DEFA14A 1 ddefa14a.txt ADDITIONAL PROXY MATERIALS =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted [_] Definitive Proxy Statement by Rule 14a-6(e)(2)) [_] Definitive Additional Materials [X] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12 eBT International, Inc. -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- Notes: Reg. (S) 240.14a-101. SEC 1913 (3-99) EBT INTERNATIONAL, INC. ANNOUNCES PLAN OF COMPLETE LIQUIDATION and First Quarter Results of Operations PROVIDENCE, R.I., May 23, 2001 - eBT International, Inc. (Nasdaq: EBTI), today announced that its Board of Directors has unanimously voted to dissolve and liquidate the Company, subject to the approval of the holders of a majority of its shares. Based upon current information, the Company anticipates that assets available for distribution to shareholders will be between $3.10 and $3.22 per share. The Board will call a special meeting of shareholders, expected to be held in August 2001, to approve the Plan of Complete Liquidation and Dissolution. A Proxy statement describing the Plan will be mailed to shareholders approximately 30 days prior to the meeting. In reaching its decision that the plan of liquidation and dissolution is in the best interests of the Company and its shareholders, the Board of Directors considered a number of factors. The Proxy statement will describe these factors in detail, including the Company's recent performance, the state of the content management industry, prevailing economic conditions and previous unsuccessful efforts to sell or merge the Company last year and more recently. The Board also considered restructuring the business in light of the Company's unsatisfactory revenue performance in the fiscal quarter ended April 30, 2001. These plans, including plans involving significant reductions in the Company's current operations, either entailed considerable risk, or did not demonstrate that positive operating cash flow or operating income could be achieved in a period of time acceptable to the Board, and required a significant amount of cash to fund the Company's operations prior to the achievement of potentially acceptable financial results. Consequently, the Board determined that it would not be advisable to continue the operations of the Company, which are currently reducing the Company's liquidity on a monthly basis. Additionally, for some time, the Company's stock has traded well below the anticipated cash liquidation value of the shares. Based on this information, the Board's business judgment of the risks associated with restructuring the business, and the advice of its advisors, the Board of Directors has concluded that distributing the Company's net liquid assets to stockholders would return the greatest value to shareholders as compared to other available alternatives. The Board of Directors also has received a fairness opinion from Morgan Stanley, a copy of which will be included in the Proxy statement. In connection with the intent to liquidate, the Company has begun the orderly wind down of its operations, including laying off the majority of its employees, seeking purchasers for the sale of its intellectual property and other tangible and intangible assets and providing for its outstanding and potential liabilities. In addition, the Company will continue to provide support and maintenance to existing maintenance agreement holders for the duration of their current contracts. Upon approval of the Plan, the Board currently anticipates that an initial distribution of liquidation proceeds, in the amount of not less than $2.75 per common share, will be made to shareholders within 75 days after the shareholders meeting. The remaining net assets will be held in a contingency reserve, and the Board anticipates that shareholders could receive periodically additional liquidation proceeds of approximately $.25 to $.50 per share. The estimated time frame for payment of these proceeds will be described in the proxy statement. The range of the total liquidating distribution may be able to be reported with greater precision at the time the proxy statement is mailed to shareholders. Under Delaware law, the Company will remain in existence as a non-operating entity for three years from the date the Company files a Certificate of Dissolution in Delaware and will maintain a certain level of liquid assets to cover any remaining liabilities and pay operating costs during the dissolution period. During the dissolution period, the Company will attempt to convert its remaining assets to cash and settle its liabilities as expeditiously as possible. The Company is currently unable to estimate with certainty the amount of proceeds that it will realize upon the sale of its intellectual property and related assets, or the amount of retained cash that will be needed to satisfy the Company's liabilities. If the Company's shareholders approve the plan of liquidation, the Company will file a Certificate of Dissolution promptly after the shareholders vote, and shareholders will then be entitled to share in the liquidation proceeds based upon their proportionate ownership at that time. The Company expects that its shares will be delisted from the Nasdaq Stock Market in connection with the dissolution, but the shares may be eligible for trading on the NASD's electronic bulletin board pending the liquidation. In light of the cessation of the Company's operations, the Board also announced that James Ringrose has resigned as President and Chief Executive Officer effective May 30, 2001. The Company reported net revenues of $1,097,000 for the fiscal quarter ended April 30, 2001. This compares to net revenues of $3,934,000 for the Company's ongoing operations for the fiscal quarter ended April 30, 2000. Total net revenues for the fiscal quarter ended April 30, 2000 was $10,290,000, including revenues of the Company's former IED division, as well as its former MediaBank product line, which were divested in the second quarter of fiscal 2001. The Company's net loss for the fiscal quarters ended April 30, 2001 and April 30, 2000, excluding net restructuring and special charges, was $4,756,000, or $0.32 per share, and $4,937,000, or $0.30 per