<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2000
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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 000-25847
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RAZORFISH, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3804503
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
32 Mercer Street, 3rd Floor, New York, New York, 10013
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(Address of Principal Executive Offices, Including Zip Code)
(212) 966-5960
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address And Former
Fiscal Year, if Changed Since Last Report)
Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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. [X] YES [_] NO
The number of shares outstanding of the Registrant's Class A Common Stock
$.01 per value as of November 8, 2000 was 98,275,707.
<PAGE>
RAZORFISH, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Interim Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 1999 (audited)
and September 30, 2000 1
Consolidated Statements of Operations for the three and nine
months ended September 30, 1999 and 2000 2
Consolidated Statements of Cash Flows for the nine months ended
September 30, 1999 and 20000 3
Notes to Consolidated Interim Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Qualitative and Quantitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 16
<PAGE>
RAZORFISH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
<TABLE>
<CAPTION>
December 31, September 30,
1999 2000
------------ -------------
(unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS: $ 98,798 $ 84,069
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts of $1,416
and $2,046 at December 31, 1999 and September 30, 2000, respectively 30,420 45,926
Unbilled revenues 15,667 19,573
Prepaid expenses and other current assets 3,371 9,764
Deferred tax assets 1,225 2,246
Due from affiliate 1,273 1,513
------------ ------------
Total current assets 151,114 163,091
PROPERTY AND EQUIPMENT, net of accumulated depreciation and 15,428 24,557
amortization of $6,914 and $12,020 at December 31, 1999 and
September 30, 2000, respectively
INTANGIBLES, net of accumulated amortization of $3,641 and $10,108 at
December 31, 1999 and September 30, 2000, respectively 79,233 184,263
LOAN TO AFFILIATE 2,250 2,250
OTHER ASSETS 3,565 11,465
------------ ------------
Total assets $ 251,590 $ 385,626
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Due to affiliate $ 97 $ -
Accounts payable and accrued expenses 36,086 46,240
Income taxes payable 9,132 981
Deferred revenues 2,464 1,483
Deferred rent 604 -
Other current liabilities - 3,597
Current portion of long-term obligations 682 111
------------ ------------
Total current liabilities 49,065 52,412
LONG-TERM OBLIGATIONS 1,760 2,003
MINORITY INTEREST IN JOINT VENTURE - 1,356
DEFERRED TAX LIABILITY 191 2,030
OTHER LIABILITIES 2,221 327
------------ ------------
Total liabilities 53,237 58,128
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock $.01 par valve; 10,000,000 shares authorized;
none issued or outstanding $ - $ -
Common Stock:
Class A $.01 par value; 200,000,000 shares authorized: 88,811,621 and
98,906,443 issued at December 31, 1999 and September 30, 2000,
respectively 888 976
Class B $.01 par value; 50 shares authorized, issued and outstanding at
December 31, 1999 and September 30, 2000 - -
Receivable from stockholder (533) (533)
Additional paid-in-capital 200,297 320,834
Accumulated other comprehensive income 6 (650)
Retained earnings (deficit) (1,717) 7,459
Treasury stock at costs; 73,584 shares at
December 31, 1999 and September 30, 2000 (588) (588)
------------ ------------
Total stockholders' equity 198,353 327,498
------------ ------------
Total liabilities and stockholders equity $ 251,590 $ 385,626
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
1
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RAZORFISH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
1999 2000 1999 2000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 44,850 $ 77,078 $ 117,474 $ 217,754
Project personnel costs 21,251 41,634 56,505 107,888
------------ ------------ ------------ ------------
Gross profit 23,599 35,444 60,969 109,866
Sales and marketing 3,631 6,236 8,581 15,187
General and administrative 12,938 28,504 32,770 73,243
Merger-related costs - - 3,445 -
Non-cash compensation expense 108 - 162 -
Amortization of intangibles 900 2,315 2,529 6,467
------------ ------------ ------------ ------------
Income from operations 6,022 (1,611) 13,482 14,969
Other income, net 1,236 723 2,585 2,959
------------ ------------ ------------ ------------
Income before income taxes 7,258 (888) 16,067 17,928
Provision for income taxes 3,648 (435) 7,586 8,753
------------ ------------ ------------ ------------
Net income $ 3,610 $ (453) $ 8,481 $ 9,175
============ ============ ============ ============
Earnings per share:
Basic $ .04 $ .00 $ .10 $ .10
============ ============ ============ ============
Diluted $ .04 $ .00 $ .10 $ .09
============ ============ ============ ============
Weighted average common shares outstanding:
Basic 85,348 95,356 80,787 92,622
Diluted 94,385 99,246 88,654 98,906
</TABLE>
2
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RAZORFISH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 2000
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 8,481 9,175
Adjustments to reconcile net income to net cash used in by operating activities--
Allowance for doubtful accounts 687 1,251
Depreciation and amortization 5,354 11,901
Realized gain on sale of investments (166) -
Non-cash capital contribution 55 -
Non-cash common stock option compensation 162 -
Tax benefit due to stock option exercise 1,200 4,911
Minority Interest 26 1,431
Changes in operating assets and liabilities, net of acquisitions: - -
Accounts receivable (14,694) (16,757)
Unbilled revenues (6,734) (3,906)
Prepaid expenses and other current assets (1,090) (6,033)
Due from affiliate 934 (240)
Other assets (79) (1,530)
Accounts payable and accrued expenses 5,881 10,155
Advanced Billings 2,316 -
Deferred revenues 506 (981)
Increase (decrease) in deferred tax assets (541) (1,021)
Deferred tax liabilities 977 1,839
Income taxes payable 561 (8,151)
Deferred rent 201 (493)
Due to related party (500) (97)
Other liabilities (497) 1,189
------------ ------------
Net cash provided by operating activities 3,040 2,643
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (8,062) (14,236)
