SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 10, 2000
CYBERSOURCE CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
000-26477 77-0472961
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(Commission File Number) (I.R.S. Employer Identification No.)
550 South Winchester Blvd., Suite 301, San Jose, California 95128
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(Address of Principal Executive Offices) (Zip Code)
(408) 556-9100
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(Registrant's telephone number, including area code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
1
INFORMATION TO BE INCLUDED IN REPORT
Item 2. Acquisition or Disposition of Assets.
On January 10, 2000, pursuant to the Agreement and Plan of Merger, dated as
of January 10, 2000, by and among CyberSource Corporation, a Delaware
corporation (the "Registrant"), Aurum Acquisition Corporation, a Delaware
corporation ("Merger Sub"), and ExpressGold.com, Inc., a privately held South
Dakota corporation ("ExpressGold") (the "Agreement"), the Registrant completed
the merger of Merger Sub, a wholly-owned subsidiary of the Registrant, with and
into ExpressGold, with ExpressGold being the surviving corporation of the merger
and becoming a wholly-owned subsidiary of the Registrant. The transaction was
closed on January 10, 2000 and is being accounted for as a pooling of interests
transaction.
As consideration for the transaction, the Registrant issued an aggregate of
1,554,431 shares of the Registrant's common stock, $0.001 par value, in exchange
for the outstanding shares of capital stock of ExpressGold, subject to the
withholding of 10% of such shares in escrow in accordance with the terms of the
Agreement. At the effective time of the merger, all outstanding options to
purchase shares of ExpressGold common stock were automatically converted into
options to purchase 12,067 shares of the Registrant's common stock based upon
the conversion factor set forth in the Agreement with corresponding adjustment
to their respective exercise prices. In addition, the Registrant has assumed
ExpressGold's obligation to issue up to 58,710 shares of its common stock from
time to time to an employee of ExpressGold.
The Registrant currently intends that ExpressGold's business will continue
to be operated in its current manner. Certain of the assets of ExpressGold were
used in the development and support of ExpressGold's Internet-based stored-value
applications for use by online merchants, and the Registrant currently intends
to use such assets in substantially the same manner.
The total value of consideration paid for the purchase transaction was
determined based on arm's length negotiations between the Registrant and
ExpressGold, which took into account ExpressGold's financial position, operating
history, products, intellectual property and other factors relating to
ExpressGold's business and certain income tax aspects of the transaction. There
are no material relationships between ExpressGold and either the Registrant or
Merger Sub or any of their respective affiliates or any director or officer of
the Registrant or Merger Sub or any associate of such director or officer.
2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired
-------------------------------------------
ExpressGold.com, Inc.
Financial Statements
Year ended December 31, 1999
and Period from December 16, 1998 (inception)
to December 31, 1998
Contents
Report of Independent Auditors............................... 4
Audited Financial Statements
Balance Sheets............................................... 5
Statements of Operations..................................... 6
Statement of Shareholders' Equity (Net Capital Deficiency)... 7
Statements of Cash Flows..................................... 8
Notes to Financial Statements................................ 9
3
Report of Independent Auditors
Board of Directors and Shareholders
ExpressGold.com, Inc.
We have audited the accompanying balance sheets of ExpressGold.com, Inc. as of
December 31, 1999 and 1998, and the related statements of operations,
shareholders' equity (net capital deficiency) and cash flows for the year ended
December 31, 1999, and the period from December 16, 1998 (inception) to December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ExpressGold.com, Inc. at
December 31, 1999 and 1998, and the results of its operations and its cash flows
for the year ended December 31, 1999, and the period from December 16, 1998
(inception) to December 31, 1998, in conformity with accounting principles
generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Minneapolis, Minnesota
February 11, 2000
4
ExpressGold.com, Inc.
