SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-QSB
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1999
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 ____________
-------------------------
MONSTERDAATA.COM, INC.
(Exact name of small business issuer as specified in its charter)
(Formerly known as D-Vine, Ltd.)
Delaware 22-2732163
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) No.)
115 Stevens Avenue
Valhalla, NY 10595
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 747-9100
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
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. |X| Yes |_| No
As of June 30, 1999, 7,024,733 shares of the Registrant's common stock, par
value $.01 per share, were outstanding.
Documents incorporated by reference: Exhibit 99
Transitional Small Business Disclosure Format: |_| Yes |X| No
<PAGE>
MONSTERDAATA.COM, INC.
Table of Contents
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEET -- As of June 30,
1999 (Unaudited) ......................................... Page 3
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)--For the Three Months Ended June 30,
1998 and June 30, 1999; for the Six Months Ended
June 30, 1998 and June 30, 1999 ........................ Page 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)--For the Six Months Ended June 30,
1998 and June 30, 1999 ................................. Page 5
NOTES TO FINANCIAL STATEMENTS ............................ Page 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ...................... Page 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ........................................ Page 13
Item 6. Exhibits and Reports on Form 8-K ......................... Page 13
Signatures ....................................................... Page 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MONSTERDAATA.COM, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1999
-------------
<S> <C>
CURRENT ASSETS
Cash $ 695,256
Accounts receivable 586,755
Prepaid expenses and other current assets 3,000
-----------
TOTAL CURRENT ASSETS 1,285,011
PROPERTY AND EQUIPMENT, Net 132,592
OTHER ASSETS 16,288
TOTAL ASSETS $ 1,433,891
===========
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 827,720
Deferred revenue 963,118
Notes Payable - Stockholders 298,702
Current maturities of capital lease obligation 29,497
-----------
TOTAL LIABILITIES 2,119,037
-----------
STOCKHOLDERS' DEFICIENCY
Preferred Stock - $0.01 par value;
10,000,000 shares authorized, 0 issued and outstanding
Common stock - $0.01 par value; 50,000,000 shares
authorized, 7,024,773 issued and
outstanding 70,248
Additional paid in capital 3,072,287
Options and warrant 132,156
Accumulated deficit (3,959,837)
-----------
TOTAL STOCKHOLDERS' DEFICIENCY (685,146)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 1,433,891
===========
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
MONSTERDAATA.COM, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, 1998 June 30, 1999 June 30, 1998 June 30, 1999
----------------------------------- --------------------------------
<S> <C> <C> <C> <C>
SALES $ 450,524 $ 681,253 $ 979,313 $ 1,324,508
COST OF SALES 308,255 337,530 566,096 623,772
----------------------------------- --------------------------------
GROSS PROFIT 142,269 343,723 413,217 700,736
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,008,235 1,176,279 1,294,091 1,530,857
----------------------------------- --------------------------------
OPERATING INCOME (LOSS) (865,966) (832,556) (880,874) (830,121)
----------------------------------- --------------------------------
OTHER INCOME (EXPENSE)
Interest (expense net of)
income (12,279) 16,341 (51,087) 3,391
Merger/acquisition costs -0- 215,000 -0- 215,000
----------------------------------- --------------------------------
NET INCOME (LOSS) BEFORE
INCOME TAXES (878,245) (1,031,215) (931,961) (1,041,730)
INCOME TAXES -- -- -- --
----------------------------------- --------------------------------
NET (LOSS) $ (878,245) $(1,031,215) $ (931,961) $(1,041,730)
=================================== ================================
Weighted Average Number of
Shares Outstanding 6,024,773 7,002,796 6,024,773 6,519,177
=========== =========== =========== ===========
Net Loss Per Share, Basic and
Diluted $ (0.15) $ (0.15) $ (0.16) $ (0.16)
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
MONSTERDAATA.COM, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the six For the six
months ended months ended
June 30, 1998 June 30, 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (931,961) $(1,041,730)
----------- -----------
Adjustments to reconcile net (loss) to net cash
used in operating activities:
Depreciation 57,723 52,208
Accrued interest 49,980 --
Stock compensation 211,800 --
[Stock issued for services] 248,821
(Increase) decrease in accounts
receivable (310,810) 72,186
Increase in accounts payable and
accrued expenses 330,788 386,834
Decrease (increase) in deferred revenue 310,293 (120,593)
Decrease (increase) in prepaids and
other assets 45 (10,955)
----------- -----------
TOTAL ADJUSTMENTS 649,819 628,501
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (354,269) (413,229)
----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
Capital expenditures (41,147) (52,439)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock warrants -- 1,000,000
Proceeds from contributed capital -- 223,075
Proceeds from notes payable, related
parties 350,000 --
Repayment of notes payable -- (62,236)
Repayment of notes payable, stockholders 20,000 (21,833)
Principal repayments of capital lease
obligations (53,456) (33,674)
----------- -----------
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES 316,544 1,105,332
----------- -----------
NET INCREASE (DECREASE) IN CASH (6,745) 639,664
CASH - Beginning 33,570 55,592
----------- -----------
CASH - Ending $ 26,825 $ 695,256
=========== ===========
</TABLE>
CERTAIN NON CASH ACTIVITIES
Stock was issued during the six months ended June 30, 1999 for payment of
officers' bonuses in the amount of $131,350.
