Prepared by R.R. Donnelley Financial -- Form 8-K/A
Table of Contents
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K/A
 
Amended Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of earliest event reported: April 16, 2002
 
 
 
BLUE MARTINI SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
   
0-30925
   
94-3319751
(State or other jurisdiction of
incorporation or organization)
   
(Commission File No.)
   
(I.R.S. Employer
Identification No.)
 
2600 Campus Drive
San Mateo, California 94403
(Address of principal executive offices)
 
Telephone Number (650) 356-4000
(Registrant’s telephone number, including area code)

Table of Contents
 
Explanatory Note
 
On May 1, 2002, Blue Martini Software, Inc. (“Blue Martini”) filed a Current Report on Form 8-K to report its acquisition of The Cybrant Corp. (“Cybrant”) on April 16, 2002 (the “Original Form 8-K”). On June 28, 2002, Blue Martini filed an Amendment to the Original Form 8-K (the “Original Form 8-K/A”) to provide certain financial information under Item 7 of Form 8-K. This Amendment is being filed to amend certain information under Item 7 that was included in the Original Form 8-K/A.
 
Item 7.    Financial Statements, Pro Forma Financial Information and Exhibits
 
(b)   Pro Forma Financial Information.
 
    
Page
  
3
  
4
  
5
  
6
  
7

2

Table of Contents
 
BLUE MARTINI SOFTWARE
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
 
On April 16, 2002, Blue Martini Software, Inc. (“Blue Martini”) completed the acquisition of The Cybrant Corp. (“Cybrant”), through the merger of a wholly owned subsidiary of Blue Martini with and into Cybrant, with Cybrant surviving as a wholly owned subsidiary of Blue Martini (the “Merger”).
 
The following unaudited pro forma combined condensed financial information has been prepared to give effect to the Merger. This financial information reflects certain assumptions deemed probable by management regarding the Merger. The total estimated purchase consideration of the Merger has been allocated on a preliminary basis to assets and liabilities based on management’s best estimates of their fair value with the excess cost over the net assets acquired allocated to goodwill. The adjustments to the unaudited pro forma combined condensed financial information are subject to change pending a final analysis of the total purchase cost and the fair value of the assets and liabilities assumed. The impact of these changes could be material.
 
The unaudited pro forma combined condensed balance sheet as of December 31, 2001 gives effect to the Merger as if it had occurred on December 31, 2001, and combines the historical consolidated balance sheet of Blue Martini and the historical balance sheet of Cybrant as of that date.
 
The unaudited pro forma combined condensed statement of operations for the year ended December 31, 2001 combines the historical consolidated statement of operations of Blue Martini for the year ended December 31, 2001 with the historical statement of operations of Cybrant for the year ended December 31, 2001, and assumes that the merger had occurred on January 1, 2001.
 
The unaudited pro forma combined condensed financial information is based on estimates and assumptions. These estimates and assumptions are preliminary and have been made solely for purposes of developing this pro forma information. Unaudited pro forma combined condensed financial information is presented for illustrative purposes only and is not necessarily indicative of the combined financial position or results of operations of future periods or the results that actually would have been realized had the entities been a single entity during this period. This unaudited pro forma combined financial information is based upon the respective historical consolidated financial statements of Blue Martini and notes thereto, previously filed with the Securities and Exchange Commission and the historical financial statements of Cybrant and notes thereto, previously filed with the Securities and Exchange Commission, and should be read in conjunction with those statements and the related notes.

3

Table of Contents
 
BLUE MARTINI SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
December 31, 2001
(In thousands)
 
    
Blue Martini
     
Cybrant
     
Pro Forma Adjustment
       
Pro Forma Combined
  
ASSETS
                                      
Current assets:
                                      
Cash and cash equivalents
   
$
12,945
 
   
$
1,744
 
   
 
—
 
     
$
14,689
 
Short-term investments
   
 
84,554
 
   
 
—
 
   
 
—
 
     
 
84,554
 
Accounts receivable, net
   
 
5,558
 
   
 
1,506
 
   
 
—
 
     
 
7,064
 
Prepaids and other current assets
   
 
2,370
 
   
 
1,179
 
   
$
(89
)(A)
     
 
3,460
 
    
  
  
    
Total current assets
   
 
105,427
 
   
 
4,429
 
   
 
(89
)
     
 
109,767
 
Property and equipment, net
   
 
4,654
 
   
 
1,724
 
   
 
(1,586
)(A)
     