Balance Sheets
December 31,
1999 1998
----------------------------------
Assets
Current assets:
Cash and cash equivalents $ 20,495 $ 311,301
Accounts receivable 17,671 -
Prepaids 7,845 7,941
----------------------------------
Total current assets 46,011 319,242
Fixed assets, net 298,260 93,567
Other assets 3,503 690
----------------------------------
Total assets $ 347,774 $ 413,499
==================================
Liabilities and shareholders' equity (net
capital deficiency)
Current liabilities:
Shareholder note payable $ 600,000 $ -
Accounts payable 210,231 43,453
Accrued expenses 183,419 15,426
----------------------------------
Total current liabilities 993,650 58,879
Shareholders' equity (net capital deficiency):
Common stock, par value $.05:
Authorized shares - 40,000,000
Issued and outstanding- 1,179,200 in 1999
and 565,000 in 1998 58,960 28,250
Additional paid-in capital 5,341,890 489,250
Deferred compensation (136,657) -
Accumulated deficit (5,910,069) (161,630)
----------------------------------
(645,876) 355,870
Subscriptions receivable - (1,250)
----------------------------------
Total shareholders' equity (net capital (645,876) 354,620
deficiency)
----------------------------------
Total liabilities and shareholders' equity (net
capital deficiency) $ 347,774 $ 413,499
==================================
See accompanying notes.
5
ExpressGold.com, Inc.
Statements of Operations
Period from
December 16,
1998
Year ended (inception) to
December 31, December 31,
1999 1998
-----------------------------------
Revenues $ 33,251 $ -
Cost of revenues 112,969 -
-----------------------------------
Gross loss (79,718) -
Operating expenses:
Product development 349,852 29,499
Sales and marketing 557,517 -
General and administrative 566,580 132,368
Deferred compensation amortization 4,192,493 -
-----------------------------------
5,666,442 161,867
-----------------------------------
Operating loss (5,746,160) (161,867)
Interest income 6,059 237
Interest expense (8,338) -
-----------------------------------
Net loss $(5,748,439) $(161,630)
===================================
Basic and diluted net loss per share $(7.23) $(6.96)
===================================
Weighted average common shares outstanding 795,301 23,219
===================================
See accompanying notes.
6
ExpressGold.com, Inc.
Statement of Shareholders' Equity (Net Capital Deficiency)
Common Stock Additional
-------------------- Paid-In Deferred
Shares Amount Capital Compensation
-----------------------------------------------------
Balance December 16, 1998 (inception) - $ - $ - $ -
Sale of common stock:
December 30, 1998 at $.05 per share 50,000 2,500 -
December 30, 1998 at $1.00 per share 500,000 25,000 475,000 -
Issuance of stock for services rendered at
$1.00 per share 15,000 750 14,250 -
Net loss - - - -
-----------------------------------------------------
Balance at December 31, 1998 565,000 28,250 489,250 -
Sale of common stock at $1.00 per share 554,200 27,710 526,490 -
Issuance of common stock for services at
prices ranging from $1.00 per share to $41 per share 60,000 3,000 594,000 -
Compensation associated with common stock issued to
employee at prices below fair value - - 3,580,000 -
Deferred compensation related to stock option grants - - 152,150 (152,150)
Amortization of deferred compensation - - - 15,493
Net loss - - - -
----------------------------------------------------
Balance at December 31, 1999 1,179,200 $58,960 $5,341,890 $(136,657)
=====================================================
Stock
Accumulated Subscriptions
Deficit Receivable Total
--------------------------------------------------
Balance December 16, 1998 (inception) $ - $ - $ -
Sale of common stock:
December 30, 1998 at $.05 per share - (1,250) 1,250
December 30, 1998 at $1.00 per share - - 500,000
Issuance of stock for services rendered at
$1.00 per share - - 15,000
Net loss (161,630) - (161,630)
-----------------------------------------------
Balance at December 31, 1998 (161,630) (1,250) 354,620
Sale of common stock at $1.00 per share - 1,250 555,450
Issuance of common stock for services at
prices ranging from $1.00 per share to $41 per share - - 597,000
Compensation associated with common stock issued to
employee at prices below fair value - - 3,580,000
Deferred compensation related to stock option grants - - -
Amortization of deferred compensation - - 15,493
Net loss (5,748,439) - (5,748,439)
-----------------------------------------------
Balance at December 31, 1999 $(5,910,069) $ - $ (645,876)
===================================================
See accompanying notes.
