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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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<TABLE>
<C> <S>
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM __________TO __________
COMMISSION FILE NUMBER 0-25575
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@plan.inc
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TENNESSEE 62-1643381
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3 LANDMARK SQUARE, SUITE 400 06901
STAMFORD, CT (Zip Code)
(Address of principal executive offices)
</TABLE>
(203) 961-0340
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate 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, and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock of the latest practical date.
<TABLE>
<CAPTION>
CLASS OF COMMON STOCK OUTSTANDING AT APRIL 30, 2000
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<S> <C>
Voting common stock, no par value 11,231,300 shares
</TABLE>
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@PLAN.INC
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Balance Sheets as of March 31, 2000 (unaudited) and 2
December 31, 1999 (audited)
Statements of Operations for the three months ended
March 31, 2000 and March 31, 1999 (unaudited) 3
Statements of Cash Flows for the three months ended
March 31, 2000 and March 31, 1999 (unaudited) 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 13
Part II. - Other Information
Item 2. Changes in Securities and Use of Proceeds 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
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@PLAN.INC
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
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(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 33,374,984 $ 34,817,991
Accounts receivable, net of allowance
of $214,000, and $164,000, respectively:
Billed 2,703,753 2,214,834
Unbilled 276,607 181,432
Prepaid expenses and other 737,442 635,356
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Total current assets 37,092,786 37,849,613
Property and equipment, net 312,858 260,372
Software development costs, net 561,270 551,545
Other assets 408,497 460,823
------------ ------------
Total assets $ 38,375,411 $ 39,122,353
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 741,937 $ 881,041
Accrued liabilities 903,720 956,447
Deferred revenue 2,826,882 2,452,214
------------ ------------
Total current liabilities 4,472,539 4,289,702
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Shareholders' equity (deficit):
Preferred Stock, no par value,
10,000,000 shares
authorized; no shares issued
and outstanding, respectively -- --
Common stock, no par value,
50,000,000 shares authorized;
11,231,300 and 11,205,700 shares
issued and outstanding, respectively 41,760,501 41,730,405
Additional paid-in capital 1,855,511 1,855,511
Accumulated deficit (9,713,140) (8,753,265)
------------ ------------
Total shareholders' equity 33,902,872 34,832,651
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Total liabilities and shareholders' equity $ 38,375,411 $ 39,122,353
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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@PLAN.INC
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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2000 1999
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<S> <C> <C>
Revenues $ 2,835,298 $ 1,337,122
Costs and expenses:
Product costs 2,131,675 740,480
Selling and marketing 1,341,068 539,160
General and administrative 782,583 402,750
Compensation expense -- 30,060
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Total costs and expenses 4,255,326 1,712,450
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Loss from operations (1,420,028) (375,328)
Interest income 478,777 36,730
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Net loss before income taxes (941,251) (338,598)
Income tax provision 18,624 3,300
------------ -----------
Net loss $ (959,875) $ (341,898)
============ ===========
Basic and diluted loss per share $ (0.09) $ (0.38)
============ ===========
Weighted average shares outstanding 11,221,195 907,200
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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@PLAN.INC
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net loss $ (959,875) $ (341,898)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Depreciation and amortization 173,876 139,153
Provision for doubtful accounts 50,000 75,000
Non cash charges -- 30,060
Changes in operating assets and liabilities:
Increase in accounts receivable (634,094) (471,603)
Increase in prepaid expenses and other (102,086) (151,133)
Decrease (increase) in other assets 52,326 (6,660)
(Decrease) increase in accounts payable (139,104) 29,764
Decrease in accrued liabilities (52,727) (168,911)
Increase in deferred revenue 374,668 467,872
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Net cash used in operating activities (1,237,016) (398,356)
Cash flows from investing activities:
Purchases of equipment (89,767) (16,455)
Software development costs (146,320) (110,908)
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Net cash used in investing activities (236,087) (127,363)
Cash flows from financing activities:
Proceeds from issuance
of common stock, net 30,096 --
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Net cash provided by
financing activities 30,096 --
------------ -----------
Net change in cash and cash equivalents (1,443,007) (525,719)
Cash and cash equivalents
at beginning of period 34,817,991 3,682,576
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Cash and cash equivalents
at end of period $ 33,374,984 $ 3,156,857
============ ===========
Supplemental information:
Cash paid for income taxes $ 18,624 $ 3,300
</TABLE>
The accompanying notes are an integral part of these financial statements.