 
4,792
 
Intangible assets and other, net
   
 
12,340
 
   
 
164
 
   
 
2,700
(A)
     
 
15,204
 
Goodwill
   
 
—
 
   
 
—
 
   
 
3,667
(A)
     
 
3,667
 
    
  
  
    
Total assets
   
$
122,421
 
   
$
6,317
 
   
$
4,692
 
     
$
133,430
 
    
  
  
    
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
                                      
Current liabilities:
                                      
Accounts payable
   
$
1,848
 
   
$
208
 
   
 
—
 
     
$
2,056
 
Accrued liabilities and other current liabilities
   
 
12,940
 
   
 
1,927
 
   
$
552
(A)
     
 
15,419
 
Deferred revenues
   
 
5,061
 
   
 
1,000
 
   
 
(802
)(A)
     
 
5,259
 
Long-term obligations—current
   
 
110
 
   
 
1,668
 
   
 
96
(A)
     
 
1,874
 
    
  
  
    
Total current liabilities
   
 
19,959
 
   
 
4,803
 
   
 
(154
)
     
 
24,608
 
Long-term obligations—non current
   
 
—
 
   
 
218
 
   
 
—
 
     
 
218
 
    
  
  
    
Total liabilities
   
 
19,959
 
   
 
5,021
 
   
 
(154
)
     
 
24,826
 
    
  
  
    
Redeemable convertible preferred stock
   
 
—
 
   
 
37,178
 
   
 
(37,178
)(B)
     
 
—
 
Stockholders’ deficit:
                                      
Common stock
   
 
68
 
   
 
2
 
   
 
(2
)(B)
     
 
68
 
Additional paid-in capital
   
 
253,946
 
   
 
2,770
 
   
 
(2,770
)(B)
     
 
260,981
 
                      
 
7,035
(A)
           
Deferred stock compensation
   
 
(8,000
)
   
 
—
 
   
 
—
 
     
 
(8,000
)
Notes receivable from stockholders
   
 
—
 
   
 
(93
)
   
 
—
 
     
 
(93
)
Accumulated other comprehensive income
   
 
595
 
   
 
—
 
   
 
—
 
     
 
595
 
Accumulated deficit
   
 
(144,147
)
   
 
(38,561
)
   
 
38,561
(B)
     
 
(144,947
)
                      
 
(800
)(A)
           
    
  
  
    
Total stockholders’ deficit
   
 
102,462
 
   
 
(35,882
)
   
 
42,024
 
     
 
108,604
 
    
  
  
    
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
   
$
122,421
 
   
$
6,317
 
   
$
4,692
 
     
$
133,430
 
    
  
  
    
 
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements.

4

Table of Contents
 
BLUE MARTINI SOFTWARE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2001
(In thousands, except per share data)
 
    
Blue Martini
     
Cybrant
     
Pro Forma Adjustments
       
Pro Forma Combined
  
Revenues:
                                      
License
   
$
20,438
 
   
$
4,074
 
   
 
—
 
     
$
24,512
 
Service
   
 
39,476
 
   
 
3,902
 
   
 
—
 
     
 
43,378
 
    
  
  
    
Total revenues
   
 
59,914
 
   
 
7,976
 
   
 
—
 
     
 
67,890
 
    
  
  
    
Cost of revenues:
                                      
License
   
 
2,122
 
   
 
1,000
 
   
 
—
 
     
 
3,122
 
Service
   
 
37,359
 
   
 
5,297
 
   
 
—
 
     
 
42,656
 
Amortization of purchased technology
   
 
2,000
 
   
 
—
 
   
$
1,200
(C)
     
 
3,200
 
    
  
  
    
Total cost of revenues
   
 
41,481
 
   
 
6,297
 
   
 
1,200
 
     
 
48,978
 
    
  
  
    
Gross profit
   
 
18,433
 
   
 
1,679
 
   
 
(1,200
)
     
 
18,912
 
Operating expenses:
                                      
Sales and marketing
   
 
46,661
 
   
 
8,041
 
   
 
—
 
     
 
54,702
 
Research & development
   
 
18,623
 
   
 
7,066
 
   
 
—
 
     
 
25,689
 
General & administrative
   
 
10,900
 
   
 
1,243
 
   
 
—
 
     
 
12,143
 
Charges for stock compensation
   
 
12,014
 
   
 
—
 
   
 
—
 
     
 
12,014
 
Amortization of acquired other intangibles
   
 
—
 
   
 
