Prospectus Summary
You should read the following summary together with the more detailed information and financial statements and notes thereto appearing elsewhere in this prospectus. Except where noted otherwise, all information in this prospectus, including share and per-share information, assumes (1) the conversion of a promissory note issued by Intelligent Life into 6,738 shares of Series B Preferred Stock, (2) the conversion of all outstanding shares of Series A Preferred Stock and Series B Preferred Stock into shares of common stock immediately prior to completion of this offering, (3) no exercise of the underwriters' over-allotment option, and (4) a stock dividend of four shares to be paid on each issued and outstanding share of Intelligent Life's common stock immediately prior to completion of this offering. See "Description of Capital Stock" on page 45 and "Underwriting" on page 50.
The Company
Overview
We are the leading provider of independent, objective research regarding consumer banking and credit products and a significant publisher of original editorial content relating to personal finance matters. Since 1984, we have provided this information to leading newspapers and magazines and through our publication Bank Rate Monitor. Today, we publish our data online through our principal web site, Bankrate.com, and through arrangements with more than 60 distribution (or syndication) partners such as Yahoo!, Quicken.com, America Online and Money.com. Information is presented for 120 geographic markets and nationally and includes data regarding mortgage and home equity loans, credit cards, automobile loans, checking accounts, ATM fees and yields on savings instruments. Our unique information, which is compiled by 38 researchers, is accompanied by extensive editorial content designed to assist consumers with their decision-making process. We believe Bankrate.com's audience, which may search for information by product and geographic area using this web site, represents a highly desirable group of target customers for our advertisers. As a result, we believe we are able to obtain premium rates for advertising on Bankrate.com.
We are currently using the resources of Bankrate.com to create new online publications that provide personal finance information to additional targeted audiences. These publications include: theWhiz.com, which targets an audience that is younger, more female and more ethnically diverse than typical personal finance publications; Consejero.com, which targets a Spanish-speaking audience; CPNet.com, which targets the college market; and Garzarelli.com, a subscription-based service. Our goal is to develop a broad base of loyal users of our network of web sites who believe our information can improve their personal financial lives.
The "Business and Finance Report" compiled by Media Metrix, Inc. for the quarter ended December 31, 1998 indicated that we had 1.3 million unique visitors, compared to 1.1 million for the quarter ended September 30, 1998. Unique visitors are the number of different web users that visited our sites over the course of the reporting period.
Our Opportunity
We believe many purchasers of financial products and services are relatively uninformed with respect to these products and services, and often rely upon personal relationships when making such purchases. We also believe many of these products and services are not well explained, and alternatives are not typically presented, when marketed to consumers through traditional media. As the sale of many of these products and services moves to the web, where there is little personal contact, we believe that consumers will seek sources of independent, objective information such as Bankrate.com to facilitate and support their buying decisions. Because of the interactive nature of the internet, where web technology allows us to display extensive research on financial products and services that was previously unavailable to consumers, we believe we are able to provide a superior vehicle to educate consumers about how to best select and purchase such products and services.
Additionally, we believe consumers are becoming more proactive managers of their financial affairs and, as a result, there is an increasing demand for financial information from a larger proportion of the population concerning a broader range of financial issues than in the past. We believe the majority of the financial information available on the web is oriented toward investment advice and providing business news and financial market information rather than personal and consumer finance data. Our publications are targeted to fulfill the market need for personal and consumer finance information.
By expanding our comparative data regarding financial products and related editorial content, we are creating a unique web-based service designed to enable our audience to keep abreast of personal finance developments and better manage their financial affairs. As a result, we believe we can assemble a loyal base of users made up of targeted audiences that are attractive to advertisers. We believe Intelligent Life will benefit significantly from the anticipated growth in internet usage and spending on internet advertising, direct marketing and electronic commerce.
Strategy
Our objective is to create a series of online publications that are trusted sources of editorial content for consumers in the area of personal finance. Elements of our strategy include:
Increase Awareness of Our Publications. We intend to aggressively promote our online publications. Developing greater awareness of our brand names should increase the value of our web sites to potential advertisers and distribution partners. Historically, we have had relatively low levels of promotional expenditures. With the proceeds of this offering, we anticipate increasing our marketing efforts substantially.
Expand Existing Publications. We plan to expand and improve our existing online publications by including additional editorial and research content. Recent additions to Bankrate.com include information regarding 30-year jumbo mortgages, VA mortgages, money market accounts, credit unions, Year 2000 issues and bank ratings. We expect forthcoming additions will include new content in the areas of investment and insurance on theWhiz.com and Consejero.com. These additions may incorporate opportunities for consumers to initiate transactions on our sites.
Grow Distribution Relationships. We intend to pursue new and expand existing distribution relationships in order to increase site traffic and raise the profile of our brand names. In particular, we intend to focus on increasing the number of distribution relationships we have for theWhiz.com and Consejero.com.