Acquisition of subsidiaries, net of cash acquired (3,881) (4,911)
Earn out payments associated with acquisitions - (1,000)
Investments, at cost - (2,000)
Loan to affiliate (1,872) -
Other (438) -
Proceeds from sale of marketable securities 63 -
------------ ------------
Net cash used in investing activities (14,190) (22,147)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 1,666 5,507
Deferred registration costs 564 (76)
Payments under capital lease obligations 123 -
Proceeds from officer's loan 350 -
Proceeds from Initial Public Offering 77,041 -
Proceeds from long term obligations (57) -
Proceeds from exercise of Communicade's 10% option 25,303 -
Proceeds from bank notes payable (51) -
Net borrowings (repayments) under lines of credit (4,838) -
Principal payments on long term debt (88) -
Repurchase of Treasury Stock (588) -
------------ ------------
Net cash provided by financing activities 99,425 5,431
------------ ------------
------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 29 (656)
------------ ------------
Net increase (decrease) in cash and cash equivalents 88,304 (14,729)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 12,227 98,798
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 100,531 $ 84,069
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Income taxes paid 10,276 2,726
Income paid - 148
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ACTIVITIES
Fair market value of common stock issued for earn out payments
associated with acquisitions - 90,923
Fair market value of common stock issued for acquisitions 54,940 16,996
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
3
<PAGE>
RAZORFISH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
($ in thousands, except per share amounts)
1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
Razorfish, Inc. ("Razorfish"), together with its wholly owned subsidiaries (the
"Company"), is a leading provider of global digital solutions. Digital solutions
are business solutions that use digital technologies to enhance communications
and commerce between businesses and their consumers, suppliers, employees, and
other partners. These digital solutions utilize a wide variety of platforms,
including the World Wide Web, wireless, broadband, and satellite communications
and a variety of digital devices and information appliances, including desktop
PCs, mobile phones, pagers, personal digital assistants, and backend ERP and
legacy systems. The Company thereby creates for its clients digital solutions
and designs to help them fundamentally re-architect their business models and
identify and improve communications and commerce opportunities. Razorfish
currently has offices in New York, Boston, Los Angeles, San Francisco, Santa
Clara, Amsterdam, Frankfurt, Hamburg, Helsinki, London, Milan, Munich, Oslo,
Stockholm, and Tokyo.
On January 12, 2000, the Board of Directors authorized a 2-for-1 stock split of
the Company's Class A common stock effected as a 100% stock dividend on January
27, 2000 for stockholders of record on January 20, 2000. All references in the
accompanying unaudited interim consolidated financial statements and footnotes
have been retroactively restated to give effect to this stock split.
Principles of Consolidation
The accompanying unaudited consolidated financial statements of the Company have
been prepared pursuant to the rules of the Securities and Exchange Commission
(the "SEC"). Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. These unaudited interim consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K, as amended (File
No. 000-25847). In the opinion of management, the accompanying unaudited interim
consolidated financial statements reflect all adjustments, which are of a normal
recurring nature, necessary for a fair presentation of the results for the
periods presented.
The results of operations presented for the three and nine month periods ended
September 30, 1999 and 2000 are not necessarily indicative of the results to be
expected for any other interim period or any future fiscal year.
SEGMENT REPORTING
The Company discloses business segments under SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." SFAS No. 131 established
standards for the way public business enterprises report information about
operating segments in annual financial statements and required those
enterprises to report selected information about operating segments in interim
financial statements. It also requires disclosures about products and services,
geographic areas, and major customers.
The Company is a provider of global digital solutions. The Company evaluated
its business activities that are regularly reviewed by executive management and
the Board of Directors for which discrete financial information is available. As
a result of this evaluation, the Company determined that it has one operating
segment.
ACQUISITIONS
On January 24, 2000, Razorfish acquired all of the outstanding stock of
Stockholm-based Qb International Holding AB. Under the terms of the acquisition,
Razorfish issued 399,284 shares of its Common Stock and paid $2,939,159 in cash
to Qb International's stockholders in exchange for the entire equity interest of
Qb International Holding AB. Qb is a Swedish IT/Strategic consulting company.
The Qb acquisition strengthens Razorfish's expertise in change and knowledge
management and will help the company meet the increased demand for its services
across Europe by adding 40 billable employees with strong skills in management
consulting and systems development.
4
<PAGE>
On May 15, 2000, Razorfish issued 140,772 shares of its Common Stock in exchange
for substantially all of the net assets of Limage Dangerouse Rotterdam B.V.
("Limage"). Limage is a award winning visual communications agency based in
Rotterdam, The Netherlands. Founded in 1986, Limage is mainly focused on the
creation of (online-) identities, interactive and graphic design. The Limage
acquisition strengthens Razorfish's presence in the Benelux region with premier
strategic, creative, and technological capabilities to deliver complex digital
solutions and will help the company meet the increased demand for its services
across Europe by adding approximately 45 billable employees with strong creative
skills.
On August 18, 2000 Razorfish issued 446,080 shares of common stock and paid $1.4
million in cash to acquire MediaLab AG, a Munich based e-business solutions
provider that specialized in strategy consulting, back end technology and
advanced web design.
