SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2009
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
FOR THE TRANSITION PERIOD FROM
TO
EDGAR Online, Inc.
(Exact name of registrant as specified in its charter)
0-26071
(Commission File Number)
|
|
|
|
|
Delaware
|
|
06-1447017
|
(State or other jurisdiction
of incorporation)
|
|
(IRS Employer
Identification Number)
|
50 Washington Street, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
(203) 852-5666
(Registrant’s telephone number, including area code)
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 by check mark whether the registrant has
submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). YES
¨
NO
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions
of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
x
|
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES
¨
NO
x
Number of shares of common stock outstanding at May 14, 2009: 26,763,020 shares.
EDGAR ONLINE, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2009
Forward Looking Statements
The discussions set forth in this
Quarterly Report on Form 10-Q contain statements concerning potential future events. Such forward-looking statements are based upon assumptions by our management, as of the date of this Quarterly Report, including assumptions about risks and
uncertainties faced by us. In addition, management may make forward-looking statements orally or in other writings, including, but not limited to, in press releases, in the annual report to shareholders and in our other filings with the U.S.
Securities and Exchange Commission (the “SEC”). Readers can identify these forward-looking statements by the use of such verbs as expects, anticipates, believes or similar verbs or conjugations of such verbs. If any of management’s
assumptions prove incorrect or should unanticipated circumstances arise, our actual results could materially differ from those anticipated by such forward-looking statements. The differences could be caused by a number of factors or combination of
factors including, but not limited to, those factors identified in Part II, Item 1A, “Risk Factors” of this report, as well as our other periodic reports on Forms 10-K, 10-Q and 8-K filed with the SEC, from time to time. Readers are
strongly encouraged to consider those factors when evaluating any forward-looking statements concerning us. We will not update any forward-looking statements in this Quarterly Report to reflect future events or developments. Investors should also be
aware that while we, from time to time, do communicate with securities analysts, it is against our policy to disclose to them any material non-public information or other confidential commercial information. Investors should not assume that we agree
with any report issued by any analyst or with any statements, projections, forecasts or opinions contained in any such report. Unless otherwise indicated, all references to the “Company,” “we,” “us,” “our,”
and “EDGAR Online” include reference to our subsidiaries as well.
Index
- 2 -
PART 1. FINANCIAL INFORMATION
|
Item 1.
|
Financial Statements
|
EDGAR ONLINE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2008
|
|
|
March 31,
2009
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,062
|
|
|
$
|
1,730
|
|
|
Short-term investments
|
|
|
220
|
|
|
|
223
|
|
|
Accounts receivable, less allowance of $312 at December 31, 2008 and $350 at March 31, 2009
|
|
|
2,570
|
|
|
|
2,185
|
|
|
Other current assets
|
|
|
254
|
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
5,106
|
|
|
|
4,303
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
1,826
|
|
|
|
2,205
|
|
|
Goodwill
|
|
|
2,189
|
|
|
|
2,189
|
|
|
Other intangible assets, net
|
|
|
2,952
|
|
|
|
2,640
|
|
|
Other assets
|
|
|
933
|
|
|
|
855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
13,006
|
|
|
$
|
12,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
2,407
|
|
|
$
|
2,334
|
|
|
Deferred revenues
|
|
|
4,239
|
|
|
|
4,240
|
|
|
Current portion of long-term debt
|
|
|
438
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
7,084
|
|
|
|
7,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
1,885
|
|
|
|
1,766
|
|
|
Other long-term liabilities
|
|
|
333
|
|
|
|
264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
9,302
|
|
|
|
9,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, $0.01 par value, 50,000,000 authorized at December 31, 2008 and March 31, 2009, 27,554,713 shares issued and
26,505,818 shares outstanding at December 31, 2008 and 27,783,343 shares issued and 26,739,210 shares outstanding at March 31, 2009
|
|
|
276
|
|
|
|
278
|
|
|
Additional paid-in capital
|
|
|
73,092
|
|
|
|
73,562
|
|
|
Accumulated deficit
|
|
|
(67,836
|
)
|
|
|
(68,933
|
)
|
|
Treasury stock, at cost, 1,048,895 at December 31, 2008 and 1,044,133 at March 31, 2009
|
|
|
(1,828
|
)
|
|
|
(1,819
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
