UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended August 31, 1997
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: 2-91525-NY
MARKET GUIDE INC.
(Exact name of Registrant as specified in its charter)
New York 11-2646081
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
2001 Marcus Avenue
Suite South 200
Lake Success, New York 11042-1011
(Address of principal executive offices) (Zip Code) Registrant's
telephone number,
including area code:
(516) 327-2400
(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 (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 _______
4,713,659 Common shares, $.001 par value were issued and outstanding on
September 23, 1997.
Table of Contents
Financial Statements
Balance Sheets as of August 31, 1997 (Unaudited) and February 28, 1997 3
Statement of
Operations for the Three Months and Six Months Ended
August 31, 1997 (Unaudited) and August 31, 1996 (Unaudited) 5
Statement of Cash Flows for the Six Months Ended August 31, 1997
(Unaudited) and August 31, 1996 (Unaudited) 6
Notes to Financial Statements 7
Business 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations -- August 31, 1997 13
Other Information 16
Signature 17
<TABLE>
MARKET GUIDE INC.
Balance Sheets
August 31, 1997 February 28, 1997
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $711,800 $1,230,893
Accounts Receivable (net
of allowance for doubtful 947,147 557,415
accounts)
Prepaid expenses and
other current assets 125,303 263,630
Total current assets 1,784,250 2,051,938
Property, plant and
equipment:
Furniture and equipment 1,311,679 936,097
Equipment held under
capital leases 74,626 72,509
2,329,254 1,951,555
Less: accumulated
depreciation and
amortization (including
amortization of capital
leases totaling $278,422
and $189,234 as of August
31, 1997 and February 28, 915,713 744,551
1997, respectively).
Net property, plant and
equipment 1,413,541 1,207,004
Other assets:
Computer software and
product enhancements (net
of accumulated 2,385,961 1,891,621
amortization)
Deposits and other assets 78,085 78,085
Total other assets 2,464,046 1,969,706
Total assets $5,661,837 $5,228,648
</TABLE>
<TABLE>
MARKET GUIDE INC.
Balance Sheets - continued
<S> <C> <C>
August 31, 1997 February 28, 1997
(Unaudited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Current maturities of long-term
debt and capital leases $185,599 $176,012
Unearned revenues 641,832 248,679
Accounts payable and other
accrued expenses 154,823 179,493
Total current liabilities 982,254 604,184
Non-current liabilities:
Long-term debt and capital
lease obligations, less current 729,257 564,262
maturities
Total non-current liabilities 729,257 564,262
Commitments - -
Total liabilities 1,711,511 1,168,446
Stockholders' equity:
Common stock - $.001 par value,
20,000,000 shares authorized,
4,713,659 and 4,708,186 shares
issued and outstanding as of
August 31, 1997 and February 4,714 4,708
28, 1997, respectively
Capital in excess of par value 4,985,867 4,972,032
Accumulated deficit (1,040,255) (916,538)
Total stockholders' equity 3,950,326 4,060,202
Total liabilities and
stockholders' equity $5,661,837 $5,228,648
</TABLE>
<TABLE>
MARKET GUIDE INC.
Statement of Operations
(Unaudited)
<S> <C> <C> <C> <C>
Three months Three months Six months Six months
August 31, August 31, August 31, August 31,
1997 1996 1997 1996
Revenues:
Database vendors $1,281,896 $1,002,632 $2,453,298 $2,036,493
Market Guide products 383,996 101,630 642,858 182,134
Print product 13,421 12,886 29,170 29,627
Total revenues 1,679,313 1,117,148 3,125,326 2,248,254
Expenses:
Salaries, payroll taxes
& employee benefits 1,015,752 626,979 1,939,150 1,262,124
Database and product 219,854 197,614 414,280 340,893
costs
General and 381,355 218,704 694,031 391,680
administrative
Advertising and 95,430 28,783 172,895 58,116
promotion
Total expenses 1,712,391 1,072,080 3,220,356 2,052,813
Income from operations (33,078) 45,068 (95,030) 195,441
Interest income 4,402 8,308 12,563 14,884
Interest expense 18,513 15,284 39,251 33,202
Income before income (47,189) 38,092 (121,718) 177,123
taxes
Provision for income 2,000 650 2,000 1,970
taxes
Net income $(49,189) $37,442 $(123,718) $175,153
Earnings per share:
Primary $(0.01) $0.01 $(0.03) $0.04
Fully diluted $(0.01) $0.01 $(0.03) $0.04
Weighted average number
of shares outstanding:
Primary 4,709,801 4,192,088 4,709,002 4,190,167
Fully diluted 4,737,084 4,375,517 4,735,144 4,373,596
</TABLE>
<TABLE>
MARKET GUIDE INC.