The following unaudited Pro Forma consolidated results of operations reflects
the results of operations for the three and nine month periods ended September
30, as if the aforementioned acquisitions had occurred on January 1, 1999.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
Pro forma 1999 2000 1999 2000
-------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues $ 47,162 $ 78,323 $ 124,373 $ 221,504
Net Income $ 3,627 $ 46 $ 8,561 $ 9,987
Basic earnings per share $ .04 $ .00 $ .09 $ .11
======== ======== ========= =========
Diluted earnings per share $ .04 $ .00 $ .10 $ .10
======== ======== ========= =========
</TABLE>
On May 17, 2000 Razorfish, Inc. and Intervision Inc. an advertising agency
affiliated with Sony Group, entered into a 50/50 joint venture agreement
resulting in the incorporation of Intervision-Razorfish, Inc., located in Tokyo.
The joint venture with Intervision allows Razorfish rapid entry into the
Asia-Pacific region, which current has a strong digital economy that is
projected to continue growing, complementing Razorfish's ongoing operations in
North America and Europe.
In February 2000, Razorfish issued an aggregate of 1,039,946 shares of Common
Stock, paid cash of $1.0 million, and agreed to issue 520,054 shares of Common
Stock for a total fair value of $72,323 to the former principals of Media,
Plastic, and CHBi in consideration for their agreement to amend their respective
acquisition agreements to remove the earn-out provisions contained therein. The
amounts associated with these transactions were accounted for as additional
purchase price and an adjustment to goodwill.
EARNINGS PER SHARE
Basic earnings per share is calculated as net income divided by the weighted
average common shares outstanding. Diluted earnings per share is calculated as
net income divided by the weighted average common shares outstanding including
the dilutive effects of potential common shares, which include the Company's
stock options.
5
<PAGE>
A reconciliation of the numerator and denominator of the calculations for the
three and nine month periods ended September 30, 2000 and 1999, respectively, is
presented below.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
Diluted EPS Computation 1999 2000 1999 2000
-------- -------- -------- --------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Numerator: Net Income $ 3,610 $ (453) $ 8,481 $ 9,175
Denominator:
Weighted common shares outstanding 85,348 95,356 80,787 92,622
Potential common shares; common stock options 9,037 3,890 7,867 6,284
Diluted common and common equivalent shares 94,385 99,246 88,654 98,906
======== ======== ========= =========
Basic earnings per share $ .04 $ .00 $ .10 $ .10
======== ======== ========= =========
Diluted earnings per share $ .04 $ .00 $ .10 $ .09
======== ======== ========= =========
</TABLE>
COMPREHENSIVE INCOME
The Company accounts for comprehensive income under SFAS No. 130, "Reporting
Comprehensive Income." This statement established standards for reporting and
displaying comprehensive income and its components in a financial statement
that is displayed with the same prominence as other financial statements. The
components of comprehensive income are as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
Diluted EPS Computation 1999 2000 1999 2000
-------- -------- --------- ---------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net income $ 3,610 $ (453) $ 8,481 $ 9,175
Foreign currency translation adjustment 38 (1,247) (79) (656)
-------- -------- --------- ---------
Comprehensive income (loss) $ 3,648 $ (1,700) $ 8,591 $ 8,519
======== ======== ========= =========
</TABLE>
LEGAL PROCEEDINGS
On March 17, 2000, a legal action was commenced against the Company by a former
consultant of a wholly owned subsidiary for, amongst other things, breach of
contract. The Company is reviewing the action and believes that the allegations
are baseless and without merit in law or fact. No assurance can be given,
however, that this matter will be resolved in the Company's favor.
On July 14, 2000, the Company was served with a complaint by IAM.com that
alleges that the Company did not fulfill its duties in connection with work
performed for IAM.com for recovery of monies owed under the contract. The
Company disputes IAM.com's allegations and believes that IAM.com's action is
without merit in law or fact. No assurances can be given, however, that this
matter will be resolved in the Company's favor.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards of derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. This
6
<PAGE>
statement is effective for all quarters of fiscal years beginning after June 15,
1999. In July 1999, the FASB issues SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities--Deferral of the Effective Date of FASB No.
133, "which amends SFAS No. 133 effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138
"Accounting for Certain Hedging Activities, an amendment of FASB Statement No.
133", effective for all interim and annual periods beginning after June 15,
2000. As indicated, SFAS No. 138 amend accounting and reporting standards for
certain derivative instruments and certain hedging activities. Razorfish does
not expect the adoption of these standards to have a material effect on the
results of consolidated operations, financial position or cash flows.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements,"
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. SAB 101 was effective the first fiscal
quarter of fiscal years beginning after December 15, 1999 and requires companies
to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation in accordance with
Accounting Principles Board Opinion 20, "Accounting Changes". In June 2000, the
SEC issued SAB 101B, "Amendment: Revenue Recognition in Financial Statements,"
which delayed implementation of SAB 101 until Razorfish's fourth fiscal quarter
of 2000. Razorfish does not expect the implementation of SAB 101 to have a
material effect on the results of consolidated operations, financial position,
or cash flows.
In March 2000, the Financial Accounting Standard Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation -- an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 and among other issues clarifies
the following: the definition of an employee for purposes of applying APB
Opinion No. 25; the criteria for determining whether a plan qualifies as a
noncompensatory plan; the accounting consequence of various modifications to the
terms of previously fixed stock options or awards; and the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 cover specific events
that occurred after either December 15, 1998 or January 12, 2000. Razorfish has
adopted FIN 44 with no known reportable changes n the Company's financial
position or results of operations.
