-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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: March 6, 2001 Commission File Number: 0-25427 ---------------- NETOBJECTS, INC. (Exact name of Registrant as specified in its charter) Delaware 94-3233791 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 301 Galveston Drive, Redwood City, California 94063 (Address of Principal Executive Offices) (Zip Code) (650) 482-3200 (Registrant's Telephone Number, Including Area Code) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On February 19, 2001 NetObjects, Inc. completed the sale of its Enterprise division to Merant Incorporated. The gross proceeds from the sale was approximately $18 million in cash, of which $4 million was paid in December, 2000 for the option to purchase the division. The sale and other transactions directly related to the sale were consummated on February 19, 2001 and resulted in an estimated net gain of $15.3 million for the Company, subject to a final determination of the carrying value of the assets sold. The information regarding the sale of the Company's sale of the Enterprise division is set forth in the Company's Definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission on January 22, 2001. The Company presently intends to use the net proceeds of the sale to fund general corporate expenses and transition to its new business model. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements None. (b) Pro Forma Financial Information - Pro Forma Unaudited Condensed Consolidated Balance Sheet as of December 31, 2000 appearing on page 4 of this Form 8-K. - Pro Forma Unaudited Condensed Consolidated Statement of Operations for the quarter ended December 31, 2000 appearing on page 5 of this Form 8-K. - Pro Forma Unaudited Condensed Consolidated Statement of Operations for the three fiscal years ended September 30, 2000, 1999, and 1998, respectively appearing on pages 6 through 8 of this Form 8-K. (c) Exhibits Exhibit 2.3 Asset sale and purchase agreement. Exhibit 2.4 Technology license agreement. 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, thereunto duly authorized. NETOBJECTS, INC. Date: March 6, 2001 By: /s/ Samir Arora ----------------------------------- Samir Arora Chairman of the Board, Chief Executive Officer, and President NETOBJECTS, INC. AND SUBSIDIARIES Pro Forma Financial Information The following pro forma unaudited financial information presents the Company's pro form unaudited condensed balance sheet as of December 31, 2000 and the Company's pro forma unaudited condensed consolidated statements of operations for the quarter ended December 31, 2000 and the fiscal years ended September 30, 2000, 1999, and 1998 respectively. The pro forma unaudited financial information give effect to (i) the Sale, including the payment of legal fees and costs incurred as a direct result of the Sale, and (ii) the certain curtailment of inventory obsolescence accruals and deferred revenue which resulted from the Sale. The pro forma adjustments were recorded as if the sale had occurred as of December 31, 2000 and, for purposes of the pro forma unaudited condensed consolidated statements of operations, the results as previously reported, have been amended to reflect the discontinued operations of the Enterprise division. This pro forma unaudited financial information does not purport to represent what the Company's actual financial position and operating results would have been had such events actually occurred on the aforementioned dates. The pro forma unaudited financial information also does not purport to serve as a forecast of the Company's financial position or results of operations for any future periods. The pro forma adjustments are based upon currently available information and upon certain assumptions that management believes are reasonable in the circumstances. This pro forma financial information should be read in conjunction with the Company's audited consolidated financial statements as of fiscal year ended September 30, 2000 appearing in the Company's Form 10-K for fiscal year 2000, and the unaudited condensed consolidated financial statements as of and for the fiscal quarter ended December 31, 2000 appearing in the Company's Form 10-Q for the quarter then ended. Basic net loss per share is computed using the weighted-average number of outstanding shares of common stock, excluding shares of common stock subject to repurchase. Diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding and, when dilutive, potential common shares from stock subject to repurchase, options and warrants to purchase common stock using the treasury stock method and from convertible securities on an "as if-converted" basis. All potential common shares have been excluded from the computation of diluted net loss per share for all periods presented because the effect would have been antidilutive. 3 NETOBJECTS, INC. AND SUBSIDIARIES Pro Forma Unaudited Condensed Consolidated Balance Sheet As of December 31, 2000 (in thousands)

4 NETOBJECTS, INC. AND SUBSIDIARIES Pro Forma Unaudited Condensed Consolidated Statement of Operations For the quarter ended December 31, 2000 (in thousands)

5 NETOBJECTS, INC. AND SUBSIDIARIES Pro Forma Unaudited Condensed Consolidated Statement of Operations For the fiscal year ended September 30, 2000 (in thousands)

6 NETOBJECTS, INC. AND SUBSIDIARIES Pro Forma Unaudited Condensed Consolidated Statement of Operations For the fiscal year ended September 30, 1999 (in thousands) NetObjects Pro Forma As Reported Adjustments Pro Forma ------------ ------------ ------------ Net sales $ 22,215 $ (4,531) $ 17,684 Cost of revenues 6,225 (2,218) 4,007 ------------ ------------ ------------ Gross profit 15,990 (2,313) 13,677 Operating expenses: Sales and marketing 18,800 (2,580) 16,220 Research and development 9,358 (2,524) 6,834 General and administrative 4,314 -- 4,314 Amortization of goodwill -- -- -- Stock-based compensation 559 -- 559 In-process research and development -- -- -- ------------ ------------ ------------ Total operating expenses 33,031 (5,104) 27,927 ------------ ------------ ------------ Operating loss (17,041) 2,791 (14,250) Interest income (745) -- (745) Accretion of discount on debt (1,653) -- (1,653) Interest charge on beneficial conversion feature on convertible debt (7,457) -- (7,457) ------------ ------------ ------------ Total other expense (9,855) -- (9,855) ------------ ------------ ------------ Loss before income taxes (26,896) 2,791 (24,105) ------------ ------------ ------------ Provision for income taxes 44 -- 44 ------------ ------------ ------------ Net loss from continuing operations (26,940) 2,791 (24,149) Net loss from discontinuing operations -- (2,791)(a) (2,791) Gain on the sale from the discontinued operations -- 15,278 (b) 15,278 ------------ ------------ ------------ Net loss (26,940) 15,278 (11,662) Comprehensive loss $ (26,940) $ 15,278 $ (11,662) ============ ============ ============ Basic and diluted net loss per share $ (2.40) $ (1.04) ============ ============ Shares used to calculate basic and diluted net income (loss) per share 11,215,118 11,215,118 ============ ============ (a) The net loss from discontinued operations is related to the sale of the Enterprise division on February 19, 2001. (b) The $15,278,000 gain from the sale of the Enterprise division has been calculated on a consistent basis as of December 31, 2000

7 NETOBJECTS, INC. AND SUBSIDIARIES Pro Forma Unaudited Condensed Consolidated Statement of Operations For the fiscal year ended September 30, 1998 (in thousands)

8 NetObjects, Inc. Index to Exhibits Exhibit Number Description -------------- ----------- 2.3 Asset sale and purchase agreement 2.4 Technology license agreement 9

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