Stock options were issued during the six months ended June 30, 1999 for services
rendered in the amount of $90,625.
Stock warrants were issued during the six months ended June 30, 1999 to purchase
up to 500,000 shares of common stock at $3.00 per share. These warrants were
valued at $0.17 per warrant under the Black-Scholes option valuation method.
A capital contribution was made during the six months ended June 30, 1999 in the
amount of $243,075, of which $223,075 was in cash and $20,000 was converted from
Accounts Payable.
See accompanying notes to financial statements
5
<PAGE>
MONSTERDAATA.COM, INC.
Notes to the Financial Statements
June 30, 1999
NOTE 1 - THE COMPANY AND BASIS OF PRESENTATION
The Company
MonsterDaata.com, Inc. was incorporated in Delaware on July 22, 1985 under the
corporate name "Trans West, Inc." For eight years prior to September 27, 1995,
we were an inactive corporation. On September 27, 1995, we revived our corporate
charter in Delaware and were reactivated, although we had no material assets or
capital, and no operations or income. On February 13, 1996, we changed our
corporate name to "D-Vine, Ltd."
On April 2, 1999, we acquired 99.2% of the outstanding capital stock of Taconic
Data Corp. ("Taconic"), a provider of database development and management
services to the real estate industry. Taconic was incorporated in New York in
1992. In connection with this acquisition, Taconic became our majority-owned
subsidiary and all of our directors and officers were replaced by Taconic
directors and officers. The stockholders of Taconic were issued 6,000,000 of our
shares of common stock in exchange for their shares, or approximately 85% of our
total outstanding common shares after giving effect to the acquisition (and the
exercise of certain warrants referenced in Note 3 below). Accordingly, a change
in control of our company occurred in connection with the acquisition, and the
acquisition was deemed a "reverse acquisition" for accounting purposes.
Our accompanying unaudited financial statements represent a consolidation of our
business with that of Taconic, and the consolidation has been prepared assuming
that we owned 100% of Taconic after the acquisition. Subsequent to the
acquisition, we changed our fiscal year end from September 30 to December 31 to
correspond with the fiscal year end of Taconic. On April 5, 1999, we changed our
corporate name to "MonsterDaata.com, Inc."
Minority Interest
The minority interest referred to above is held by an entity which owns 0.8% of
Taconic. This entity's interest in the net assets of Taconic has been reduced to
zero on the Consolidated Balance Sheet portion of our accompanying unaudited
financial statements. Therefore, in accordance with Generally Accepted
Accounting Principles, the entity's minority interest in the losses for the six
month and three month periods ended June 30, 1999 has not been recorded on our
accompanying unaudited financial statements. This minority interest in losses
will remain unrecognized in our future financial statements unless and until
they are fully offset, in the aggregate, by the entity's minority interest in
future profits of Taconic.
Basis of Presentation
Our accompanying unaudited financial statements reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the results
of the interim periods presented. All such adjustments are of a normal recurring
nature. The financial statements should be read in conjunction with the notes to
the financial statements and in conjunction with our audited financial
statements contained in
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our Form 10-KSB (filed on March 23, 1999) and with the audited financial
statements of Taconic contained in our Form 8-K/A (filed on June 15, 1999).