3,704
|
|
|
|
3,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
13,006
|
|
|
$
|
12,192
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
- 3 -
EDGAR ONLINE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
$
|
2,287
|
|
|
$
|
1,878
|
|
|
Data and solutions
|
|
|
2,621
|
|
|
|
2,115
|
|
|
XBRL filings
|
|
|
83
|
|
|
|
242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
4,991
|
|
|
|
4,235
|
|
|
Cost of revenues
|
|
|
798
|
|
|
|
1,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
4,193
|
|
|
|
3,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
1,215
|
|
|
|
929
|
|
|
Product development
|
|
|
1,021
|
|
|
|
558
|
|
|
General and administrative
|
|
|
2,105
|
|
|
|
2,087
|
|
|
Depreciation and amortization
|
|
|
467
|
|
|
|
497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,808
|
|
|
|
4,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(615
|
)
|
|
|
(987
|
)
|
|
Interest expense, net
|
|
|
(90
|
)
|
|
|
(110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(705
|
)
|
|
$
|
(1,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding—basic
|
|
|
26,279
|
|
|
|
26,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share—basic
|
|
$
|
(0.03
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding— diluted
|
|
|
26,279
|
|
|
|
26,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share—diluted
|
|
$
|
(0.03
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
- 4 -
EDGAR ONLINE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(705
|
)
|
|
$
|
(1,097
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
155
|
|
|
|
185
|
|
|
Amortization of intangible assets
|
|
|
312
|
|
|
|
312
|
|
|
Stock-based compensation
|
|
|
283
|
|
|
|
465
|
|
|
Provision for losses on trade accounts receivable
|
|
|
150
|
|
|
|
135
|
|
|
Amortization of capitalized product costs
|
|
|
55
|
|
|
|
55
|
|
|
Amortization of deferred financing costs and discount
|
|
|
30
|
|
|
|
17
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(872
|
)
|
|
|
250
|
|
|
Other assets, net
|
|
|
5
|
|
|
|
101
|
|
|
Accounts payable and accrued expenses
|
|
|
(767
|
)
|
|
|
(73
|
)
|
|
Deferred revenues
|
|
|
345
|
|
|
|
1
|
|
|
Long-term payables
|
|
|
(116
|
)
|
|
|
(69
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
(420
|
)
|
|
|
1,379
|
|
|
Net cash (used in) provided by operating activities
|
|
|
(1,125
|
)
|
|
|
282
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(190
|
)
|
|
|
(139
|
)
|
|
Capitalized product development costs
|
|
|
—
|
|
|
|
(425
|
)
|
|
Short-term investments
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(190
|
)
|
|
|
(567
|
)
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options and warrants
|
|
|
31
|
|
|
|
16
|
|
|
Payments of notes payable
|
|
|
—
|
|
|
|
(63
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
31
|
|
|
|
(47
|
)
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(1,284
|
)
|
|
|
(332
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
3,568
|
|
|
|
2,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
2,284
|
|
|
$
|
1,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
58
|
|
|
$
|
50
|
|
See accompanying notes to condensed consolidated financial statements.
- 5 -
EDGAR ONLINE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE
DATA)
(UNAUDITED)
(1) BASIS OF PRESENTATION
EDGAR Online was incorporated in the State of Delaware in November 1995 under the name Cybernet Data Systems, launched its EDGAR Online website in January
1996, and went public in May 1999 under its current name. The Company creates and distributes financial data and public filings for equities, mutual funds, and a variety of other publicly traded assets. The highly detailed data produced by the
Company assists in the analysis of the financial, business and ownership conditions of a company or investment vehicle. The Company has also developed high volume distribution techniques for managing and delivering regulatory filings. In addition,
the Company has developed proprietary automated data parsing, tagging and processing systems that allow for rapid conversion of unstructured data into structured financial data sets. The Company specializes in the use of the financial reporting
standard called eXtensible Business Reporting Language (“XBRL”) and leverages its automated processing platform and expertise in XBRL to produce both standard and custom data sets and to assist companies with the creation of their own XBRL
financial reports. The Company also creates tools and web sites for easy viewing and analysis of this XBRL data. Consumers of our information are generally financial, corporate and advisory professionals who work in financial institutions such as
investment funds, asset management firms, insurance companies and banks, stock exchanges and government agencies, as well as accounting firms, law firms, corporations or individual investors.
