To be filed with the Securities and Exchange Commission on August 14, 2000
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to ____________________
Commission file number: 0-24559
MULTEX.COM, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 22-3253344
------------------------------- --------------------------------
(State of Incorporation) I.R.S. Employer
Identification Number)
100 WILLIAM STREET, 7th FLOOR
NEW YORK, NEW YORK 10038
(212) 607-2400
----------------------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Check whether the registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes /X/ No /_/
As of June 30, 2000 there were 30,388,828 shares of the registrant's common
stock outstanding.
<PAGE>
QUARTERLY REPORT ON
MULTEX.COM, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION...............................................................................................3
ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited):........................................................3
Condensed Consolidated Balance Sheets as of June 30, 2000 and December 31, 1999.................................3
Condensed Consolidated Statements of Operations for the three months and six months ended June 30,
2000 and 1999...................................................................................................4
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and 1999.................5
Notes to Condensed Consolidated Financial Statements June 30, 2000..............................................7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........................10
PART II. OTHER INFORMATION..............................................................................................21
ITEM 1. LEGAL PROCEEDINGS..............................................................................................21
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS......................................................................21
ITEM 3. DEFAULTS UPON SENIOR SECURITIES................................................................................21
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................................21
ITEM 5. OTHER INFORMATION..............................................................................................22
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K................................................................................22
ITEM 7. SIGNATURES.....................................................................................................22
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
MULTEX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
ASSETS June 30, December 31,
-------- ------------
2000 1999
---- ----
(unaudited) (see Note 1)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 10,683 $ 6,089
Marketable securities 26,021 33,028
Accounts receivable, net 18,113 10,954
Other current assets 4,022 3,193
------ ------
Total current assets 58,839 53,264
Property and equipment, net 26,107 10,862
Goodwill 39,758 -
Other 2,098 1,474
------ ------
Total assets $ 126,802 $ 65,600
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,503 $ 5,051
Accrued expenses 5,446 4,778
Current portion of capital lease obligations 173 225
Deferred revenues 7,957 5,691
------ -----
Total current liabilities 16,079 15,745
Long term liabilities:
Capital lease obligations 127 192
Deferred rent 2,770 2,431
Other 17 31
------ ------
Total long term liabilities 2,914 2,654
Stockholders' equity:
Preferred stock- $.01 par value:
Authorized- 5,000,000 shares; none issued and outstanding - -
Common stock $.01 par value
Authorized - 200,000,000 shares: issued and outstanding-
30,388,828 shares at June 30, 2000 and 27,179,717 at
December 31, 1999 304 272
Additional paid-in-capital 181,948 109,564
Accumulated deficit (63,390) (60,141)
Deferred equity consideration (11,038) (2,431)
Accumulated other comprehensive loss (15) (63)
-------- ---------
Total stockholders' equity 107,809 47,201
-------- ---------
Total liabilities and stockholders' equity $ 126,802 $ 65,600
========== =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
MULTEX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 19,167 $ 8,841 $ 35,250 $ 16,447
Cost of revenues 3,936 2,293 7,904 4,299
---------- ------- ---------- --------
Gross profit 15,231 6,548 27,346 12,148
Operating expenses:
Sales and marketing 5,917 4,912 12,157 8,943
Research and development 2,767 1,122 5,022 2,187
General and administrative 8,288 4,087 14,635 7,824
--------- ------- --------- --------
Total operating expenses 16,972 10,121 31,814 18,954
Loss from operations (1,741) (3,573) (4,468) (6,806)
Other income (expense)
Interest income 626 738 1,336 1,037
Interest expense (10) (27) (23) (63)
--------- -------- ---------- --------
Loss from continuing operations before
income taxes (1,125) (2,862) (3,155) (5,832)
Income tax expense (48) (226) (95) (672)
--------- ------- ---------- --------
Loss from continuing operations (1,173) (3,088) (3,250) (6,504)
Discontinued operations:
Gain from discontinued operations - - - 331
--------- ------- ----------- -------
Net loss (1,173) (3,088) (3,250) (6,173)
Redeemable preferred stock dividends - - - (1,188)
--------- ------- ---------- --------
Net loss available to common stockholders $ (1,173) $ (3,088) $ (3,250) $ (7,361)
======== ========== ========== =========
Basic and diluted earnings (loss) per share:
Continuing operations, net of preferred
stock dividends $ (0.04) $ (0.12) $ (0.11) $ (0.42)
Discontinued operations - - - 0.02
--------- --------- ------- ---------
Loss per share available to common stockholders $ (0.04) $ (0.12) $ (0.11) $ (0.40)
========= ========= ======== =========
Number of shares used in computed basic and
diluted loss per share 29,842 26,613 29,076 18,420
======== ========= ========== =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
MULTEX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited; in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 June 30, 1999
-------------- -------------
<S> <C> <C>
Operating activities
Net loss from continuing operations $ (3,250) $ (6,504)
Adjustments to reconcile net loss from continuing operations
to net cash used in operating activities:
Amortization of equity consideration 1,203 240
Depreciation and amortization 2,804 1,637
Amortization of goodwill 805 -
Amortization of issuance costs - 13
Bad debt expense 430 264
Accumulated deficit adjustment - (364)
Changes in operating assets and liabilities:
Accounts receivable (7,589) (3,197)
Other current assets (829) (1,908)
Other assets (624) 328
Accounts payable (3,386) 706
Accrued expenses 668 2,177
Deferred revenue 2,266 2,387
Deferred rent 339 415
Other liabilities (14) (14)
---- -------
Net cash used in operating activities from continuing operations (7,177) (3,820)
Investing activities
Purchase of marketable securities (19,197) (22,061)
Proceeds from sale of marketable securities 26,262 5,550
Acquisition of Sage Online and BuzzCompany, net of cash acquired (6,724) -
Purchase of property and equipment (11,811) (2,219)
Net cash used in investing activities (11,470) (18,730)
Financing activities
Proceeds from issuances of stock 23,368 42,971
Repayment of long-term debt and capital leases (117) (202)
-------- -------
Net cash provided by financing activities 23,251 42,769
Discontinued activities
Income from discontinued operations including gain on sale,
net of taxes - 106
Adjustments to reconcile income from discontinued operations
to net cash provided by discontinued operations:
Gain on sale of discontinued operations, net of taxes - 225
-------- --------
Net cash provided by discontinued operations - 331
Effect of exchange rate changes on cash (10) 12
-------- --------
Increase in cash and cash equivalents 4,594 20,562
Cash and cash equivalents, beginning of year 6,089 3,219
-------- -------
Cash and cash equivalents, end of period $ 10,683 $ 23,781
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
MULTEX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(unaudited; in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 June 30, 1999
------------- -------------
Supplemental disclosures of cash flow information
Noncash investing and financing activity:
<S> <C> <C>
Acquisition of fixed assets through capital leases $ - $ 280
======== ======
Accrued purchases of fixed assets $ 838 $ 329
======== ======
Unrealized gain on marketable securities $ 58 $ -
======== ======
Stock issued for acquisition of Sage Online $ 11,037 $ -
========= ======
Stock issued for acquisition of BuzzCompany $ 22,801 $ -
========= ======
Stock issued for acquisition of software $ 5,400 $ -
======== ======
Stock issued for exercise of warrants $ 3 $ -
======== ======
Fair market value of warrants issued $ 9,809 $ -
======== ======
Taxes paid $ 2 $ -
======== ======
Interest paid $ 20 $ 46
======== ======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
MULTEX.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30, 2000
NOTE 1 -- BASIS OF PRESENTATION
Multex.com, Inc. ("Multex.com") and its wholly owned subsidiaries
(collectively referred to as the "Company") is the leading financial
e-marketplace connecting buyers and sellers of financial services. The Company
provides information and commerce enabling technology and infrastructure,
application services, Web hosting and online community services to brokerage
firms, investment banks, corporations and institutional and individual
investors. The disclosure of segment information was not required as the Company
operates in only one business segment.
