<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
<TABLE>
<S> <C>
X Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to____________
</TABLE>
Commission File No: 0-28703
DEMANDSTAR.COM, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 59-3590973
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
1200 PINE ISLAND ROAD
SUITE 600
PLANTATION, FLORIDA 33324
(954) 577-3860
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AS OF AUGUST 7, 2000
----- --------------------------------
<S> <C>
Common Stock
Par value $.0001 per share 7,638,480
</TABLE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEMANDSTAR.COM, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
DEMANDSTAR.COM, INC.
(THE COMPANY)
-------------------------------------
DECEMBER 31, 1999 JUNE 30, 2000
----------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 127,733 $ 4,723,839
Accounts receivable 8,593 27,857
Prepaid assets 92,844 452,538
----------- -----------
Total current assets 229,170 5,204,234
----------- -----------
PROPERTY AND EQUIPMENT, net 108,855 529,292
----------- -----------
OTHER ASSETS:
Deposits 8,900 26,900
Customer lists and vendor database, net 245,268 195,552
Goodwill, net 719,198 573,415
----------- -----------
Total other assets 973,366 795,867
----------- -----------
Total assets $ 1,311,391 $ 6,529,393
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 191,558 $ 771,817
Due to HTE - 205,017
Current portion of note payable 200,000 200,000
Deferred revenue 139,252 425,974
----------- -----------
Total current liabilities 530,810 1,602,808
----------- -----------
NOTE PAYABLE, less current portion 1,106,885 1,550,000
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock 125 764
Preferred stock - 1,500,000
Additional paid-in capital 812,413 6,698,711
Accumulated deficit (1,138,842) (4,822,890)
----------- -----------
Total shareholders' (deficit) equity (326,304) 3,376,585
----------- -----------
Total liabilities and shareholders'
(deficit) equity $ 1,311,391 $ 6,529,393
=========== ===========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
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<PAGE> 3
THE PURCHASE METHOD OF ACCOUNTING WAS USED TO RECORD ASSETS ACQUIRED AND
LIABILITIES ASSUMED BY THE COMPANY. SUCH ACCOUNTING RESULTS IN INCREASED
AMORTIZATION REPORTED IN FUTURE PERIODS. ACCORDINGLY, THE ACCOMPANYING FINANCIAL
STATEMENTS OF THE PREDECESSOR AND THE COMPANY ARE NOT COMPARABLE IN ALL MATERIAL
RESPECTS SINCE THOSE FINANCIAL STATEMENTS REPORT RESULTS OF OPERATIONS AND CASH
FLOWS OF THESE TWO SEPARATE ENTITIES.
DEMANDSTAR.COM, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
(THE PREDECESSOR)
-------------------------------- (THE COMPANY)
INFORMATION ON INFORMATION ON -----------------------------------------------------------------
DEMAND, INC. DEMAND, INC. HTE-IOD, INC.
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FROM FROM FROM DEMANDSTAR.COM, INC. DEMANDSTAR.COM, INC.
JANUARY 1, 1999 APRIL 1, 1999 JUNE 1, 1999 FOR THE FOR THE
TO TO TO THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 17, 1999 JUNE 17, 1999 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 2000
--------------- -------------- ------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
REVENUE $ 132,135 $ 69,763 $ 97 $ 145,695 $ 228,596
OPERATING EXPENSES
Marketing and
advertising 15,866 5,392 6,750 1,264,391 1,776,044
Research and development 136,279 63,477 566 167,207 237,459
General and
administrative 250,349 106,475 17,742 771,498 1,618,452
Depreciation and
amortization -- -- -- 121,368 230,523
--------- --------- -------- ----------- -----------
Total operating
expenses 402,494 175,344 25,058 2,324,464 3,862,478
--------- --------- -------- ----------- -----------
OPERATING LOSS (270,359) (105,581) (24,961) (2,178,769) (3,633,882)
INTEREST EXPENSE, net -- -- -- 20,653 50,166
--------- --------- -------- ----------- -----------
LOSS BEFORE INCOME TAX
BENEFIT (270,359) (105,581) (24,961) (2,199,422) (3,684,048)
INCOME TAX BENEFIT -- -- -- -- --
--------- --------- -------- ----------- -----------
NET LOSS $(270,359) $(105,581) $(24,961) $(2,199,422) $(3,684,048)
========= ========= ======== =========== ===========
BASIC AND DILUTED LOSS PER
COMMON SHARE $ (0.40) $ (1.08)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,537,135 3,398,315
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 4
THE PURCHASE METHOD OF ACCOUNTING WAS USED TO RECORD ASSETS ACQUIRED AND
LIABILITIES ASSUMED BY THE COMPANY. SUCH ACCOUNTING RESULTS IN INCREASED
AMORTIZATION REPORTED IN FUTURE PERIODS. ACCORDINGLY, THE ACCOMPANYING FINANCIAL
STATEMENTS OF THE PREDECESSOR AND THE COMPANY ARE NOT COMPARABLE IN ALL MATERIAL
RESPECTS SINCE THOSE FINANCIAL STATEMENTS REPORT RESULTS OF OPERATIONS AND CASH
FLOWS OF THESE TWO SEPARATE ENTITIES.