Add New Publications. We intend to use our expertise in producing online research and editorial content to develop new online publications similar in concept to Bankrate.com in complementary areas such as property and casualty insurance and tax planning. In addition to developing publications internally, and in order to accelerate our growth, we intend to pursue acquisitions of personal finance companies and products that will extend our network of web sites.
Provide High Value Added Solutions to Advertisers. Delivering audiences to our advertisers on a targeted demographic basis, segmented by geographic region and product of interest, provides high value added marketing solutions to advertisers. By expanding the breadth and depth of our online publications and adding to our advertising inventory, we believe we will be able to expand the scope of our services, thereby increasing sales to existing advertisers and attracting new advertisers.
Background
Intelligent Life commenced internet operations in 1995. In 1997, following the hiring of William P. Anderson, III, our President and Chief Executive Officer, our online activities became our principal focus. Mr. Anderson was formerly the Chief Financial Officer of H&R Block, Inc. and President and Chief Executive Officer of Block Financial Corporation, a subsidiary of H&R Block, Inc., engaged in consumer lending, software and online financial service delivery. Since commencing online operations, we have developed substantial online business capabilities, and now create and host a significant number of web sites and sell and deliver advertising relating to all of these sites. As a result of having developed this infrastructure, we believe we are well-positioned to grow our business.
Intelligent Life was incorporated in Florida in 1993 and acquired the assets of its predecessor at that time. Our principal executive office is located at 11811 U.S. Highway One, Suite 101, North Palm Beach, Florida 33408 and our telephone number is (561) 627-7330.
The Offering
Common stock offered by Intelligent Life............... shares Common stock outstanding after this offering.................. shares(1) Use of proceeds................. For expansion of our business, including marketing and promotional expenditures, investment in editorial and content production resources, and possible future acquisitions, and for general corporate purposes, including working capital. See "Use of Proceeds" on page 13. Proposed Nasdaq Stock Market symbol......................... ILIF (1) Includes: (1) conversion of a promissory note issued by Intelligent Life into 6,738 shares of Series B Preferred Stock; (2) 5,696,250 shares of common stock to be issued upon conversion of our Series A and Series B Convertible Preferred Stock at the time this offering is completed; and (3) a change in accounting converting 189,238 shares of redeemable common stock into common stock. Excludes: 807,500 shares of common stock issuable upon the exercise of stock options outstanding as of March 10, 1999, at the weighted average exercise price of $2.51 per share. See "Management--Stock Option and Other Compensation Plans" on page 41.
Summary Financial and Operating Data
Six Months
Year Ended June 30, Ended December 31,
1996 1997 1998 1997 1998
in thousands, except share in thousands, except share
and per share data and per share data
Statement of Operations Data: Online publishing revenue................ $ 70 $ 485 $ 1,282 $ 508 $ 1,809 Print publishing and licensing revenue...... 1,558 2,058 2,559 1,180 1,660 Total revenue.......... 1,628 2,543 3,841 1,688 3,469 Loss from operations.... (619) (879) (2,828) (939) (2,287) Net loss................ (672) (956) (2,782) (904) (2,095) Basic and diluted net loss per share......... $ (0.67) $ (1.24) $ (3.62) $ (1.18) $ (2.58) Weighted average shares outstanding used in basic and diluted per share calculation(1)... 1,000,000 769,240 769,240 769,240 810,640
As of December 31, 1998 Actual As Adjusted(2) in thousands
Balance Sheet Data: Cash and cash equivalents............................... $ 1,633 $ Working capital......................................... 658 Total assets............................................ 3,099 Long-term liabilities................................... 263 Redeemable convertible preferred stock.................. 12,198 Total stockholders' equity (deficit).................... (10,985)
(1) Includes: (1) conversion of a promissory note issued by Intelligent Life into 6,738 shares of Series B Preferred Stock; (2) 5,696,250 shares of common stock to be issued upon conversion of our Series A and Series B Convertible Preferred Stock at the time this offering is completed; and (3) a change in accounting converting 189,238 shares of redeemable common stock into common stock. Excludes: 807,500 shares of common stock issuable upon the exercise of options outstanding at March 10, 1999, at a weighted average exercise price of $2.51 per share. See "Management--Stock Option and Other Compensation Plans" on page 41. (2) As adjusted to give effect to the sale by Intelligent Life of the shares of common stock offered hereby at an assumed initial public offering price of $ per share and the receipt of the estimated net proceeds therefrom. See "Use of Proceeds" on page 13 and "Capitalization" on page 14.
Selected Monthly Financial and Operating Data
Online Number of Online
Publishing Revenue Advertisement Views
in thousands in millions
1998
January........................... $112 3.0
February.......................... 100 4.0
March............................. 116 5.8
April............................. 156 4.9
May............................... 164 5.2
June.............................. 125 6.2
July.............................. 183 6.7
August............................ 286 7.4
September......................... 348 13.9
October........................... 334 18.0
November.......................... 333 14.8
December.......................... 325 13.8
1999
January........................... $458 18.7
February..........................
March.............................