The unaudited interim financial statements of the Company as of March 31, 2009 and for the three months ended March 31, 2008 and 2009 included herein have been
prepared in accordance with the instructions for Form 10-Q under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Article 10 of Regulation S-X under the Exchange Act. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.
In the opinion of the Company, the accompanying unaudited interim financial statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial position of the Company as of March 31, 2009 and the results of its operations and cash flows for the three months ended March 31, 2008 and 2009. The results for the three months
ended March 31, 2009 are not necessarily indicative of the expected results for the full 2009 fiscal year or any future period.
These financial
statements should be read in conjunction with the financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, filed with the SEC in March 2009. The condensed
consolidated balance sheet information was derived from the audited consolidated financial statements as of that date.
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates embedded in the condensed consolidated
financial statements for the periods presented concern the allowance for doubtful accounts, the fair values of goodwill and other intangible assets and the estimated useful lives of intangible assets.
Basic loss per share excludes dilution for common
stock equivalents and is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects, in periods in which they have a dilutive effect, the potential dilution that
could occur if securities or other contracts to issue common stock were exercised or converted and resulted in the issuance of common stock.
Diluted loss
per share is the same as basic loss per share amounts, as the outstanding stock options, unvested restricted stock grants and warrants are anti-dilutive for each of the periods presented. At March 31, 2008 and 2009, the number of anti-dilutive
securities outstanding were 3,485,400 and 3,952,797, respectively.
- 6 -
(3) SOFTWARE DEVELOPMENT COSTS
The Company capitalizes software development costs in accordance with Statement of Financial Accounting Standards (SFAS) No. 86 (SFAS 86)
, “
Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise
Marketed.
”
Software development costs are capitalized after technological feasibility is established. Once the software products become available for general release to the public, the Company amortizes such costs over the related
product’s estimated economic useful life to cost of revenues. Net capitalized software development costs (included in other assets) totaled $416 and $361 at December 31, 2008 and March, 31, 2009, respectively. Related amortization expense,
included in cost of revenues, totaled $55 for both the three months ended March 31, 2008 and 2009.
The Company capitalizes internal-use software
development costs in accordance with Statement of Position (“SOP”) No. 98-1 (“SOP 98-1”), “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” SOP 98-1 requires that entities
capitalize certain internal-use software costs once certain criteria are met. Once the internal-use software is ready for its intended use, the capitalized internal-use software costs will be amortized over the related software’s estimated
economic useful life in amortization and depreciation expense. Our computer software is also subject to review for impairment as events or changes in circumstances occur indicating that the amount of the asset reflected in the Company’s balance
sheet may not be recoverable. Net capitalized internal-use software costs (included in property and equipment) were $725 and $1,107 at December 31, 2008 and March 31, 2009, respectively. Related amortization expense totaled $0 and $44 in
the three months ended March 31, 2008 and 2009, respectively.
(4) LONG-TERM DEBT
On April 5, 2007, the Company entered into a Financing Agreement (“Financing Agreement”) with Rosenthal & Rosenthal, Inc. (“Rosenthal”) for additional working capital. Under the
Financing Agreement, Rosenthal made a term loan in the principal amount of $2,500 to the Company and has additionally agreed to provide up to an additional $2,500 under a revolving line of credit. Interest on outstanding borrowings under the
Financing Agreement is payable at variable rates of interest over the published JPMorgan Chase prime rate (with a minimum prime rate of 6%), 2.5% on the term loan and 2% on borrowings under the revolving credit facility. The Company’s
obligations under the term loan are evidenced by a secured Term Note and all of the Company’s obligations to Rosenthal are secured by a first priority security interest in substantially all of the Company’s assets.
The Financing Agreement, as amended most recently on March 13, 2009, terminates on March 30, 2011 unless sooner terminated by either party in accordance with
the terms of the Financing Agreement. The terms include a provision that would allow the lender to accelerate the due date of the debt based on certain circumstances. The Company is required to maintain certain levels of working capital and tangible
net worth. On April 22, 2008, these amounts were amended effective as of December 31, 2007. On March 13, 2009, these amounts were amended effective as of December 31, 2008. The Company was in compliance with the amended terms at
March 31, 2009.