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@PLAN.INC
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The financial information as of March 31, 2000 and for the three months
ended March 31, 1999 and 2000 is unaudited, but includes all adjustments,
consisting only of normal recurring adjustments, that we consider necessary for
a fair presentation of our financial position at March 31, 2000, and our
operations and cash flows for the three months ended March 31, 1999 and 2000.
Operating results for the three months ended March 31, 2000 are not necessarily
indicative of results that may be expected for the entire year. The financial
statements included herein have been prepared in accordance with generally
accepted accounting principles and the instructions of Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These financial
statements should be read in conjunction with our audited financial statements
for the year ended December 31, 1999, which were included as part of our Annual
Report on Form 10-K.
2. GENERAL:
@plan.inc was incorporated in the State of Tennessee in May 1996. We
provide target market research planning systems for Internet advertisers,
advertising agencies, Web publishers, online retailers and consumer brand
marketers. Our internally developed systems, which our clients access through
our Web site, combine our databases of consumer lifestyle, product preference
and demographic data with technology that enables our clients to perform queries
and searches to plan campaigns and strategies.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
REVENUE RECOGNITION
We provide target market research planning systems to our clients on a
renewable subscription basis. We recognize revenue ratably over the contract
period, which is generally twelve months. We bill our clients for our services
based on terms of the contracts, which may not coincide with criteria required
for revenue recognition.
On the accompanying balance sheets, deferred revenue represents amounts
invoiced prior to rendering our services while unbilled receivables represents
the value of services rendered prior to being invoiced. Substantially all of the
deferred and unbilled revenue will be earned and billed, respectively, within
twelve months of the respective period ends.
Upon signing a contract, our sales representatives become eligible for
a commission. These commissions are paid at the time of the contract signing.
For financial reporting purposes, we capitalize these commissions as a component
of prepaid expenses and amortize these amounts over the lives of the related
contracts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand and all investments in
highly liquid instruments purchased with original maturities of three months or
less. Funds in excess of operating cash needs are maintained in a money market
fund, which may exceed the amount insured by the Federal Deposit Insurance
Corporation.
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PROPERTY AND EQUIPMENT
Property and equipment is stated at cost less accumulated depreciation
and amortization. Property and equipment consists of computer equipment,
software, furniture and fixtures and leasehold improvements. Computer equipment,
software, furniture and fixtures are depreciated using the straight-line method
over their useful lives that range from 3 to 5 years. Leasehold improvements are
amortized over the term of the lease.
SOFTWARE DEVELOPMENT COSTS
We capitalize direct costs relating to our computer software
development upon the establishment of technological feasibility. Until our
products reach technological feasibility, all costs related to development
efforts are expensed as a component of product costs. Software development
costs, subsequent to technological feasibility and prior to general release,
have been capitalized and are reported at the lower of unamortized cost or net
realizable value. We amortize capitalized software development costs on a
straight-line basis for periods ranging from one to three years. As of March 31,
2000 and December 31, 1999, software development costs are as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
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(UNAUDITED)
<S> <C> <C>
Software development costs $ 1,338,022 $ 1,191,702
Less: Accumulated depreciation (776,752) (640,157)
----------- -----------
$ 561,270 $ 551,545
=========== ===========
</TABLE>
We periodically review our software development costs and property and
equipment for any potential impairments. We consider undiscounted cash flows,
future operating results, trends or other relevant information in assessing
whether the carrying value of our assets is recoverable. At March 31, 2000, we
do not believe that any of our assets are impaired.
