<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2000
Commission File Number 000-26225
------------------------
WIT SOUNDVIEW GROUP, INC.
(exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-3900397
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Industrial Identification Number)
</TABLE>
826 BROADWAY, NEW YORK, NEW YORK 10003
(Address of Principal Executive Offices) (Zip Code)
(212) 253-4400
(Registrant's Telephone Number, including Area Code)
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months, and (2) has been subject to such filing
requirements for the past ninety days: Yes (X) No ( )
As of August 3rd, 2000, there were 78,856,516 shares of the Registrant's
common stock outstanding and 11,666,666 shares of the Registrant's Class B
Common Stock Outstanding.
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<PAGE>
WIT SOUNDVIEW GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
PART I--FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Financial Condition as
of June 30, 2000 and December 31, 1999...................... 1
Condensed Consolidated Statements of Operations for the
three and six Months ended June 30, 2000 and 1999........... 2
Condensed Consolidated Statements of Cash Flows for the six
months ended June 30, 2000 and 1999......................... 3
Notes to Condensed Consolidated Financial Statements........ 5
Management's Discussion and Analysis of Financial Condition
Item 2. and Results of Operations................................... 9
Item 3. Quantitative and Qualitative Disclosure about Market Risk... 14
PART II--OTHER INFORMATION
Item 1. Legal Proceedings........................................... 15
Item 2. Changes in Securities and Use of Proceeds................... 15
Item 3. Default upon Senior Securities.............................. 15
Item 4. Submission of Matters to a Vote of Security Holders......... 15
Item 5. Other Information........................................... 16
Item 6. Exhibits and Reports on Form 8-K............................ 16
Signatures.......................................................................... 18
</TABLE>
<PAGE>
PART I
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS................................... $101,683,112 $ 12,447,885
RECEIVABLE FROM CLEARING BROKER............................. 64,716,088 681,807
SECURITIES OWNED, at market or fair value................... 40,631,449 114,468,173
INVESTMENT BANKING FEES RECEIVABLE.......................... 24,013,602 3,570,176
INVESTMENTS................................................. 62,350,382 --
INVESTMENTS IN AFFILIATES................................... 21,280,463 17,511,403
INTANGIBLE ASSETS, net of accumulated amortization of
$6,873,500
at June 30, 2000
Goodwill................................................ 196,183,278 --
Institutional client relationships...................... 63,502,087 --
Other................................................... 9,298,605 --
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net of
accumulated depreciation and amortization of $5,830,514
and $1,110,369 at June 30, 2000 and December 31, 1999,
respectively.............................................. 14,225,481 6,312,242
COMPUTER SOFTWARE, net of accumulated amortization of
$1,147,005 and $1,212,907 at June 30, 2000 and December
31, 1999, respectively.................................... 3,742,266 3,706,112
PREPAID EXPENSES............................................ 2,542,941 1,610,628
OTHER ASSETS................................................ 37,130,523 3,309,750
------------ ------------
Total assets.......................................... $641,300,277 $163,618,176
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Securities sold but not yet purchased, at market value.... $ 1,066,814 $ 39,234
Accounts payable and accrued expenses..................... 10,093,831 5,130,675
Accrued compensation...................................... 103,194,374 13,506,087
Deferred tax liabilities.................................. 31,304,300 --
Other liabilities......................................... 4,246,914 540,647
------------ ------------
Total liabilities..................................... 149,906,233 19,216,643
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value, 30,000,000 shares
authorized, no shares outstanding at June 30, 2000 and
December 31, 1999....................................... -- --
Common Stock, $.01 par value, 500,000,000 shares
authorized, 78,797,470 and 61,629,828 shares issued and
outstanding at June 30, 2000 and December 31, 1999,
respectively............................................ 787,974 616,298
Common Stock, Class B, $.01 par value, 75,000,000 shares
authorized, 11,666,666 shares issued and outstanding.... 116,667 116,667
Common Stock, Class C, $.01 par value, 159,000,000 shares
authorized, no shares issued and outstanding at June 30,
2000 and December 31, 1999.............................. -- --
Additional paid-in capital................................ 558,034,349 196,777,759
Notes receivable from stockholders........................ (22,886,640) (15,333,070)
Deferred compensation..................................... (19,976,993) (3,311,765)
Accumulated deficit....................................... (24,681,313) (34,464,356)
------------ ------------
Total stockholders' equity............................ 491,394,044 144,401,533
------------ ------------
Total liabilities and stockholders' equity............ $641,300,277 $163,618,176
============ ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
1
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- --------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 1999 2000 1999
----------- ----------- ------------ -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES:
Investment banking..................... $54,157,901 $ 8,246,614 $114,506,995 $11,369,034
Brokerage.............................. 38,902,164 1,567,584 75,427,117 2,001,791
Asset management fees.................. (185,171) -- 7,647,863 --
Interest and investment income......... 2,828,299 1,176,599 4,647,512 1,368,269
Unrealized gains on investments........ 585,437 289,507 647,317 444,331
Other income........................... (155,140) -- (155,140) --
----------- ----------- ------------ -----------
Total revenues....................... 96,133,490 11,280,304 202,721,664 15,183,425
----------- ----------- ------------ -----------
EXPENSES:
Compensation and benefits.............. 55,704,769 8,588,459 120,647,125 15,146,585
Brokerage and clearance................ 6,561,750 1,303,597 12,758,456 1,564,225
Marketing and business development..... 4,574,604 844,747 7,621,634 1,057,086
Amortization of intangible assets and
goodwill............................. 4,124,100 -- 6,873,500 --
Professional services.................. 2,201,238 1,085,302 4,478,359 1,766,811