Statement of Cash Flows
(Unaudited)
<S> <C> <C>
Six months ended
August 31, August 31,
1997 1996
Cash Flows From Operating Activities:
Net income $(123,718) $175,153
Adjustments to reconcile net income to
net cash provided from operating
activities
Depreciation 374,277 231,690
Changes in assets and liabilities:
(Increase)/Decrease in accounts (389,732) 314,010
receivable
(Increase)/Decrease in prepaid assets 138,327 (7,665)
(Increase)/Decrease in deposits and other 0 1,745
assets
Increase/(Decrease) in accounts payable (24,970) (163,146)
Increase/(Decrease) in unearned revenues 393,153 171,093
Total adjustments 491,055 547,727
Net cash from operating activities 367,337 722,880
Cash Flows From Investing Activities:
Payments for purchase of fixed assets (377,699) (179,551)
Development of computer software and
product enhancements (697,853) (270,309)
Net cash from investing activities (1,075,552) (449,860)
Cash Flows From Financing Activities:
Payments for notes payable, long-term
debt and capital leases (87,724) (81,925)
Proceeds from capital leases 0 188,839
Proceeds from line of credit 263,005 0
Proceeds from issuance of employee stock 13,841 21,260
plan Proceeds from private placement of common 0 0
stock
Net cash from financing activities 189,122 128,174
Net increase/(decrease) in cash (519,093) 401,194
Cash at beginning of period 1,230,893 680,783
Cash at end of period $711,800 $1,081,977
</TABLE>
Market Guide Inc.
Note to Financial Statements
August 31, 1997
Note 1 INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of Market Guide Inc.
have been prepared without audit, except for the balance
sheet as of February 28, 1997. In the opinion of
management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for
the six months ended August 31, 1997
are not necessarily indicative of the results that may be
expected for the year ending February 28, 1998.
Note 2 BANK LINE OF CREDIT
During the second quarter ended August 31, 1997, the
Company borrowed $263,005 under its previously arranged
line of credit with Fleet Bank. Proceeds were used to
fund acquisitions of capital equipment (principally
computers and peripherals). The bank line was used in
lieu of alternative leasing arrangements used in the past.
Note 3 DEPRECIATION AND AMORTIZATION
Depreciation and amortization are provided for in amounts
sufficient to relate the cost of depreciable assets to
operations over their estimated service lives. Leased
property under capital leases is amortized over the
lives of the respective leases or over the service lives
of the assets for those leases which substantially transfer
ownership. The straight-line method of depreciation is
followed for substantially all assets for both financial
and tax reporting purposes.
Business
Market Guide Inc. was incorporated in the State of New York
on March 23, 1983 as "The Unlisted Market Service
Corporation." On September 3, 1986 the current corporate
name was adopted. In 1996, the Company formed a new
division, CreditRisk Monitor, to develop products and
services for the corporate credit manager and other
corporate applications.
The Company acquires, integrates, condenses and publishes
accurate, timely, and objective financial and other information
on publicly traded corporations, and markets this information to the
financial, investment and credit communities, as well as to
independent investors, in a cost effective manner.
The Market Guide Database covers over 9,500 companies
trading on the New York, American, Nasdaq and Over-the-
Counter Stock Exchanges, including foreign companies
trading in the U.S. as ADRs and ADSs. The content created
by Market Guide is derived from information filed by
the subject company with the Securities and Exchange
Commission, issued in press releases or carried in other
media reports and publications. Each company's
fundamental information is updated at least four and
often more than eight times a year, as soon as the
relevant information becomes available. Pricing and
trading volume information incorporated into the database
are updated daily, and short interest statistics
are updated monthly.
Market Guide adds value, distinguishes itself from the
competition, and serves its clients
through its:
Flexible database design which gives users important
insights not available in competitive databases, thereby
enabling them to make better informed investment
decisions
Inclusion of auxiliary information such as earnings
estimates, price performance, relative price performance,
summary insider and institutional ownership statistics,
bond ratings, and short interest statistics giving users
a complete perspective on each company
Calculation of over 500 popular financial ratios,
growth rates, and averages computed for the user's
convenience and
Carefully planned, market tested display formats,
including company to industry comparisons, that allow
users to quickly and efficiently make carefully
considered investment and credit decisions.