The accompanying condensed consolidated statement of operations for
the three and six month periods ended June 30, 1999 have been restated to
reflect the September 23, 1999 acquisition of Market Guide Inc. ("Market Guide")
which was accounted for as a pooling of interests. The pooling of interests
method of accounting requires the restatement of all periods as if the Company
and Market Guide had always been combined. The condensed consolidated statement
of operations for the three month period ended June 30, 1999 combines the
statement of operations of Multex.com for the three month period ended June 30,
1999 and the statement of operations of Market Guide for the three month period
ended May 31, 1999, respectively. The condensed consolidated statement of
operations for the six month period ended June 30, 1999 combines the statement
of operations of Multex.com for the six month period ended June 30, 1999 and the
statement of operations of Market Guide for the six month period ended May 31,
1999, respectively.
As a result of significantly improved subscriber retention rates, now
over 95%, which establishes recoverability of commission expense, Multex.com
changed its method of accounting for commission expense in the second quarter of
2000. The Company changed from immediately expensing, to deferring and
amortizing over the life of the subscription or contract period. This change was
adopted prospectively in the second quarter of 2000 and reduced the net loss by
$865,000, or $0.03 per share, in the second quarter of 2000.
In June 2000, the Financial Accounting Standards Board issued
Statement No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities, an Amendment to Statement No. 133." which is effective for
fiscal years beginning after June 15, 2000. The Company does not believe that
Statement 138 will have a material impact on its results of operations or
financial position.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for the three and
six months ended June 30, 2000 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2000.
The balance sheet at December 31, 1999 has been derived from audited
financial statements but does not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended December 31, 1999 included
in the Company's annual report on Form 10-K.
7
<PAGE>
NOTE 2 -- STOCKHOLDERS' EQUITY
During the three months ended March 31, 2000, the Company issued
151,776 shares of its common stock in connection with the exercise of stock
options to employees. During the three months ended June 30, 2000, the Company
issued 178,382 shares of its common stock in connection with the exercise of
stock options to employees and the employee stock purchase plan.
NOTE 3 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share for the periods indicated (in thousands, except per share
data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator:
Net loss from continuing operations $ (1,173) $ (3,088) $ (3,250) $ (6,504)
Discontinued operations -- -- -- 331
Redeemable preferred stock dividends -- -- -- (1,188)
Numerator for basic and diluted net loss per share --------- ---------- --------- ----------
- net loss available for common stockholders $ (1,173) $ (3,088) $ (3,250) $ (7,361)
========= ========== ========= ==========
Denominator:
Denominator for basic and dilutive net loss per share -
weighted average shares 29,842 26,613 29,076 18,420
--------- ---------- --------- ----------
Basic and diluted net loss per share $ (0.04) $ (0.12) $ (0.11) $ (0.40)
========= ========== ========= ==========
</TABLE>
NOTE 4 - COMPREHENSIVE LOSS
Total comprehensive loss (in thousands) was $1,145 and $3,082 for the
three months ended June 30, 2000 and June 30, 1999, respectively. Total
comprehensive loss (in thousands) was $3,202 and $6,161 for the six months ended
June 30, 2000 and June 30, 1999, respectively.
NOTE 5 - ACQUISITIONS
On March 20, 2000 the Company entered into an agreement (the
"Agreement") to acquire all of the outstanding shares of Sage Online, Inc. In
connection with the agreement, the Company issued 354,183 shares of common
stock, with a fair market value of $31.16, and paid $6 million in cash. The
acquisition has been accounted for by the purchase method of accounting and
accordingly, the excess of the purchase price over the fair market value of the
net assets acquired has been allocated to goodwill in the amount of $17,021,595.
The purchase price allocation is preliminary and subject to adjustment based
upon further analysis of the fair value of the assets acquired. Goodwill is
being amortized over a life of 10 years.
On May 10, 2000 the Company entered into an agreement (the
"Agreement") to acquire all of the outstanding shares of BuzzCompany, Inc. In
connection with the agreement, the Company issued 1,058,043 shares of common
stock, with a fair market value of $21.55 per share. The acquisition has been
accounted for by the purchase method of accounting and accordingly, the excess
of the purchase price over the fair market value of the net assets acquired has
been allocated to goodwill in the amount of $23,352,820. The purchase price
allocation is preliminary and subject to adjustment based upon further analysis
of the fair value of the assets acquired. Goodwill is being amortized over a
life of 10 years.