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
Razorfish should be read in conjunction with the Management's Discussion and
Analysis of Financial Condition and Results of Operations and the Consolidated
Financial Statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999. This quarterly report
on Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements involve risks
and uncertainties, and actual results could be significantly different than
those discussed in this Quarterly Report on Form 10-Q. All forward-looking
statements included in this document are made as of the date hereof, and the
risk factors set forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999 were made as of the date thereof, based on information
available to the Company on the date thereof, and the Company assumes no
obligation to update any forward-looking statements or risk factors.
Overview
Razorfish is a leading provider of global digital solutions. Digital solutions
are business solutions that use digital technologies to enhance communications
and commerce between businesses and their consumers, suppliers, employees, and
other partners. Razorfish provides an integrated, end-to-end solution.
Razorfish's strategy involves creative and technology professionals carrying out
every aspect of a solution from strategic consulting to design of information
architectures and user-interfaces to integration of backend Enterprise Resource
Planning (ERP) and legacy systems. These digital solutions utilize a wide
variety of platforms, including the World Wide Web, wireless, broadband and
satellite communications and a variety of digital devices and information
appliances, including desktop PCs, mobile phones, pagers and personal digital
assistants. Razorfish thereby creates for its clients digital solutions designed
to help them re-architect their traditional business models and identify and
improve communications and commerce opportunities.
Razorfish derives substantially all of its revenues from fees for services
generated on a project-by-project basis. Razorfish's services are provided on
both a fixed-time, fixed-price basis and on a time and materials basis.
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Razorfish recognizes revenues for both time and materials-based arrangements and
fixed-time, fixed-price arrangements on the percentage-of-completion method of
accounting based on the ratio of costs incurred to total estimated costs. In
developing the fixed price of a project, Razorfish follows a process that
assesses the technical complexity of the project, the nature of the work, the
functions to be performed and the resources required to complete the engagement.
Razorfish periodically reassesses its estimated costs for each project, and
provisions for estimated losses on unfinished projects are recorded in the
period in which such losses are determined. To date, such losses have not been
significant. Revenues exclude reimbursable expenses charged to clients.
Agreements entered into in connection with time and materials projects are
generally terminable by the client upon 30-days' prior written notice, and
clients are required to pay Razorfish for all time, materials and expenses
incurred by Razorfish through the effective date of termination. Agreements
entered into in connection with fixed-time, fixed-price projects, are generally
terminable by the client upon payment for work performed and the next progress
payment due. If clients terminate existing agreements or if Razorfish is unable
to enter into new engagements, Razorfish's business, financial condition, and
results of operations could be materially and adversely affected. In addition,
because a proportion of Razorfish's expenses is relatively fixed, a variation in
the number of client engagements can cause significant variations in operating
results from quarter to quarter.
Razorfish's projects vary in size and scope; therefore, a client that accounts
for a significant portion of Razorfish's revenues in one period may not generate
a similar amount of revenue in subsequent periods. No client accounted for more
than 10.0% of Razorfish's revenues in the periods ended December 31, 1999 or
September 30, 2000.
Razorfish does not believe that it will derive a significant portion of its
revenues from a limited number of clients in the near future. However, there is
a risk that the source of Razorfish's revenues may be generated from a small
number of clients. These clients may not retain Razorfish in the future. Any
cancellation, deferral, or significant reduction in work performed for these
principal clients or a significant number of smaller clients could have a
material adverse affect on Razorfish's business, financial condition, and
results of operations.
Operating and other expenses
Razorfish's project personnel costs consist primarily of compensation and
related costs of personnel dedicated to customer assignments. Project personnel
costs also include fees paid to subcontractors for work performed in connection
with projects and non-reimbursed project travel expenses.
Razorfish's selling and marketing costs consist primarily of compensation and
related costs of sales and marketing personnel, travel expenses, and marketing
programs and promotion costs.
Razorfish's general and administrative costs consist primarily of compensation
and related costs of the management and administrative functions, including
finance and accounting, human resources and internal information technology, and
the costs of Razorfish's facilities and other general corporate expenses.
Seasonality
In general, the laws of the European countries in which Razorfish operates
mandate that all employees receive significantly more vacation days than in the
United States. For example, in Sweden, each employee must receive a minimum of
25 days paid vacation per year. These vacations are typically taken in the third
quarter, resulting in declining revenues during this period due to a reduction
in both billable hours and client demand.
Quarter-to-quarter fluctuations in margins
The Company's operating results and quarter-to-quarter margins may fluctuate in
the future as a result of many factors, some of which are beyond the Company's
control. Historically, the Company's quarterly margins have been impacted by:
. the number of client engagements undertaken or completed;
. a change in the scope of ongoing client engagements;
8
<PAGE>
. seasonality;
. a shift from fixed-fee to time and materials-based contracts;
. the number of days during the quarter;
. utilization rates of employees;
. marketing and business development expenses;
. charges relating to strategic acquisitions;
. pricing changes in the information technology services market; and
. economic conditions generally or in the information technology services
market.
The Company expects this trend to continue.
