Engage is actually a rat-dog, hopefully it doesn't bite you.
The purchases of adsmart and flycast put enga under pressure, and some did not like the transaction at all. Some may argue that this transaction helped CMGI at the expense of ENGA.... I don't know, but read yourself:
sec.gov
L. LITIGATION
On March 16, 2000, a derivative action was filed in the Court of Chancery
of the State of Delaware against Edward A. Bennett, Christopher A. Evans, Craig
D. Goldman, Andrew J. Hajducky, III, Frederic D. Rosen, Paul L. Schaut, David S.
Wetherell, members of the Company's Board of Directors, CMGI, Inc., the majority
stockholder of the Company and the Company, as nominal defendant. The complaint
alleges that, in connection with the proposed sale by CMGI of Flycast
Communications Corporation and Adsmart Corporation to the Company, CMGI and the
individual defendants have violated their fiduciary duties. The Company believes
that the complaint is without merit and expects that the Company's Board of
Directors will contest the claims vigorously.
..........
Dividend to CMGI
The Company has recorded the difference between CMGI's historical carrying
value and the combined purchase price paid for Flycast and Adsmart as a dividend
to CMGI. This dividend has been included in the accumulated deficit balance as
of April 30, 2000 as follows:
(IN THOUSANDS)
Accumulated deficit at July 31, 1999 $ (84,715)
Net loss for the nine months ended April 30, 2000 (265,615)
Dividend to CMGI (2,249,595)
-----------
Accumulated deficit at April 30, 2000 $(2,599,925)
===========
..............
CMGI's purchase price of the Flycast acquisition was allocated as follows:
(IN THOUSANDS)
Working capital, net of cash acquired of
$12,893 ........................... $ 21,484
Property and equipment, net ............ 11,751
Other assets ........................... 316
In-process research and development .... 29,300
Long-term obligations .................. (2,834)
Goodwill ............................... 738,537
Other identifiable intangible assets ... 93,820
---------
Purchase price, net of cash acquired ... $ 892,374
=========
So, whats left in ENGA:
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1999 2000
--------- -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................................... $ 112,034 $ 48,493
Available-for-sale securities ............................................... 1,067 41,772
Accounts receivable, less allowance for doubtful accounts of $1,790 and
$8,175 at July 31, 1999 and April 30, 2000, respectively .................. 16,463 69,947
Prepaid expenses ............................................................ 727 3,571
--------- -----------
Total current assets ...................................................... 130,291 163,783
--------- -----------
Property and equipment, net ................................................... 1,997 24,654
Investment in joint venture ................................................... 1,047 95
Intangible assets, net of accumulated amortization of $10,492 and $129,300 at
July 31, 1999 and April 30, 2000, respectively ............................. 73,335 958,764
Restricted cash ............................................................... -- 5,020
Other assets .................................................................. 371 3,728
--------- -----------
Total assets .............................................................. $ 207,041 $ 1,156,044
========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt ........................................... $ -- $ 2,046
Obligation under capital lease .............................................. 327 4,071
Due to CMGI and affiliates .................................................. 44,829 3,548
Accounts payable ............................................................ 12,614 38,904
Accrued expenses and other current liabilities .............................. 15,251 21,465
Investment banker fees payable .............................................. -- 25,576
Deferred revenue ............................................................ 4,293 5,755
--------- -----------
Total current liabilities ................................................. 77,314 101,365
--------- -----------
Deferred revenue .............................................................. 1,508 804
Long-term debt, net of current portion ........................................ -- 2,325
Obligation under capital lease, net of current portion ........................ 436 3,409
Other long-term liabilities ................................................... -- 604
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.01 par value, 5,000 shares authorized,
0 issued and outstanding ................................................. -- --
Common Stock, $.01 par value, 350,000 shares authorized, 98,047
and 173,055 shares issued and outstanding at July 31, 1999
and April 30, 2000, respectively ......................................... 980 1,731
Additional paid-in capital .................................................. 215,895 3,646,875
Deferred compensation ....................................................... (4,024) (1,544)
Accumulated other comprehensive (loss) income ............................... (353) 400
Accumulated deficit ......................................................... (84,715) (2,599,925)
--------- -----------
Total stockholders' equity ................................................ 127,783 1,047,537
--------- -----------
Total liabilities and stockholders' equity ................................ $ 207,041 $ 1,156,044
========= ===========
..... has ENGA mounting losses, some payment dues (investment banker fees ...), and NTA of only 90 MM...which is ~$0.5/shr)...went pffft! If B2C internet companies trade at .8 to 1.0/cash and 0.4-0.8/book... where should a money losing B2Crelated entity trade? |