Data processing and communications..... 2,568,757 884,043 4,341,020 1,183,654
Write-off of computer software and
equipment............................ -- -- 1,339,772 --
Depreciation and amortization.......... 1,501,702 278,558 2,777,536 499,053
Technology development................. 1,547,400 526,088 2,590,201 861,883
Occupancy.............................. 1,077,455 213,496 1,869,570 303,503
Other.................................. 2,824,842 353,881 4,159,134 498,658
----------- ----------- ------------ -----------
Total expenses..................... 82,686,617 14,078,171 169,456,307 22,881,458
----------- ----------- ------------ -----------
Net income (loss) before provision
for income taxes and equity in net
loss of affiliates................. 13,446,873 (2,797,867) 33,265,357 (7,698,033)
Provision for income taxes............... 6,683,389 -- 17,291,555 --
----------- ----------- ------------ -----------
Net income (loss) before equity in
net loss of affiliates............. 6,763,484 (2,797,867) 15,973,802 (7,698,033)
Equity in net loss of affiliates......... (4,481,070) -- (6,190,759) --
----------- ----------- ------------ -----------
Net income (loss).................... $ 2,282,414 $(2,797,867) $ 9,783,043 $(7,698,033)
=========== =========== ============ ===========
Net income (loss) per share:
Basic.................................. $ 0.03 $ (0.11) $ 0.13 $ (0.48)
Diluted................................ $ 0.02 $ (0.11) $ 0.10 $ (0.48)
Weighted average shares used in the
computation of net income (loss) per
share:
Basic.................................. 79,410,828 24,486,238 76,204,016 15,923,484
Diluted................................ 98,800,933 24,486,238 98,443,344 15,923,484
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
2
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------------
2000 1999
------------ ------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ 9,783,043 $ (7,698,033)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities--
Deferred tax expense.................................. 13,927,792 --
Depreciation and amortization......................... 9,651,036 499,053
Equity in net loss of affiliates...................... 6,190,759 --
Write-off of computer software and equipment.......... 1,339,772 --
Compensation expense on restricted stock awards....... 4,756,737 --
(Increase) decrease in operating assets-
Receivable from clearing broker......................... (45,643,549) (610,163)
Securities owned........................................ 2,549,421 (449,492)
Investment banking fees receivable...................... 2,218,498 (3,476,558)
Investments............................................. (1,444,977) --
Prepaid expenses........................................ (168,031) (910,239)
Other assets............................................ (14,091,826) (2,348,892)
Increase (decrease) in operating liabilities-
Securities sold but not yet purchased................... 334,903 --
Accounts payable and accrued expenses................... (38,406,302) 1,799,868
Accrued compensation.................................... 89,688,287 4,262,461
Other liabilities....................................... (4,866,005) (227,883)
------------ ------------
Net cash provided by (used in) operating
activities...................................... 35,819,558 (9,159,878)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investment securities............. (33,963,061) --
Sale of short-term investment securities.................. 108,080,863 --
Acquisition of SoundView, net of cash received............ (6,773,571) --
Investment in Wit Capital Japan........................... (10,500,000) --
Computer software purchased............................... (1,918,379) (550,484)
Payments for purchases of furniture, equipment and
leasehold improvements.................................. (5,083,317) (2,182,169)
------------ ------------
Net cash provided by (used in) investing
activities...................................... 49,842,535 (2,732,653)
------------ ------------
</TABLE>
3
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------------
2000 1999
------------ ------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments and issuances of notes receivable from
stockholders............................................ 238,624 (615,833)
Net proceeds from initial public offering of common
stock................................................... -- 72,782,731
Repurchase of common stock................................ (250,000) --
Proceeds from issuance of common stock.................... 3,584,510 2,473,542
Net proceeds from issuance of preferred stock............. -- 56,434,742
------------ ------------
Net cash provided by financing activities......... 3,573,134 131,075,182
------------ ------------
Net increase in cash and cash equivalents......... 89,235,227 119,182,651
CASH AND CASH EQUIVALENTS, beginning of period.............. 12,447,885 18,110,146
------------ ------------
CASH AND CASH EQUIVALENTS, end of period.................... $101,683,112 $137,292,797
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for-
Taxes............................................... $ 12,330,000 $ 18,000
NON-CASH TRANSACTIONS:
Issuance of common stock to stockholders for notes
receivable.............................................. 7,979,688 8,967,237
Repurchase of common stock for note receivable............ (187,494)
Investment in enba plc for common stock................... 30,996,834 --
Issuance of restricted stock to employees................. 19,434,465 --
Issuance of common stock for consulting services.......... -- 40,613
Tax benefit from non-qualified stock option exercises..... 6,785,796 --
Acquisition of SoundView Technology Group, Inc.
Fair value of net assets acquired, net of cash received... 44,431,499 --
Intangible assets and goodwill............................ 275,857,420 --
Issuance of common stock.................................. 291,003,482 --
Deferred tax asset........................................ 16,770,000 --
Deferred tax liabilities.................................. 32,465,000 --
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
statements.
4
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
Wit SoundView Group, Inc. (the "Company", formerly Wit Capital Group, Inc.)
was incorporated on March 27, 1996 and commenced operations in September 1997.
On June 6, 2000, the company changed its name to Wit SoundView Group, Inc. The
accompanying unaudited condensed consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries, Wit SoundView
Corporation ("WSV", formerly SoundView Technology Group, Inc.), Wit Capital
Corporation ("WCC"), SoundView Asset Management, Inc., SoundView Capital
Management, Inc. and Wit SoundView Ventures Corp. (formerly Wit VC LLC). All
material intercompany balances and transactions have been eliminated in
consolidation.
These financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC") and, in the
opinion of management, reflect all adjustments necessary for a fair presentation
of the results for the periods presented in conformity with accounting
principles generally accepted in the United States. These financial statements
should be read in conjunction with the Company's audited financial statements
included in the Company's Annual Report on Form 10-K filed with the SEC on March
30, 2000 and with other interim financial statements filed with SEC. Results of
the interim periods are not necessarily indicative of results to be obtained for
a full fiscal year.
2. MERGER
On January 31, 2000, the Company completed its merger with SoundView
Technology Group, Inc., a Connecticut-based private broker-dealer and investment
banking firm focused exclusively on technology. The total consideration was $320
million consisting of Wit SoundView Group, Inc. common stock and cash. The
merger was accounted for using the purchase method of accounting. The excess of
the purchase price over the estimated fair value of the net assets acquired was
allocated to certain identifiable intangible assets and goodwill, a total of
$275.9 million which will be amortized on a straight line basis over periods
between 3 and 20 years. Pro forma results for the six months ended June 30, 2000
are not presented as the merger closed on January 31, 2000, and the pro forma
results for the year ended December 31, 2000 will not be materially different
from the Company's actual results. Subsequent to the closing of the merger,
SoundView Technology Group, Inc. changed its name to Wit SoundView Corporation.
3. NET INCOME (LOSS) PER SHARE
The following table sets forth the calculation of shares used in the
computation of basic and diluted net income (loss) per share
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
2000 1999 2000 1999
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Shares used in computations:
Weighted average common shares used in
computation of basic net income (loss)
per share.............................. 79,410,828 24,486,238 76,204,016 15,923,484
Dilutive effect of common stock
equivalents............................ 19,390,105 -- 22,239,328 --
---------- ---------- ---------- ----------
Weighted average common shares used in
computation of diluted net income
(loss) per share....................... 98,800,933 24,486,238 98,443,344 15,923,484
========== ========== ========== ==========
</TABLE>
5
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. NET INCOME (LOSS) PER SHARE (CONTINUED)
Because the Company reported a net loss in the period ended June 30, 1999,
the calculation of diluted earnings per share in that period does not include
convertible preferred stock, options, warrants and common stock collateralizing
the notes receivable from stockholders, as they are anti-dilutive and would
result in a reduction of net loss per share. If the Company had reported net
income, there would have been an additional 50,076,270 shares for the quarter
ended June 30, 1999 and an additional 32,453,380 shares for the six months ended
June 30, 1999 included in the calculation of diluted earnings per share.
4. STOCK OPTION PLAN
The Company has adopted a stock incentive plan (the "Plan") that permits the
granting of stock options, restricted stock and other awards to employees,
directors and certain consultants of the Company. The exercise price of any
share covered by an option granted to a person owning more than 10% of the
voting power of all classes of stock of the Company cannot be less than 110% of
the fair market value on the day of the grant. The exercise price of any share
covered by an option granted to any person cannot be less than 85% of the fair
value on the day of the grant. Options expire five or ten years from the date of
grant, with the majority of the options expiring in the year 2009.
As part of the Company's merger with SoundView, on January 31, 2000, the
Company adopted SoundView's Stock Option Plan, although no additional options to
purchase common stock will be granted under SoundView's plan.
As permitted by Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," ("SFAS No. 123") the Company has
accounted for options granted to employees using the intrinsic value method
prescribed by Accounting Practice Bulletin ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees." The Company has granted options with exercise
prices that are equal to or greater than management's estimate of the fair value
of such common stock at the date of grant, and accordingly, the Company has
recorded no related compensation expense. For restricted stock issued with
future service requirements, compensation expense is recognized over the
relevant vesting period.
As of June 30, 2000, the Company has 17,657,832 outstanding options with a
range of exercise prices between $0.35 and $34.88 per share and a weighted
average exercise price of $4.98.
5. WARRANTS
The Company has 5,796,405 outstanding warrants as of June 30, 2000 with a
range of exercise prices between $1.43 and $5.57 and a weighted average exercise
price of $5.46. These warrants are exercisable for 159,110 shares of common
stock and 5,637,295 shares of Class B common stock.
6. COMMITMENTS AND CONTINGENCIES
The Company is currently subject to claims and legal proceedings arising in
the normal course of its business. In the opinion of management, the resolution
of such legal proceedings should not have a material adverse effect on the
financial position, results of operations or liquidity of the Company.
A person formerly associated with the Company has asserted a right to
purchase 560,000 shares of common stock at $1.43 per share. In the opinion of
management, such assertion is without merit, and the Company intends to contest
any lawsuit filed against it. These 560,000 shares of common stock have been
reported as forfeited stock options in 1998.
6
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. INCOME TAXES
The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting For Income Taxes," which requires the recognition of deferred tax
assets and liabilities at tax rates expected to be in effect when these balances
reverse. Future tax benefits attributable to temporary differences are
recognized to the extent that realization of such benefits is more likely than
not. The Company files consolidated Federal and combined state and local income
tax returns with its wholly-owned subsidiaries.
The components of the Company's income tax expense for the periods ended
June 30, 2000 and June 30, 1999 are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Current:
Federal................................. $ 93,827 $ -- $ 93,827 $ --
State and local......................... 2,547,537 -- 3,269,936 --
---------- ---------- ----------- ----------
2,641,364 -- 3,363,763 --
---------- ---------- ----------- ----------
Deferred:
Federal................................. 3,290,020 -- 11,092,153 --
State and local......................... 752,005 -- 2,835,639 --
---------- ---------- ----------- ----------
4,042,025 -- 13,927,792 --
---------- ---------- ----------- ----------
$6,683,389 $ -- $17,291,555 $ --
========== ========== =========== ==========
</TABLE>
The Company's effective tax rate differs from the Federal statutory rate due
to the amortization of intangible assets and goodwill and state and local income
taxes.