The following unaudited pro forma summary presents information as if
BuzzCompany had been acquired as of the beginning of the periods ended June 30,
1999 and 2000, respectively. The pro forma information does not necessarily
reflect the actual results that would have occurred nor is it necessarily
indicative of future results of operations of the combined companies.
8
<PAGE>
The table sets forth the pro forma data (in thousands, except per
share data):
<TABLE>
<CAPTION>
Three Months Ended June 30, 2000 Three Months Ended June 30, 1999
(1)Pro forma (1)Pro forma
------------------------------------------------- ---------------------------------------------
Multex Buzz Adjustment Combined Multex Buzz Adjustment Combined
------ ---- ---------- -------- ------ ---- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue $ 18,631 $ 792 $ - $ 19,423 $ 8,841 $ 612 $ - $ 9,453
Net income (301) (940) (575) (1,816) (3,088) (117) (575) (3,780)
EPS $ (0.01) - - $ (0.06) $ (0.12) - - $ (0.14)
Six Months Ended June 30, 2000 Six Months Ended June 30, 1999
(1)Pro forma (1)Pro forma
------------------------------------------------- ---------------------------------------------
Multex Buzz Adjustment Combined Multex Buzz Adjustment Combined
------ ---- ---------- -------- ------ ---- ---------- --------
Revenue $ 34,714 $ 1,697 $ - $ 36,411 $ 16,447 $ 1,194 $ - $ 17,641
Net income (2,953) (1,750) (1,150) (5,853) (7,361) 46 (1,150) (8,465)
EPS $ (0.10) - - $ (0.20) $ (0.40) - - $ (0.43)
</TABLE>
(1) Goodwill for Buzz will be amortized over a period of 10 years,
the expected period of benefit. The pro forma adjustment reflects three and six
months of amortization expense for the periods ended June 30, 2000 and June 30,
1999, respectively, assuming the transaction occurred as of the beginning of the
periods presented.
NOTE 6 - SUBSEQUENT EVENT
On July 31, 2000, Munder NetNet Fund acquired $30 million of newly issued
restricted Multex stock in a private placement.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING
OF SECTION 27A OF THE SECURITIES ACT OF 1993 AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934. THE COMPANY'S ACTUAL RESULTS AND TIMING OF CERTAIN EVENTS
COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF CERTAIN FACTORS, INCLUDING, BUT NOT LIMITED TO, THOSE
SET FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS QUARTERLY REPORT.
OVERVIEW
Multex.com is the leading financial e-marketplace connecting buyers
and sellers of financial services. The Company provides information and commerce
enabling technology and infrastructure, application services, Web hosting and
online community services to brokerage firms, investment banks, corporations and
institutional and individual investors. We offer five main services, as follows:
o MultexNET, which was launched in June 1996;
o MultexEXPRESS, which was launched in January 1997;
o Multex Research-On-Demand, which was launched in April 1997;
o Multex Investor, which was launched in November 1998; and
o Market Guide database, which was acquired in September 1999.
MultexNET, typically offered as a one- to three-year subscription, allows
entitled institutional investors to access full-text investment research reports
on a real-time basis from investment banks, brokerage firms and other
third-party research providers over the Internet or through other distribution
channels. MultexEXPRESS, also provided pursuant to one- to three-year
subscriptions, enables financial institutions to distribute their proprietary
financial research, as well as other corporate documents, over the Internet,
through intranets and other private networks. Multex Research-On-Demand gives
corporations, financial institutions and advisors, and institutional investors
the ability to access research reports on a pay-per-view basis from a majority
of the contributors to MultexNET, over the Internet or through other
distribution channels. Multex Investor, www.multexinvestor.com, gives individual
investors who register as members access to a range of financial reports and
services, including research reports on a pay-per-view basis, over the Internet
from a majority of the contributors to MultexNET. Multex Investor also includes
banner advertising and sponsorship advertising throughout the site. Sponsors to
Multex Investor include full-service brokerage firms and other financial
institutions interested in attracting individual investors to their products,
services and brands. Market Guide's financial and descriptive information on
over 12,000 publicly traded companies is licensed on over 140 web sites as well
as its own web site, www.marketguide.com. Revenue from Market Guide information
is primarily derived from license and redistribution agreements and advertising.
Revenues from subscriptions to MultexNET and MultexEXPRESS are recognized
in equal installments over the term of the subscription. Revenues from Multex
Research-On-Demand and pay-per-view transactions on Multex Investor are
recognized upon sale. Revenues from sponsorships to Multex Investor are
recognized in equal installments over the term of the sponsorship. Some of the
users of Multex Research-On-Demand pay a flat annual fee for the service, which
entitles them to receive research and other reports at a discounted rate.
Revenues from these users are recognized in equal installments over the term of
the subscription. All costs associated with revenues from MultexNET,
MultexEXPRESS, Multex Research-On-Demand and Multex Investor are expensed as and
when incurred. We pay distribution fees to our distributors and, with respect to
Multex Research-On-Demand and pay-per-view transactions on Multex Investor,
royalties to the investment banks, brokerage firms or third-party research
providers that authored the research.
10
<PAGE>
Recent Developments
On May 10, 2000, Multex acquired BuzzCompany, Inc., a developer of
next-generation e-community software and a provider of web application
development services. Multex is currently integrating the Buzz suite of products
into Multex's three business groups: ASP, B2B and B2C.
Results of Operations
Quarter Ended June 30, 2000 Compared to Quarter Ended June 30, 1999
Revenues
Multex.com's revenues consist of subscription fees for MultexNET; subscription,
development and hosting fees for MultexEXPRESS; sales of investment research on
a pay-per-view basis through Multex Research-On-Demand; license and
redistribution fees for the Market Guide database; and sales of sponsorships,
advertising and investment research through the Multex Investor and Market Guide
Web sites. We also provide professional services to select MultexEXPRESS
clients, including software development, customization and integration services.