Results of operations
Three Months Ended September 30, 2000 Compared to the Three Months Ended
September 30, 1999
Revenues
The Company's revenues increased $32.2 million, or 72%, to $77.1 million for
the three months ended September 30, 2000 from $44.9 million for the comparable
period in 1999. This increase in revenue was primarily due to the growth of the
Company's offices as a result of the increase in the number of projects, an
increase in the billing rates of the Company's employees, and revenues related
to the acquisitions that were made in the previous nine months.
Project personnel costs
The Company's project personnel costs increased $20.4 million, or 96%, to $41.6
million for the three months ended September 30, 2000 from $21.3 million for the
comparable in period in 1999. This increase was due to an increase in personnel
required to service the company's expanding projects.
Sales and marketing
The Company's sales and marketing costs increased $2.6 million, or 72%, to $6.2
million for the three months ended September 30, 2000 from $3.2 million for the
comparable period in 1999. The increase in sales and marketing costs in absolute
dollar terms was primarily due to an increase in the number of personnel who
spend a portion of their time on sales and marketing activities and an increase
in spending on promotional activities.
General and administrative
The Company's general and administrative expenses increased $15.6 million, or
121%, to $28.5 million for the three months ended September 30, 2000 from $12.9
million for the comparable period in 1999. The increase in general and
administrative expenses was a result of the increase in the number of
non-billable employees and an increase in other types of general and
administrative expenses, such as salaries and bonuses, rent expense, equipment
rental, and depreciation necessary to maintain company growth and efficiency.
Amortization of intangibles
Amortization of intangibles for the Company was $2.3 million for the three
months ended September 30, 2000 compared to $.9 million for the comparable
period in 1999. This increase was due to the amortization of intangibles
resulting from the purchase of Qb in January 2000, the purchase of MediaLab in
August 2000, acquisitions closed in the second, third and fourth quarters of
1999, and the consideration paid to the principles of three companies
9
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acquired by the Company in previous years to amend their respective acquisition
agreements to remove the earn-out provisions contained therein.
Income Taxes
The effective income tax rate was 50% and 49% for the three months ended
September 30, 2000 and 1999, respectively, the effective tax rate for the
periods was primarily the result of non-tax deductible expenses, including
amortization of intangible and non-cash compensation expense.
Nine Months Ended September 30, 2000 Compared to Nine Months Ended September 30,
1999.
Revenues
The Company's revenues increased $100.3 million, or 85%, to $217.8 million for
the nine months ended September 30, 2000 from $117.5 million for the comparable
period in 1999. This increase in revenue was primarily due to the growth of the
Company's offices as a result of the increase in the number of projects,
an increase in the billing rates of the Company's employees, and revenues
related to the acquisitions that were completed in the last twelve months.
Project personnel costs
The Company's project personnel costs increase $51.4 million, or 91%, to $107.9
million for the nine months ended September 30, 2000 from $56.5 million for the
comparable period in 1999. This increase was due to an increase in personnel
required to service the company's increasing project and client base.
Sales and marketing
The Company's sales and marketing costs increased $6.6 million, or 77%, to $15.2
million for the nine months ended September 30, 2000 from $8.6 million for the
comparable period in 1999. The increase in sales and marketing costs was
primarily due to an increase in the number of personnel who spend a portion of
their time on sales and marketing activities and an increase in spending on
promotional activities.
General and administrative
The Company's general and administrative expenses increased $40.5 million, or
124%, to $73.2 million for the nine months ended September 30, 2000 from $32.8
million for the comparable period in 1999. The increase in general and
administrative expenses was a result of the increase in the number of non-
billable employees and an increase in other types of general and administrative
expenses, such as salaries and bonuses, rent expense, equipment rental, and
depreciation that are necessary expenses to maintain company growth and
efficiency.
Amortization of intangibles
Amortization of intangibles for the Company was $6.5 million for the nine months
ended September 30, 2000 compared to $2.5 million for the comparable period in
1999. This increase was due to the amortization of intangibles resulting from
the purchase of Qb in January 2000, Limage in May 2000, MediaLab in August 2000,
acquisitions closed in the second, third and fourth quarters of 1999, and the
consideration paid to the principles of six companies acquired by the Company in
previous years to amend their respective acquisition agreements to remove the
earn-out provisions contained therein.
Income Taxes
The effective income tax rate was 48% and 47% for the nine months ended
September 30, 2000 and 1999, respectively, the effective tax rate for the
periods was primarily the result of non-tax deductible expenses, including
amortization of intangibles and non-cash compensation expense.
10
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Liquidity and Capital Resources
Razorfish believes that cash generated by operations combined with the proceeds
of its initial public offering will be sufficient to meet its working capital
needs for the next twelve months.
The Company's net cash provided by operating activities was $2.6 million for the
nine months ended September 30, 2000 compared to net cash provided by operating
activities of $3.0 million for the nine months ended September 30, 1999. The
decrease in net cash used in operating activities during the period ended
September 30, 2000 when compared to the same period ending September 30, 1999
was mainly due to an increase in accounts receivable, prepaid expenses.
The Company's net cash used in investing activities was $20.1 million for the
nine months ended September 30, 2000 compared to $14.2 million for the nine
months ended September 30, 2000. Net cash used in investing activities for the
period ended September 30, 2000 was mainly due to capital expenditures of $14.2
million, and $4.9 million used for the acquisition of subsidiaries. Net cash
used in investing activities for the period ended September 30, 1999 was mainly
due to capital expenditures of $8.1 million, and $3.9 million used for
acquisitions net of cash acquired.