The Company has recorded deferred tax assets of $18,100,000 primarily
related to net operating loss carryforwards and deferred compensation offset by
deferred tax liabilities resulting from unrealized appreciation on investments
and from the tax benefits related to the exercise of non qualified stock options
by the Company's employees. The Company has also recorded deferred tax
liabilities as a result of the difference between the accounting and tax basis
of intangible assets acquired in the merger with SoundView, other than goodwill.
8. NET CAPITAL REQUIREMENTS
WSV and WCC are subject to the SEC's Uniform Net Capital Rule 15c3-1. WSV's
net capital, as defined, is required to be the greater of $250,000 or an amount
determinable based on the market prices and number of securities in which WSV
acts as a market maker. As of June 30, 2000 WSV's net capital was $38,283,529,
which was $37,703,529 in excess of the minimum net capital requirement. WCC's
net capital, as defined, is required to be the greater of $100,000 or the
minimum net capital required based on aggregate indebtedness. As of June 30,
2000 and December 31, 1999, WCC's ratio of aggregate indebtedness to net capital
was 1.01 to 1 and .51 to 1 and its net capital was $13,144,611 and $23,914,930,
which was $12,261,245 and $23,095,740 in excess of the minimum net capital
requirements, respectively.
7
<PAGE>
WIT SOUNDVIEW GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. SUBSEQUENT EVENT
On May 15, 2000, the Company entered into an agreement with the shareholders
of E*OFFERING to acquire 100 percent of the outstanding shares of E*OFFERING, an
Internet investment banking firm. Under the terms of the agreement, the Company
will acquire the outstanding shares of E*OFFERING in exchange for approximately
$290 million in Wit SoundView Group, Inc. common stock and options and warrants
replacing E*OFFERING options and warrants. In addition, the Company entered into
a strategic alliance agreement with E*TRADE which provides the Company with the
exclusive right to distribute equity and equity related securities to the
customers of E*TRADE. As consideration for this agreement, the Company will
issue E*TRADE approximately 4 million shares of its common stock and warrants to
purchase an additional 2 million shares, exercisable under certain circumstances
after year 3 of the agreement. Additionally, E*TRADE and certain affiliates of
General Atlantic Partners LLC have agreed to each purchase 2 million shares of
Wit SoundView Group, Inc. common stock. The Board of Directors of each Company
and the shareholders of E*OFFERING have approved the transaction, which is
expected to close in the third quarter of 2000. Completion is contingent upon
Wit SoundView stockholder approval, regulatory approval and other customary
closing conditions.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
Wit SoundView Group, Inc. (the "Company", formerly Wit Capital Group, Inc.)
was incorporated on March 27, 1996 and commenced operations in September 1997.
The accompanying unaudited condensed consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries, Wit SoundView
Corporation ("WSV", formerly SoundView Technology Group, Inc.), Wit Capital
Corporation ("WCC"), SoundView Asset Management, Inc., SoundView Capital
Management, Inc. and Wit SoundView Ventures Corp. (formerly Wit VC LLC). Through
our broker-dealer subsidiaries, we are the largest online investment banking
group focused exclusively on the Internet and technology sectors. We offer a
strong complement of investment banking services, from Internet-strategic
advisory, venture capital and private equity placements, to public offerings and
M&A advisory. With one of the largest research teams in the sector, we produce
comprehensive sell-side research on over 285 Internet and technology companies,
developed for our online and institutional audiences. We offer a variety of
sales and trading services to our institutional client base and operate an
extensive market making operation.
We are also recognized as the first firm to bring online individual
investors directly into the capital formation process in a meaningful way and
continue to leverage the Internet to revolutionize the way in which issuers and
investors communicate.
The results presented below for the six month period ended June 30, 2000
reflect the results of the combined company after completion of our merger with
SoundView Technology Group, Inc. ("SoundView") on January 31, 2000. In March
2000, SoundView changed its name to Wit SoundView Corporation.
The results presented in the discussion of the three and six months ended
June 30, 1999 reflect the results of Wit Capital Group, Inc. and its
broker-dealer subsidiary, Wit Capital Corporation. During the first six months
of 1999, Wit Capital Corporation was in an early stage of its operations and
generated only minimal revenues from its investment banking and brokerage
activities. Accordingly, the Company does not believe that the period to period
comparisons of its operating results below are necessarily meaningful and should
not be relied upon as indicators of future performance.
MERGER
On January 31, 2000, the Company completed its merger with SoundView
Technology Group, Inc., a Connecticut-based private broker-dealer and investment
banking firm focused exclusively on technology. The total consideration was $320
million consisting of Wit Capital Group, Inc. common stock and cash. The merger
was accounted for using the purchase method of accounting. The excess of the
purchase price over the estimated fair value of the net assets acquired was
allocated to certain identifiable intangible assets and goodwill, a total of
$275.9 million which is being amortized on a straight line basis over periods
between 3 and 20 years.
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2000 AS
COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE 30, 1999.
REVENUES
The Company's revenues for the three months ended June 30, 2000 were $96.1
million compared to $11.3 million for the three months ended June 30, 1999. The
Company's revenues for the six months ended June 30, 2000, which include
revenues of SoundView after January 31, 2000, were $202.7 million compared to
$15.2 million for the six months ended June 30, 1999.
Investment banking revenue for the three months ended June 30, 2000
increased to $54.2 million from $8.2 million for the three months ended June 30,
1999. For the six months ended June 30, 2000, revenue
9
<PAGE>
from investment banking increased to $114.5 million from $11.4 million for the
six months ended June 30, 1999. Investment banking revenue is primarily derived
from the public offering of equity securities, and also from Internet-strategic
advisory, venture capital and private equity placements, and M&A advisory
services. The Company participated in a total of 88 securities offerings during
the first six months of 2000, 47 as co-manager and 41 as syndicate member
compared to the first six months of 1999 during which the Company participated
in 61 securities offerings, 29 as co-manager and 32 as syndicate member. Of the
88 securities offerings the Company participated in during 2000, 61 were offered
in the first quarter and 27 were offered in the second quarter compared to 19
and 42 in the first and second quarters of 1999, respectively. The growth in
investment banking revenue in the first quarter of 2000 was attributable to
favorable issuing conditions for technology and Internet companies as well as a
larger number of professionals dedicated to our investment banking activities.