NOTE 2 - INCOME TAXES
We provide for the tax effects of transactions reported in the financial
statements. The provision, if any, consists of taxes currently due plus deferred
taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any, represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of June 30, 1999, we had no material
current tax liability, deferred tax assets, or liabilities impacting our
financial position because the deferred tax asset related to our net operating
loss carryforward and was fully offset by a valuation allowance.
At June 30, 1999, we have net operating loss carry forwards for income tax
purposes of approximately $2.4 million. This carryforward is available to offset
future taxable income, if any, and expires in the year 2010. Our utilization of
this carryforward against future taxable income may become subject to an annual
limitation due to a cumulative change in our ownership of more than 50 percent.
The components of the net deferred tax asset as of June 30, 1999, are as
follows:
Deferred tax asset:
Net operating loss carry forward $ 984,000
Valuation allowance $(984,000)
----------
Net deferred tax asset $ -0-
==========
We recognized no income tax benefit for the loss generated in the period from
reorganization, October 1, 1995, to June 30, 1999. SFAS No. 109 requires that a
valuation allowance be provided if it is more likely than not that some portion
or all of a deferred tax asset will not be realized. Our ability to realize
benefit of our deferred tax asset will depend on the generation of future
taxable income. Because we have yet to recognize any significant profits from
operations, we have provided for a full valuation allowance against our deferred
tax asset.
NOTE 3 - COMMON STOCK PURCHASE WARRANTS
In August, 1997, we sold to Ocean Strategic Holdings Limited, a Guernsey
corporation ("OSHL"), for an aggregate consideration of $50,000, a warrant to
purchase 1,000,000 shares of our common stock at $0.01 per share (the "1997
Warrant"). The 1997 Warrant was exercisable beginning August 1, 1998 until
August 1, 2001. On March 31, 1999, the exercise price of the 1997 Warrant was
increased from $0.01 per share to $1.00 per share and, in connection with such
increase, we issued to OSHL an additional warrant to purchase 500,000 shares of
our common stock at $3.00 per share (the "1999 Warrant"). The 1997 Warrant was
exercised on April 2, 1999, and we issued 1,000,000 shares of our common stock
thereunder to OSHL upon receipt of the $1,000,000 exercise price.
The 1999 Warrant is not exercisable until March 31, 2000, and it expires on
March 31, 2004. The holder of the 1999 Warrant is entitled to an adjustment in
the kind and number of shares of stock receivable upon exercise of the warrant
upon certain events, including reclassification of common stock, capital
reorganization, stock dividend or other change in outstanding shares of common
stock, certain
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consolidations or mergers and certain sales of our property. The exercise price
and the number of shares issuable upon exercise of the 1999 Warrant, however,
shall remain unchanged in the event we complete a "reverse split" of our shares
into a smaller number of outstanding shares. The warrant holder may not exercise
any portion of the 1999 Warrant which would give it and its affiliates a
beneficial ownership of 5.0% or more of the outstanding shares of our common
stock at the time of such exercise without at least 61 days prior written notice
to us.
As of June 30, 1999, 500,000 shares of common stock were reserved for potential
issuance upon the conversion of the 1999 Warrant.
NOTE 4 - 1999 STOCK OPTION PLAN
On June 15, 1999, we adopted the MonsterDaata.com, Inc. 1999 Stock Option Plan.
Under the option plan, we may issue to our employees, officers, directors and
consultants options to purchase shares of our common stock. All incentive stock
options granted under the plan will have an exercise price of not less than the
fair market value of our common stock at the time of grant, and all
non-incentive stock options granted under the plan will have an exercise price
of not less than 85% of the fair market value of our common stock at the time of
grant. Our board of directors (or any duly appointed committee thereof)
determines the vesting period of the options upon the granting of the options.
The total number of shares of common stock for which options may be granted
under the plan is 1,750,000. No grant of a stock option under the plan may be
made after June 15, 2009.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The statements contained in this Report on Form 10-QSB that are not historical
facts are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and uncertainties.
Such forward-looking statements may be identified by, among other things, the
use of forward-looking terminology such as "believes," "expects," "may," "will,"
"should" or "anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. From time to time, we or our representatives have made or may
make forward-looking statements, orally or in writing. Such forward-looking
statements may be included in our various filings with the Securities and
Exchange Commission (the "SEC"), or press releases or oral statements made by or
with the approval of our authorized executive officer.