Revenues increased 117% to $19.2 million for the quarter ended June 30, 2000
from $8.8 million for the quarter ended June 30, 1999. The increase in revenues
was attributable to a number of factors: a significant increase in the number of
institutions and individuals using our pay-per-view service, greater acceptance
of Multex Research-On-Demand, an increase in the number of installations
utilizing MultexEXPRESS to distribute their proprietary research to their
employees and customers, an increase in the number of vendors distributing the
Market Guide database, and increased advertising and sponsorship revenues from
the Multex Investor and Market Guide Web sites.
Cost of Revenues
Cost of revenues consist primarily of fees payable to distributors of MultexNet
and Multex Research-On-Demand, royalties payable to the authors of investment
research and content offered through Multex Research-On-Demand, Multex Investor
and marketguide.com, external development costs incurred for MultexEXPRESS
customers, research department costs related to the collection and processing of
financial data and earnings estimates, and data communications costs.
Cost of revenues increased 71.7% to $3.9 million in the quarter ended June 30,
2000 from $2.3 million for the quarter ended June 30, 1999. As a percentage of
revenues, cost of revenues decreased to 20.5% for the quarter ended June 30,
2000 from 25.9% for the quarter ended June 30, 1999. The increase in cost of
revenues in dollar terms was primarily due to royalty and distribution fee
payments as a result of increased sales of Multex Research-On- Demand, increased
data collection costs related to the maintenance and expansion of the Market
Guide database, increased royalty payments to content providers resulting from
increased web site traffic, increased third-party Web site development costs
reflecting an increased number of MultexEXPRESS installations, and additional
data communications charges resulting from increased installations of
MultexEXPRESS and sales of subscriptions for MultexNET.
Operating Expenses
Sales and Marketing. Sales and marketing expenses consist primarily of salaries,
commissions, advertising, public relations, tradeshow expenses and costs of
marketing materials. Sales and marketing expenses increased 20.5% to $5.9
million for the quarter ended June 30, 2000 from $4.9 million for the quarter
ended June 30, 1999. As a percentage of revenues, sales and marketing expenses
decreased to 30.9% for the quarter ended June 30, 2000 from 55.6% for the
quarter ended June 30, 1999. The increase in sales and marketing expenses was
due to an expansion of our sales force both domestically and internationally and
increased marketing activities partially offset by an $865,000 benefit to income
in the current quarter as a result of an adjustment to the accounting for sales
commission expense due to a change in facts and circumstances.
11
<PAGE>
Research and Development. Research and development expenses consist primarily of
salaries and benefits. Research and development expenses increased 147% to $2.8
million for the quarter ended June 30, 2000 from $1.1 million for the quarter
ended June 30, 1999. As a percentage of revenues, research and development
expenses increased to 14.4% for the quarter ended June 30, 2000 from 12.7% for
the quarter ended June 30, 1999. The increase in research and development
expenses in dollar terms was primarily due to an increase in the number of
developers employed by us, salary increases and costs related to creating and
developing new products and enhancements to the Company's products and services.
We believe that continued investment in product development is critical to
attaining our strategic objectives and, as a result, expect research and
development expenses to increase in dollar terms in future periods.
General and Administrative. General and administrative expenses consist
primarily of salaries and benefits, fees for professional services and facility
expenses, including depreciation of assets and amortization of deferred expenses
and goodwill. General and administrative expenses increased 103% to $8.3 million
for the quarter ended June 30, 2000 from $4.1 million for the quarter ended June
30, 1999. As a percentage of revenues, general and administrative expenses
decreased to 43.2% for the quarter ended June 30, 2000 from 46.2% for the
quarter ended June 30, 1999. The increase in general and administrative expenses
in dollar terms in each period was primarily due to increased personnel,
professional service fees and facility expenses necessary to support our
domestic and international growth, including costs associated with our Lake
Success, San Francisco and London offices and the build out of our new data
center in New York, as well as the inclusion of $560,000 in expenses related to
amortization of warrants and $770,000 in amortization of goodwill related to the
acquisitions of Sage and BuzzCompany. We expect that general and administrative
expenses will increase in dollar terms in future periods as we hire additional
personnel and incur additional costs related to the growth of our business and
our operations as a public company.
Loss from Operations
Loss from operations decreased 51.3% to $1.7 million for the quarter ended June
30, 2000 from $3.6 million for the quarter ended June 30, 1999. As a percentage
of revenues, loss from operations decreased to 9.1% for the quarter ended June
30, 2000 compared to 40.4% for the quarter ended June 30, 1999.
Interest Income (Expense) and Other Income
Net interest income decreased 13.4% to $616,000 for the quarter ended June 30,
2000 from $711,000 for the quarter ended June 30, 1999. The decrease in net
interest income is primarily attributable to a decrease in cash available for
investing.
Income Taxes
Income tax expense decreased 78.8% to $48,000 for the quarter ended June 30,
2000 from $226,000 for the quarter ended June 30, 1999. The majority of the tax
expense in the quarter ended June 30, 1999 was attributable to Market Guide's
operations prior to the September 1999 acquisition.
Net loss available to common stockholders
The Company recorded a net loss from continuing operations of $1.2 million and
$3.1 million for the three months ended June 30, 2000 and June 30, 1999,
respectively, or a net loss per share of $0.04 and $0.12, respectively. The
decrease in the net loss was due to increased sales in all of the Company's
businesses coupled with tighter cost control measures implemented in the first
quarter, an adjustment to the accounting for sales commission expense due to a
change in facts and circumstances and a reduction in income taxes.
12
<PAGE>
Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999
Revenues
Multex.com's revenues consist of subscription fees for MultexNET, subscription,
development and hosting fees for MultexEXPRESS, sales of investment research on
a pay-per-view basis through Multex Research-On-Demand, license and
redistribution fees for the Market Guide database, and sales of sponsorships,
advertising and investment research through the Multex Investor and Market Guide
Web sites. We also provide professional services to select MultexEXPRESS
clients, including software development, customization and integration services.
Revenues increased 114% to $35.3 million for the six months ended June 30, 2000
from $16.4 million for the six months ended June 30, 1999. The increase in
revenues was attributable to a number of factors: a significant increase in the
number of institutions and individuals using our pay-per-view service, greater
acceptance of Multex Research-On-Demand, an increase in the number of
installations utilizing MultexEXPRESS to distribute their proprietary research
to their employees and customers, an increase in the number of vendors
distributing the Market Guide database, and increased advertising and
sponsorship revenues from the Multex Investor and Market Guide Web sites.