The growth in investment banking revenue in the second quarter of 2000 was
attributable to increased economics in public offerings in which we participated
as well as an increased contribution from our mergers and acquisitions advisory
and private equity services during a quarter when market conditions for public
equity offerings were not favorable.
Brokerage revenue for the three months ended June 30, 2000 increased to
$38.9 million from $1.6 million for the three months ended June 30, 1999. For
the six months ended June 30, 2000, revenue from brokerage increased to $75.4
million from $2 million for the six months ended June 30, 1999. Revenues derived
from our brokerage operations are related to our institutional equity and our
online, or individual trading, operations. For the three months ended June 30,
2000, our institutional and online operations contributed $36.3 million and $2.6
million, respectively, to our total brokerage revenue. For the quarter ended
June 30, 2000, average daily institutional trading commissions rose 67% compared
to average daily commissions earned by SoundView in the second quarter of 1999
prior to the merger. This revenue has increased as a result of increased trading
volumes, an increase in the number of companies under research coverage and an
increase in the number of stocks for which we make a market. The number of
stocks we make markets in increased to 230 as of June 30, 2000 compared to 162
stocks which SoundView made markets in as of June 30, 1999, prior to the merger.
The increase in revenue derived from our online, or individual trading business
resulted primarily from an increase in the number of active customer accounts
and an increase in the number of trades executed for our online customers. On a
sequential basis, this revenue has decreased from the first quarter of 2000 as a
result of lower market volumes and the announcement of our proposed strategic
alliance with E*TRADE, including the proposed transfer of our online accounts to
E*TRADE. The average daily number of trades executed for the three and six month
periods ended June 30, 2000 was 2,050 and 2,521 compared to 1,377 and 884 for
the three and six month periods ended June 20, 1999. As of June 30, 2000, total
active online accounts approximated 85,000 compared to 27,060 active online
accounts as of June 30, 1999.
Asset management fees for the three months ended June 30, 2000 decreased to
($185,000) from $0 for the three months ended June 30, 1999. For the six months
ended June 30, 2000, revenue from asset management fees increased to $7.6
million from $0 for the six months ended June 30, 1999. This revenue is derived
from management and syndication fees received from our series of Dawntreader II
venture capital funds which closed during the first quarter of 2000 and from
incentive royalties from hedge funds that were formerly managed by SoundView.
During the second quarter of 2000, management fee income from our venture
capital funds was offset by decrease in unrealized incentive fees from hedge
funds that experienced losses for the quarter. During the three and six months
ended June 30, 1999, we had not yet commenced our venture capital fund
operations and had no hedge fund incentive royalty fees, and accordingly,
derived no revenue from this business.
Interest income for the three months ended June 30, 2000 increased to $2.8
million from $1.2 million for the three months ended June 30, 1999. The Company
earns interest income from the investment of cash balances raised through
financing activities and from its results of operations until the funds are used
in its business. For the six months ended June 30, 2000, revenue from interest
income increased to $4.6 million from $1.4 million for the six months ended June
30, 1999. During the first six months of 2000, the
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<PAGE>
Company's average monthly cash balance was $165 million as compared to a monthly
average of $56.4 million for the first six months of 1999. It is the Company's
policy to pay bonuses and other compensation related payments to its employees
on a semi annual basis. Accordingly, the Company expects its cash balance and
the related interest income to decrease once such payments are made.
Unrealized gains on investments for the three months ended June 30, 2000
increased to $585,000 from $290,000 for the three months ended June 30, 1999.
Unrealized gains on investments for the six months ended June 30, 2000 increased
to $647,000 from $444,000 for the six months ended June 30, 1999. Unrealized
gains on investments primarily consist of the net realized and unrealized gains
and losses on the mark to market and sale of equity securities that the Company
receives as consideration for financial advisory services and from investment
gains and losses from the Company's investments in equity securities and
investment partnerships focused on the technology sector.
Other income decreased to ($155,000) for the three and six months ended June
30, 2000 from $0 for the three and six months ended June 30, 1999. This decrease
is due to an adjustment to estimated advertising revenue related to the sale of
banner advertisements on our website that had been recorded in 1999.
EXPENSES
Compensation and benefits expense for the three months ended June 30, 2000
increased to $55.7 million from $8.6 million for the three months ended June 30,
1999. For the six months ended June 30, 2000, compensation and benefits expense
increased to $120.6 from $15.1 million for the six months ended June 30, 1999.
Compensation and benefits expense consists of salaries, bonuses and other
benefits paid or provided to our employees. The increase in compensation expense
primarily relates to higher incentive compensation accrued on higher revenues
and an increase in the number of employees from 169 as of June 30, 1999 to 486
as of June 30, 2000. Compensation and benefits expense as a percentage of total
revenues was 60% for the six months ended June 30, 2000, which represents an
improvement from 100% for the six months ended June 30, 1999. For the six months
ended June 30, 1999, compensation expense included $2.6 million related to those
portions of contractual upfront payments to several professionals for which no
future service by the employees was required. As we continue to hire more
investment banking and research professionals and participate in more
transactions, we expect compensation expense to grow.