These forward-looking statements, such as statements regarding anticipated
future revenues, capital expenditures and other statements regarding matters
that are not historical facts, involve predictions. Our actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements. We do not undertake any
obligation to publicly release any revisions to these forward-looking statements
or to reflect the occurrence of unanticipated events. Many important factors
affect our ability to achieve its objectives, including, among other things,
technological and other developments in the Internet field, intense and evolving
competition, the lack of an "established trading market" for our shares, and our
ability to obtain additional financing, as well as other risks detailed from
time to time in our public disclosure filings with the Securities and Exchange
Commission. Among other things, potential investors should review the risk
factors incorporated by reference into this Report on Form 10-QSB (see Item 6,
Exhibit 99, below).
Overview of Operations
We are a leading provider of real estate transaction facilitation, due diligence
and research tools over the Internet. We license, reformat, integrate, and
enhance over 60 proprietary databases that include real estate related
business-to-business and consumer information. Business information includes
real estate transaction due diligence, risk assessment and valuation
information. Consumer services consist of data products covering over 61,000
communities in the United States, and neighborhood profiles containing school,
town and community, crime, culture, affordability, demographic and lifestyle
characteristic data. As of June 30, 1999 we employed 27 full-time officers, data
managers, Web site developers, salespeople and support personnel.
We believe that our Internet Web site has the potential to be a hub or "portal"
for a variety of real estate sector transaction sites, and that we could earn
significant profits for our shareholders by linking real estate professionals --
including brokers, lenders, appraisers and insurers -- with consumers,
businesses and investors through our Web site. Currently, real estate
professionals, consumers, businesses and investors visit our Web site to access
customized reports prepared from our databases that can enhance decision making
regarding the relative desirability and offered values of specific communities,
neighborhoods and individual properties.
We provide summary reports on our Web site to users free of charge, and more
detailed reports are available on our Web site for a nominal charge per report
or on an annual subscription basis. Through various licensing and revenue
sharing arrangements, we also provide our summary reports free of charge to
users of other popular real estate sites on the Internet, including
www.realtor.com, the largest real estate
9
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listing site on the Internet, and www.stewarttitle.com, a leading national title
insurer. If users on these licensed sites then desire further information, they
are in some cases directed to our Web site for our detailed customized reports
(and we often share the revenues we earn from the sales of detailed reports in
the referred session with the referring Web site owner).
Our financial condition and results for periods prior to April 2, 1999 are
almost entirely attributable to the historical results of Taconic Data Corp.
("Taconic"), which was deemed the acquiror for accounting purposes in our
business combination with Taconic that was completed on April 2, 1999.
Results of operations for the six months ended June 30, 1999 as compared to the
six months ended June 30, 1998
Our total revenues for the six month period ended June 30, 1999, were $1,324,508
compared to $979,313 for the six month period ended June 30, 1998. This 35%
increase in revenue is partially attributable to our new licensing agreement
with a real estate related Internet site concluded at the end of the first half
of 1999, but almost 90% of the increase is attributable to non-recurring revenue
received on existing agreements and to the recognition of deferred revenue on a
previously prepaid licensing agreement. We believe the increase in total
revenue, particularly to the extent attributable to the new Internet-related
licensing agreement that was signed at the end of the first half of 1999,
reflects a trend that will continue in future periods as we continue to
transition our business revenue sources to the Internet and the effects of our
development of a national sales force are realized.
Our cost of sales for this six month period was $623,772, compared to $566,096
for the six month period ended June 30, 1998. Our gross margin was 53% of total
revenues during the six month period ended June 30, 1999, compared to 42% of
total revenues during the six month period ended June 30, 1998, as a result of
our increased revenues in 1999. Without the non-recurring revenues in the first
half of 1999 that are described above, our gross margin would have been
approximately 40% of total revenues during the six month period ended June 30,
1999. We anticipate improvements to our gross margins in future periods, as we
believe that our total revenues will increase faster than our related costs of
sales.
Selling, general and administrative expenses increased from $1,294,091 for the
six month period ended on June 30, 1998 to $1,530,857 for the six month period
ended June 30, 1999. The increase is largely attributable to our Web site
development expenses of approximately $360,000 incurred during the first half of
1999. In addition, our increased hiring resulted in increased payroll expenses.
During the six month period ended on June 30, 1999, we hired a Senior
Vice-President for corporate development, two national sales representatives and
a Controller. Prior to 1999, we did not have a separate sales force, and
customer sales were solicited directly by our corporate officers. We expect
payroll expenses to increase in future periods, as well, as we continue to build
out our management team.