Cost of Revenues
Cost of revenues consist primarily of fees payable to distributors of MultexNet
and Multex Research-On-Demand, royalties payable to the authors of investment
research and content offered through Multex Research-On-Demand, Multex Investor
and marketguide.com, external development costs incurred for MultexEXPRESS
customers, research department costs related to the collection and processing of
financial data and earnings estimates, and data communications costs.
Cost of revenues increased 83.9% to $7.9 million for the six months ended June
30, 2000 from $4.3 million for the six months ended June 30, 1999. As a
percentage of revenues, cost of revenues decreased to 22.4% for the six months
ended June 30, 2000 from 26.1% for the six months ended June 30, 1999. The
increase in cost of revenues in dollar terms was primarily due to royalty and
distribution fee payments as a result of increased sales of Multex Research-On-
Demand, increased data collection costs related to the maintenance and expansion
of the Market Guide database, increased royalty payments to content providers
resulting from increased web site traffic, increased third-party Web site
development costs reflecting an increased number of MultexEXPRESS installations,
and additional data communications charges resulting from increased
installations of MultexEXPRESS and sales of subscriptions for MultexNET.
Operating Expenses
Sales and Marketing. Sales and marketing expenses consist primarily of salaries,
commissions, advertising, public relations, tradeshow expenses and costs of
marketing materials. Sales and marketing expenses increased 35.9% to $12.2
million for the six months ended June 30, 2000 from $8.9 million for the six
months ended June 30, 1999. As a percentage of revenues, sales and marketing
expenses decreased to 34.5% for the six months ended June 30, 2000 from 54.4%
for the six months ended June 30, 1999. The increase in sales and marketing
expenses was due to an expansion of our sales force both domestically and
internationally and increased marketing activities partially offset by an
$865,000 benefit to income in the second quarter as a result of an adjustment to
the accounting for sales commission expense due to a change in facts and
circumstances.
Research and Development. Research and development expenses consist primarily of
salaries and benefits. Research and development expenses increased 130% to $5.0
million for the six months ended June 30, 2000 from $2.2 million for the six
months ended June 30, 1999. As a percentage of revenues, research and
development expenses increased to 14.2% for the six months ended June 30, 2000
from 13.3% for the six months ended June 30, 1999. The increase in research and
development expenses in dollar terms was primarily due to an increase in the
number of developers employed by us, salary increases and costs related to
creating and developing new products and enhancements to the Market Guide
database. We believe that continued investment in product development is
critical to attaining our strategic objectives and, as a result, expect research
and development expenses to increase in dollar terms in future periods.
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General and Administrative. General and administrative expenses consist
primarily of salaries and benefits, fees for professional services and facility
expenses, including depreciation of assets and amortization of deferred expenses
and goodwill. General and administrative expenses increased 87.1% to $14.6
million for the six months ended June 30, 2000 from $7.8 million for the six
months ended June 30, 1999. As a percentage of revenues, general and
administrative expenses decreased to 41.5% for the six months ended June 30,
2000 from 47.6% for the six months ended June 30, 1999. The increase in general
and administrative expenses in dollar terms in each period was primarily due to
increased personnel, professional service fees and facility expenses necessary
to support our domestic and international growth, including costs associated
with our Lake Success, San Francisco and London offices and the build out of our
new data center in New York, as well as the inclusion of $960,000 in expenses
related to amortization of warrants and $800,000 in amortization of goodwill
related to the acquisitions of Sage and BuzzCompany. We expect that general and
administrative expenses will increase in dollar terms in future periods as we
hire additional personnel and incur additional costs related to the growth of
our business and our operations as a public company.
Loss from Operations
Loss from operations decreased 34.4% to $4.5 million for the six months ended
June 30, 2000 from $6.8 million for the six months ended June 30, 1999. As a
percentage of revenues, loss from operations decreased to 12.7% for the six
months ended June 30, 2000 compared to 41.4% for the six months ended June 30,
1999.
Interest Income (Expense) and Other Income
Net interest income increased 34.8% to $1.3 million for the six months ended
June 30, 2000 from $974,000 for the six months ended June 30, 1999. The increase
in net interest income is primarily attributable to an increase in cash
available for investing.
Income Taxes
Income tax expense decreased 85.9% to $95,000 for the six months ended June 30,
2000 from $672,000 for the six months ended June 30, 1999. The majority of the
tax expense in the six months ended June 30, 1999 was attributable to Market
Guide's operations prior to the September 1999 acquisition.
Loss from continuing operations
The Company recorded a net loss from continuing operations of $3.3 million and
$6.5 million for the six months ended June 30, 2000 and June 30, 1999,
respectively, or a net loss per share of $0.11 and $0.42, respectively. The
decrease in the net loss was due to increased sales in all of the Company's
businesses coupled with tighter cost control measures implemented in the first
quarter, an adjustment to the accounting for sales commission expense due to a
change in facts and circumstances, increased interest income, a reduction in
income taxes and the elimination of the redeemable preferred stock dividends at
the date of the initial public offering.
Discontinued operations
Discontinued operations reflects the January 1999 sale of Market Guide's
CreditRisk Monitor business. Gain from discontinued operations totaled $331,000
for the six months ended June 30, 1999 compared to the absence of any
discontinued operating activities for the six months ended June 30, 2000.
Net loss available to common stockholders
Net loss available to common stockholders totaled $3.3 million and $7.4 million
for the six months ended June 30, 2000 and June 30, 1999, respectively or a loss
per share of $0.11 and $0.40, respectively. The decrease in the net loss was due
to increased sales in all of the Company's businesses coupled with tighter cost
control measures implemented in the first quarter, an adjustment to the
accounting for sales commission expense due to a change in
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facts and circumstances, increased interest income, a reduction in income taxes
and the elimination of the redeemable preferred stock dividends at the date of
the initial public offering.
Liquidity and Capital Resources
We have financed our operations primarily through the sale of equity securities
as we have not generated cash flow from operations since our inception. Through
June 30, 2000, we have received an aggregate of $115.9 million in net proceeds
from the sale of common stock and convertible preferred stock. At June 30, 2000,
we had $36.7 million of cash, cash equivalents and marketable securities. Our
principal commitments consist of obligations under operating leases.