Developing efficient, timely, cost-effective and easy to
use delivery systems such as our CD/ROM based analytic service
Market Guide for Windows, our Internet site (www.marketguide.com) and
the CreditRisk Monitor Internet site (www.creditriskmonitor.com).
The targeted markets for Market Guide's data and
related products include investment managers, investment
research departments, financial planners, investment
counselors, investment bankers, banks, stockbrokers and
brokerage firms, traders, libraries, publications,
corporations, law firms and individual investors. The
Company sells its information through four channels:
information vendors, the Internet, Market Guide for
Windows (its proprietary analytic software) and a print
publication. The CreditRisk Monitor division serves the
need of corporate credit managers through an Internet-based
service.
Vendors
Market Guide works in partnership with financial
information service vendors. The financial
information service vendors combine data from various real-
time and historical information sources with their own
analytic software and data delivery capability. Their
sales forces sell the product and they also provide
customer training and support services. Market Guide
focuses on developing the highest quality information
content and leveraging off the information vendor's sales
force, software, information dissemination infrastructure
and customer base. The amount of data presented, its
display format, and the software's analytic capabilities
vary depending upon the way each information provider
defines its customers' needs, software capabilities,
distribution technologies and preferred pricing strategies.
The information service vendors that currently
distribute the Market Guide Database include: Accutrade,
American Association of Individual Investors, America
Online, Ameritrade Holding, Argus Research, Aufhauser,
Automatic Data Processing, AIQ Systems, Inc., Bridge
Information Systems Inc., Briefing.com, Business Wire, CDA
Technology, Ceres Securities, Charles Schwab and Company,
Data Broadcasting Corporation, Devsonshire Technology,
Dial/Data, Dow Jones PIR Corporate Profiles, Dow Jones
Telerate, EDGAR Online, EuroAmerican Group, FactSet
Research, First Call Corporation, Global Market
Information, Go2Net, Holt Value Associates, IBM
Infomarket, ILX Systems Inc., Individual Investor Magazine,
Instinet Analytics, Interactive Data Corporation,
Interactive Workplace, Internet Securities, Investools Inc.,
Los Angeles Times, Money Club, MX Net, News Alert, NewsWare,
Omega Research, OneSource Information Services, Inc.,
Pacific Brokerage Services, Papyrus Technology Inc., P.C.
Quote, Inc., PointCast, PR Newswire, Prodigy Services
Company, Quote.com, Quotes Plus, Quotron Systems, Inc.,
Real Time Quotes, Inc., Reality Online, Reuters Ltd.,
Securities Data Corporation, Shark Information Services, Inc.
Snapshot Inc., Telemet America, Inc., Telescan, Inc.,
Track Data Corporation, Track Online, Vickers Stock
Research Corporation, Wall Street on Demand, Westergaard
Publishing, Windows on Wall Street and Yahoo!.
Business Developments
Market Guide has developed an analytic software
package, Market Guide for Windows,
introduced in fiscal year 1996, that allows users to
search the database, develop user defined reports and
download information to popular spreadsheet software
packages. The software is not patented or trademarked, but
a copyright is claimed by the Company. Market Guide for
Windows is delivered on a CD/ROM in weekly, monthly or
quarterly update formats.
In June 1996, the Company announced a multi-year contract
with Reuters Limited which grants Reuters' worldwide use of
Market Guide's financial database. To date, this
agreement represents the largest single contract in Market
Guide's history.
The Company has an Internet site that has been in
operation since August 1996 . It is anticipated that this
site will broaden the Company's ability to sell and
service its products directly to end users. The address
to our site is http://www.marketguide.com. The Company also
uses its Internet infrastructure to host cobranded sites and
partnership with various vendors. Amongst our cobranded
sites are discount brokerage firms such as Charles Schwab &
Co., Ameritrade Holding, and Pacific Brokerage Services;
and other sites such as Yahoo!, PointCast, the Los Angeles
Times and Individual Investor Magazine.
A version of the Market Guide for Windows software with a
smaller information set is sold over the Internet to
individual investors under the name StockQuest. StockQuest
was introduced in August 1996.
In September 1996, the Company formed a new division,
CreditRisk Monitor (CRM). CRM is an Internet-based
financial information and real-time news service
targeted towards the credit industry. After seven months
of development work, the CreditRisk Monitor service was
successfully introduced in April 1997.