7
ExpressGold.com, Inc.
Statements of Cash Flows
Period from
December 16, 1998
Year ended (inception) to
December 31, December 31,
1999 1998
----------------------------------------
Operating activities
Net loss $(5,748,439) $(161,630)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation expense 81,603 17,092
Stock compensation 4,177,000 -
Amortization of deferred compensation 15,493 -
Changes in operating assets and liabilities:
Accounts receivable (17,671) -
Prepaid expenses and other assets (2,717) (8,631)
Accounts payable 166,778 43,453
Accrued expenses 167,993 15,426
----------------------------------------
Net cash used in operating activities (1,159,960) (94,290)
Investing activities
Capital expenditures (286,296) (110,659)
----------------------------------------
Net cash used in investing activities (286,296) (110,659)
Financing activities
Proceeds from note payable 600,000 -
Proceeds from stock issued 555,450 516,250
----------------------------------------
Net cash provided by financing activities 1,155,450 516,250
----------------------------------------
Net change in cash (290,806) 311,301
Cash and cash equivalents at beginning of period 311,301 -
----------------------------------------
Cash and cash equivalents at end of period $ 20,495 $ 311,301
========================================
See accompanying notes.
8
ExpressGold.com, Inc.
Notes to Financial Statements
December 31, 1999
1. Summary of Significant Accounting Policies
The Company
ExpressGold.com, Inc. (the Company) provides private-label, Internet-based gift
certificate solutions to merchants who want to offer graphical, branded gift
certificates delivered through e-mail.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Revenue Recognition
The Company derives its revenues primarily from transaction fees related to the
issuance of gift certificates and promotional certificates, redemption fees
equal to a percentage of gift certificates and promotional certificates redeemed
and support service fees. Transaction fees and redemption fees are recognized in
the period in which the transactions occur. Support fees are recognized when the
services are provided and the related costs are incurred.
Net Loss Per Share
Basic net loss per share is computed based on the weighted average number of
common shares outstanding during the periods presented. Diluted net loss per
share is the same as basic net loss per share because the effect of all options
is antidilutive.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity
from the date of purchase of three months or less to be cash equivalents.
9
1. Summary of Significant Accounting Policies (continued)
Accounts Receivable and Concentration of Credit Risk
The Company generally does not require collateral for accounts receivable
balances. The Company maintains allowances for potential credit losses, if
necessary.
Property and Equipment
Property and equipment are stated at cost and are depreciated on a declining
balance basis over estimated useful lives of 5 to 7 years. Leasehold
improvements are amortized over the shorter of the lease term or the declining
balance basis over 15 years.
Research and Development
Research and development expenditures are charged to operations as incurred.
Advertising Expense
The cost of advertising is recorded as an expense when incurred. Advertising
costs charged to expense totaled $160,560 and $152 for the year ended December
31, 1999 and the period from December 16, 1998 (inception) to December 31, 1998,
respectively.
Accounting for Stock-Based Compensation
The Company has elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees (APB Opinion No. 25), and related
interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (FAS 123),
requires the use of option valuation models that were not developed for use in
valuing employee stock options. Under APB Opinion No. 25, compensation expense
is recognized when the option exercise price is less than the current fair
market value of the underlying stock on the date of grant.
10
1. Summary of Significant Accounting Policies (continued)
Income Taxes
The Company has elected, with the consent of its shareholders, to be treated as
an S corporation for federal and state income tax reporting purposes. As an S
corporation, corporate taxable income is passed through to the shareholders of
the Company and reported on their respective individual income tax returns.
Accordingly, no federal or state income taxes are reported.