Net cash used in operating activities from continuing operations was $7.2
million in the six months ended June 30, 2000, and $3.8 million in the
equivalent period in 1999. The principal use of cash for all periods was to fund
our losses from operations and the increase in accounts receivable as a result
of the 114% increase in sales.
Net cash used in investing activities was $11.5 million in the six months ended
June 30, 2000, and $18.7 million in the equivalent period in 1999. Cash used in
investing activities was primarily related to purchases of marketable
securities, the acquisition of Sage Online and the acquisition of property and
equipment.
Net cash provided by financing activities was $23.3 million in the six months
ended June 30, 2000, and $42.8 million for the equivalent period in 1999. Net
cash provided by financing activities primarily consisted of net proceeds from
the sale of common stock to Merrill Lynch and proceeds from the exercise of
employee stock options.
Net cash provided by discontinued activities totalled $331,000 in the six months
ended June 30, 1999. There was no comparable transaction in the six months ended
June 30, 2000.
Although we have no material commitments for capital expenditures, we anticipate
that we will experience a substantial increase in our capital expenditures and
lease commitments consistent with our anticipated growth in operations,
infrastructure and personnel, including the implementation of our new data
center and various capital expenditures associated with expanding our
facilities. We currently anticipate that we will continue to experience
significant growth in our operating expenses for the foreseeable future and that
our operating expenses will be a material use of our cash resources. We believe
that our existing cash, cash equivalents and marketable securities, will be
sufficient to meet our anticipated cash needs for working capital and capital
expenditures at least for the next twelve months.
RISK FACTORS THAT MAY AFFECT FUTURE RESULTS
We have limited operating history in certain of our lines of business and the
markets for our products and services are rapidly changing
Multex.com commenced operations in April 1993, but all of our current
services were launched after May 1996. Accordingly, we have a limited operating
history upon which you can evaluate our business. In order to be successful, we
must increase our revenues from subscription fees for MultexNET, from
development, hosting and subscription fees for MultexEXPRESS, generate
additional sales of investment research on a pay-per-view basis through Multex
Research-On-Demand, attract more users to Multex Investor and increase license
fees from the Market Guide database. We must also integrate and increase
revenues from our newly acquired subsidiaries, Sage Online and BuzzCompany.com.
We face risks, among others, relating to our ability to:
o anticipate and adapt to the changing Internet market;
o attract more subscribers, research and data contributors, and technology
and business partners;
o implement our sales, marketing, and branding strategies, both
domestically and internationally;
o attract, retain and motivate qualified personnel;
o respond to actions taken by our competitors;
o continue to build an infrastructure to effectively manage our growth and
handle any future increased usage; and
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o integrate acquired businesses, technologies, products, and services.
If we are unsuccessful in addressing these risks or in executing our business
strategy, our business, results of operations, and financial condition would be
materially and adversely affected.
Multex.com's business would be materially and adversely affected if the emerging
market for online investment research does not continue to grow
The market for the distribution of investment research and other
information over the Internet has only recently begun to develop, is rapidly
evolving, and is characterized by an increasing number of market entrants who
have introduced or developed electronic investment research distribution
services by facsimile and over public and private networks, online services and
the Internet. As is typical of a rapidly evolving market, demand and market
acceptance for new services are subject to a high level of uncertainty.
Because the market for our services is new and rapidly evolving, it
is difficult to predict with any assurance the growth rate, if any, and the
ultimate size of this market. We cannot assure you that the market for our
services will develop or that our services will ever achieve market acceptance.
If the market fails to develop, develops more slowly than expected, or becomes
saturated with competitors, if our services do not achieve market acceptance, or
if pricing becomes subject to significant competitive pressures, our business,
results of operations and financial condition would be materially and adversely
affected.
Multex.com's business could be materially and adversely affected by pressures of
competition
The market for the distribution of investment research and other
information over the Internet is intensely competitive. We expect competition to
continue to increase. Competition also may increase as a result of industry
consolidation. Increased competition could result in price reductions, reduced
gross margins and loss of market share, any of which would have a material and
adverse effect on our business, results of operations and financial condition.
We currently face direct and indirect competition for both providers of
investment research and other reports, and for subscribers, including with large
and well-established distributors of financial information, such as Thomson
Financial Services (through its subsidiaries First Call and Investext) and
I|B|E|S, a subsidiary of Primark Corp. Some of our competitors enjoy exclusive
distribution arrangements with major financial institutions. We also compete
with:
o companies that provide investment research, including investment banks
and brokerage firms, many of whom have their own Web sites;
o other providers of either free or subscription research services on the
Internet;
o services provided by some of our strategic distributors which are
competitive in one or more respects with our service offerings;
o numerous prospective competitors, including Standard & Poor's, Moody's,
and Zacks Investment Research, that offer investment research-based
services;
o various written publications, including traditional media, investment
newsletters, personal financial magazines and industry research
appearing in financial periodicals;
o services provided by in-house management information services personnel
and independent systems integrators;
o annual reports and other filings with the Securities and Exchange
Commission;
o Standard & Poor's company-specific reports; and
o Value Line investment research reports.
If we fail to successfully compete with any of these entities or
information sources, our business, results of operations, and financial
condition may be materially adversely affected. It is also possible that new
competitors may emerge and rapidly acquire significant market share. Increased
competition is likely to result in price reductions, reduced gross margins and
loss of market share, which could materially and adversely affect our business,
results of operations and financial condition.
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Multex.com's business could be materially and adversely affected by a downturn
in the financial services industry
We are dependent upon the continued demand for the distribution of
investment research and other information over the Internet, making our business
susceptible to a downturn in the financial services industry. For example, a
decrease in the number of analysts that prepare investment research reports or
in the capital dedicated to the dissemination of this research could result in a
decrease in the number of research reports and other financial information
available for distribution and a concomitant decrease in demand by our
subscribers for these reports and other information. In addition, U.S. financial
institutions are continuing to consolidate, increasing the leverage of our
information providers to negotiate price and decreasing the overall potential
market for some of our services. These factors, as well as other changes
occurring in the financial services industry, could have a material and adverse
effect on our business, results of operations and financial condition.