INCOME TAXES
We recognize deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized.
STOCK-BASED COMPENSATION
We account for our stock-based compensation to our employees by
recognizing compensation expense for the difference between the estimated fair
value of our stock at the date of grant and the exercise price of the granted
stock. Stock-based grants issued to non-employees are recorded at either the
fair value of the services provided or the fair value of the stock issued, as
determined using the Black-Scholes model.
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USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires us to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. These assumptions also affect the reported amounts of
revenue and expenses during the reporting periods. Actual results could differ
from those estimates and assumptions.
STOCK-SPLIT
The accompanying financial statements give retroactive effect to a 1.8
for 1 stock-split that was approved by our Board of Directors on March 10, 1999.
4. BASIC AND DILUTED NET LOSS PER SHARE
Basic loss per share amounts are computed by dividing the net loss by
the weighted average number of shares of common stock outstanding during the
period. Diluted loss per share is computed by dividing the net loss by the
weighted average number of shares of common stock outstanding during the period
plus the effects of any potentially dilutive securities. In the accompanying
statements of operations, diluted loss per share does not include the effects of
potentially dilutive securities for all periods presented as they would have
been anti-dilutive in years in which a loss is reported.
The following summarizes the securities outstanding which are excluded
from the loss per share calculation as amounts would have an anti-dilutive
effect.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
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(UNAUDITED)
<S> <C> <C>
Stock options 2,281,606 1,852,740
Warrants 200,000 --
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Total 2,481,606 1,852,740
========= =========
</TABLE>
5. EQUITY TRANSACTIONS:
In May 1999, we completed an initial public offering of our common
stock. We sold 2,500,000 shares of our common stock at an initial offering price
of $14.00 per share resulting in proceeds of $31.7 million, net of underwriting
discounts and offering expenses.
In 1996 and 1997, we issued a total of 448,000 shares of Series A
preferred stock and 2,016,000 shares of Series B preferred stock at a purchase
price of $1.00 and $2.00 per share, respectively. In 1998, we issued 1,725,667
shares of Series C preferred stock at a purchase price of $3.00 per share. Upon
the closing of the initial public offering, all outstanding shares of Series A,
B and C Preferred Stock were converted into 806,400 shares, 3,628,800 shares and
3,106,200 shares of common stock, respectively.
Simultaneous with the closing of our initial public offering, a
director and an officer and all of the preferred shareholders received warrants
to purchase an aggregate of 200,000 shares of common stock. Of these warrants,
warrants to purchase 25,000 shares of common stock were granted to each of the
director and officer. The preferred shareholders, including the director and
officer, received a pro rata
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portion of the remaining 150,000 warrants. These warrants are exercisable for
seven years.
We accounted for these warrants at the time of issuance as follows:
- For warrants issued to the holders of our preferred stock, we
recorded the value of these warrants as a dividend to these
shareholders on the date of grant. This dividend increased our
accumulated deficit but had no effect on reported net income
(loss). The value of this dividend was $1.3 million
(unaudited) which was determined by using the Black-Scholes
model with the following assumptions:
- risk free interest rate of 5.3%,
- expected dividend yield of 0%,
- expected life of 5.0 years and
- expected volatility of 75%.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other sections of this Quarterly Report contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include, but are
not limited to, statements about our plans, objectives, expectations and
intentions and other statements contained in this prospectus that are not
historical facts. When used, the words "expect,""anticipate," "intent,""plan,"
"believe," "estimate" and similar expressions are generally intended to identify
forward-looking statements. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements, including:
- market acceptance of the Internet as an advertising medium;
- the continued development of the electronic commerce market;
- market acceptance of our products and services;
- our limited operating history;
- our history of losses and expectation of continued losses;
- our dependence on our relationship with The Gallup
Organization for the collection of data;
- our ability to manage our rapid growth;
- intense competition in our market;
- our ability to attract, retain and train qualified sales,
client service and other personnel;
- our ability to timely collect, process, store and deliver
accurate data;
- our ability to develop and introduce new products;
- the unpredictability of our financial results and expected
fluctuations in our quarterly results;
- variations in product or client mix;
- possible technical difficulties or service interruptions;
- the magnitude and timing of strategic pricing changes,
marketing decisions, product development costs and possible
acquisitions;
- our ability and relevant third parties' ability to achieve
year 2000 readiness; and
- other risk factors described in the "Risk Factors" section of
the Company's Registration Statement on Form S-1 (File no.