In connection with the Financing Agreement, the Company issued to Rosenthal a warrant to purchase 100,000 shares of the
Company’s common stock at an exercise price equal to $2.81 (the market price of the Company’s common stock on the closing date of the transaction) which warrant expires on April 30, 2010. A discount related to the warrant totaling
$125 was recorded based on the Black-Scholes-Merton fair value of the warrant on the date of issue and is being amortized over the term of the Financing Agreement. Also in connection with this transaction, the Company paid its financial advisor
$125, which represents 3% of the gross principal amount of the term loan and 2% of the gross principal amount of the revolving credit.
The term loan, as
amended, is due as follows: (i) $21 per month from July 1, 2008 through and including March 1, 2009; (ii) $42 from April 1, 2009 through the maturity date and (iii) the entire remaining unpaid balance on the maturity
date. At March 31, 2009, $500 was classified as the current portion of long-term debt and $1,766 was classified long-term debt. There were $88 of unamortized deferred financing costs included in other assets. The Company has not received any
funding under the revolving line of credit as of March 31, 2009. Interest expense under the Agreement, totaled $99 and $96 for the three months ended March 31, 2008 and 2009, respectively, and included $30 and $17, respectively, of
amortization of deferred financing costs and warrant discount.
(5) STOCK-BASED COMPENSATION
Stock Compensation Expense
The Company records stock-based compensation expense under the provisions of SFAS
No. 123 (R), “Share-Based Payment,” (“SFAS 123(R)”). Stock-based compensation expense for the three months ended March 31, 2008 and 2009 was recognized in the following income statement expenses:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2008
|
|
2009
|
|
Cost of revenues
|
|
$
|
12
|
|
$
|
11
|
|
Sales and marketing
|
|
|
73
|
|
|
111
|
|
Product development
|
|
|
39
|
|
|
35
|
|
General and administrative
|
|
|
159
|
|
|
308
|
|
|
|
|
|
|
|
|
|
Total stock compensation expense
|
|
$
|
283
|
|
$
|
465
|
|
|
|
|
|
|
|
|
- 7 -
This expense increased the Company’s net loss per share by $0.01 and $0.02 in the three months ended March 31,
2008 and 2009, respectively.
The estimated per share weighted-average grant-date fair values of stock options granted during the three months ended
March 31, 2008 and 2009 were $1.96 and $1.01, respectively. Amounts were determined using the Black-Scholes-Merton option pricing model based on the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Expected dividend yield
|
|
0.0
|
%
|
|
0.0
|
%
|
|
Expected volatility
|
|
76.51
|
%
|
|
74.46
|
%
|
|
Risk-free interest rate
|
|
3.82
|
%
|
|
2.04
|
%
|
|
Expected life in years
|
|
6
|
|
|
6
|
|
The assumptions used in calculating the value of stock options, which involve inherent uncertainties and the
application of management judgment, were based on the following:
|
•
|
|
Expected dividend yield
—reflects the Company’s present intention to retain earnings, if any, for use in the operation and expansion of the
Company’s business;
|
|
•
|
|
Expected volatility
—determined considering historical volatility of the Company’s common stock over the preceding six years;
|
|
•
|
|
Risk-free interest rate
—based on the yield available on U.S. Treasury zero coupon issues with a remaining term approximating the expected life of the
stock option awards; and
|
|
•
|
|
Expected life
—calculated as the weighted average period that the stock option awards are expected to remain outstanding based on historical experience.
|
- 8 -
Stock Options and Restricted Stock Grants as of March 31, 2009
In May 2005, the Company adopted the 2005 Stock Award and Incentive Plan (the “2005 Plan”) which replaced all previous stock option plans which in total had
authorized the issuance of options to purchase up to 4.1 million shares of the Company’s common stock since the Company’s inception. All remaining available shares under the Company’s prior stock option plans are now available
under the 2005 Plan. In addition, the 2005 Plan, when adopted, authorized 1,087,500 new shares of common stock for equity awards. The 2005 Plan authorizes a broad range of awards, including stock options, stock appreciation rights, restricted stock,
non-restricted stock and deferred stock. At the Annual Meeting of Stockholders held on June 23, 2008, the 2005 Plan was amended to increase the number of shares available for grant by 1,000,000.