Rapid growth in Multex.com's future operations could strain our managerial,
operational and financial resources
We have experienced rapid growth in our operations. This rapid growth
has placed, and our anticipated future growth will continue to place, a
significant strain on our managerial, operational and financial resources, that
if not properly managed, could materially adversely affect our business, results
of operations, and financial condition.
The loss of any of Multex.com's key personnel could have a material and adverse
effect
Our future success will depend, in substantial part, on the continued
service of our senior management, including Mr. Isaak Karaev, our Chairman and
Chief Executive Officer, and key technical and sales personnel, none of whom has
entered into an employment agreement with us other than a
non-competition/non-disclosure agreement. We maintain a key person life
insurance policy in the amount of $2.0 million on the life of Mr. Karaev. The
loss of the services of one or more of our key personnel could have a material
and adverse effect on our business, results of operations and financial
condition. We have from time to time in the past experienced, and we expect to
continue to experience in the future, difficulty in hiring and retaining highly
skilled employees with appropriate qualifications.
Multex.com's international operations are new and may not be successful. We have
only limited business experience outside of the United States
We have only recently commenced operations in a number of
international markets and a key component of our strategy is to continue to
expand our international operations. To date, we have only limited experience in
developing and obtaining research and other financial information relating to
companies whose securities are traded on foreign markets and in marketing,
selling and distributing our services internationally. The failure to gain the
necessary experience, hire appropriate personnel, and enter into key business
relationships in these markets could have a material and adverse effect on our
business, results of operations and financial condition.
Doing business internationally subjects us to additional regulatory
requirements, tax liabilities and other risks
There are risks inherent in doing business in international markets,
including unexpected changes in regulatory requirements, potentially adverse tax
consequences, export restrictions and controls, tariffs and other trade
barriers, difficulties in staffing and managing foreign operations, political
instability, fluctuations in currency exchange rates, and seasonal reductions in
business activity during the summer months in Europe and various other parts of
the world, any of which could have a material and adverse effect on the success
of our international operations and, consequently, on our business, results of
operations and financial condition. Furthermore, we cannot assure you that
governmental regulatory agencies in one or more foreign countries will not
determine that the services provided by us constitute the provision of
investment advice, which could result in our having to register in these
countries as an investment advisor or in our having to cease selling our
services in these countries, either of which could have a material and adverse
effect on our business, results of operations and financial condition.
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Because Multex.com's business is dependent upon network and computer systems
located in one area, we are susceptible to problems caused by natural disasters,
power failures, system failures, security breaches or other damage to our system
Our electronic distribution of investment research utilizes
proprietary technology which resides principally in New York City. The continued
and uninterrupted performance of our network and computer systems is critical to
our success. Any disaster, power outage or system failure that causes
interruptions in our ability to provide our services to our customers, including
failures that affect our ability to collect research from our information
providers or provide electronic investment research to our users, could reduce
customer satisfaction and, if sustained or repeated, would reduce the
attractiveness of our services. An increase in the volume of research reports
handled by our systems, or in the rate of requests for this research, could
strain the capacity of our software or hardware, which could lead to slower
response times or system failures. Furthermore, we face the risk of a security
breach of our systems that could disrupt the distribution of research and other
reports and information. Our business, results of operations and financial
condition could be materially and adversely affected if any of these problems
occur.
Our operations are dependent on our ability to protect our network
and computer systems against damage from computer viruses, fire, power loss,
data communications failures, vandalism and other malicious acts, and similar
unexpected adverse events. In addition, a failure of our communications
providers to provide the data communications capacity in the time frame required
by us for any reason could cause interruptions in the delivery of our services.
Despite precautions we have taken, unanticipated problems affecting our systems
have from time to time in the past caused, and in the future could cause, delays
and interruptions in the delivery of our services. Although we carry general
liability insurance, our insurance may not cover any claims by dissatisfied
providers or subscribers or may not be adequate to indemnify us for any
liability that may be imposed in the event that a claim were brought against us.
Our business, results of operations and financial condition could be materially
and adversely affected by any system failure, security breach or other damage
that interrupts or delays our operations.
The market price of our shares may experience extreme price and volume
fluctuations
The stock market has, from time to time, experienced extreme price
and volume fluctuations. The market prices of the securities of Internet-related
companies have been especially volatile, including fluctuations that are often
unrelated to the operating performance of the affected companies. Broad market
fluctuations of this type may adversely affect the market price of our common
stock. The market price of our common stock could be subject to significant
fluctuations due to a variety of factors, including:
o public announcements concerning us or our competitors, or the Internet
industry;
o fluctuations in operating results;
o a downturn in the financial services industry generally or the market
for securities trading in particular;
o introductions of new products or services by us or our competitors;
o changes in analysts' earnings estimates; and
o announcements of technological innovations.
In the past, companies that have experienced volatility in the market
price of their stock have been the object of securities class action litigation.
If we were the object of securities class action litigation, it could result in
substantial costs and a diversion of our management's attention and resources
and have a material adverse effect on our business, results of operation and
financial condition.
The future sale of shares of our common stock may negatively affect our stock
price
If our stockholders sell substantial amounts of our common stock,
including shares issuable upon the exercise of outstanding options and warrants
in the public market, the market price of our common stock could fall. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and price that we deem appropriate.
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Distribution and other fees to research providers and strategic partners
increase Multex.com's costs
Royalties and distribution fees payable to our information providers
and strategic partners to obtain distribution rights to research reports
included in Multex Research-On-Demand constitute a significant portion of our
cost of revenues. If we are required to increase the royalties or fees payable
to these information providers or strategic partners, these increased payments
could have a material and adverse effect on our business, results of operations
and financial condition.
The inadvertent distribution of research reports could result in a claim for
damages against Multex.com or harm our reputation
Under certain of our contracts we are required to restrict
distribution of financial information to those users who have been authorized or
entitled to access the report by the information provider. We might
inadvertently distribute a particular report to a user who is not so authorized
or entitled, which could subject us to a claim for damages by the information
provider or which could harm our reputation in the marketplace, either of which
could have a material and adverse effect on our business, results of operations
and financial condition.