333-74507), which was filed with the Securities and Exchange
Commission on May 17, 1999, and our form 10-K for the year
ended December 31, 1999.
OVERVIEW
We were founded in May 1996. During the period from May 1996 to
December 31, 1996, our inception period, we had no revenues and were primarily
engaged in the development and planning of our software and survey research
infrastructures. In June 1997, we introduced our first product system, the @plan
Gutenberg Advertising System. Since 1997, subscribers to this system have
included Internet advertisers,
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advertising agencies and Web publishers and, to a lesser extent, online
retailers and consumer brand marketers. During 1997, we continued to build our
sales and operations staff and during 1998, our first full year of sales, we
continued to grow our client subscriber base, develop new products, and opened a
satellite office in San Francisco, California to service our existing West Coast
clients and to expand our client base in this market. In December 1998, we
introduced the @plan Kepler E-Business System specifically designed for online
retailers and consumer brand marketers. In March 2000, we launched our first
highly targeted vertical market research system which focuses on the automotive,
travel and merchandising e-commerce sector.
We derive all of our revenues from the sale of subscriptions to our
systems. The subscription contracts are generally non-cancelable for a period of
one year and most automatically renew unless we receive notice of termination
from the client prior to the anniversary date. Clients typically pay contract
fees on an annual, quarterly or monthly basis which are recorded as deferred
revenue until the revenue is recognized. Revenue is recognized on a straight
line basis beginning over the non-cancelable contract period, generally 12
months. Upon renewal, many of the subscription rates increase automatically in
accordance with contract provisions. These automatic increases are generally
higher in the first two renewal years than in subsequent renewal years where the
rate adjustment is based on increases in the Consumer Price Index, or CPI. We
have experienced a contract renewal rate in excess of 90% from inception through
March 31, 2000. The renewal rate is not necessarily indicative of the rate of
future retention of our revenue base.
One measure of the volume of our business is "contract value" which
represents the annualized value of all contracts in effect at a given point in
time, without regard to the duration of contracts then outstanding and without
deducting revenue already recognized under these contracts. Our contract value
was $5.9 million at March 31, 1999 and $12.3 million at March 31, 2000. As of
March 31, 2000, we have recognized $5.6 million of revenues of the $12.3 million
in contract value.
Our revenues and operating margins will fluctuate due, in part, to
product and customer mix. Annual subscriptions to the @plan Kepler E-Business
System are typically priced higher than annual subscriptions to the @plan
Gutenberg Advertising System. Moreover, annual subscription pricing and renewal
pricing are often negotiated and may vary based on the volume of subscriptions
being sold to the client. Variations in product or client mix could cause our
revenue and operating results to fluctuate on a quarterly or annual basis.
Product costs consist primarily of amounts paid to The Gallup
Organization for quarterly collection of data used in our market research
systems. From time to time we will engage Gallup on a case-by-case basis to
collect additional data. In the past, these additional engagements have caused
our data collection costs to fluctuate from quarter to quarter, and we expect
quarterly data collection costs to continue to fluctuate as we plan to continue
to use Gallup for additional data collection. Product costs will also increase
during the remainder of 2000 and in future periods as we continue to develop
additional highly targeted vertical market research systems.