Option awards are generally granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant. Option awards
generally vest over three years and have ten year contractual terms.
Option activity for the three months ended March 31, 2009 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF
OPTIONS
|
|
|
WEIGHTED
AVERAGE
EXERCISE
PRICE
|
|
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
TERM
|
|
AGGREGATE
INTRINSIC
VALUE
|
|
Outstanding at December 31, 2008
|
|
3,362,216
|
|
|
$
|
2.47
|
|
|
|
|
|
|
Granted
|
|
462,500
|
|
|
$
|
1.01
|
|
|
|
|
|
|
Exercised
|
|
(20,000
|
)
|
|
$
|
0.79
|
|
|
|
|
|
|
Cancelled
|
|
(199,083
|
)
|
|
$
|
3.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at March 31, 2009
|
|
3,605,633
|
|
|
$
|
2.21
|
|
6.82 years
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at March 31, 2009
|
|
2,378,225
|
|
|
$
|
2.42
|
|
5.53 years
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value represents the difference between the exercise price of the underlying awards and
the market price of the Company’s common stock for those awards that have an exercise price below the market price at March 31, 2009. During the three months ended March 31, 2009, the aggregate intrinsic value of options exercised
under the Company’s stock option plans was approximately $4. Cash received from stock options exercised during the three months ended March 31, 2009 was $16.
In addition, the Company granted restricted shares under the 2005 Plan during the three months ended March 31, 2009. Restricted shares have no exercise price and vest depending on the individual grants. The fair
value of the restricted shares is based on the market value of the Company’s common stock on the date of grant. Restricted share activity is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER
OF
SHARES
|
|
|
WEIGHTED
AVERAGE
GRANT-DATE
FAIR VALUE
|
|
AGGREGATE
INTRINSIC
VALUE
|
|
Non-vested at December 31, 2008
|
|
270,556
|
|
|
$
|
2.82
|
|
|
|
|
Granted
|
|
190,000
|
|
|
$
|
1.01
|
|
|
|
|
Vested
|
|
(213,392
|
)
|
|
$
|
1.20
|
|
|
|
|
Cancelled
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested at March 31, 2009
|
|
247,164
|
|
|
$
|
2.82
|
|
$
|
247
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value was calculated based on the market price of the Company’s common stock at
March 31, 2009. During the three months ended March 31, 2009, the aggregate intrinsic value of shares vested was $218, determined based on the market price of the Company’s common stock on the respective vesting dates.
At March 31, 2009, 474,376 shares are available for grant under the 2005 Plan.
- 9 -
(6) SEVERANCE COSTS
In
2007, the Company accrued $2,011 of severance costs related to several executive and other employee terminations. As part of the employment and/or severance agreements, all options held by the terminated executives vested immediately. As a result,
additional-paid-in-capital was increased by $465 in the year ended December 31, 2007 to recognize previously unrecognized stock compensation remaining from the original grant date valuation of the options. At March 31, 2009, there were
$347 of remaining severance cost accruals included in accrued expenses and $59 in other long-term payables.
(7) RECENT ACCOUNTING PRONOUNCEMENTS
In April 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) FAS 107-1 and Accounting Principles
Board Opinion (“APB”) APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP 107-1” and “APB 28-1”). FSP 107-1 and APB 28-1 require that disclosures about the fair value of a
company’s financial instruments be made whenever summarized financial information for interim reporting periods is made. The provisions of FSP 107-1 are effective for interim reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. Early adoption of FSP 107-1 and APB 28-1 may be made only if FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP 157-4”) and FSP FAS 115-2 and FAS 124-2 “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP 115-2” and
“FSP 124-2”) are also adopted early. The Company is currently evaluating the impact that FSP 107-1 and APB 28-1 will have on its consolidated financial statements.
In April 2009, the FASB issued FSP 157-4. FSP 157-4 does not change the definition of fair value as detailed in SFAS 157, but provides additional guidance for estimating fair value in accordance with SFAS 157 when the
volume and level of activity for the asset or liability have significantly decreased. The provisions of FSP 157-4 are effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods
ending after March 15, 2009. If early adoption is elected for either FSP 115-2 or FSP 107-1 and APB 28-1, FSP 157-4 must also be adopted early. The Company is currently evaluating the impact that FSP 157-4 will have on its consolidated
financial statements.
