THE OFFERING
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Common stock offered by NetCreations......... 3,300,000 shares
Common stock to be outstanding after the
offering................................... 15,000,000 shares(1)
Use of proceeds.............................. To fund expansion of our network of
third-party Web sites, to increase
expenditures on sales, marketing, research
and development and other costs of expanding
our business, to repay indebtedness under our
line of credit, for working capital and for
other general corporate purposes, which may
include payment of the second, third and
fourth advances of fees to ICQ, Inc. and
which may also include acquiring or investing
in companies, technologies or expertise
complementary to our business.
Proposed Nasdaq National Market symbol....... NTCR
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(1) The number of shares to be outstanding after the offering excludes 1,170,000
shares of common stock reserved for issuance under our 1999 Stock Option
Plan. We have granted options, effective as of September 14, 1999, to
purchase 232,500 shares of common stock at an exercise price of $5.00 per
share. In addition, we have granted options, effective as of October 8,
1999, to purchase 100,000 shares of common stock to each of our
non-management directors, Messrs. Michael Levy, Gregory W. Slayton and
Mitchell York, at an exercise price per share equal to the lesser of $10.00
or the initial public offering price.
CORPORATE INFORMATION
We are a New York corporation. We were originally incorporated in Florida in
1995 and we reincorporated in New York in January 1996. Our principal executive
offices are located at 379 West Broadway, Suite 202, New York, New York 10012
and our telephone number is (212) 625-1370. Our corporate Web site is located at
WWW.NETCREATIONS.COM. We provide our services on our other Web site,
WWW.POSTMASTERDIRECT.COM. Information on our Web sites does not constitute part
of this prospectus.
NETCREATIONS, POSTMASTER and 100% OPT-IN are registered trademarks of
NetCreations, Inc. We have filed applications to register POSTMASTERDIRECT.COM
and POSTMASTER DIRECT RESPONSE. Other service marks, trademarks and tradenames
referred to in this prospectus are the property of their respective owners.
6
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SUMMARY FINANCIAL DATA
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PERIOD FROM NINE MONTHS ENDED
INCEPTION TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, ---------------------------------- ------------------------
1995 1996 1997 1998 1998 1999
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STATEMENTS OF OPERATIONS DATA:
Net revenues (1)............... $101,652 $476,190 $1,100,781 $3,446,539 $2,062,333 $10,202,614
Gross profit................... 93,439 433,100 927,657 1,936,763 1,249,786 5,240,947
Income (loss) before income tax
provision.................... 22,789 (1,562) 283,377 678,091 399,930 2,899,924
Net income (loss).............. $ 22,789 $ (8,996) $ 260,349 $ 605,863 $ 357,330 $ 2,597,569
======== ======== ========== ========== ========== ===========
Net income (loss) per
share-basic and diluted...... $ 0.00 $ (0.00) $ 0.02 $ 0.05 $ 0.03 $ 0.22
======== ======== ========== ========== ========== ===========
Shares used in per share
computation (000's
omitted)..................... 11,700 11,700 11,700 11,700 11,700 11,700
PRO FORMA DATA (2):
Historical income (loss) before
income tax provision......... $ 22,789 $ (1,562) $ 283,377 $ 678,091 399,930 2,899,924
Pro forma income tax provision
(benefit).................... 3,500 (1,000) 129,000 316,000 186,000 1,342,000
-------- -------- ---------- ---------- ---------- -----------
Pro forma net income (loss).... $ 19,289 $ (562) $ 154,377 $ 362,091 $ 213,930 $ 1,557,924
======== ======== ========== ========== ========== ===========
Pro forma net income (loss) per
share--basic & diluted....... $ 0.00 $ (0.00) $ 0.01 $ 0.03 $ 0.02 $ 0.13
======== ======== ========== ========== ========== ===========
Shares used in per share
computation (000's
omitted)..................... 11,700 11,700 11,700 11,700 11,700 11,700
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SEPTEMBER 30, 1999
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PRO FORMA
ACTUAL PRO FORMA (3) AS ADJUSTED (3)(4)
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BALANCE SHEET DATA:
Cash................................................ $ 798,135 $ -- $31,984,000
Working capital (deficiency)........................ 179,445 (710,190) 31,548,810
Total assets........................................ 4,576,265 3,778,130 35,762,130
Long-term debt (including current portion).......... 477,510 477,510 202,510
Total stockholders' equity.......................... 1,112,994 223,359 32,482,359
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(1) Net revenues represent revenues earned for our services less volume and
broker discounts.
(2) We have elected to be taxed as an S corporation for federal and state income
tax purposes since our inception. Accordingly, no provision has been made
for federal or certain state income taxes. Pro forma net income has been
computed as if we had been fully subject to federal, state and city taxes.
Immediately prior to the effective date of this offering, we will terminate
the S corporation election and, thereafter, become a C corporation.
(3) We intend to pay to Ms. Resnick and Mr. Druckenmiller final S corporation
distributions based on current year earnings, to the extent of available
cash balances. At September 30, 1999, this amount would have been $798,135.
Pro forma adjustments reflect (a) our pro forma S corporation distributions
for this amount and (b) the deferred tax liability resulting from the
termination of our S corporation election.
(4) As adjusted to reflect the sale of 3,300,000 shares of common stock offered
at an assumed initial public offering price of $11.00 per share, the
mid-point of the filing range, and the application of the estimated net
proceeds from this offering. |