Also included in product costs are software development costs which
consist primarily of the amortization of capitalized software development costs
and, to a lesser extent, other non-capitalized technology expenses such as Web
site maintenance. Software development costs represent direct expenses incurred
to improve or enhance our systems, including increasing access speeds, designing
new user interfaces and developing new system modules. As of March 31, 2000, we
had approximately $561,000 in capitalized software development costs which will
be amortized and expensed as product costs over the next one to three years. See
note 3 of the notes to our financial statements for an explanation of the
accounting for our software development costs.
We have incurred significant losses since inception and as of March 31,
2000, we had an accumulated deficit of $9.7 million. Our net losses and
accumulated deficit resulted from our lack of substantial revenues and the
significant costs incurred in the development of our systems and in the
establishment of our operations
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infrastructure. Additionally, our accumulated deficit was affected by a $1.3
million dividend in connection with warrants issued to the holders of our
preferred stock upon the consummation of our initial public offering. We intend
to continue to make significant investments in the development of new products,
the enhancement of our current systems and in the expansion of our sales force.
As a result, we expect to incur additional losses at least through December 31,
2000.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999
Revenues. Total revenues increased 112% from $1.3 million for the three
months ended March 31, 1999 to $2.8 million for the three months ended March 31,
2000. The increase in revenues resulted principally from an increase of
approximately $933,000 in recurring revenues from the retention of existing
clients. These renewals generally reflect higher subscription rates than those
in place during the initial term of these contracts, in accordance with contract
provisions. Additionally, we experienced increased revenues of approximately
$565,000 from subscription sales to new clients, including revenues from our
@plan Kepler E-Business System launched in December 1998. During the quarter, we
had no revenues from our vertical system as it was not launched until March
2000.
Product Costs. Product costs consist primarily of amounts paid to
Gallup for quarterly collection of data used in our market research systems and
software development costs. Product costs increased 188% from approximately
$740,000 for the three months ended March 31, 1999 to $2.1 million for the three
months ended March 31, 2000. This increase was due primarily to an increase of
$1.2 million in additional data collection costs and software development costs
associated with the introduction of our first vertical target market planning
system. Consistent with our strategy, we are currently developing additional
highly targeted vertical market research systems. As a result, we anticipate
continuing to incur increased data collection and software costs during the
remainder of 2000 and in future periods.
Selling and Marketing. Selling and marketing costs consist primarily of
the personnel expenses associated with the sale and service of our systems,
including commissions, public relations costs and marketing expenses. Selling
and marketing costs increased 149% from approximately $539,000 for the three
months ended March 31, 1999 to $1.3 million for the three months ended March 31,
2000. This increase was due largely to the expansion of our sales force and
client service team, commissions associated with increased sales, and to a
lesser extent, company branding initiatives. Selling and marketing costs will
increase as we continue to expand our sales force and introduce new products.
General and Administrative. General and administrative expenses consist
primarily of salaries and related costs for our administrative, financial and
information technology personnel, professional fees, occupancy costs and general
office expenses. General and administrative expenses increased 94% from
approximately $433,000 for the three months ended March 31, 1999 as compared to
approximately $783,000 for the three months ended March 31, 2000. This increase
was primarily due to the increase in personnel needed to support our expanding
operations and related costs as well as costs related to being a public company
including directors' and officers' liability insurance. We anticipate hiring
additional personnel and expect general and administrative expenses will
increase in future periods.
Interest income. Interest income consists of interest on our cash and
cash equivalents. Interest income was approximately $37,000 for the three months
ended March 31, 1999 as compared to $479,000 for the three months ended March
31, 2000. The increase in interest income was primarily attributable to the
higher cash balances during the three months ended March 31, 2000 as a result of
net proceeds from our sale of common stock in May 1999.