In September 1997, the Company announced a multi-year
agreement with America Online to provide financial and
investment information to AOL. It is anticipated
this service will become operational in the third quarter
of fiscal 1998.
In September 1997, the Company also announced a
distribution agreement with Riemer Reporting Services,
Inc. to distribute CreditRisk Monitor products and
services. Riemer Reporting Services is a leading provider
of national credit network services to users of
business credit information.
Publications
A quarterly print product called The Market Guide -
Select Over the Counter Stock Edition
is a single volume of 800 one-page reports on fast
growing, profitable overthe-counter companies. The book
also has a detailed company index listing 15 key
statistics on each company in a tabular format. This index
is very useful to investors searching for attractive
investment opportunities.
Market Guide attempts to provide continuity of coverage so
that subscribers to the book can
keep following companies in which they have an interest.
However, from timeto-time the companies covered do change
due to mergers, acquisitions, bankruptcy, delisting or
moving to the New York or American Stock Exchanges.
Companies dropped from the book are replaced by companies
which are selected by using proprietary Market Guide
selection criteria. The companies selected for inclusion
in the book have, as a group, regularly outperformed the
Nasdaq composite as a whole.
Database Enhancements
The Company continuously expands, enhances and
improves the Market Guide Database based on customer
suggestions and employee feedback.
In the fall of 1994, Market Guide introduced a
completely new set of industry and sector classifications
that reflect the current economy and are being
incorporated into all of Market Guide's products.
These industry and sector classifications will help
investors:
Identify which industry and sectors are
outperforming the market or have fallen from favor,
Compare companies to a well defined peer group,
Permit investors to construct and analyze industry
aggregate financial characteristics,
Properly construct portfolios to ensure adequate diversification, and
Make well reasoned asset allocation decisions.
In the fall of 1995, the Company completed development of
a historical pricing database to complement the financial
information it had compiled. The pricing database
contains both historical and current information for all
issues trading on the New York and American Stock
Exchanges, the Nasdaq Stock Market, and selected OTC
Bulletin Board Companies. The Market Guide pricing
database contains Open, High, Low, Close and Volume
information on a daily basis beginning in 1983,
with daily updates occurring each trading day.
In order to satisfy institutional investors' needs for
extensive historical financial information, Market Guide
increased the number of years of historical annual
financial statements in the Market Guide database. With
the culmination of this project, Market Guide now has
annual financial statement information going back to
1983 for most companies on its database. As a result of
the completion of this project, Market Guide believes it is
now able to compete for other business where at least ten
years of historical data is required. The information
is currently being distributed within the OneSource US
Equities product, the Market Guide for Windows product, and
through selected vendors.
In fiscal year 1997, the Company began collecting
information on Dividend Reinvestment Plans (DRIPs).
The DRIP information Market Guide collects includes
restrictions, fees, discounts and contacts on over 900
plans. The Company will continue to expand its DRIP database
as more companies implement such plans for shareholder reinvestment of
dividends.
In fiscal year 1997, the Company incorporated Senior
Debt Ratings into its database. The ratings offered on
the Market Guide Database are provided by Fitch Investors
Service, L.P., Moody's Investors Service and Standard &
Poor's Rating Group, and include current ratings, prior
ratings and the accompanying dates. Using these ratings,
Market Guide has calculated an average company and industry
rating.
Internet
The Company has created a dynamic, comprehensive and
extremely useful Internet site. The site contains both
advertising supported and added cost content. Advertising
supported content is free to the user and Market Guide expects
to cover costs and generate profits from the sale of
advertising. As of August 1997, advertising supported
content included:
Price quotes (in partnership with PC Quote),
News (in partnership with News Alert),
Market Guide's Company Snapshot Reports,
Market Guide's What's Hot/What's Not service that
identifies the price performing
leaders and laggards by sector, industry and company
over various time periods, and
Price charts.
For users who wish to have more comprehensive information,
added cost content is available for nominal per report or
subscription based fees. The added cost content
includes:
The Market Guide Quick Facts Report,
The Market Guide Company Profile Report,
The Market Guide Ratio Comparison Report, The Market
Guide Detailed Financials,
The Market Guide ProVestor Report,
The Earnings Estimate Report (in partnership with
First Call), and
The Market Guide StockQuest Screening and Reporting application.