Our operating loss declined from $880,874 for the six month period ended June
30, 1998 to $830,121 for the six month period ended June 30, 1999. In other
income/expense, we recorded $215,000 of legal and accounting expenses incurred
in connection with our acquisition of Taconic. Due to these non-recurring
expenses arising out of our acquisition of Taconic in 1999, our net loss of
$1,041,730 during the six month period ended June 30, 1999 represents an
increase from our net loss of $931,961 for the corresponding period of 1998.
However, our net loss per share remained the same, at $0.16 per share, during
these periods for 1998 and 1999.
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Liquidity and capital resources
As of June 30, 1999, our cash balance was $695,266 and we had net working
capital (excluding deferred revenue) of $129,092. For the six months ended June
30, 1999, our net cash used in operating activities was $413,229. Of this
$413,229, we used $215,000 for non-recurring merger and acquisition expenses
relating to our purchase of Taconic.
Total cash flows from financing activities increased from $316,544 for the six
month period ended on June 30, 1998 to $1,105,332 for the six month period ended
June 30, 1999. In the six month period ended June 30, 1999, we received
$1,000,000 in proceeds from the exercise of an outstanding stock warrant. In
addition, existing shareholders made a capital contribution of $243,075 in the
first quarter of this year, $20,000 of which was offset by various expenses
incurred in connection with the contribution.
Our working capital requirements depend upon numerous factors, including,
without limitation, levels of resources that we devote to the further
development of our Web site and marketing capabilities, technological advances,
status of competitors and our ability to establish collaborative arrangements
with other organizations. We will be required to raise additional capital in
order to meet our business objectives in 1999, and there can be no assurance
that we will be successful in doing so or, in general, that we will be able to
achieve fully our business objectives. We believe that our current cash
resources will not be sufficient to fund our current operations much beyond the
third calendar quarter of 1999 if our development spending were to continue at
its current pace. We have taken steps to reduce our use of cash pending the
raising of additional equity capital, which we intend to pursue vigorously
during the second half of 1999. We believe that such reduced use of cash will
not unduly interfere with the achievement of our major short-term business
objectives and, accordingly, that our current resources will permit us to meet
our primary business objectives through the second half of 1999.
Impact of the Year 2000
The computer systems and software programs of many companies and governmental
agencies are currently coded to accept or recognize only two digit entries in
the date code field. These systems may recognize a date using "00" as the year
1900 rather than the year 2000. As a result, these computer systems and/or
software programs may need to be upgraded to comply with such year 2000
requirements or risk system failure or miscalculations causing disruptions of
normal business activities.
State Of Readiness
We have made an assessment of the year 2000 readiness of our information
technology systems, including the hardware and software that operate our Web
site and our non-information technology systems. We have been informed by many
of our vendors of material hardware and software components of our information
technology systems that all or substantially all of the products we use are
currently year 2000 compliant. We will request that the remaining vendors of the
material hardware and software components of our information technology and
non-information technology systems provide us with assurances of their year 2000
compliance. We plan to complete this process during the second half of 1999.
Until such testing is complete and such vendors and providers are contacted, we
will not be able to completely evaluate to what extent our information
technology systems or non-information technology systems will need to be revised
or replaced. If our efforts to address year 2000 risks are not successful, or if
suppliers or other third
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parties with whom we conduct business do not successfully address such risks, it
could have a material adverse effect on our business.
Costs
We have identified approximately $85,000 in capital equipment and software that
requires upgrading or replacement and which will be year 2000 compliant once
upgraded or replaced. Prior to June 30, 1999, we have not expended any material
amounts for year 2000 compliance. However, in July 1999 we entered into a
$65,000 lease for computer hardware that is year 2000 compliant, and we intend
to expend an additional $20,000 for year 2000 compliant software before the end
of 1999.
Risks
We are not currently aware of any year 2000 compliance problems relating to our
proprietary software or our information technology or non-information technology
systems that would have a material adverse effect on our business. We cannot
assure that we will not discover year 2000 compliance problems in our
proprietary software that will require substantial revisions. In addition, we
cannot assure you that third-party software, hardware or services incorporated
into our material information technology and non- information technology systems
will not need to be revised or replaced, all of which could be time consuming
and expensive. Our failure to fix our proprietary software or to fix or replace
third-party software, hardware or services on a timely basis could result in
lost revenues, increased operating costs, the loss of customers and other
business interruptions, any of which could have a material adverse effect on our
business. Moreover, the failure to adequately address year 2000 compliance
issues in our proprietary software and our information technology and
non-information technology systems could result in claims of mismanagement,
misrepresentation or breach of contract and related litigation, which could be
costly and time-consuming to defend.