In April 2009, the FASB issued FSP 115-2 and FSP 124-2. FSP 115-2 and FSP 124-2 amends the other-than-temporary impairment guidance
in U.S. GAAP for debt securities and provides additional disclosure requirements for other-than-temporary impairments for debt and equity securities. FSP 115-2 and FSP 124-2 addresses the determination as to when an investment is considered
impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. The provisions of FSP 115-2 and FSP 124-2 are effective for interim and annual reporting periods ending after June 15, 2009, with early
adoption permitted for periods ending after March 15, 2009. If early adoption is elected for either FSP 157-4 or FSP 107-1 and APB 28-1, FSP 115-2 and FSP 124-2 must also be adopted early. The Company is currently evaluating the impact that FSP
115-2 and FSP 124-2 will have on its consolidated financial statements.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (IN THOUSANDS)
|
OVERVIEW
We create and distribute financial data and public filings
for equities, mutual funds, and a variety of other publicly traded assets. We produce highly detailed data that helps in the analysis of the financial, business and ownership conditions of an investment. We are considered a pioneer and leader in the
rapidly emerging financial reporting standard, XBRL, and use our automated processing platform and our expertise in XBRL to produce both datasets and tools to assist organizations with the creation, management and distribution of XBRL financial
reports. We launched our EDGAR Online web site and began selling our subscription services and establishing contractual relationships with business and financial information web sites to supply EDGAR content in January 1996.
We went public in May 1999. In September 1999, we acquired all of the outstanding equity of Partes Corporation, owner of the Freeedgar.com web site for $9,900. The
purchase price consisted of the issuance of common stock, stock options and warrants, the assumption of liabilities and acquisition related expenses. In October 2000, we acquired all the outstanding equity of Financial Insight Systems, Inc. for
approximately $28,100. The purchase price included the issuance of common stock and notes, a cash payment and acquisition related expenses.
We recognize
revenue from providing the following services:
Subscriptions
. Our end-user subscription services include I-Metrix and I-Metrix
Professional, EDGAR Pro and EDGAR Access. I-Metrix delivers a web only service while I-Metrix Professional allows a user to do in-depth analysis of companies and industries by providing fundamental data and a suite of tools and models that allow
users to search, screen and evaluate the data via the web and a Microsoft Excel add-in. EDGAR Pro offers financial data, stock ownership, public offering data sets and advanced search tools. It is available via multi-seat and enterprise-wide
contracts, and may also include add-on services such as global annual reports and conference call transcripts. EDGAR Access, our retail product, has fewer features than EDGAR Pro and is available via single-seat, credit card purchase only.
Subscriptions also includes ancillary advertising and e-commerce revenues through the sale of advertising banners, sponsorships and through e-commerce activities such as marketing third party services to the users of our web sites. Revenue from
subscription services is recognized ratably over the subscription period, which is typically 12 months. Advertising and e-commerce revenue is recognized as the services are provided.
- 10 -
Data and Solutions.
We produce a specialized line of data feeds, products and solutions based on
content sets that we have extracted from SEC filings and other data providers. Both our data products and solutions consist of digital data feeds transmitted through various formats including hosted web pages, multiple application programming
interfaces, and other response mechanisms. Our data products include, but are not limited to, full access to SEC filings in multiple formats, standardized and as-reported fundamental financial data, annual and quarterly financial statements, insider
trades, institutional holdings, initial and secondary public offerings, Form 8-K disclosures, electronic prospectuses and other investment instrument disclosure information. Our data solutions include the customization of our data products, the
conversion of data from unstructured content into multiple formats including XML, XBRL and PDF, the storage and delivery of data and custom feeds and tools to access the information. Revenue from data licenses is recognized over the term of the
contract, which are typically non-cancelable, one-year contracts with automatic renewal clauses. Our data solutions sometimes involve some upfront customization fees along with more traditional annual data licensing arrangements for the ongoing
delivery of the data solution. In addition, some of our data solutions are billed on a time and materials basis, per service level agreements or for delivery of data. We review each contract in connection with the respective governing accounting
literature to determine revenue recognition on a case-by-case basis. Revenue from time and materials based agreements and data delivery is recognized as the data and services are provided. Upfront customization fees are recorded systematically over
the expected customer relationship period.