DEMANDSTAR.COM, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(THE
PREDECESSOR)
--------------
INFORMATION ON
DEMAND, INC. (THE COMPANY)
FOR THE PERIOD ------------------------------------------
FROM HTE-IOD, INC.
JANUARY 1, FOR THE PERIOD FROM DEMANDSTAR.COM, INC.
1999 TO JUNE 1, 1999 TO FOR THE SIX MONTHS
JUNE 17, 1999 JUNE 30, 1999 ENDED JUNE 30, 2000
-------------- ------------------- --------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income loss $(270,359) $ (24,961) $(3,684,048)
Adjustments to reconcile net loss to net
cash used in operating activities-
Depreciation and amortization -- -- 230,524
Compensation from stock transactions -- -- 26,842
Changes in operating assets and
liabilities-
Increase in accounts receivable (2,663) -- (19,264)
Increase in prepaid assets -- -- (359,694)
Increase in deposits -- -- (18,000)
Increase in accounts payable and accrued
liabilities 146,634 25,058 580,259
Increase in due to HTE -- 200,000 205,017
Increase in deferred revenue 66,232 4,763 286,722
--------- ----------- -----------
Net cash (used in) provided by
operating activities (60,156) 204,860 (2,751,642)
--------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition -- (1,000,000) --
Capital expenditures (3,064) -- (455,462)
--------- ----------- -----------
Net cash used in investing activities (3,064) (1,000,000) (455,462)
--------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Contributions of capital 50,441 -- --
Proceeds from issuance of common stock, net
of offering costs -- 800,000 5,860,095
Proceeds from issuance of Series A preferred
stock -- -- 1,500,000
Borrowings under note payable -- -- 443,115
--------- ----------- -----------
Net cash provided by financing
activities 50,441 800,000 7,803,210
--------- ----------- -----------
NET (DECREASE) INCREASE IN CASH (12,779) 4,860 4,596,106
CASH, beginning of period 17,564 -- 127,733
--------- ----------- -----------
CASH, end of period $ 4,785 $ 4,860 $ 4,723,839
========= =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 5
DEMANDSTAR.COM, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 2000
The financial statements included herein have been prepared by DemandStar.com,
Inc. (the "Company" or "DemandStar"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. These
condensed financial statements should be read in conjunction with the financial
statements for the year ended December 31, 1999, and the notes thereto, included
in the Company's registration statement on Form S-1, as amended (Registration
No. 333-93445).
The unaudited financial statements included herein include normal recurring
adjustments and reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of such financial statements. The interim
results are not indicative of results for a full year.
Information On Demand, Inc. (the "Predecessor") was formed as a Florida
corporation in June 1997 and commenced operations in January 1998. The
Predecessor was an S corporation. On June 1, 1999, H.T.E., Inc. ("HTE"), formed
a wholly-owned subsidiary, HTE-IOD, Inc., by purchasing 1,250,000 shares for
$800,000 and advancing $200,000 of cash. On June 18, 1999, HTE-IOD, Inc.
purchased the business and certain net assets of the Predecessor. On August 23,
1999, HTE-IOD, Inc. changed its name to Information On Demand, Inc. and on
December 21, 1999, its name was changed to DemandStar.com, Inc. The registration
statement on Form S-1 filed by the Securities and Exchange Commission (the
"SEC") in connection with the Company's public rights offering (File No.