In addition, we cannot assure you that governmental agencies, utility companies,
Internet access companies, third-party service providers and others outside our
control will be year 2000 compliant. The failure by such entities to be year
2000 compliant could result in a systemic failure beyond our control, such as a
prolonged Internet, telecommunications or electrical failure, which could
prevent us from delivering our Web site, could decrease the use of the Internet
or prevent users from accessing our Web site, which could have a material
adverse effect on our business.
Contingency Plan
We attempt to identify and maintain relationships with alternative suppliers of
services and products in order to mitigate the risks associated with suppliers
who are not year 2000 compliant. A change in suppliers on short notice if
necessary, however, may nonetheless result in a material disruption to our
business.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are a party to litigation arising in the ordinary course
of our business. We are not currently a party to any litigation that, if
determined adversely to us, we believe would have a material adverse effect on
us.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule (for electronic filers).
99 Risk Factors (incorporated by reference to our Form 8-K filed with
the SEC on April 16, 1999).
(b) Reports on Form 8-K:
Two Current Reports on Form 8-K and an Amended Current Report on Form 8-K/A were
filed by us with the SEC during the three months ended June 30, 1999:
o On April 16, 1999, we filed Items 1, 2 and 5 disclosures on a Form
8-K dated April 2, 1999 relating to our change in control, our
acquisition of Taconic, our corporate name change, our issuance to
OSHL of 1,000,000 shares of our common stock (pursuant to OSHL's
exercise of an outstanding stock warrant) and our issuance of an
additional warrant to OSHL for the purchase of 500,000 shares of our
common stock at an exercise price of $3.00 per share (the "1999
Warrant"). Under Item 7 we included, as Exhibits to the Form 8-K,
(i) the Acquisition Agreement and Plan of Reorganization, dated as
of March 26, 1999, between Taconic, us, certain shareholders of
Taconic and certain of our shareholders, (ii) the 1999 Warrant,
(iii) 1997 unaudited financial statements of Taconic, (iv) a press
release, dated April 2, 1999, regarding the acquisition and (v) risk
factors pertaining to MonsterDaata.com, Inc.
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o On June 15, 1999, we filed an Amendment to our Form 8-K described
above that had been filed on April 16, 1999. This Amendment amended
Item 7 of such Form 8-K to provide certain financial statements and
information for the fiscal years ended December 31, 1997 and
December 31, 1998 and the quarterly periods ended March 31, 1998 and
March 31, 1999, which was impracticable to provide on April 16, 1999
at the time we filed the Form 8-K.
o On June 16, 1999, we filed Items 4 and 8 disclosures on a Form 8-K
dated June 15, 1999 relating to a change in our certifying
accountant and a change in our fiscal year. Under Item 7 of the Form
8-K we included, as an Exhibit, a letter from our former certifying
accountant regarding such change in accountants.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MONSTERDAATA.COM, INC.
(Registrant)
Date: August 24, 1999 /s/ Mitchell Deutsch
--------------------------------------------
Mitchell Deutsch
President and Chief Executive Officer
Date: August 24, 1999 /s/ James Garfinkel
--------------------------------------------
James Garfinkel
Treasurer, Secretary and Vice President
(Principal Financial and Accounting Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from our form
10-QSB for the quarter ending June 30, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 695,256
<SECURITIES> 0
<RECEIVABLES> 586,755
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,285,011
<PP&E> 132,592
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,433,891
<CURRENT-LIABILITIES> 2,119,097
<BONDS> 0
0
0
<COMMON> 70,428
<OTHER-SE> (755,394)
<TOTAL-LIABILITY-AND-EQUITY> 1,433,891
<SALES> 681,253
<TOTAL-REVENUES> 681,253
<CGS> 407,689
<TOTAL-COSTS> 1,513,809
<OTHER-EXPENSES> 215,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,341
<INCOME-PRETAX> (1,031,215)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,031,215)
<EPS-BASIC> (0.15)
<EPS-DILUTED> (0.15)
</TABLE>
