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): March 12, 1999
EARTHWEB INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 000-25017 13-3899472
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
3 PARK AVENUE, NEW YORK, NEW YORK 10016
(Address of Principal Executive Offices) (Zip Code)
(212) 725-6550
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OF ASSETS.
On March 12, 1999, EarthWeb Inc. ("EarthWeb") entered into a Securities Purchase
Agreement (the "Agreement") with MicroHouse International, Inc. ("MicroHouse"),
Steve Anderson, Doug Anderson and Robert Anderson (collectively, the "Sellers"),
and, with respect to a certain provision, Ascent Partners ("Ascent"). Pursuant
to the Agreement, EarthWeb acquired all of the capital stock of MicroHouse on
March 19,1999. Prior to the acquisition, the ownership of MicroHouse was held by
Steve Anderson, Doug Anderson and Robert Anderson. A copy of the Agreement is
attached as Exhibit 2.1.
The consideration paid by EarthWeb to acquire all of the capital stock of
MicroHouse consisted of (a) $1,595,000 in cash, $1,000,000 of which was paid at
closing, with $500,000 and $95,000 of the balance payable on July 19, 1999 and
April 1, 2000, respectively, (b) 50,856 shares of EarthWeb common stock
delivered at closing, of which 48,314 shares were delivered to the Sellers and
the balance were delivered to Ascent as a fee in connection with the
acquisition, and (c) promissory notes in an aggregate amount of $4,973,719
convertible into 126,475 shares of common stock on March 20, 2000 (collectively,
the "Promissory Notes") (copies of the Promissory Notes are attached as Exhibits
4.2 to 4.4). The foregoing purchase price is subject to future adjustments, not
to exceed $611,349, based on EarthWeb's calculation of Microhouse's net revenue
from continuing operations for the year ended December 31, 1998, following a
financial audit to be conducted on the operations of Microhouse for that year.
Such purchase price was reached through arm's length negotiations and was funded
through the issuance of EarthWeb common stock and the Promissory Notes, and from
the proceeds of EarthWeb's initial public offering.
The acquisition will be accounted for as a purchase. The purchase price will be
allocated to the assets acquired and liabilities assumed based on their
estimated fair values. EarthWeb will record a one-time charge in the second
quarter of 1999, relating to the issuance of employee stock options of
approximately $500,000. Results of operations for MicroHouse will be included
with those of EarthWeb for periods subsequent to the date of acquisition.
MicroHouse is a provider of subscription-based electronic reference libraries to
information technology professionals.
In accordance with a registration rights agreement executed and delivered as
part of the acquisition, EarthWeb granted certain rights to Steve Anderson, Doug
Anderson, Robert Anderson, and Ascent Partners with respect to the registration
of EarthWeb common stock. A copy of such registration rights agreement is
attached as Exhibit 4.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
Pursuant to the instructions to Item 7 of Form 8-K, the financial
information required by Item 7(a) will be filed by amendment within
60 days of the date of this filing.
(b) Pro Forma Financial Information
Pursuant to the instructions to Item 7 of Form 8-K, the financial
information required by Item 7(b) will be filed by amendment within
60 days of the date of this filing.
(c) Exhibit Index
Exhibit
No. Description
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2.1 Securities Purchase Agreement, dated as of March 12, 1999,
between EarthWeb Inc., MicroHouse International, Inc. and Steve
Anderson, Doug Anderson, Robert Anderson, and, with respect to
a certain provision, Ascent Partners.
4.1 Registration Rights Agreement, dated as of March 19, 1999,
between EarthWeb Inc., Steve Anderson, Doug Anderson, Robert
Anderson, and Ascent Partners.
4.2 Zero Coupon Convertible Promissory Note, dated as of March 19,
1999, of EarthWeb Inc. in favor of Steve Anderson.
4.3 Zero Coupon Convertible Promissory Note, dated as of March 19,
1999, of EarthWeb Inc. in favor of Doug Anderson.
4.4 Zero Coupon Convertible Promissory Note, dated as of March 19,
1999, of EarthWeb Inc. in favor of Robert Anderson.
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.
EarthWeb Inc.
Dated: March 26, 1999 By: /s/ Jack D. Hidary
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Jack D. Hidary
President and Chief Executive
Officer