333-93445), as amended, was declared effective by the SEC on March 27, 2000 and
expired on May 1, 2000. The offering period for the rights offering commenced on
March 27, 2000 and expired on May 1, 2000, with the offering closing May 5,
2000. Each right was exercisable for one share of common stock at an exercise
price of $1.00 per share. Upon closing, rights to purchase an aggregate of
4,998,050 registered shares of common stock and an aggregate of 1,376,030
restricted shares of common stock were exercised for an aggregate purchase price
of $6,374,080. After deducting reasonable estimated total expenses incurred in
connection with the offering of $513,985, the Company's net proceeds from the
offering were $5,860,095.
The Company is a provider of Internet based procurement systems for business to
government eCommerce over the Internet. The Company's electronic marketplace
enables governmental agencies to purchase goods and services more efficiently
and makes it easier for commercial vendors to do business with government
agencies. Membership in the Company's Internet-based procurement network is
provided free to governmental agencies that enter into an agreement to
distribute all of their formal bids and request for proposals through the
Internet site. Businesses pay an annual subscription fee per county to be
registered vendors in the Company's procurement network.
1. LOSS PER SHARE
The Company's basic and diluted net loss per share are found in the accompanying
statement of operations. Basic and diluted per share information are the same as
the Company generated a net loss for the period. Options to purchase
approximately 3,077,500 shares were outstanding as of June 30, 2000, but were
not included in the computation of diluted loss per share because they are
antidilutive. Loss per share information for the Predecessor has not been
presented as this information is not meaningful given the Predecessor's capital
structure.
2. DUE TO HTE
Due to HTE represents amounts owed to HTE in excess of the loan agreement
discussed below. This amount results from timing of payments and was repaid in
full on July 24, 2000. HTE charged the Company a
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<PAGE> 6
management fee for finance, accounting, management and basic processing services
based on a percentage of total expenses for the first quarter and actual hours
incurred for the second quarter. The total of these charges was approximately
$68,000 and $6,500 for the three months ended March 31, 2000 and June 30, 2000
respectively, which are included in general and administrative expenses in the
accompanying statement of operations of the Company.
3. RELATED PARTY TRANSACTIONS
The Predecessor used office space owned by the shareholder for which rent of
approximately $4,200 was paid for the period January 1, 1999 to June 17, 1999.
This rent charge is included in general and administrative expenses in the
accompanying statement of operations of the Predecessor.
4. NOTE PAYABLE
During 1999 and 2000, the Company borrowed money from HTE to acquire the
business and certain net assets of the Predecessor and to fund its operations.
On October 31, 1999, the Company issued an unsecured note in the principal
amount of $1,750,000 in favor of HTE (the "Loan"). As of June 30, 2000,
borrowings under the Loan totaled $1,750,000, with no available balance.
Interest at a rate of eight percent, which totaled approximately $63,700, was
charged by HTE during the three months ended June 30, 2000, pursuant to the
terms of the Loan. Approximately $91,000 related to accrued interest is included
in accounts payable and accrued liabilities in the accompanying balance sheet as
of June 30, 2000. Principal and interest due under the Loan are payable in
annual installments on each anniversary of the note, with the entire remaining
outstanding balance due upon the earlier of the maturity date of the Loan or the
date of the effectiveness of a secondary public offering of the Company's common
stock yielding gross proceeds of at least $10,000,000.
Scheduled principal reductions of the Loan were as follows as of June 30, 2000:
<TABLE>
<CAPTION>
OCTOBER 31, AMOUNT
----------- --------------
<S> <C>
2000 $ 200,000
2001 250,000
2002 350,000
2003 450,000
2004 500,000
----------
$1,750,000
==========
</TABLE>
5. INCOME TAXES
The Predecessor elected to be taxed as an S corporation for both federal and
state income tax reporting purposes. Accordingly, the losses related to periods
presented for the Predecessor are includable in the personal income tax returns
of the Predecessor's shareholder. The operating results of the Company are
included in the consolidated federal and state income tax returns of HTE. The
Company's income tax provision is computed as if it were filing separate federal
and state tax returns. The Company accounts for income taxes using an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns. In estimating
future tax consequences, the Company generally considers all expected future
events other than enactments of changes in the tax laws or rates. Changes in tax
laws or rates will be recognized in the future years in which they occur.