The Market Guide web site is very comprehensive with
easy navigational capabilities. It has been designed to handle
all the needs of most investors. However, the Company continues
to enhance the site with additional content, capabilities and
educational aids. Future enhancements will include online
trading capabilities and the sale of investment materials.
In addition to our own site, Market Guide's information is available
on over 20 other web sites. Most of these web partners also offer
their users added cost services from Market Guide.
These added cost services are delivered mostly through cobranded
sites hosted by Market Guide.
CreditRisk Monitor
Market Guide's newest division, CreditRisk Monitor (CRM), is a new
online information and news service that follows more than 375 U.S.
publicly traded domestic retail chains and wholesalers. This online
service is accessible through the Internet (www.creditriskmonitor.com)
and has been designed to provide corporate credit managers with the
analytical tools necessary to follow, on a daily basis, all the public
companies they do business with. CRM was formed specifically to leverage
Market Guide's comprehensive database and state of-the-art technology
through sales to a new market. CRM provides the credit community with a
cost efficient, online credit and financial information service.
The CRM information service consists of: CRM Company Reports, the CRM
Alert Notification Service, and the CRM Real-Time News Service. The CRM
web site became operational in April 1997.
Business Facilities
In October 1994, the Company relocated to new headquarters in Lake Success,
New York. Lake Success is on the Queens (New York City) - Nassau County
(Long Island) border. The Company currently maintains two office suites
in this complex, Suite South 200 which totals 13,500 square feet, and
Suite West 290 which totals 5,500 square feet.
In June 1996, the Company leased a sales office in Chicago, Illinois.
This space totals 572 square feet and is staffed by a full time sales
representative.
Market Guide Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations August 31, 1997
Results of Operations
For the three months ended August 31, 1997 compared to August 31, 1996
Total revenues for three months ended August 31, 1997 increased 50% to
$1,679,313. The growth in revenues reflects increases of 28% in database vendor
sales to $1,281,896 and 278% in Market Guide product sales to $383,996.
The revenue growth is attributable to increases in sales to our traditional
core of vendors that sell to the institutional, retail and individual
investor marketplaces, new revenue from the addition of more than twenty
Internet related vendors, growth in sales at our own web site
(www.marketguide.com), incremental sales of Market Guide for Windows products,
and the introduction of CreditRisk Monitor's Internet-based service
(www.creditriskmonitor.com) in the first quarter of this fiscal year. Print
product revenues, consisting mainly of the Market Guide - Select OTC
Stock Edition, increased 4% to $13,421. Market Guide continues to concentrate
on marketing electronic products and services.
Total operating expenses for three months ended August 31, 1997 increased 60% to
$1,712,391. The largest component of this increase is expenses related to the
CreditRisk Monitor division. Cash outlays did not rise significantly from the
previous quarter ended May 31, 1997, but expenses rose significantly due to
expensing of CreditRisk Monitor's activities that had been capitalized until
product introduction in April 1997.
Costs associated with increased staffing levels in all departments, higher
general and administrative expenses, and increased sales and marketing
activities also contributed to the 60% expense increase. For financial
reporting purposes, CreditRisk
Monitor sales are recognized over a defined period of time and expenses are
recorded as incurred. The result is that CreditRisk Monitor expenses
continue to exceed recognizable sales. Management expects that CreditRisk
Monitor will become profitable within one year of its introduction.
Management also believes that CreditRisk Monitor will develop into a major
source of earnings and cash flow in the years to come.
Loss from operations for three months ended August 31, 1997 totaled $33,078
compared to operating income of $45,068 for the three months ended August 31,
1996. These losses are attributable to the start-up of the new CreditRisk
Monitor division. Without the expenses of launching this new division and
business line, Market Guide would have recorded record profits in the quarter
just ended.
Interest income for three months ended August 31, 1997 decreased 47% to $4,402.
The decrease reflects lower cash balances throughout the quarter.
Interest expense for three months ended August 31, 1997 increased 21% to
$18,513.Higher interest expense reflects additional capital lease service
requirements.
Net loss for the three months ended August 31, 1997 totaled $49,189 compared to
net income of $37,442 for the three months ended August 31, 1996. The loss
reflects increased new product line costs as noted above.