Brokerage and clearance expense for the three months ended June 30, 2000
increased to $6.6 million from $1.3 million for the three months ended June 30,
1999. For the six months ended June 30, 2000, brokerage and clearance expense
increased to $12.8 million from $1.6 million for the six months ended June 30,
1999. This expense primarily consists of fees paid to independent floor brokers
on the New York Stock Exchange for the execution of institutional customer
agency business as well as amounts paid to our clearing brokers for processing
and clearing customers' trades. The increase in brokerage and clearance expense
reflects the increased transactional volume and growth of our brokerage
operations.
Marketing and business development expense for the three months ended June
30, 2000 increased to $4.6 million from $845,000 for the three months ended June
30, 1999. For the six months ended June 30, 2000, marketing and business
development expense increased to $7.6 million from $1.1 million for the six
months ended June 30, 1999. Marketing and business development expense consists
primarily of travel, entertainment, costs associated with our conferences and a
focused print advertising campaign that we commenced in 2000. Marketing expense
in 1999 primarily consists of travel, entertainment and other costs associated
with developing our investment banking business. We expect these expenses to
continue to increase as we continue to expand our business.
Amortization of intangible assets and goodwill for the three months ended
June 30, 2000 increased to $4.1 million from $0 for the three months ended June
30, 1999. For the six months ended June 30, 2000, amortization of intangible
assets and goodwill increase to $6.9 million from $0 for the six months ended
June 30, 1999. This expense results from the amortization of intangible assets
and goodwill related to our
11
<PAGE>
Merger with SoundView on January 31, 2000. We expect these expenses to increase
when we close our proposed merger with E*OFFERING.
Professional services expense for the three months ended June 30, 2000
increased to $2.2 million from $1.1 million for the three months ended June 30,
1999. For the six months ended June 30, 2000, professional services expense
increased to $4.5 million from $1.8 million for the six months ended June 30,
1999. Professional services expense includes legal, consulting, accounting, and
recruiting fees which have increased as we continue to make strategic
investments, expand our business internationally, make improvements to our
customer service and infrastructure, hire additional personnel, and increase our
investment banking operations.
Data processing and communications expense for the three months ended June
30, 2000 increased to $2.6 million from $884,000 for the three months ended June
30, 1999. For the six months ended June 30, 2000, data processing and
communications expense increased to $4.3 million from $1.2 million for the six
months ended June 30, 1999. Data processing and communications expense includes
costs related to market data services, transaction processing and telephone and
other communication charges. These expenses have increased as a result of an
increased number of active customer accounts and an increased volume of
transactions processed. We expect these costs will continue to grow as
transaction volume increases.
For the six months ended June 30, 2000, we wrote-off approximately $1.3
million in computer software and hardware originally developed or purchased to
operate an after-hours trading system. In light of information that became
available to us during the first quarter regarding redeployment of those assets,
we wrote-off approximately $1.3 million of previously capitalized costs
representing management's estimate of the impairment in the value of the assets.
Depreciation and amortization for the three months ended June 30, 2000
increased to $1.5 million from $279,000 for the three months ended June 30,
1999. For the six months ended June 30, 2000, depreciation and amortization
increased to $2.8 million from $499,000 for the six months ended June 30, 1999.
Depreciation and amortization consists primarily of depreciation and
amortization of property, equipment and leasehold improvements and amortization
of computer software. The increases in depreciation and amortization reflect the
increased investments the Company has made in its technology, equipment and
facilities. The Company expects these expenses to continue to grow as it
continues to invest in technology and infrastructure.
Technology development expense for the three months ended June 30, 2000
increased to $1.5 million from $526,000 for the three months ended June 30,
1999. Technology development expense for the six months ended June 30, 2000
increased to $2.6 million from $862,000 for the six months ended June 30, 1999.
This increase resulted from continued enhancements to our technology
infrastructure, primarily related to the development of Vostock, our online
auction system for secondary and follow-on offerings and our online brokerage
operations. We expect technology development expense to increase as operations
continue to grow and as we continue to invest in our infrastructure and new
business initiatives.
Occupancy expense for the three months ended June 30, 2000 increased to $1.1
million from $213,000 for the three months ended June 30, 1999. For the six
months ended June 30, 2000, occupancy expense increased to $1.9 million from
$304,000 for the six months ended June 30, 1999. We now lease several floors in
our New York location and we operate an office in Stamford, Connecticut and an
additional, larger office in San Francisco. As we continue to grow and expand
our business, we expect occupancy expense to increase.
Other expenses for the three months ended June 30, 2000 increased to $2.8
million from $354,000 for the three months ended June 30, 1999. For the six
months ended June 30, 2000, other expenses increased to $4.2 million from
$499,000 for the six months ended June 30, 1999. Other expenses include office
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<PAGE>
supplies, registrations and other general and administrative expenses which have
all increased as we continue to expand our business and operations.
Equity in net loss of affiliates for the three months ended June 30, 2000
increased to $4.5 million from $0 for the three months ended June 30, 1999. For
the six months ended June 30, 2000, equity in net loss of affiliates increased
to $6.2 million from $0 for the six months ended June 30, 1999. Equity in net
loss of affiliates represents our proportional share of the losses incurred by
Wit Capital Japan and Wit Capital Europe based on our ownership interest in each
joint venture. We expect these losses to increase as Wit Capital Japan and Wit
Capital Europe commence or prepare to commence operations in 2000.
LIQUIDITY AND CAPITAL RESOURCES
Historically, Wit Capital has satisfied its cash requirements primarily
through private placements of common stock and convertible preferred stock.
During June 1999, Wit Capital Group, Inc. completed an initial public offering
in which it issued 8,740,000 shares of its common stock at $9.00 per share. The
Company received approximately $72.8 million in cash proceeds, net of
underwriting discounts and offering costs. The Company believes that its
existing cash balances will be sufficient to meet anticipated cash requirements
for at least the next twelve months. We may, nonetheless, seek additional
financing to support our activities during the next twelve months or thereafter.