New Accounting Pronouncements
In January 1999, the Company adopted American Institute of Certified Public
Accountants Statement of Position, Accounting for Computer Software Developed
for or Obtained for Internal Use (SOP 98-1). SOP 98-1 applies to all
nongovernmental entities and provides revised guidance for the accounting
treatment for software which is internally developed, acquired, or modified
solely to meet the entity's internal needs. SOP 98-1 did not have a material
effect on the Company's financial statements or results of operations for the
year ended December 31, 1999.
2. Fixed Assets
Fixed assets at December 31, 1999 and 1998 consisted of the following:
1999 1998
-------------------------------
Furniture and equipment $118,280 $ 54,059
Computer equipment 266,365 46,460
Leasehold improvements 12,310 10,140
-------------------------------
396,955 110,659
Less accumulated depreciation (98,695) (17,092)
-------------------------------
$298,260 $ 93,567
===============================
11
3. Commitments
The Company leases its primary facility under noncancelable operating leases
expiring periodically through August 2003. Rental expense was approximately
$50,550 and $7,650 for the year ended December 31, 1999 and the period from
December 16, 1998 (inception) to December 31, 1998, respectively.
Future minimum lease payments under noncancelable operating leases at December
31, 1999 are as follows:
Year ending December 31:
2000 $ 82,204
2001 76,927
2002 65,536
2003 29,333
---------------
$254,000
===============
4. Shareholder Note Payable
The Company had a note payable to its majority shareholder totaling $600,000 at
December 31, 1999. The note accrues interest at 11% and is unsecured. The note
is due on demand.
5. Stock Options
The Company has issued various non-qualified option agreements to employees as
follows:
Weighted
Average
Shares Exercise Price
-------------------------------
Options granted during 1998 5,000 $1.00
---------------
Balance outstanding at December 31, 1998 5,000
Options granted during 1999 19,250 1.00
---------------
Balance outstanding at December 31, 1999 24,250
===============
12
5. Stock Options (continued)
There are currently exercisable options outstanding covering 5,000 shares at
December 31, 1999 and 1998 at a weighted average exercise price of $1.00. The
weighted average fair value of options granted during 1999 was $3.31 per share.
The remaining average exercisable life is 9.58 years at December 31, 1999.
In connection with certain stock options granted during 1999, the Company
recorded deferred compensation for the estimated difference between the exercise
price of the options and the deemed fair value of $152,150, which is being
amortized over the three-year vesting term of the options.
Pro forma information regarding net loss is required by FAS 123, which requires
that the information be presented as if the Company had accounted for its
employee stock options granted under the fair value method of FAS 123. The fair
value for these options was estimated at the date of grant using the minimum
value method with the following weighted average assumptions: a risk-free
interest rate of 6.5% and a weighted average life of the option of 10 years.
The option valuation models were developed for use in estimating the fair value
of traded options that have no vesting restriction and are fully transferable.
In addition, option valuation models require the input of highly subjective
assumptions, including the expected life of the option. Because the Company's
employee stock options have characteristics significantly different from those
of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of
its employee stock options.
Compensation expense determined using the fair value at the grant date for
options granted calculated using the minimum value method of FAS 123 is not
materially different than compensation expense recognized under APB Opinion No.
25.
13
6. Stock Grants
The Company has an employment agreement with a shareholder whereby 5,000 shares
are issued monthly through September 2000, providing that the terms of the
employment agreement are met.
7. Litigation and Contingencies
On January 7, 2000, the Company received a letter from a former employee
claiming that the Company had wrongfully terminated the employee in order to
deny vesting of his option to purchase 15,000 of the Company's common shares, as
well as breach of contract, conversion, and fraud. No formal lawsuit has been
filed at this time and the Company believes that the claims are without merit,
and intends to vigorously defend itself against these allegations. While there
can be no assurance as to the ultimate result of these allegations, the Company
does not believe that the resolution, if any, will have a material adverse
effect on its financial position, results of operations, or cash flows.