The Company's net cash provided by financing activities was $5.4 million for the
nine months ended September 30, 2000 compared to $99.4 million for the nine
months ended September 30, 1999. Net cash provided for the period ended
September 30, 2000 was mainly due to proceeds received from the exercise of
stock options of $5.5 million. Net cash provided from financing activities for
the period ended September 30, 1999 was mainly due to $77.1 million in proceeds
from the initial public offering and $25.3 in proceeds from the exercise of
Communicade's 10% option.
Capital expenditures, earn-out payments and rent expenses
Razorfish's capital expenditures for the period ended September 30, 2000 were
$14.2 million compared to $8.1 million for the comparable period in 1999. The
increase in capital expenditures during 2000 was due primarily to leasehold
improvements made to Razorfish's leased office space and to purchase computer
hardware and software and furniture and fixtures.
In February 2000, Razorfish issued an aggregate of 1,039,946 shares of Common
Stock, paid cash of $1.0 million, and agreed to issue 520,054 shares of Common
Stock for a total fair value of $72,323 to the former principals of Media,
Plastic, and CHBi in consideration for their agreement to amend their respective
acquisition agreements to remove the earn-out provisions contained therein. The
amounts associated with these transactions were accounted for as additional
purchase price and an adjustment to goodwill.
Currency fluctuation and the euro conversion
Razorfish does not believe that it is subject to material currency fluctuations
as a result of its international operations. Revenues from the operations of its
European subsidiaries are currently denominated primarily in the applicable
local currencies. Razorfish does not plan to repatriate such revenues to the
United States in the foreseeable future. However, no assurance can be given that
the quarterly results will not be impacted in the future, for financial
reporting purposes only, due to the conversion into dollars of non-dollar
denominated revenues.
Eleven of the fifteen member states of the European Union have agreed to adopt
the euro as their common legal currency. On January 1, 1999, these members
began the process of converting their native currencies to the euro, and on that
date the euro commenced trading on currency exchanges and became available for
non-cash transactions. For the period from January 1, 1999 to January 1, 2002,
both the euro and the native currencies will be legal tender in the
participating member states. During this period, the conversion rates for
currencies will be determined by a formula that has been established by the
European Commission. On January 1, 2002, new euro-denominated bills and coins
will be fully deployed and all native bills and coins will be withdrawn by July
1, 2002.
In addition, as of January 1, 1999, the new European Central Bank gained the
authority to direct monetary policy with respect to the euro, including money
supply and official interest rates for the euro. Some of the rules and
regulations with regard to the euro have yet to be promulgated and completed by
the European Commission.
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While the United Kingdom and Sweden, two of the countries in which Razorfish
operates, are members of the European Union, they are not participating in the
euro conversion; however, they may elect to convert to the euro at a later date.
Risks related to the conversion to the euro may not impact Razorfish directly,
but could have a materially adverse effect on its clients' businesses, which
could have an indirect effect on their demand for Razorfish's services.
Razorfish's management does not believe that the conversion to the euro will
have a material or adverse impact on its business.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards of derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. This statement is effective for all quarters of fiscal years
beginning after June 15, 1999, In July 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities--Deferral of the
Effective Date of FASB No. 133," which amends SFAS No. 133 effective for all
fiscal quarters of all fiscal years beginning after June 15, 2000. In June 2000,
the FASB issued SFAS No. 138 "Accounting for Certain Hedging Activities, an
amendment of FASB Statement No. 133," effective for all interim and annual
periods beginning after June 15, 2000. As indicated, SFAS No. 138 amends
accounting and reporting standards for certain derivative instruments and
certain hedging activities. The Company does not expect the adoption of these
standards to have a material effect on the Company's results of consolidated
operations, financial position, or cash flows.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements,"
which provides guidance related to revenue recognition based on interpretations
and practices followed by the SEC. SAB 101 was effective the first fiscal
quarter of fiscal years beginning after December 15, 1999 and requires companies
to report any changes in revenue recognition as a cumulative change in
accounting principle at the time of implementation in accordance with Accounting
Principles Board Opinion 20, "Accounting Changes". In June 2000, the SEC issued
SAB 101B, "Amendment: Revenue Recognition in Financial Statements," which
delayed implementation of SAB 101 until Razorfish's fourth fiscal quarter of
2000. Razorfish does not expect the implementation of SAB 101 to have a material
effect on its financial position or results of operations.
In March 2000, the Financial Accounting Standard Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation - an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 and among other issues clarifies
the following: the definition of an employee for purposes of applying APB
Opinion No. 25; the criteria for determining whether a plan qualifies as a
noncompensatory plan; the accounting consequence of various modifications to the
terms of previously fixed stock options or awards; and the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 cover specific events
that occurred after either December 15, 1998 or January 12, 2000, but certain
conclusions in FIN 44 cover specific events that occurred after either December
15, 1998 or January 12, 2000. Razorfish has adopted FIN 44 with no known
reportable changes in the Company's financial position or results of operations.
Item 3. Qualitative and Quantitave Disclosures about Market Risk - Not
applicable.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On March 17, 2000, a legal action was commenced against the Company by a former
consultant of a wholly owned subsidiary for, amongst other things, breach of
contract. The Company is reviewing the action and believes that the allegations
are baseless and without merit in law or fact. No assurance can be given,
however, that this matter will be resolved in the Company's favor.
On July 14, 2000, the Company was served with a complaint by IAM.com that
alleges that the Company did not fulfill its duties in connection with work
performed for IAM.com. The Company has sued IAM.com for recovery of monies owed
under the contract. The Company disputes IAM.com's allegations and believes that
IAM.com's action is without merit in law or fact. No assurances can be given,
however, that this matter will be resolved in the Company's favor.