Net loss. Our net loss increased 181% from approximately $342,000 for
the three months ended March 31, 1999 to approximately $960,000 for the three
months ended March 31, 2000. This increase was primarily attributable to an
increase of
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$1.2 million in products costs incurred during the three months ended March 31,
2000 in connection with the development of our vertical systems.
Loss per share. The loss per share amounts for the three months ended
March 31, 2000 was $.09. See Note 4 of Notes to Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, we had $33.4 million in cash and cash equivalents
as compared to $3.2 million as of March 31, 1999. In May 1999, we consummated
our initial public offering by selling 2,500,000 shares of Common Stock at a
price of $14.00 per share. Net proceeds from the IPO, net of underwriting
discounts and offering costs, were approximately $31.7 million. Prior to May
1999, we financed our operations primarily through the private placement of
preferred stock. Net proceeds from the sale of convertible preferred stock from
inception through March 31, 2000 totaled $9.6 million.
Net cash used in operating activities was approximately $1.2 million
for the three months ended March 31, 2000. Cash used in operating activities was
primarily attributable to net losses and increases in accounts receivable offset
by increases in deferred revenue. For the three months ended March 31, 1999, net
cash used in operating activities was $398,000 which was primarily attributable
to net operating losses and increases in accounts receivable offset partially by
increases in deferred revenue and accrued expenses.
Deferred revenue was $2.8 million at March 31, 2000 as compared to $1.6
million at March 31, 1999. Deferred revenue represents amounts invoiced under
contract prior to our rendering of services to the client. Unbilled accounts
receivable was approximately $277,000 at March 31, 2000 and approximately
$241,000 at March 31, 1999. Unbilled accounts receivable represents the value of
services provided prior to invoicing.
Net cash used in investing activities was approximately $236,000 for
the three months ended March 31, 2000 and approximately $127,000 for the three
months ended March 31, 2000. Cash used in investing activities in each period
was attributed to software development costs and purchases of property and
equipment.
Net cash provided by financing activities was approximately $30,000 for
the three months ended March 31, 2000. Cash provided by financing activities was
primarily attributable to the proceeds from the sale of common stock, net of
issuance costs. For the three months ended March 31, 1999, there was no net cash
provided by financing activities.
We believe that our existing cash and cash equivalents will be
sufficient to meet our working capital and capital expenditure requirements
through 2001. Thereafter, we may be required to raise additional funds. If
additional funds are raised through the issuance of equity securities, our
shareholders may experience significant dilution. There can be no assurance that
additional funding, if needed, will be available on attractive terms, or at all.
If financing is not available when required or is not available on acceptable
terms, we may be unable to develop or enhance our products or services. The
failure to raise capital when needed could harm our business, operating results
and financial condition.
COMMITMENTS AND CONTINGENCIES
We have no material commitments other than our lease for our corporate
headquarters and obligations under our agreement with Gallup. Our agreement with
Gallup provides us with initial baseline data and quarterly tracking data
collection. The agreement has a one-year term with nine successive one-year
renewals and is cancelable by us upon 90-days' written notice prior to an
anniversary date. The annual renewal provides for CPI increases to the
associated fees. During the third quarter of 1999 and the first quarter of 2000,
we entered into additional agreements with Gallup to provide us with initial
baseline data and quarterly tracking data collection for our targeted vertical
market research systems. These
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agreements extend through August 2009 and September 2006, respectively and are
cancelable by us upon 90-days' written notice prior to each anniversary date.
Consistent with our growth strategy, we anticipate incurring increased data
collection and software costs during the remainder of 2000 and in future periods
as we continue to develop additional products.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products are
coded to accept or recognize only two digit entries in the date code field.
These systems and software products will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and software may need to be upgraded to comply with Year 2000
requirements or risk system failure or miscalculations causing disruptions of
normal business activities.
