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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 26, 1999
GIGA INFORMATION GROUP, INC.
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EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
Delaware File No. 0-21529 06-1422860
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(State or other (Commission (I.R.S Employer
jurisdiction or File Identification
organization) Number) Number)
139 Main Street
Cambridge, MA 02138
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 949-4900
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One Longwater Circle
Norwell, MA 02061
(former name or former address, if changed since last report)
47954.0001
<PAGE>
Item 5. Other Events
1. Filed herewith is a copy of the Giga Information Group, Inc. (the
"Company") Press Release, dated October 27, 1999, announcing its
results of operations for the quarter ended September 30, 1999 and the
nine months ended September 30, 1999. All normal recurring adjustments
that are, in the opinion of management, necessary for a fair
presentation of the results of operations for the periods presented
have been included. The nature of the Company's business is such that
the results for any interim period are not necessarily indicative of
the results for an entire fiscal year or any other interim period.
2. On October 26, 1999 the Company's Board of Directors accepted
Gideon Gartner's resignation from his position as Chairman of the
Board. Last January, Mr. Gartner and the Company announced that he was
scaling back his role with the Company to spend more time pursuing
other interests, and his decision to resign his position as Chairman
is a logical next step. Mr. Gartner is continuing as a director of the
Company.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of business acquired:
Not applicable.
(b) Pro Forma financial information:
Not applicable.
(c) Exhibit:
(99) Press Release, dated October 27, 1999
<PAGE>
SIGNATURES
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 hereunto duly authorized.
GIGA INFORMATION GROUP, INC.
By: /s/ Daniel M. Clarke
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Daniel M. Clarke
Senior Vice President and
Chief Financial Officer
Date: October 29, 1999
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<PAGE>
GIGA INFORMATION GROUP, INC.
FORM 8-K
CURRENT REPORT
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
(99) Press Release, dated September 30, 1999
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FOR IMMEDIATE RELEASE
FOR INFORMATION CONTACT:
Daniel M. Clarke
Chief Financial Officer
Giga Information Group
139 Main Street, 5th Floor
Cambridge, MA 02138
1 (617) 949-4900
Fax: 1 (617) 949-4903
[email protected]
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GIGA INFORMATION GROUP REPORTS
THIRD QUARTER RESULTS
CAMBRIDGE, Mass. (October 27, 1999) -- Giga Information Group, Inc. (NASDAQ:
GIGX) today announced that revenues for the third quarter ended September 30,
1999 increased 42 percent to $12.5 million from $8.8 million in the same period
of 1998. Revenues from Continuous Information Services for the third quarter of
1999 increased 42 percent to $11.7 million from $8.2 million in the same period
last year. The net loss for the third quarter of 1999 decreased to $4.4 million,
or $0.44 per share, from $5.6 million, or $0.79 per share, in the third quarter
of 1998.
Annualized Value* at September 30, 1999 was $51.8 million versus $38.3 million
at September 30, 1998, representing a 35 percent increase year-over-year.
Revenues for the nine months ended September 30, 1999 increased 41 percent to
$37.3 million from $26.4 million for the same period in 1998. The net loss for
the nine months ended September 30, 1999 decreased to $14.2 million, or $1.42
per share, from $15.1 million, or $3.94 per share, for the first nine months of
1998.
(more)
<PAGE>
Giga Information Group Reports Third Quarter Results 2-2-2
"Giga reached some important milestones in the third quarter, including the
1,000 enterprise client mark and over 118,000 licensed users," said Robert K.
Weiler, chairman, president and chief executive officer of Giga Information
Group. "Since its inception, Giga has been dedicated to providing quality,
practical research and advice on technology and e-Business, and our growth shows
that the market is accepting our approach. Giga continues to invest in growth,
moving to a new headquarters in August and expanding our analyst ranks by 44
percent during the past twelve months. This is truly an exciting time to have
joined this company."
"What our numbers don't show is the work our analysts do to help our clients
take advantage of the power of the Internet as a business tool," continued
Weiler. "In the third quarter, Giga analysts produced over 1,200 research
documents, fielded more than 4,000 client inquiries and spent more than 200 days
consulting directly with clients to provide expert advice and counsel on how
they can reach their e-Business potential. This translates to value for our
clients."
ABOUT GIGA INFORMATION GROUP
Giga Information Group provides objective research, advice and continuous
coaching on technology for e-Business. Giga's integrated suite of offerings
helps clients make strategic decisions about the technologies, people and
processes needed to excel in the new digital economy. Emphasizing close
interaction between analysts and clients, Giga delivers support with the speed
and scope necessary for e-Business.
Giga, founded by Gideon I. Gartner, began providing services in April 1996 and
now has a global client base encompassing more than 1,000 organizations and over
118,000 licensed users, making it the fastest growing company in the IT advisory
industry's history. Its enterprise clients include companies that use, sell and
invest in technology.
(more)
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<PAGE>
Giga Information Group Reports Third Quarter Results 3-3-3
Headquartered in Cambridge, Massachusetts, Giga has 10 other offices covering
the Americas and Europe. Giga is also represented by distributors in other areas
of the world. The Company's Web site can be accessed at http://www.gigaweb.com.
The Company's logo with the name Giga Information Group is a registered
trademark of Giga Information Group, Inc.
# # #
*Giga defines Annualized Value as the cumulative annualized subscription value
of its continuous information services contracts in effect at any given point in
time.
