSORY NOTE
On December 23, 1999, a holder of a $500,000 convertible promissory note
converted his note into 1,123,000 shares of Common Stock of the Company
representing the conversion of principal and accrued interest thereon at
$0.50 per share. Concurrently with the conversion, the holder entered into a
lock-up agreement, whereby he has agreed not to sell any of the aforementioned
shares before January 18, 2001.
RECENT DEVELOPMENTS
On January 1, 2000, the Company hired Kevin E. Leininger as President and
Chief Executive Officer
of the Company replacing James Gagel who was acting President and Chief
Executive Officer. Mr. Gagel has resumed the positions of Executive Vice
President, Chief Operating Officer and General Counsel of the Company. On
February 1, 2000, the Board of Directors appointed Mr. Leininger to the
Company's Board of Directors. Prior to joining the Company, Mr. Leininger served
as Vice President of Global Marketing for ESPS Inc. (Nasdaq: ESPS), a provider
of enterprise compound document publishing software and services. Prior to ESPS,
Inc., Mr. Leininger served as vice president of business development and
marketing for NeoMedia Technologies, Inc, formerly DevTech Associates, Inc., a
developer of document systems and intelligent document software and products.
From June 1994 to March 1997, Mr. Leininger was managing director and head of
marketing of DevTech, and was director of Open Systems for DevTech from
September 1991 to June 1994. Mr. Leininger holds a B.S. in physics and
mathematics from Iowa State University and an M.B.A. in international business
and finance from the University of Chicago.
On January 10, 2000, Real Time Translators S.A.C., a wholly owned
subsidiary commenced operations in Lima, Peru. Concurrently, the Company
initiated use of its proprietary translation management program in order to
translate its content to Spanish and Portuguese pursuant to its Agreement with
StarMedia Network, Inc.
On February 22, 2000, the Company hired Jeffrey A. Rudman as Senior Vice
President of Partner Operations of the Company. Mr. Rudman will be responsible
for managing the Company's international strategic alliances, including the
recently announced partnership with StarMedia Network (Nasdaq: STRM). Mr. Rudman
will oversee the implementation and maintenance of new key partnerships with
Internet companies and financial service providers on a global basis. Mr.
Rudman joined the Company from KPMG Consulting, where he was a manager in KPMG's
Financial Services Consulting division, delivering strategic consulting services
to retail brokerage firms, banks providing personal trusts services, mutual fund
organizations and investment mangers. He served as an advisor and member of the
Project Management Team of WingspanBank.com, the online banking division of
First USA Bank, N.A. Mr. Rudman holds an M.B.A. in Finance and International
Business from the University of Chicago and a Bachelor's degree in Finance from
Boston University.
On March 2, 2000, the Company appointed Edward Mullen as Chairman of the
Board of Directors. Mr. Mullen was President and a director of Marketing
Services Group Inc. (MSGi), a holding company with eleven Internet and marketing
services companies in its portfolio. Significant stockholders of MSGi include
CMGi and GE Capital Corporation. Prior to joining MSGi, Mr. Mullen served as
the President and Chief Executive Officer of CMG Direct Corp, the original CMGi
company. Under Mr. Mullen's leadership, several Internet technologies were
created and he was responsible for incubating and founding WiredEmpire, a
subsidiary of MSGi and leading e-relationship company. Mr. Mullen is a director
of several Internet companies and worked with non-profit organizations such as
WGBH-TV's Business Executive Council, The Massachusetts Interactive Media
Council and Business and Technology for Schools and Technology. Mr. Mullen is
an adjunct professor at Boston College's Graduate School of Management where he
teaches courses on Venture Capital and Mergers & Acquisitions.
On March 10, 2000, the Company hired Ron Guerriero as Senior Vice President
of Business Development of the Company. Prior to joining the Company, Mr.
Guerriero was Chief Executive Officer of Sylvan International Inc., a consulting
firm based in Needham, Massachusetts. Prior to Sylvan, Mr. Guerriero was Chief
Executive Officer of WTG International Consulting and Director of Emerging
Business Consulting at Arthur Andersen. During his tenure at Sylvan
International, Mr. Guerriero was Interim Chief Executive Officer of benext.com
concluding more than 15 strategic alliances with on and offline companies to
drive traffic to their Web site. Mr. Guerriero is an active member of the MIT
Enterprise Forum and a member of the adjunct faculty at the Carroll Graduate
School of Management at Boston College, where he teaches courses in Venture
Capital and Entrepreneurship. He also serves on the Board of Advisors for
opholio.com, merlin-net.com, benext.com and the Neuroaugmentation Laboratory at
Massachusetts General Hospital.
On March 17, 2000, Ray Barton, Senior Vice President of Marketing and
Technology, resigned from the Company.
On March 20, 2000, the Company hired Leonard W. von Vital as Senior Vice
President and Chief Financial Officer of the Company. Prior to joining the
Company, Mr. von Vital was chief financial officer of ESPS, Inc., a provider of
business-to-business document management and publishing software. From May 1998
until October 1998, Mr. von Vital was vice president of finance, vending
operations for Real Time Data, Inc., a consolidator of vending businesses and a
provider of technology to the vending industry. From May 1997 until May 1998,
Mr. von Vital was senior vice president of product management for Astea
International Inc. (Nasdaq: ATEA), a developer and vendor of enterprise customer
relationship management software, and from November 1993 to May 1997, he was
chief financial officer of that company. Mr. von Vital is a certified public
accountant and holds a B.S. in accounting from St. Francis College.
For additional discussion regarding the above Recent Developments, see also
the Company's press releases regarding the same.
This current report on Form 8-K is neither an offer to sell nor a
solicitation of an offer to buy any of these securities. This private offering
is being made pursuant to the registration exemptions contained in Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act") and Rule 506 of
Regulation D promulgated thereunder. The shares of Common Stock offered in this
private offering will not be, and have not been, registered under the Securities
Act or applicable state securities laws and may not be offered or sold in the
United States absent registration under the Securities Act and applicable state
securities laws or an applicable exemption from the registration requirements.
This current report is being filed pursuant to and in accordance with Rule 135c
under the Securities Act.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit No. Description
4.1 Form of Certificate of Designations, Preferences and Rights for Series
A Convertible Preferred Stock
10.1 Form of Conversion Notice to One Year Convertible Note Holders
SIGNATURE
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 duly authorized.
Date: April 7, 2000 FINANCIALWEB.COM, INC.
By: /s/ Kevin Leininger
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Kevin Leininger
Chief Executive Officer and President