Due to uncertainties regarding the Company's ability to realize the benefits of
its deferred tax assets through future operations, a valuation allowance has
been established that completely offsets the net operating loss as of June 30,
2000.
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<PAGE> 7
DEMANDSTAR.COM, INC.
JUNE 30, 2000
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
This Report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. Discussions containing
such forward-looking statements may be found in Management's Discussion and
Analysis of Financial Condition and Results of Operations under the captions
"Comparison of Three and Six Months Ended June 30, 2000 and June 17, 1999," and
"Liquidity and Capital Resources." These statements by their nature involve
substantial risks and uncertainties, certain of which are beyond the Company's
control, and actual results for future periods could differ materially from
those discussed in this Item depending on a variety of important factors. A
comprehensive summary of these and other risks and uncertainties can be found in
the Company's filings with the Securities and Exchange Commission from time to
time, including the Company's registration statement on Form S-1, as amended
(Registration No. 333-93445).
<TABLE>
<CAPTION>
(THE PREDECESSOR)
------------------------------------- (THE COMPANY)
INFORMATION ON INFORMATION ON --------------------------------------------------------------
DEMAND, INC. DEMAND, INC. HTE-IOD, INC.
FOR THE FOR THE FOR THE DEMANDSTAR.COM, INC. DEMANDSTAR.COM, INC.
PERIOD FROM PERIOD FROM PERIOD FROM FOR THE THREE FOR THE SIX
JANUARY 1, 1999 TO APRIL 1, 1999 TO JUNE 1, 1999 TO MONTHS ENDED MONTHS ENDED
JUNE 17, 1999 JUNE 17, 1999 JUNE 30, 1999 JUNE 30, 2000 JUNE 30, 2000
------------------ ---------------- ---------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
REVENUE 100% 100% 100% 100% 100%
OPERATING EXPENSES
Marketing and
advertising 12 8 6959 868 777
Research and
development 103 91 584 115 104
General and
administrative 189 153 18291 530 708
Depreciation and
amortization 0 0 0 83 101
---- ---- ------ ----- -----
Total operating
expenses 304 252 25834 1596 1690
---- ---- ------ ----- -----
OPERATING LOSS (204) (152) (25734) (1496) (1590)
INTEREST EXPENSE, net 0 0 0 14 22
---- ---- ------ ----- -----
LOSS BEFORE INCOME TAX
BENEFIT (204) (152) (25734) (1510) (1612)
INCOME TAX BENEFIT 0 0 0 0 0
---- ---- ------ ----- -----
NET LOSS (204)% (152)% (25734)% (1510)% (1612)%
==== ==== ====== ===== =====
</TABLE>
Comparison of Three Months Ended June 30, 2000 and the period from April 1, 1999
to June 17, 1999
Revenues
Revenues include amounts received from vendors for registration fees and bid
document mailings. Total revenues increased by 109% to $145,695 for the three
months ended June 30, 2000, from $69,763 for the period April 1, 1999 to June
17, 1999. The increase in revenues is due primarily to the increased marketing
effort in late 1999 and 2000 compared to the early and mid-1999 focus on
research and development.
Operating Expenses
Marketing and advertising expenses. Marketing and advertising expenses
increased 23349% to $1,264,391 for the three months ended June 30, 2000, from
$5,392 for the period April 1, 1999 to June 17, 1999. The increase in marketing
and advertising expenses primarily resulted from an increased marketing strategy
to promote DemandStar.
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<PAGE> 8
DEMANDSTAR.COM, INC.
JUNE 30, 2000
Research and development expenses. Research and development expenses increased
163% to $167,207 for the three month period ended June 30, 2000, from $63,477
for the period April 1, 1999 to June 17, 1999. In early and mid-1999, the
Company was focused on product development. During the three months ended June
30, 2000, the focus was on expanding our products' features and improving the
stability and scalability of DemandStar's systems to support the growth that is
anticipated.