8. Subsequent Events
On January 10, 2000, the Company merged with CyberSource Corporation
(CyberSource), in a transaction that is expected to be accounted for as a
pooling of interests. CyberSource is a publicly traded company.
On January 5, 2000, non-vested options outstanding covering 15,000 shares were
forfeited due to termination of employment. Concurrent with the merger, all
remaining options outstanding became 100% vested.
The Company has entered into various agreements with third parties to provide
financial and technical support for the operations of the business. As provided
for under one agreement, the Company was required to pay a transaction fee
totaling $475,000 upon execution of the merger agreement.
14
(b) Pro Forma Financial Information
-------------------------------
The following unaudited pro forma financial statements give effect to the
acquisition of ExpressGold by the Registrant as if it had taken place at the
beginning of the periods presented. The unaudited pro forma combined
information is not necessarily indicative of future operations or the actual
results that would have occurred had the acquisition been consummated at the
beginning of the periods presented. The unaudited pro forma combined
information and related adjustments are based upon available information and
upon certain assumptions which the Registrant believes are reasonable. The
unaudited pro forma combined condensed financial statements should be read in
conjunction with the Registrant's historical financial statements for the year
ended December 31, 1998 included in its Form S-1 and the ExpressGold historical
financial statements and notes thereto contained elsewhere herein.
The accompanying unaudited pro forma financial information combines the
respective balance sheets of the Registrant and ExpressGold as of December 31,
1999 and 1998 and their respective statements of operation for the periods ended
December 31, 1999 and 1998. The Registrant's financial statements for 1997 will
not be restated to reflect this transaction as ExpressGold did not commence
operations until December 16, 1998.
The accompanying unaudited pro forma financial information combines the
results of operations of the Registrant and ExpressGold for each of the five
quarters in the period ended December 31, 1999.
15
CyberSource Corporation
Unaudited Pro Forma Balance Sheet
December 31, 1998
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Ref. Total
ASSETS
Current assets:
Cash and cash equivalents $ 11,111 $ 311 $ 11,422 $ - $ 11,422
Accounts receivable, net 863 - 863 - 863
Prepaid expenses and other current assets 411 8 419 - 419
---------------------------------------------------------------------------------
Total current assets 12,385 319 12,704 - 12,704
Property and equipment, net 2,300 94 2,395 - 2,395
Other noncurrent assets 290 1 290 - 290
---------------------------------------------------------------------------------
Total assets $ 14,975 $ 414 $ 15,389 $ - $ 15,389
=================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
(NET CAPITAL DEFICIENCY)
Current liabilities:
Convertible note payable to an officer and
Stockholder $ 3,000 $ - $ 3,000 $ - $ 3,000
Accounts payable 531 44 575 - 575
Other accrued liabilities 969 15 984 - 984
Current obligations under capital leases 211 - 211 - 211
Deferred revenue 120 - 120 - 120
---------------------------------------------------------------------------------
Total current liabilities 4,831 59 4,890 - 4,890
Non current obligation under capital leases 256 - 256 - 256
Redeemable convertible preferred stock 18,911 - 18,911 - 18,911
Stockholders' equity (net capital deficiency)
Common stock 5 28 33 (27) (1) 6
Additional paid-in capital 1,199 489 1,688 27 (1) 1,715
Deferred compensation (142) - (142) - (142)
Accumulated deficit (10,085) (162) (10,247) - (10,247)
---------------------------------------------------------------------------------
Total stockholders' equity (net capital
deficiency) (9,023) 355 (8,668) - (8,668)
----------------------------------------------------------------------------------
Total liabilities and stockholders' equity
(net capital deficiency) $ 14,975 $ 414 $ 15,389 $ - $ 15,389
=================================================================================
(1) To adjust ExpressGold's common stock amounts to reflect CyberSource par
value of shares issued in the transaction; adjusted based on the 1.3047
conversion rate.
16
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Year Ended December 31, 1998
Period
from
December
16, 1998
to
Year Ended December Unaudited Ref.