—
 
   
 
150
(C)
     
 
150
 
Restructuring charges
   
 
6,257
 
   
 
—
 
   
 
—
 
     
 
6,257
 
    
  
  
    
Total operating expenses
   
 
94,455
 
   
 
16,350
 
   
 
150
 
     
 
110,955
 
    
  
  
    
Loss from operations
   
 
(76,022
)
   
 
(14,671
)
   
 
(1,350
)
     
 
(92,043
)
Interest & other, net
   
 
6,418
 
   
 
(5
)
   
 
—
 
     
 
6,413
 
    
  
  
    
Net loss
   
$
(69,604
)
   
$
(14,676
)
   
$
(1,350
)
     
$
(85,630
)
    
  
  
    
Basic and diluted net loss per common share
   
$
(1.09
)
                       
$
(1.26
)
    
                      
Shares used in computing basic and diluted net loss per common share
   
 
63,970
 
            
 
4,027
 
     
 
67,997
 
    
           
    
 
See accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements.

5

Table of Contents
 
BLUE MARTINI SOFTWARE, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
 
 
(A)
 
To record the application of the purchase accounting.
 
The total estimated purchase price is $7,587,000 and is comprised of:
 
1.    The issuance of 4,027,022 shares of Blue Martini common stock to Cybrant shareholders. The fair value of the Blue Martini shares issued is based on a per share value of $1.58, which is equal to the average market price as reported on the Nasdaq National Market for the period from two days prior to two days subsequent to the public announcement of the merger.
 
2.    The exchange of warrants assumed in the Merger exercisable for up to an aggregate of 507,914 shares of Blue Martini common stock at an exercise price of $0.92 per share that expire in 2007. The warrants have been valued based on the Black-Scholes option pricing model.
 
3.    Estimated restructuring and exit costs consisting primarily of severance payments, facility and equipment related charges.
 
4.    Estimated direct costs of the transactions consisting primarily of fees for legal, accounting and valuation services.
 
The amounts and components of the estimated purchase price is presented below (in thousands):
 
Fair value of Blue Martini common stock issued
   
$
6,363
Estimated fair value of warrants exchanged
   
 
672
Estimated restructuring and exit costs
   
 
352
Estimated acquisition-related costs
   
 
200
    
    
$
7,587
    
 
Under purchase accounting, the total purchase price will be allocated to Cybrant’s assets and liabilities based on their fair values. Allocations are subject to valuations as of the date of the consummation of the merger. The total price is expected to be allocated to tangible assets and liabilities, identifiable intangible assets, including in-process research and development (“IPRD”) and purchased technology, and goodwill. The purchased technology is expected to be amortized over two years beginning at acquisition date and the IPRD will be charged to expense in the second quarter of 2002.
 
The following represents the preliminary allocation of the purchase price to the acquired assets and assumed liabilities of Cybrant. The allocation is preliminary and based on Cybrant’s assets and liabilities as of December 31, 2001 (in thousands):
 
Net assets assumed
   
$
420
Purchased technology
   
 
2,400
Other intangible assets
   
 
300
Goodwill
   
 
3,667
In-process research and development
   
 
800
    
Total purchase price
   
$
7,587
    
 
The actual allocation of the purchase price is based on the composition of Cybrant’s net assets on April 16, 2002 (the Merger closing date.) Consequently, the actual allocation of the purchase price differs from that presented above. The actual purchase price allocation is detailed in Note 3 to Notes to Financial Statements in Blue Martini’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.
 
Net assets assumed were adjusted primarily for the adjustments of certain fixed assets to fair values, the reduction of deferred revenue to the fair value of the obligation assumed and additional liabilities in connection with payoff of certain lease obligations.
 
Goodwill represents the excess of the purchase price over the fair value of the tangible and identifiable assets. The unaudited pro forma combined statement of operations does not include the amortization of goodwill acquired in the acquisition in accordance with Financial Accounting Standards Board Statement No. 142, Goodwill and Other Intangible Assets.
 
 
(B)
 
The pro forma adjustment represents the elimination of Cybrant’s stockholders’ equity accounts.
 
 
(C)
 
Acquired intangible assets are amortized over a period of two years.

6

Table of Contents
 
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.
 
Dated:    August 13, 2002
      
BLUE MARTINI SOFTWARE , INC .
           
By:
  
    /s/    MONTE ZWEBEN
               
Monte Zweben
Chairman and Chief Executive Officer

7