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Statements that are not historical fact may be considered forward-looking
statements (as defined in the Private Securities Litigation Reform Act of 1995)
that involve risks and uncertainties. Consequently, actual events or results may
differ materially from those expressed or implied by those set forth in such
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to, the Company's ability to attract and
retain highly skilled and experienced employees, ability to secure subscriptions
to its services and to achieve and sustain high renewal rates, ability to
effectively manage growth, ability to understand and anticipate market trends
and develop and offer new products and services, significant competition from
existing and new competitors, potential fluctuations in quarterly operating
results, continued market acceptance and demand of Giga services, dependence on
Internet infrastructure for access to GigaWeb and other risks as detailed from
time-to-time in the Company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to update any forward-looking
statements as a result of new information, unanticipated events, or otherwise.
*****************************************
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<PAGE>
<TABLE>
<CAPTION>
GIGA INFORMATION GROUP, INC.
CONSOLIDATED OPERATING RESULTS
(IN THOUSANDS, EXCEPT SHARE AND QUARTER ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
PER SHARE DATA ----------------------------------------- -------------------------------------
(UNAUDITED) % (UNAUDITED) %
1999 1998 Change 1999 1998 Change
-------------- --------------- -------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Continuous Information Services $ 11,709 $ 8,235 42% $ 32,878 $ 22,643 45%
Other, principally events 753 515 46% 4,414 3,771 17%
-------------- --------------- ------------- -------------
Total revenues 12,462 8,750 42% 37,292 26,414 41%
-------------- --------------- ------------- -------------
COSTS AND EXPENSES:
Cost of services 5,234 4,579 14% 18,646 14,272 31%
Sales and marketing 8,146 6,739 21% 23,501 19,055 23%
Research and development 801 402 99% 1,452 1,040 40%
General and administrative 2,266 1,628 39% 6,508 4,727 38%
Depreciation and amortization 490 321 53% 1,309 1,120 17%
-------------- --------------- ------------- -------------
Total costs and expenses 16,937 13,669 24% 51,416 40,214 28%
-------------- --------------- ------------- -------------
LOSS FROM OPERATIONS (4,475) (4,919) -9% (14,124) (13,800) 2%
-------------- --------------- ------------- -------------
INTEREST INCOME 143 270 -47% 607 429 41%
INTEREST EXPENSE (28) (432) -94% (98) (1,212) -92%
FOREIGN EXCHANGE GAIN/(LOSS) (64) 195 -133% (480) 245 -296%
-------------- --------------- ------------- -------------
LOSS FROM OPERATIONS BEFORE INCOME TAXES (4,424) (4,886) -9% (14,095) (14,338) -2%
INCOME TAX (BENEFIT)/CHARGE 10 36 -72% 62 36 72%
-------------- --------------- ------------- -------------
LOSS FROM CONTINUING OPERATIONS, BEFORE
EXTRAORDINARY ITEM (4,434) (4,922) -10% (14,157) (14,374) -2%
-------------- --------------- ------------- -------------
EXTRAORDINARY ITEM, NET OF APPLICABLE - (707) -100% - (707) -100%
TAXES OF $0 (NOTE 1.) -------------- --------------- ------------- -------------
NET LOSS $ (4,434) $ (5,629) -21% $ (14,157) $ (15,081) -6%
============== =============== ============= =============
RESULTS PER COMMON SHARE:
HISTORICAL - BASIC AND DILUTED:
NET LOSS $ (0.44) $ (0.79) -44% $ (1.42) $ (3.94) -64%
============== =============== ============= =============
WEIGHTED AVERAGE NUMBER OF SHARES (NOTE 2.) 10,017,712 7,142,319 9,987,621 3,824,978
============== =============== ============= =============
</TABLE>
GIGA INFORMATION GROUP, INC.
NOTES TO CONSOLIDATED OPERATING RESULTS
NOTE 1. EXTRAORDINARY ITEM:
$707,000 of accretion was accelerated from future periods due to repayment
of notes on August 4, 1998. The accelerated accretion would have been
recognized ratably over the six month period ending February 1, 1999 had the
Company not completed its Initial Public Offering and retired the notes as
contractually required.
<PAGE>
NOTE 2. COMPONENTS OF WEIGHTED AVERAGE COMMON SHARES:
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- ----------------------------
1998 1999 1998 1999
-------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares issued and outstanding at beginning of period 2,184,346 10,000,594 2,093,107 9,943,502
3,000,000 shares issued from Initial Public Offering 2,021,739 - 681,319 -
4,686,784 shares issued from conversion of preferred stock 2,903,768 - 978,559 -
Shares issued from exercise of warrants 29,739 - 10,022 11,023
Shares issued from exercise of stock options 2,727 17,118 61,971 33,096
-------------- --------------- ------------- -------------
Total 7,142,319 10,017,712 3,824,978 9,987,621
============== =============== ============= =============
</TABLE>
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<PAGE>
GIGA INFORMATION GROUP, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT SHARE DATA) SEPTEMBER 30, DECEMBER 31,
1999 1998
------------------ -----------------
<S> <C> <C>
ASSETS
Cash, cash equivalents and marketable securities $ 8,828 $ 21,057
Accounts receivable, net 13,428 15,017
Total current assets 30,524 45,591
Property and equipment, net 5,624 3,430
Total assets 36,337 49,213
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Deferred revenues $ 29,290 $ 29,470
Debt, current portion 566 461
Total current liabilities 40,178 39,363
Total liabilities 40,178 39,807
Total stockholders' equity (deficit) (3,841) 9,406
Total liabilities and stockholders' equity (deficit) 36,337 49,213
COMMON STOCK ISSUED AND OUTSTANDING 10,026,502 9,943,502
</TABLE>
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