General and administrative expenses. General and administrative expenses, which
include the costs of corporate operations, finance and accounting, human
resources and other general operations, increased 625% to $771,498 for the three
months ended June 30, 2000, from $106,475 for the period April 1, 1999 to June
17, 1999. The increase in general and administrative expenses is necessary to
support the growth in operations and infrastructure of DemandStar.
Depreciation and amortization. Depreciation and amortization of $121,368
resulted from the acquisition of the Predecessor by DemandStar and the purchase
of miscellaneous equipment and leasehold improvements during the three months
ended June 30, 2000. There were no comparable expenses for the period April 1,
1999 to June 17, 1999.
Interest expense, net. Net interest expense consists of interest income of
$14,348, which resulted primarily from the investment of the net proceeds from
the rights offering, and interest expense of $35,001 relates to the loan with
HTE. There were no comparable expenses for the period April 1, 1999 to June 17,
1999.
Comparison of the Six Months Ended June 30, 2000 and the period from January 1,
1999 to June 17, 1999
Revenues
Revenues include amounts received from vendors for registration fees and bid
document mailings. Total revenues increased by 73% to $228,596 for the six
months ended June 30, 2000, from $132,135 for the period January 1, 1999 to June
17, 1999. The increase in revenues is due primarily to the increased marketing
effort in late 1999 and 2000 compared to the early and mid-1999 focus on
research and development.
Operating Expenses
Marketing and advertising expenses. Marketing and advertising expenses
increased 11094% to $1,776,044 for the six months ended June 30, 2000, from
$15,866 for the period January 1, 1999 to June 17, 1999. The increase in
marketing and advertising expenses primarily resulted from an increased
marketing strategy to promote DemandStar.
Research and development expenses. Research and development expenses increased
74% to $237,459 for the six month period ended June 30, 2000, from $136,279 for
the period January 1, 1999 to June 17, 1999. In early and mid-1999, the Company
was focused on product development. During the six months ended June 30, 2000,
the focus was on expanding our products' features and improving the stability
and scalability of DemandStar's systems to support the growth that is
anticipated.
General and administrative expenses. General and administrative expenses, which
include the costs of corporate operations, finance and accounting, human
resources and other general operations, increased 546% to $1,618,452 for the six
months ended June 30, 2000, from $250,349 for the period January 1, 1999 to June
17, 1999. The increase in general and administrative expenses is directly
related to the growth in the volume of revenues and expenses. This growth was
necessary to support the general operations and infrastructure of DemandStar.
Depreciation and amortization. Depreciation and amortization of $230,523
resulted from the acquisition of the Predecessor by DemandStar and the purchase
of miscellaneous equipment and leasehold improvements during the six months
ended June 30, 2000. There were no comparable expenses for the period January 1,
1999 to June 17, 1999.
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<PAGE> 9
DEMANDSTAR.COM, INC.
JUNE 30, 2000
Interest expense, net. Net interest expense consists of interest income of
$14,348 which resulted primarily from the investment of the net proceeds from
the rights offering, and interest expense of $64,514 which relates to the loan
with HTE. There were no comparable expenses for the period January 1, 1999 to
June 17, 1999.
LIQUIDITY AND CAPITAL RESOURCES
Prior to the purchase of the Predecessor by DemandStar in June 1999, the
operations were funded primarily through cash generated from operations and
capital contributed from the sole shareholder of the Predecessor.
In conjunction with the purchase of the Predecessor, HTE purchased 1,250,000
shares of DemandStar's common stock for $800,000. In the first quarter of 2000,
HTE purchased 750,000 shares of Series A preferred stock for $1,500,000. In
addition to the stock purchases, HTE also loaned DemandStar $200,000 to purchase
the business and specified net assets of the Predecessor and $1,550,000 to fund
operations, the terms of which loan were evidenced by a five-year term
promissory note payable to HTE and dated October 31, 1999. As of June 30, 2000,
the balance under the note was $1,750,000.
With completion of the Company's rights offering of its common stock, which
provided gross proceeds of $6,374,080, the Company believes that it has
sufficient funds to continue its planned operational, growth and development
activities for the remainder of the year 2000. In addition, based on current
operating projections for the year 2000, the Company believes its cash balances
and cash generated from operations will satisfy the Company's working capital
and capital expenditure requirements for at least 12 months. However, the
Company may seek additional sources of funds through debt financing or an equity
offering to increase its cash reserves and to fund additional projects not
reflected in its current operating projections. In the event the Company's
operating projections do not materialize, and the Company is not successful in
obtaining additional funds, the Company will be required to reduce or cut back
its operations.