December 31, 31, 1998 Pro Forma
1998 Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Total
Revenues $ 3,384 $ - $ 3,384 $ - $ 3,384
Cost of revenues 3,471 - 3,471 - 3,471
--------------------------------------------------------------------------------
Gross loss (87) - (87) - (87)
Operating expenses
Product development 3,802 29 3,831 - 3,831
Sales and marketing 4,184 - 4,184 - 4,184
General and administrative 1,946 133 2,079 - 2,079
Deferred compensation amortization 18 - 18 - 18
--------------------------------------------------------------------------------
Total operating expenses 9,950 162 10,112 - 10,112
Loss from operations (10,037) (162) (10,199) - (10,199)
Interest income, net (48) - (48) - (48)
--------------------------------------------------------------------------------
Net loss $(10,085) $(162) $(10,247) $ - $(10,247)
================================================================================
Basic and diluted net loss per share $ (2.05) $ (2.08)
================= =================
Shares used in computing basic and diluted
net loss per share 4,918 4,924 (1)
================= =================
Pro forma basic and diluted net loss per share $ (0.86) $ (0.87)
================= =================
Shares used in computing pro forma basic 11,740 11,746 (1)
and diluted net loss per share ================= =================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
17
CyberSource Corporation
Unaudited Pro Forma Balance Sheet
December 31, 1999
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Ref. Total
ASSETS
Current assets:
Cash and cash equivalents $ 71,653 $ 20 $ 71,673 $ - $ 71,673
Short-term investments 68,596 - 68,596 - 68,596
Accounts receivable, net 3,194 18 3,212 - 3,212
Prepaid expenses and other current assets 1,581 8 1,589 - 1,589
---------------------------------------------------------------------------------
Total current assets 145,024 46 145,070 - 145,070
Property and equipment, net 8,002 298 8,300 - 8,300
Other noncurrent assets 748 4 752 - 752
---------------------------------------------------------------------------------
Total assets $153,774 $ 348 $154,122 $ - $154,122
=================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
(NET CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable $ 1,101 $ 210 $ 1,311 $ - $ 1,311
Other accrued liabilities 3,902 784 4,686 - 4,686
Current obligations under capital leases 661 - 661 - 661
Deferred revenue 461 - 461 - 461
---------------------------------------------------------------------------------
Total current liabilities 6,125 994 7,119 - 7,119
Non current obligation under capital leases 444 - 444 - 444
Stockholders' equity (net capital deficiency)
Common stock 24 59 83 (48) (1) 35
Additional paid-in capital 182,429 5,342 187,771 48 (1) 187,819
Deferred compensation (654) (137) (791) - (791)
Accumulated other comprehensive loss (412) - (412) - (412)
Accumulated deficit (34,182) (5,910) (40,092) - (40,092)
---------------------------------------------------------------------------------
Total stockholders' equity (net capital 147,205 (646) 146,559 - 146,559
deficiency) ---------------------------------------------------------------------------------
Total liabilities and stockholders' equity
(net capital deficiency) $153,774 $ 348 $154,122 $ - $154,122
=================================================================================
(1) To adjust ExpressGold's common stock amounts to reflect CyberSource par
value of shares issued in the transaction; adjusted based on the 1.3047
conversion rate.
18
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Year Ended December 31, 1999
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustment Total Ref.