In order to minimize or eliminate the effect of the Year 2000 risk on
our business systems and applications, we identified, evaluated, implemented and
tested changes to our computer systems, applications and software necessary to
achieve Year 2000 compliance. Our computer systems and equipment successfully
transitioned to the Year 2000 with no significant issues. We continue to monitor
problems that could surface at key dates or events in the future. We do not
anticipate any significant problems related to these events. We are also not
aware of any material Year 2000 problems with our suppliers or vendors.
We have not incurred any incremental costs in connection with
identifying, evaluation or addressing Year 2000 compliance issues. Most of our
expenses have related to, and are expected to continue to relate to, the
operating costs associated with time spent by employees in the evaluation
process and Year 2000 compliance matters generally. At this time, we do not
anticipate that such expenses will be material.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The carrying values of financial instruments including cash and cash
equivalents, accounts receivable, accounts payable and notes payable,
approximate fair value because of the short maturity of these instruments.
Our results of operations, financial position, and cash flows are not
materially affected by changes in the relative values of non-U.S. currencies to
the U.S. dollar. We do not use derivative financial instruments to limit our
foreign currency risk exposure.
13
<PAGE> 15
Part II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On May 20, 1999, our Registration Statement on Form S-1 (File
No. 333-74507) was declared effective by the SEC. Pursuant to the Registration
Statement we registered and sold 2,500,000 shares of Common Stock at a price of
$14.00 per share. The managing underwriters were Hambrecht and Quist. The
aggregate price of the amount offered and sold was $35,000,000.
The following sets forth the Company's reasonable estimates of the
total expenses incurred by the Company, from the effective date of the
Registration Statement through March 31, 2000, in connection with the issuance
and distribution of the securities registered.
<TABLE>
<S> <C>
(i) underwriting discounts and commissions $2,450,000
(ii) other expenses 880,000
----------
Total $3,330,000
</TABLE>
The net offering proceeds to the Company after deducting the total
expenses set forth above were approximately $31,670,000.
From the effective date of the Registration Statement through March
31, 2000, we did not use the net offering proceeds to fund general operating
expenses.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibit is attached hereto.
27.1 Financial Data Schedule (First Quarter 2000).
(b) The Company filed no current report on Form 8-K during the
quarter ended March 31, 2000.
14
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
@plan.Inc.
DATE: May 15, 2000 BY: /s/ Mark K. Wright
----------------------------------------
Mark K. Wright,
Chairman and Chief Executive
Officer (principal executive officer)
DATE: May 15, 2000 BY: /s/ Nancy A. Lazaros
----------------------------------------
Nancy A. Lazaros,
Senior Vice President and Chief
Financial Officer (principal financial
and accounting officer)
15
<PAGE> 17
EXHIBIT INDEX
Item Description
- ---- -----------
27.1 Financial Data Schedule (First Quarter 2000)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF @PLAN, INC. FOR THE THREE MONTHS ENDED MARCH 31, 2000
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 33,374,984
<SECURITIES> 0
<RECEIVABLES> 3,194,360
<ALLOWANCES> (214,000)
<INVENTORY> 0
<CURRENT-ASSETS> 37,092,786
<PP&E> 559,834
<DEPRECIATION> 246,977
<TOTAL-ASSETS> 38,375,411
<CURRENT-LIABILITIES> 4,472,538
<BONDS> 0
0
0
<COMMON> 41,760,501
<OTHER-SE> (7,857,628)
<TOTAL-LIABILITY-AND-EQUITY> 38,375,411
<SALES> 2,835,298
<TOTAL-REVENUES> 2,835,298
<CGS> 2,131,675
<TOTAL-COSTS> 4,255,326
<OTHER-EXPENSES> 2,123,651
<LOSS-PROVISION> 214,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (941,251)
<INCOME-TAX> 18,624
<INCOME-CONTINUING> (959,875)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (959,875)
<EPS-BASIC> (.09)
<EPS-DILUTED> (.09)
</TABLE>