Net cash used in operating activities totaled $2,751,642 for the six months
ended June 30, 2000, compared to net cash provided used in operating activities
of $60,156 for the period January 1, 1999 to June 17, 1999. The increase in net
cash used in the 2000 period primarily resulted from the increased operations
and loss experienced in 2000.
Net cash used in investing activities, comprised of capital expenditures,
totaled $455,462 for the six months ended June 30, 2000 and $3,064 for the
period January 1, 1999 to June 17, 1999. The increase in net cash used in the
2000 period resulted from increased purchases of equipment to expand the
infrastructure and prepare for increased operations.
Net cash provided by financing activities totaled $7,803,210 for the six months
ended June 30, 2000 and $50,441 for the period January 1, 1999 to June 17, 1999.
The cash provided during 2000 reflects the sale of common stock through the
Company's rights offering, the sale of Series A preferred stock to HTE and
amounts borrowed under the Loan with HTE. The cash provided during 1999 includes
contributions of the sole shareholder of the Predecessor.
YEAR 2000 COMPLIANCE
Prior to January 1, 2000, there was considerable concern regarding the ability
of computers to adequately recognize 21st century dates from 20th century dates
due to the two-digit date fields used by many systems. Most reports today,
however, are that computer systems and software programs are functioning
normally and the compliance and remediation work accomplished during the years
leading up to 2000 was effective to prevent any problems. The Company is a
provider of Internet-based procurement systems for governmental agencies. As of
the date of this Report, the Company has not experienced any significant
disruption in its services as a result of any failure of any of its systems to
function properly as of January 1, 2000 or February 29, 2000. The Company also
has not experienced any Year 2000 failures related to any of its vendors,
suppliers or government clients.
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<PAGE> 10
DEMANDSTAR.COM, INC.
JUNE 30, 2000
Based on present trends, the Company does not expect to incur any significant
costs in 2000 related to Year 2000 activities. Year 2000 compliance has many
elements and potential consequences, some of which may not be foreseeable or may
be realized in future periods. In addition, unforeseen circumstances may arise,
and we may not, in the future, adequately identify equipment or systems that are
not Year 2000 compliant.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No information has been presented pursuant to Item 3 as the Company does not
have any financial instruments outstanding as of June 30, 2000, requiring market
risk disclosure or material foreign currency exposure requiring market risk
disclosure.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The registration statement on Form S-1 filed by the Company with the
Securities and Exchange Commission (the "SEC") in connection with the
Company's public rights offering (File No. 333-93445), as amended was
declared effective by the SEC on March 27, 2000. Since the completion of
the public offering on May 5, 2000, the Company used the net proceeds for
working capital purposes, capital expenditures and investments which
totaled $747,900, $121,305 and $4,990,890 respectively.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
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<PAGE> 11
DEMANDSTAR.COM, INC.
JUNE 30, 2000
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
NUMBER NAME
--------- ------------------------------------------------------------
<S> <C>
10.1 Office Lease between Talcott Realty I, Limited Partnership
(Landlord), MedPartners Acquisition Corporation (Tenant) and
DemandStar.Com, Inc. (Subtenant)
27.1 Financial Data Schedule (submitted only in electronic
format)
</TABLE>
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended June 30, 2000.
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<PAGE> 12
DEMANDSTAR.COM, INC.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DEMANDSTAR.COM, INC.
Date: August 11, 2000
/s/ O. F. RAMOS
-----------------------------------
O. F. Ramos, Chief Executive
Officer
and President
/s/ GERTRUDE J. SULZER
-----------------------------------
Gertrude J. Sulzer., Controller and
Chief
Accounting Officer
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<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER NAME
--------- ------------------------------------------------------------
<C> <S>
10.1 Office Lease between Talcott Realty I, Limited Partnership
(Landlord), MedPartners Acquisition Corporation (Tenant) and
DemandStar.Com, Inc. (Subtenant)
27.1 Financial Data Schedule (submitted only in electronic
format)
</TABLE>
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