Revenues $ 12,898 $ 33 $ 12,931 $ - $ 12,931
Cost of revenues 10,835 113 10,948 - 10,948
-----------------------------------------------------------------------------
Gross profit (loss) 2,063 (80) 1,983 - 1,983
Operating expenses
Product development 7,457 350 7,807 - 7,807
Sales and marketing 14,552 558 15,110 - 15,110
General and administrative 5,457 566 6,023 - 6,023
Deferred compensation amortization 524 4,192 4,716 - 4,716
-----------------------------------------------------------------------------
Total operating expenses 27,990 5,666 33,656 - 33,656
Loss from operations (25,927) (5,746) (31,673) - (31,673)
Interest income, net 1,830 (2) 1,828 - 1,828
-----------------------------------------------------------------------------
Net loss $(24,097) $(5,748) $(29,845) $ - $(29,845)
=============================================================================
Basic and diluted net loss per share $ (1.70) $ (1.95)
============== =================
Shares used in computing basic and diluted
net loss per share 14,191 15,267 (1)
============== =================
Pro forma basic and diluted net loss per share $ (1.25) $ (1.46)
============== =================
Shares used in computing pro forma basic
and diluted net loss per share 19,335 20,411 (1)
============== =================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
19
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Three Months Ended December 31, 1998
Period
from
December 16,
Three Months 1998 to
Ended December 31, Unaudited
December 31, 1998 Pro Forma
1998 Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Total Ref.
Revenues $ 1,103 $ - $ 1,103 $ - $ 1,103
Cost of revenues 1,274 - 1,274 - 1,274
------------------------------------------------------------------------------
Gross loss (171) - (171) - (171)
Operating expenses
Product development 1,268 29 1,297 - 1,297
Sales and marketing 1,395 - 1,395 - 1,395
General and administrative 632 133 765 - 765
Deferred compensation amortization 18 - 18 - 18
------------------------------------------------------------------------------
Total operating expenses 3,313 162 3,475 - 3,475
Loss from operations (3,484) (162) (3,646) - (3,646)
Interest income, net (27) - (27) - (27)
-------------------------------------------------------------------------------
Net loss $ (3,511) $ (162) $ (3,673) $ - $ (3,673)
==============================================================================
Basic and diluted net loss per share $ (0.65) $ (0.68)
================ =================
Shares used in computing basic and diluted
net loss per share 5,381 5,407 (1)
================ =================
Pro forma basic and diluted net loss per
share $ (0.22) $ (0.23)
================ =================
Shares used in computing pro forma basic
and diluted net loss per share 15,871 15,897 (1)
================ =================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
20
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Three Months Ended March 31, 1999
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Total Ref.
Revenues $ 1,713 $ - $ 1,713 $ - $ 1,713
Cost of revenues 1,505 - 1,505 - 1,505
----------------------------------------------------------------------------
Gross profit (loss) 208 - 208 - 208
Operating expenses
Product development 1,322 54 1,376 - 1,376
Sales and marketing 2,079 51 2,130 - 2,130
General and administrative 938 81 1,019 - 1,019
Deferred compensation amortization 67 - 67 - 67
----------------------------------------------------------------------------
Total operating expenses 4,406 186 4,592 - 4,592
Loss from operations (4,198) (186) (4,384) - (4,384)
Interest income, net 8 3 11 - 11
----------------------------------------------------------------------------
Net loss $(4,190) $(183) $(4,373) $ - $(4,373)
============================================================================
Basic and diluted net loss per share $ (0.77) $ (0.70)
============== =================
Shares used in computing basic and deluted
net loss per share 5,465 6,212
============== =================
Pro forma basic and diluted net loss $ (0.26) $ (0.26)
per share ============== =================
Shares used in computing pro forma basic
and diluted net loss per share 15,955 16,702 (1)
============== =================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
21
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Three Months Ended June 30, 1999
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Total Ref.
Revenues $ 2,536 $ - $ 2,536 $ - $ 2,536
Cost of revenues 2,236 9 2,245 - 2,245
---------------------------------------------------------------------------
Gross profit (loss) 300 (9) 291 - 291
Operating expenses
Product development 1,652 68 1,720 - 1,720
Sales and marketing 4,207 87 4,294 - 4,294
General and administrative 1,105 112 1,217 - 1,217
Deferred compensation amortization 156 - 156 - 156
---------------------------------------------------------------------------
Total operating expenses 7,120 267 7,387 - 7,387
Loss from operations (6,820) (276) (7,096) - (7,096)
Interest income, net (38) 1 (37) - (37)
---------------------------------------------------------------------------
Net loss $(6,858) $(275) $(7,133) $ - $(7,133)
===========================================================================
Basic and diluted net loss per share $ (1.15) $ (1.06)
============== ================
Shares used in computing basic and diluted
net loss per share 5,954 6,721 (1)
============== ================
Pro forma basic and diluted net loss $ (0.42) $ (0.42)
per share ============== ================
Shares used in computing pro forma basic
and diluted net loss per share 16,213 16,980 (1)
============== ================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
22
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Three Months Ended September 30, 1999
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Total Ref.