12
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Item 2. CHANGE IN SECURITIES AND USE OF PROCEEDS -- Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES -- Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting ("Annual Meeting") of Stockholders of Razorfish was held on
July 6, 2000. The 82,138,814 shares of Common Stock ("Common Stock") present at
the Annual Meeting out of a then total of 94,161,724 shares outstanding and
entitled to vote acted as follows with respect to the following proposals:
Approved, by a vote of 81,750,315 shares of Common Stock for and 388,499 shares
against the election of Jeffrey A. Dachis as a director of Razorfish; 80,119,774
shares stock for and 2,019,040 shares against the election of Craig M. Kanarick
as a director of Razorfish, 80,131,972 shares of Common Stock for and 2,006,842
shares against the election of Michael S. Simo as a director of Razorfish,
80,397,049 shares of Common Stock for and 1,741,765 shares against the election
of Carter F. Bales as a director of Razorfish, 81,752,293 shares of Common Stock
for and 386,521 shares against Pat A. Loconto as a director of Razorfish. In
addition, no shares of Common Stock represented at the Meeting for other
purposes withheld or abstained from a response to this item.
Rejected, by a vote of 15,850,910 shares of Common Stock for and 36,053,598
against the Amendment of the 1999 Stock Incentive Plan to increase the number of
shares reserved for issuance under the 1999 Stock Incentive Plan by 14,778,100
shares to 21,902,912 shares. 60,824 shares abstained from voting on this Matter,
and holders of 30,173,482 shares represented at the meeting for other purposes
withheld a response on this item.
Item 5. OTHER INFORMATION -- None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger, dated as of August 10, 1999, by and
between Razorfish, Razorfish Merger Sub and i-Cube.(2)
3.1 Certificate of Incorporation of Razorfish, Inc. (the "Company"), as
amended.(2)
3.2 By-laws of Razorfish.(1)
4.1 Stockholders Agreement, dated as of October 1, 1998, among Razorfish,
Spray Ventures, Communicade, Jeffrey A. Dachis and Craig M. Kanarick.(1)
4.2 Amendment to Stockholders Agreement, dated February 3, 1999, among
Razorfish, Spray Ventures, Communicade, Jeffrey A. Dachis and Craig M.
Kanarick.(1)
4.6 Registration Rights Agreement, dated March 30, 1999, between Razorfish
and Communicade Inc.(1)
4.7 Specimen Common Stock Certificate of Razorfish.(1)
10.1 The Amended and Restated 1997 Stock Option and Incentive Plan.(1)
10.2 1999 Amended and Restated Stock Incentive Plan.(2)
10.3 Employment Agreement, dated September 18, 1996, between Razorfish and
Jeffrey A. Dachis.(1)
10.4 Non-competitive Agreement, dated September 18, 1996, between Razorfish
and Jeffrey A. Dachis.(1)
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10.5 Employment Agreement, dated September 18, 1996, between Razorfish and
Craig M. Kanarick.(1)
10.6 Non-competitive Agreement, dated September 18, 1996, between Razorfish
and Craig M. Kanrick.(1)
10.7 Employment Agreement, dated June 19, 1997, between Razorfish and
Jean-Philippe Maheu.(1)
10.8 Employment Agreement, dated June 1, 1997, between Razorfish and Evan
Orensten.(1)
10.9 Employment Agreement, dated October 1, 1998, between Razorfish and Por
Bystedt.(10)
10.10 Employment Agreement, dated October 1, 1998, between Razorfish and Jonas
Svensson.(1)
10.11 Employment Agreement, dated August 10, 1999, between Razorfish and
Michael Pehl.(4)
10.12 Letter Agreement, dated as of August 9, 1999, between Razorfish and
Lawrence P. Begley.(4)
10.13 Lease Agreement, dated October 28, 1996, between Razorfish and Man Yun
Real Estate Corporation.(1)
10.14 Lease Agreement, dated April 30, 1997, between Razorfish and Man Yun
Real Estate Corporation.(1)
10.15 Lease Agreement, dated December 23, 1998, between C.H.B.I. Razorfish
Limited and the Mayor and Commonality and Citizens of the City of
London.(1)
10.16 Lease Agreement, dated March 10, 1998, between J&R Bechelli and Alpha
Online, Inc., as amended by letter dated February 9, 1999.(1)
10.17 Lease Agreement No. 731 100, dated April 12, 1996, between Spray (f/k/a
Spray Interactive Media Agency AB) and Bojner Estate AB ("Bojner") and
the English translation thereof.(1)
10.18 Lease Agreement No. 741 100, dated September 30, 1997, between Spray
(f/k/a Spray Interactive Media Agency AB) and Bojner Estate AB
("Bojner") and the English translation thereof.(1)
10.19 Lease Contract No. 01009 001 024 ("Trygg-Hansa Lease"), dated April 30,
1998, between Spray and Trygg-Hansa ("Trygg-Hansa") and the English
translation thereof.(1)
10.20 Supplement No. 1, dated April 30, 1998, to Trygg-Hansa Lease and the
English translation thereof.(1)
10.21 Supplement No.2, dated August 18, 1998, to Trygg-Hansa Lease and the
English translation thereof.(1)