There can be no assurance, however, that additional capital will be available on
reasonable terms, if at all, when needed or desired.
Net cash provided by operating activities was $35.8 million for the six
months ended June 30, 2000, compared to net cash used in operating activities of
$9.2 million during the same period in the preceding year. Net cash provided by
operating activities for the six months ended June 30, 2000 was primarily from
net income of $9.8 million, an increase in net operating assets of $56.6 million
offset by a net increase in operating liabilities of $46.8 million. Cash used in
operating activities for the six months ended June 30, 1999 was primarily from a
net loss of $7.7 million, a net increase in operating assets of $7.8 million,
offset by an increase in operating liabilities of $5.8 million.
Cash provided by investing activities was $49.8 million for the six months
ended June 30, 2000, compared to cash used of $2.7 million for the six months
ended June 30, 1999. Cash provided by investing activities for the six months
ended June 30, 2000 was primarily for net purchases and sales of short-term
investments of $74.1 million, the net cash payment for the acquisition of
SoundView of $6.8 million ($22.5 million of cash paid, representing the cash
portion of merger consideration, net of cash received of $15.7 million), an
additional investment in Wit Capital Japan of $10.5 million, fixed asset
purchases of $5.1 million and purchases of computer software of $1.9 million.
Cash used in investing activities for the six months ended June 30, 1999
resulted from purchases of fixed assets of $2.2 million and from purchases of
computer software of $550,000.
Cash provided by financing activities was $3.6 million for the six months
ended June 30, 2000, compared to $131.1 million for the six months ended June
30, 1999. Cash provided by financing activities for the six months ended June
30, 2000 resulted primarily from $3.6 million in proceeds received from the
issuance of common stock for exercise of options and warrants. Cash provided by
financing activities for the six months ending June 30, 1999 resulted primarily
from net proceeds of $72.8 million received from the initial public offering of
our common stock and, to a lesser extent, $24.9 million in net proceeds received
from the issuance of Series E Preferred Stock, now Class B Common Stock, and the
grant of warrants to the Goldman Sachs Group, Inc. and from $31.5 million
received from issuance of our Series D Preferred Stock, now Common Stock, to
accredited investors.
The Company continues to use the net proceeds from its IPO for working
capital purposes. In January 2000, Wit Capital paid approximately $22.5 million
to shareholders of SoundView in connection with its merger with SoundView and in
March 2000, the Company invested $10 million in Internet HealthCare
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Group, a business-to-business e-commerce company focused on e-healthcare and
e-insurance. The Company expects to continue to use the proceeds for working
capital purposes and for strategic acquisitions or investments.
PROPOSED MERGER
On May 15, 2000, the Company entered into an agreement with the shareholders
of E*OFFERING to acquire 100 percent of the outstanding shares of E*OFFERING, an
Internet investment banking firm. Under the terms of the agreement, the Company
will acquire the outstanding shares of E*OFFERING in exchange for approximately
$290 million in Wit SoundView Group, Inc. common stock and options and warrants
replacing E*OFFERING options and warrants. In addition, the Company entered into
a strategic alliance agreement with E*TRADE which provides the Company with the
exclusive right to distribute equity and equity related securities to the
customers of E*TRADE. As consideration for this agreement, the Company will
issue E*TRADE approximately 4 million shares of its common stock and warrants to
purchase an additional 2 million shares, exercisable under certain circumstances
after year 3 of the agreement. Additionally, E*TRADE and certain affiliates of
General Atlantic Partners LLC have agreed to each purchase 2 million shares of
Wit SoundView Group, Inc. common stock. The Board of Directors of each Company
and the shareholders of E*OFFERING have approved the transaction, which is
expected to close in the third quarter of 2000. Completion is contingent upon
Wit SoundView stockholder approval, regulatory approval and other customary
closing conditions.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There has been no material change from the Item 305 information included in
the Registrant's Annual Report on Form 10-K for the year ended December 31,
1999.
14
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
Certain claims and legal proceedings are described in the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1999.
On May 15, 2000, certain of Wit Capital Corporation's customers filed a
purported class action lawsuit in the Circuit Court of Cook County Illinois
styled JOSEPH YOUNES AND ROSANNE T. YOUNES v. WIT CAPITAL CORPORATION. The five
count complaint charges Wit Capital Corporation with (1) breach of contract for
alleged failure to provide "continuous, reliable trading services"; (2) breach
of fiduciary duty and unjust enrichment by reason of the fact that Wit Capital
Corporation allegedly failed to disclose material facts concerning its system
capacity and technical capabilities and allegedly failed to "incorporate the
latest technological advances" into its systems relating to customer account
access and order placement; (3) fraud by reason of the fact that Wit Capital
Corporation allegedly falsely represented its technical capabilities relating to
access to its services; (4) violation of the Illinois Consumer Fraud Act; and
(5) "negligent/intentional tort" by reason of Wit Capital Corporation's alleged
failure to provide, upgrade and maintain systems to enable customer order
placement. We intend to defend the lawsuit vigorously. We do not believe that
this lawsuit should have a material adverse effect on us.
We are currently subject to other claims and legal proceedings arising in
the normal course of our business. We do not believe that the resolution of such
claims and legal proceedings should have a material adverse effect on us.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company continues to use the net proceeds from its IPO for working
capital purposes. The Company expects to continue to use the proceeds for
working capital purposes and for strategic acquisitions or investments.
ITEM 3. DEFAULT 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 1, 2000.
Following are descriptions of the matters voted on and the results of such
meeting:
1. The election of two directors to serve until their successors have been
elected and qualified.