Revenues $ 3,634 $ 10 $ 3,644 $ - $ 3,644
Cost of revenues 3,094 30 3,124 - 3,124
-----------------------------------------------------------------------------
Gross profit (loss) 540 (20) 520 - 520
Operating expenses
Product development 2,233 76 2,309 - 2,309
Sales and marketing 3,970 111 4,081 - 4,081
General and administrative 1,485 87 1,572 - 1,572
Deferred compensation amortization 156 - 156 - 156
-----------------------------------------------------------------------------
Total operating expenses 7,844 274 8,118 - 8,118
Loss from operations (7,304) (294) (7,598) - (7,598)
Interest income, net 589 1 590 - 590
-----------------------------------------------------------------------------
Net loss $(6,715) $(293) $(7,008) $ - $(7,008)
=============================================================================
Basic and diluted net loss per share $(0.31) $(0.30)
============== =================
Shares used in computing basic and diluted
net loss per share 21,927 23,253 (1)
============== =================
Pro forma basic and diluted net loss $(0.31) $(0.30)
per share ============== =================
Shares used in computing pro forma basic
and diluted net loss per share 21,927 23,253 (1)
============== =================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
23
CyberSource Corporation
Unaudited Pro Forma Statement of Operations
Three Months Ended December 31, 1999
Unaudited
Pro Forma
Express- Total Pro Forma Combined
CyberSource Gold Combined Adjustments Total Ref.
Revenues $ 5,015 $ 23 $ 5,038 $ - $ 5,038
Cost of revenues 4,000 74 4,074 - 4,074
-------------------------------------------------------------------------------
Gross profit (loss) 1,015 (51) 964 - 964
Operating expenses
Product development 2,250 152 2,402 - 2,402
Sales and marketing 4,296 309 4,605 - 4,605
General and administrative 1,929 286 2,215 - 2,215
Deferred compensation amortization 145 4,192 4,337 4,337
-------------------------------------------------------------------------------
Total operating expenses 8,620 4,939 13,559 - 13,559
Loss from operations (7,605) (4,990) (12,595) - (12,595)
Interest income, net 1,271 (7) 1,264 - 1,264
-------------------------------------------------------------------------------
Net loss $ (6,334) $(4,997) $(11,331) $ - $(11,331)
===============================================================================
Basic and diluted net loss per share $ (0.27) $ (0.46)
============== =================
Shares used in computing basic and diluted
net loss per share 23,162 24,623 (1)
============== =================
Pro forma basic and diluted net loss per share $ (0.27) $ (0.46)
============== =================
Shares used in computing pro forma basic
and diluted net loss per share 23,162 24,623 (1)
============== =================
(1) Includes ExpressGold weighted average common shares outstanding based on a
conversion rate of 1.3047.
24
(c) Exhibits
--------
The Exhibit Index is incorporated herein by reference.
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.
CYBERSOURCE CORPORATION
(the Registrant)
By: /s/ Charles E. Noreen, Jr.
-------------------------
Charles E. Noreen, Jr.
Vice President of Finance and Administration,
Chief Financial Officer
(Principal Financial and
Chief Accounting Officer)
Dated: March 27, 2000
25
EXHIBIT INDEX
Exhibit
Number Description
- ------------------------ -------------------------------------------------------
2.1* Agreement and Plan of Merger by and among CyberSource
Corporation, Aurum Acquisition Corporation, and
ExpressGold.com, Inc.
_____________
* Previously provided.