10.22 Personal Guarantee for Premises, dated April 29, 1998, made by Lars T.
Andersson and per Bystedt in favor of Trygg-Hansa with respect to Trygg-
Hansa Lease and the English translation thereof.(1)
10.23 Personal Guarantee for Premises, dated April 29, 1998, made by Johan
Ihrfelt and Jonas Svensson in favor of Trygg-Hansa with respect to
Trygg-Hansa Lease and the English translation thereof.(1)
10.24 Rent Contract Covering Business Premises, dated February 3, 1998,
between Spray Interactive Media AB and DEGI Deutsche Gesellschaft fur
Immobilienfonds mbH and the English translation thereof.(1)
10.25 Rental Agreement for Office Space No. 910539, dated April 25, 1997,
between Spray Interactive Media Oy and Valtion Kuenteistolaitos (State
real property Authority)/Uusimaa ("State Real Property Authority") and
the English translation thereof.(1)
10.26 Rental Agreement for Office Space No. 910539, dated May 14, 1997,
between Spray Interactive Media Oy and State Real Property Authority and
the English translation thereof.(1)
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10.27 Lease Contract, dated June 17, 1998, between Spray Geelmuyden, Kiese
A.S. and Kongensgate 2 ANS and the English translation thereof.(1)
10.28 Subscription and Exchange Agreement, dated as of October 1, 1998, among
Razorfish, Spray Ventures AB and Communicade.(1)
10.29 First Amendment of the Subscription and Exchange Agreement, dated
November 25, 1998, among Razorfish, Spray Ventures AB, Spray Network AB
and Communicade.(1)
10.30 Second Amendment to the Subscription and Exchange Agreement, dated
December 10, 1998, among Razorfish, Spray Ventures AB, Spray Network AB
and Communicade.(1)
10.31 Stock Purchase Agreement, dated as of October 1, 1998, among
Communicade, Jeffrey A. Dachis and Craig M. Kanarick.(1)
10.32 Stock Purchase Agreement, dated October 23, 1998, among Communicade and
Spray Ventures AB.(1)
10.33 Amendment to Stock Purchase Agreement, dated December 10, 1998, between
Communicade and Spray Ventures AB.(1)
10.34 Loan Agreement, dated September 18, 1996, between Razorfish and Omnicom
Finance Inc.(1)
10.35 Forms of Voting Agreements.(2)
10.36 Letter Agreement dated August 8, 1995 between i-Cube and Silicon Valley
Bank.(2)
10.37 Promissory Note dated August 8, 1998 between i-Cube and Silicon Valley
Bank.(2)
10.38 Commercial Security Agreement dated August 8, 1995 between i-Cube and
Silicon Valley Bank.(2)
10.39 Negative Pledge Agreement dated August 8, 1995 between i-Cube and
Silicon Valley Bank.(2)
10.40 Letter Agreement dated October 7, 1996 between i-Cube and Silicon Valley
Bank.(2)
10.41 Promissory Note dated July 31, 1997 between i-Cube and Silicon Valley
Bank.(2)
10.42 Loan Modification Agreements between Registrant and Silicon Valley Bank
dated August 6, 1996, August 7, 1996 and August 28, 1997,
respectively.(2)
10.43 Lease Agreement dated November 20, 1996 between i-Cube, RR&C Development
Company and Patrician Associates, Inc.(2)
10.44 Lease Agreement dated as of July 14, 1995 between i-Cube and Riverfront
Office Park Joint Venture.(2)
10.45 Amendment No. 1 to Lease Agreement dated as of July 14, 1995 between
i-Cube and Riverfront Office Park Joint Venture.(2)
10.46 Sublease dated as of June 19, 1995 between i-Cube and MathSoft Inc.(2)
18.1 Letter re: Resignation of Certifying Accountant.(3)
18.2 Letter re: Appointment of New Certifying Accountant.(5)
21.1 Subsidiaries of Razorfish.(4)
27.1 Financial Data Schedule.
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(1) Filed as an exhibit to Razorfish's Registration Statement on Form S-1 or
amendments thereto declared effective by the Securities and Exchange
Commission on April 26, 1999 (File No. 333-71043) and incorporated herein by
reference.
(2) Filed as an exhibit to Razorfish's Registration Statement on Form S-4 or
amendments thereto declared effective by the Securities and Exchange
Commission on October 1, 1999 (File No. 333-87031) and incorporated herein
by reference.
(3) Filed as an exhibit to Razorfish's Report on Form 8-K that was filed with
the Securities and Exchange Commission on June 30, 2000 and incorporated
herein by reference.
(4) Filed as an exhibit to Razorfish's Report on Form 10-K that was filed with
the Securities and Exchange Commission on March 30, 2000 and incorporated
herein by reference.
(5) Filed as an exhibit to Razorfish's Report on Form 8-K that was filed with
the Securities and Exchange Commission on July 25, 2000 and incorporated
herein by reference.
(b) Reports on Form 8-K:
On each of June 30, 2000 and July 25, 2000, the Company Filed forms 8-K to
report the resignation of PricewaterhouseCoopers as the Company's
Independent Certified Public Accountant and the appointment of Arthur
Andersen, LLP as the Company's Independent Certified Public Accountant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly cause this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of New York, state of New
York, on November 13, 2000.
RAZORFISH, INC.
By: /s/ Jeffrey A. Dachis
-----------------------------
Jeffrey A. Dachis
President and Chief Executive Officer
By: /s/ John J. Roberts
-----------------------------
John J. Roberts
Chief Financial Officer
(Principal Financial and Accounting
Officer)
16