share, including results attributable to the divested businesses. The reported net loss for the fiscal quarter ended April 30, 2001 was $5,573,000, or $0.37 per share, as compared to a net loss of $6,772,000, or $0.41 per share, in the prior year fiscal quarter, including results attributable to the divested businesses. The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the Plan of Complete Liquidation and Dissolution. INFORMATION CONCERNING THE BENEFICIAL OWNERSHIP OF EACH OF THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS MAY BE FOUND IN THE COMPANY'S PROXY STATEMENT FILED WITH THE SEC UNDER SCHEDULE 14A ON MAY 4, 2001. THE PROXY STATEMENT IS AVAILABLE FOR FREE BOTH ON THE SEC'S WEBSITE (HTTP://WWW.SEC.GOV) OR BY CONTACTING CHRISTOPHER M. BURNS AT (401) 752-4400. IN CONNECTION WITH THE PROPOSED LIQUIDATION AND DISSOLUTION, THE COMPANY WILL FILE A PROXY STATEMENT ON SCHEDULE 14A WITH THE SEC, WHICH WILL DESCRIBE THE LIQUIDATION AND DISSOLUTION. SHAREHOLDERS OF THE COMPANY AND OTHER INVESTORS ARE ENCOURAGED TO READ THE PROXY STATEMENT Page 2 of 3 BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE LIQUIDATION AND DISSOLUTION. AFTER THE SCHEDULE 14A IS FILED WITH THE SEC, IT WILL BE AVAILABLE FOR FREE, BOTH ON THE SEC'S WEB SITE (HTTP://WWW.SEC.GOV/) AND FROM THE COMPANY, AS FOLLOWS: Attn: Christopher M. Burns eBT International, Inc. 299 Promenade Street Providence, RI 02908-5720 (401) 752-4400 This release contains forward-looking statements with respect to the Company's financial position, prospects and proposed liquidation and dissolution. Factors that may cause actual results to differ materially from these forward-looking statements include the following: the amounts to be realized in connection with the sale of the Company's assets, the ability of the Company to effect an orderly wind down of its operations, the possible amendment, delay in implementation or termination of the plan of liquidation and dissolution,the timing and amount of payments to shareholders, the effect of litigation in which the Company is involved and unknown liabilities which may be asserted in connection with the liquidation. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2001 and the Company's other filings with the SEC from time to time, for a description of certain additional factors which may cause results to differ materially from those indicated by these forward-looking statements. ABOUT EBT eBT (Nasdaq: EBTI) develops and markets enterprise-wide Web content management solutions and services. eBT's products are designed to satisfy three business objectives - time-to-market, integration and ease of use - to help organizations automate the creation, management and publication of Web content. Leveraging more than 5 years of XML expertise and support for other industry standards, eBT's products are well suited to work in concert with other software solutions to enable the integration customers require to build a cohesive, complete e- business solution that maximizes the viability of an organization's Web infrastructure. Headquartered in Providence, Rhode Island, eBT has offices located throughout the United States and Europe. For more information, visit http://www.ebt.com. eBT is a trademark of eBT International, Inc. in the United States and other countries. All other company, product or service names are trademarks or registered trademarks of their respective holders. Page 3 of 3 eBT International, Inc. Unaudited Condensed Consolidated Statements of Operations (In Thousands except Per Share Amounts)
Three Months ended April 30, 2001 2000 -------- -------- Net revenues: eBusiness Technologies $ 1,097 $ 4,420 Information Exchange 0 5,870 -------- -------- Total revenues 1,097 10,290 Cost of revenues 1,370 2,911 -------- -------- Gross profit (273) 7,379 Operating expenses: Sales and marketing 2,643 5,168 Product development 1,214 3,809 Amortization of intangible assets 0 321 General and administrative 1,483 3,683 Restructuring and special charges 817(1) 1,835(2) -------- -------- Total operating expenses 6,157 14,816 -------- -------- Operating loss (6,430) (7,437) Non-operating income (loss): Net investment and other income 857 665 -------- -------- Loss before provision for income taxes (5,573) (6,772) Provision for income taxes 0 0 -------- -------- Net loss $ (5,573) $ (6,772) ======== ======== Basic loss per share $ (0.37) $ (0.41) ======== ======== Diluted loss per share $ (0.37) $ (0.41) ======== ======== Weighted Average Shares Outstanding: Basic 15,029 16,596 Diluted 15,029 16,596
See accompanying notes to Unaudited Condensed Consolidated Statements of Operations. eBT International Inc Footnotes to Unaudited Condensed Consolidated Statements of Operations (In Thousands except Per Share Amounts) (1) Restructuring and special charges for the three months ended April 30, 2001 include the costs for the writedown of certain fixed assets to fair values net of a reduction in costs related to the April 30, 2000 restructuring. (2) Restructuring expenses for the three months ended April 30, 2000 include severance expenses and the disposition of fixed assets associated with the relocation of the Company's headquarters from Boston, Massachusetts to Providence, Rhode Island. eBT International, Inc. Unaudited Condensed Consolidated Balance Sheets (Dollars in Thousands)
April 30, 2001 January 31, 2001 -------------- ---------------- ASSETS Current assets: Cash and cash equivalents $ 50,022 $ 56,709 Marketable securities 10,578 8,961 Accounts receivable, net 995 3,195 Receivables from asset sales 5,775 5,973 Prepaid expenses and other current assets 1,006 537 --------- --------- Total current assets 68,376 75,375 Property and equipment, net 1,189 2,402 Product development costs, net 896 1,187 Long-term accounts receivable 0 90 Licensed technology and advances, net 799 948 --------- --------- TOTAL ASSETS $ 71,260 $ 80,002 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 8,693 $ 10,207 Unearned revenue 1,083 1,508 --------- --------- Total current liabilities 9,776 11,715 Total stockholders' equity 61,484 68,287 TOTAL LIABILITIES AND --------- --------- STOCKHOLDERS' EQUITY $ 71,260 $ 80,002 ========== ==========