Risks Related to the Internet Industry
If the Internet infrastructure is not adequately maintained, we may be unable to
provide investment research and information services in a timely manner
Our future success will depend, in substantial part, upon the
maintenance of the Internet infrastructure, including a reliable network
backbone with the necessary speed, data capacity and security, and the timely
development of enabling products, including high-speed modems, for providing
reliability and timely Internet access and services. We cannot assure you that
the Internet infrastructure will continue to be able to support the demands
placed on it or that the performance or reliability of the Internet will not be
adversely affected. Furthermore, the Internet has experienced a variety of
outages and other delays as a result of damage to portions of its infrastructure
or otherwise, and these outages or delays could adversely affect the Web sites
of our contributors, subscribers or distributors. In addition, the Internet
could lose its viability as a form of media due to delays in the development or
adoption of new standards and protocols that can handle increased levels of
activity. We cannot assure you that the infrastructure and complementary
products and services necessary to maintain the Internet as a viable commercial
medium will be developed or maintained.
We may be subject to legal claims in connection with the content we publish and
distribute on the Internet
As a publisher and distributor of online content, we face potential
direct and indirect liability for claims of defamation, negligence, copyright,
patent or trademark infringement, violation of the securities laws and other
claims based upon the reports and data that we publish. For example, by
distributing a negative investment research report, we may find ourselves
subject to defamation claims, regardless of the merits of these claims. Computer
failures may also result in incorrect data being published and distributed
widely. In these and other instances, we may be required to engage in protracted
and expensive litigation, which could have the effect of diverting management's
attention and require us to expend significant financial resources. Our general
liability insurance may not necessarily cover any of these claims or may not be
adequate to protect us against all liability that may be imposed. Any claims or
resulting litigation could have a material and adverse effect on our business,
results of operations and financial condition.
We may become subject to burdensome government regulation and legal
uncertainties
The laws governing the Internet remain largely unsettled, even in
areas where there has been some legislative action. Legislation could dampen the
growth in the use of the Internet generally and decrease the acceptance of the
Internet as a communications and commercial medium, which could have a material
and adverse effect on our business, results of operations and financial
condition. In addition, due to the global nature of the Internet, it is possible
that, although transmissions relating to our services originate in the State of
New York, governments of other states, the United States or foreign countries
might attempt to regulate our services or levy
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sales or other taxes on our activities. We cannot assure you that violations of
local or other laws will not be alleged or charged by local, state, federal or
foreign governments, that we might not unintentionally violate these laws or
that these laws will not be modified, or new laws enacted, in the future. Any of
these developments could have a material and adverse effect on our business,
results of operations and financial condition.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
NONE
ITEM 2. CHANGES IN SECURITIES
At the Company's Annual Meeting of Stockholders, which was held on June
29, 2000, the Company's stockholders approved an amendment to the
Company's Amended and Restated Certificate of Incorporation that
increases the number of authorized shares of Common Stock from
50,000,000 to 200,000,000 shares. The amendment authorizes sufficient
additional shares of Common Stock to provide the Company with the
flexibility to make issuances for any proper purpose approved by the
Board of Directors from time to time, including issuances to effect
acquisitions or raise capital and issuances in connection with future
stock splits or dividends, without the necessity of delaying such
activities for further stockholder approval except as may be required in
a particular case by the Company's charter documents, applicable law or
the rules of any stock exchange or other system on which the Company's
securities may then be listed. There are currently no arrangements,
agreements or understandings for the issuance or use of additional
shares of authorized Common Stock (other than issuances permitted or
required under the Company's stock-based employee benefit plans or
awards made pursuant to those plans). The additional shares of Common
Stock authorized by adoption of the amendment have rights identical to
the currently outstanding Common Stock of the Company. Issuance of the
Common Stock would not affect the rights of the holders of currently
outstanding Common Stock, except for effects incidental to increasing
the number of shares of the Common Stock outstanding, such as dilution
of earnings per share and voting rights of current holders of Common
Stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on June 29, 2000.
The stockholders elected George F. Adam, Jr., I. Robert Greene and James
M. Tousignant, each for a three-year term expiring at the 2003 Annual
Meeting of Stockholders. Directors continuing in office were Lennert J.
Leader, Devin N. Wenig, Homi M. Byramji, Isaak Karaev and John Tugwell.
The stockholders approved an amendment to the Company's Amended and
Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 50,000,000 to 200,000,000.
The stockholders approved amendments to the Company's 1999 Stock Option
Plan to increase the number of shares of Common Stock available under
such Plan by an additional 3,500,000 shares and to increase the number
of shares by which the share reserve under the Plan will automatically
increase on the first trading day in each calendar year from three
percent (3%) of the shares of Common Stock outstanding on the last
trading day of the immediately preceding calendar year to five percent
(5%) of such outstanding shares, subject to a maximum annual increase of
900,000 shares.
The stockholders ratified the appointment of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending December
31, 2000.
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The votes were cast as follows:
Proposal For Against Abstentions Non-Votes
-----------------------------------------------------------------------
Charter Amendment 21,523,730 5,672,781 498,571
Option Plan 14,369,989 8,875,568 503,879 3,945,646
Auditors 27,654,511 7,542 33,029
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.1 Amendment to the Amended and Restated Certificate of Incorporation of
Multex.com, Inc.
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
1. April 5, 2000 - Form 8-K relating to the Company's acquisition of
Sage Online, Inc.
2. May 24, 2000 - Form 8-K relating to the Company's acquisition of
BuzzCompany.com, Inc.
3. June 2, 2000 - Form 8-K/A amending the Company's Form 8-K filed April
5, 2000 to incorporate certain financial statements and pro forma
information.
4. July 24, 2000 - Form 8-K/A amending the Company's Form 8-K filed May
24, 2000 to incorporate certain financial statements and pro forma
information.
ITEM 7. SIGNATURES
Pursuant to the requirements of the Securities Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MULTEX.COM, INC.
(Registrant)
Date: August 11, 2000 /s/ Isaak Karaev
------------------------
Name: Isaak Karaev
Title: Chief Executive Officer
Date: August 11, 2000 /s/ John J. McGovern
-------------------------
Name: John J. McGovern
Title: Chief Financial Officer
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