For the six months ended August 31, 1997 compared to August 31, 1996
Total revenues for six months ended August 31, 1997 increased 39% to
$3,125,326. The increase in revenues reflects a 20% increase in database
vendor sales to $2,453,298 and Market Guide product sales growth of 253% to
$642,858. The revenue growth continues to reflect increases in sales to our
traditional core of vendors that sell to the institutional, retail and
individual investor marketplaces, new revenue from the addition of more than
twenty Internet related vendors, growth in sales from our own web site
(www.marketguide.com), incremental sales of Market Guide for Windows
products, and the introduction of CreditRisk Monitor's internetbased service
in April 1997. Print product revenues, consisting mainly of the Market Guide
- Select OTC Stock Edition, decreased 2% to $29,170. The decline in print
product sales reflects Market Guide's decision to concentrate on marketing
electronic products and services.
Total operating expenses for six months ended August 31, 1997 increased 57% to
$3,220,356. The largest component of this increase is expenses related to the
Company's new CreditRisk Monitor division. Costs associated with increased
staffing levels in all departments, higher general and administrative expenses,
and increased sales and marketing activities also contributed to the increased
level of expenses in the six month interval. For financial reporting purposes,
CreditRisk Monitor sales are recognized over a defined period of time and
expenses are recorded as incurred. The result is that expenses continue to
exceed recognizable sales. Management expects this trend to continue to a
lessening degree throughout the remainder of this fiscal year.
Loss from operations for six months ended August 31, 1997 totaled $95,030
compared to operating income of $195,441 for the six months ended August 31,
1996. As noted above, the operating loss was primarily attributable to the
recognition of costs associated with CreditRisk Monitor, while associated
revenues will continue to build steadily over time.
Interest income for six months ended August 31, 1997 decreased 16% to $12,563.
The decrease reflects lower cash balances throughout the period.
Interest expense for six months ended August 31, 1997 increased 18% to $39,251.
Higher interest expense reflects additional capital lease service requirements.
Net loss for the six months ended August 31, 1997 totaled $123,718 compared to
net income of $175,153 in the six months ended August 31, 1996. The loss
reflects increased costs as noted above.
Liquidity and Capital Resources
As of August 31, 1997, the Company's working capital
(current assets less current liabilities) decreased 45%
to $801,996 when compared to the amount at February 28,
1997. The Company's cash and cash equivalents decreased
42% to $711,800 when compared to the balance at February
28, 1997.
For the six months ended August 31, 1997, net cash
provided by operating activities decreased 49% to
$367,337 when compared to the six months ended August
31, 1996. The decrease reflects a higher accounts
receivable balance related to CreditRisk Monitor sales
and an operating loss. Partially offsetting this was a
sharp increase in unearned revenues reflecting advance
payments from certain customers.
For the six months ended August 31, 1997, net cash used in
investing activities increased 139% to $1,075,552 when
compared to the six months ended August 31, 1996. The
increase reflects the Company's continued investment in
product and database enhancements and in Market Guide's
Internet site.
For the six months ended August 31, 1997, net cash from
financing activities increased
48% to $189,122 when compared to the six months ended
August 31, 1996. This result reflects $263,005 drawn from
the line of credit for the purchase of computers and
equipment.
The Company believes its current liquidity is sufficient to
meet its obligations during the next twelve months.
Other Information
Item 1 Legal Proceeding
The Company has commenced litigation in the United States
District Court for the Eastern District of New York against
Information Clearinghouse Inc. d/b/a F&D Reports ("ICI")
and Lawrence Sarf. The Company's complaint alleges claims
of trademark infringement, unfair competition, deceptive
trade practices and conversion in connection with
defendants' theft and use of the Company's newly designed
proprietary slogan "On-Line, On-Time, OnTarget," developed
for use with its Internet credit reporting system. The
Company seeks injunctive relief, an accounting, monetary
and punitive damages. Contemporaneously, an action was
commenced in the Nassau County Supreme Court by ICI
against the Company, and primarily, three newly engaged
employees. ICI claims misappropriation of proprietary
information and trade secrets by the newly engaged
employees, unfair competition, breach of fiduciary duty
and tortious interference. While ICIrequests injunctive
relief as well as money damages, no request for any
temporary relief has been sought. Management does not
believe the pending actions will have a material effect
on the business activities of the Company.
Item 2 Changes in Securities None
Item 3 Defaults Upon Senior Securities None
Item 4 Submission of Matters to Vote of Security Holders None
Item 5 Exhibits and Reports on Form 8-K None
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MARKET GUIDE INC.
(Registrant)
October 13, 1997 /s/ Homi M. Byramji
Date President and CEO
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> AUG-31-1997
<CASH> 711800
<SECURITIES> 0
<RECEIVABLES> 947147
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1784250
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