XBRL Filings.
One of our data solutions provides partners and customers with a mechanism
for converting financial statements into XBRL for filing with the SEC and potentially other regulators. Our primary partner in this channel is R.R. Donnelley & Sons, where we provide services to their customer base for compliance with
upcoming SEC regulations mandating the submission of XBRL tagged company reports. This XBRL Filing solution leverages our data processing engine and proprietary business rules that we have developed for tagging US GAAP financials with the
appropriate XBRL tags. Our process combines our XBRL knowledge and expertise with data-tagging automation and workflow. We recognize revenue from fixed fees on a ratable basis as well as per-filing fees as the services are provided.
CRITICAL ACCOUNTING POLICIES
There have been no material changes in
our critical accounting policies and estimates from those disclosed in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2008. However, in 2009, we have categorized revenue into the following; subscriptions, data and
solutions and XBRL filings. Prior period revenues have been reclassified accordingly.
RESULTS OF OPERATIONS
The following table sets forth the percentage relationships of certain items from our Condensed Consolidated Statements of Operations as a percentage of total revenues.
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Total revenues
|
|
100
|
%
|
|
100
|
%
|
|
Cost of revenues
|
|
16
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
84
|
|
|
73
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Sales and marketing
|
|
24
|
|
|
22
|
|
|
Product development
|
|
21
|
|
|
13
|
|
|
General and administrative
|
|
42
|
|
|
49
|
|
|
Amortization and depreciation
|
|
9
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
(12
|
)
|
|
(23
|
)
|
|
Interest and other, net
|
|
(2
|
)
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(14
|
)%
|
|
(26
|
)%
|
|
|
|
|
|
|
|
|
REVENUES
Total revenues for the three months ended March 31, 2009 decreased 15% to $4,235, from $4,991 for the three months ended March 31, 2008. The net decrease in revenues was primarily attributable to a $409, or 18%, decrease in
subscriptions revenues and a $506, or 19%, decrease in data and solutions revenues which were partially offset by a $159, or 192%, increase in XBRL filings revenues.
- 11 -
SUBSCRIPTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Revenues (in $000s)
|
|
$
|
2,287
|
|
|
$
|
1,878
|
|
|
Percentage of total revenues
|
|
|
46
|
%
|
|
|
44
|
%
|
|
Number of subscribers
|
|
|
12,400
|
|
|
|
10,700
|
|
|
Average price per subscriber
|
|
$
|
738
|
|
|
$
|
702
|
|
Subscription revenues for the three months ended March 31, 2009 decreased from the three months ended
March 31, 2008 due to decreased sales of EDGAR Pro and EDGAR Access, our retail service. Sales of our I-Metrix Professional premium product were flat. Our subscription business has been impacted by unprecedented business and workforce
reductions in the financial services community over the past year and the current economic crisis in general. While we did add new subscribers to all of our subscription products, cancellations exceeded these new sales.
DATA AND SOLUTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Revenues (in $000s)
|
|
$
|
2,621
|
|
|
$
|
2,115
|
|
|
Percentage of total revenues
|
|
|
52
|
%
|
|
|
50
|
%
|
|
Number of contracts
|
|
|
275
|
|
|
|
283
|
|
Data and solutions revenues decreased for the three months ended March 31, 2009 from the three months ended
March 31, 2008 due in large part to non-recurring data solutions revenue of approximately $380 in the three months ended March 31, 2008. In addition, cancellations of data licenses contracts exceeded new contracts in the three months ended
March 31, 2009.
XBRL FILINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
MARCH 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
Revenues (in $000s)
|
|
$
|
83
|
|
|
$
|
242
|
|
|
Percentage of total revenues
|
|
|
2
|
%
|
|
|
6
|
%
|
The increase in XBRL filings revenues for the three months ended March 31, 2009 from the three months ended
March 31, 2008 was directly related to the SEC rules that require certain companies to file their documents in XBRL beginning with the period ending after June 15, 2009. We recognized revenue from both fixed fees and per-filing fees as
companies began to prepare their documents in XBRL in anticipation of those rules.