<TABLE>
<CAPTION>
FOR ABSTENTIONS
---------- -----------
<S> <C> <C>
Joseph R. Hardiman.................................... 53,731,923 378,578
Andrew D. Klein....................................... 53,749,950 360,551
</TABLE>
2. To consider and vote on a proposal to approve an amendment to the Company's
certificate of incorporation to change the Company's name to Wit SoundView
Group, Inc.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
---------- -------- -----------
<S> <C> <C> <C>
Votes........................................ 53,771,444 328,600 10,457
</TABLE>
15
<PAGE>
3. To consider and vote on a proposal to approve an amendment to the Company's
certificate of incorporation to eliminate the Company's Class C Common
Stock.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
---------- -------- -----------
<S> <C> <C> <C>
Votes........................................ 53,688,951 392,320 29,230
</TABLE>
ITEM 5. OTHER INFORMATION
FORWARD-LOOKING STATEMENTS
The Company has included in this Form 10-Q filing, and from time to time its
management may make, statements which may constitute forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are not
historical facts but instead represent only the Company's beliefs regarding
future events, many of which, by their nature, are inherently uncertain and
outside of the Company's or its management's control. It is possible that its
actual results may differ, possibly materially, from the anticipated results
indicated in these forward-looking statements. Important factors that could
cause actual results to differ from those in the Company's specific
forward-looking statements include:
- a decline in general economic conditions or the United States securities
markets;
- the inability to secure share allotments in underwritten offerings in
which the Company participates sufficient to satisfy its customers' demand
and generate revenue;
- the inability to ensure sufficient revenue to cover its costs and create
profits; and
- increasing competitive pressures.
Additional information regarding these and other important factors that
could cause actual results to differ from those in the Company's forward-looking
statements is contained under the section entitled "Risk Factors" in the
Company's Registration Statement on Form S-1 (File No. 333-74619), as filed with
the SEC in connection with the Company's initial public offering of common stock
and in the Company's Registration Statements on Form S-4 (No. 333-92887 and
333-42062) as filed with the SEC in connection with the company's merger with
SoundView Technology Group, Inc. and proposed merger with E*OFFERING Corp. The
Company hereby incorporates by reference those risk factors (other than those
contained under the headings "Our common stock has never been publicly traded so
we cannot predict the extent to which a market will develop for our common stock
or how volatile that market will be" and "This offering will cause immediate
dilution") into this Form 10-Q.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
2.1 Agreement and Plan of Merger by and among Wit SoundView Group, Inc., Wit
SoundView Corporation and E*OFFERING Corp., dated as of May 15, 2000
(Incorporated by reference to exhibit 2.1 to the Registration Statement
on Form S-4 (File No. 333-42062) of Wit SoundView Group, Inc.)
4.2 Voting Agreement, dated as of May 15, 2000, by and among Wit SoundView
Group, Inc. and certain security holders of E*OFFERING Corp.
(Incorporated by reference to exhibit 4.2 to the Registration Statement
on Form S-4 (File No. 333-42062) of Wit SoundView Group, Inc.)
10.2 (a) E*OFFERING Corp. 1998 Stock Option Plan (Incorporated by reference
to exhibit 10.2(a) to the Registration Statement on Form S-4 (File
No. 333-42062) of Wit SoundView Group, Inc.)
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<PAGE>
10.2 (b) E*OFFERING Corp. 2000 Stock/Stock Issuance Option Plan (Incorporated
by reference to exhibit 10.2(b) to the Registration Statement on
Form S-4 (File No. 333-42062) of Wit SoundView Group, Inc.)
10.5 Severance Agreement between Wit SoundView Group, Inc. and Ronald
Readmond (Incorporated by reference to exhibit 10.5 to the Registration
Statement on Form S-4 (File No. 333-42062) of Wit SoundView Group, Inc.)
10.14 Strategic Alliance Agreement, dated as of May 15, 2000, by and between
E*TRADE Group, Inc. and Wit SoundView Group, Inc. (Incorporated by
reference to exhibit 10.14 to the Registration Statement on Form S-4
(File No. 333-42062) of Wit SoundView Group, Inc.)
10.15 Account Transfer Agreement, dated as of May 15, 2000, by and between
E*TRADE Group Inc. and Wit SoundView Group, Inc. (Incorporated by
reference to exhibit 10.15 to the Registration Statement on Form S-4
(File No. 333-42062) of Wit SoundView Group, Inc.)
10.16 Standstill Agreement, dated as of May 15, 2000, by and between E*TRADE
Group, Inc. and Wit SoundView Group, Inc. (Incorporated by reference to
exhibit 10.16 to the Registration Statement on Form S-4 (File
No. 333-42062) of Wit SoundView Group, Inc.)
10.18 Stock Purchase Agreement, dated as of May 15, 2000, by and among E*TRADE
Group Inc. and Wit SoundView Group, Inc. and certain entities affiliated
with General Atlantic Partners, LLC. (Incorporated by reference to
exhibit 10.16 to the Registration Statement on Form S-4 (File
No. 333-42062) of Wit SoundView Group, Inc.)
27.1 --Financial Data Schedule
(b) Reports on Form 8-K:
On May 26, 2000, the Company filed a current report on Form 8-K regarding
the announcement of its strategic alliance with E*TRADE GROUP, INC. and its
proposed acquisition of E*OFFERING Corp. pursuant to the terms of an Agreement
and Plan of Merger, dated as of May 15, 2000, by and among Wit Capital Group,
Inc., Wit SoundView Corporation and E*OFFERING Corp.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C> <C>
WIT SOUNDVIEW GROUP, INC.
Dated: August 14, 2000
By: /s/ ROBERT H. LESSIN
-----------------------------------------
Robert H. Lessin
CHIEF EXECUTIVE OFFICER
By: /s/ CURTIS L. SNYDER
-----------------------------------------
Curtis L. Snyder
CHIEF FINANCIAL OFFICER
</TABLE>
18