COST OF REVENUES
Cost of revenues primarily consists of salaries and benefits of operations employees to produce data sets and create XBRL filings, fees paid to acquire data and the
amortization of costs related to developing our I-Metrix products that were previously capitalized. In addition, in the three months ended March 31, 2008, barter advertising expense was recorded equal to the barter advertising revenue for that
period. There were no barter revenues or expenses in the three months ended March 31, 2009.
Total cost of revenues for the three months ended
March 31, 2009 increased $353,000, or 44%, to $1,151 from $798 for the three months ended March 31, 2008. The net increase in cost of revenues was primarily due to a $140 increase in payroll related expenses and the addition of $172 of
XBRL related production costs.
GROSS PROFIT
Gross
profit for the three months ended March 31, 2009 decreased $1,109, or 26%, to $3,084 from $4,193 for the three months ended March 31, 2008. The gross profit percentage decreased to 73% for the three months ended March 31, 2009 from 84% for the three
months ended March 31, 2008. The decrease was due to lower total revenues as well as the higher cost of revenues related to XBRL filings revenues. We expect that gross profit percentages will remain at this lower rate as the lower margin XBRL
filings revenues are expected to continue to increase as a percentage of total revenues.
OPERATING EXPENSES
Sales and Marketing
. Sales and marketing expenses consist primarily of salaries and benefits, sales commissions, advertising expenses, public relations, and costs
of marketing materials. Sales and marketing expenses for the three months ended March 31, 2009 decreased $286 or 24%, to $929 from $1,215 for the three months ended March 31, 2008. The net decrease was primarily due to a $273 decrease in
payroll related expenses.
Development
. Development expenses, which consist primarily of salaries and benefits and outside development costs, for
the three months ended March 31, 2009 decreased $463, or 45%, to $558 from $1,021 for the three months ended March 31, 2008. The decrease was primarily due to the capitalization of certain payroll costs related to development of our XBRL
processes. In the three months ended March 31, 2009, we capitalized $425 of such costs.
General and Administrative
. General and administrative
expenses consist primarily of salaries and benefits, insurance, fees for professional services, general corporate expenses and facility expenses. General and administrative expenses for the three months ended March 31, 2009 decreased $18, or
1%, to $2,087 from $2,105 for the three months ended March 31, 2008. The net decrease was primarily due to a $183 decrease in payroll related expenses which was partially offset by a $148 increase in stock compensation expense.
- 12 -
Depreciation and Amortization
. Depreciation and amortization expenses include the depreciation of property and
equipment and the amortization of definite lived intangible assets. Depreciation and amortization for the three months ended March 31, 2009 increased $30, or 6%, to $497 from $467 for the three months ended March 31, 2008 as a result of
increased capital expenditures.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $282 for the three months ended March 31, 2009 compared to net cash used of $1,125 for the three months ended March 31, 2008. This was primarily due to increased
collections of accounts receivable in the three months ended March 31, 2009.
Net cash used in investing activities was $567 for the three months
ended March 31, 2009 compared to $190 for the three months ended March 31, 2008. The increase was due to $425 of capitalized product development costs in the three months ended March 31, 2009 which was partially offset by a decrease
in capital expenditures of $139 for the three months ended March 31, 2009 compared to $190 for the three months ended March 31, 2008. The purchases were made to support our expansion and increased infrastructure.
Net cash used in financing activities was $47 for the three months ended March 31, 2009 compared to net cash provided of $31 for the three months ended
March 31, 2008. Debt payments of $63 in the three months ended March 31, 2009 were slightly offset by proceeds from option exercises which totaled $16 in the three months ended March 31, 2009 compared to $31 in the three months ended
March 31, 2008.
On April 5, 2007, we entered into the Financing Agreement with Rosenthal for additional working capital. Under the Financing
Agreement, Rosenthal made a term loan in the principal amount of $2.5 million to us and has additionally agreed to provide up to an additional $2.5 million under a revolving line of credit. Interest on outstanding borrowings under the Financing
Agreement is payable at variable rates of interest over the published JPMorgan Chase prime rate, 2.5% on the term loan and 2% on borrowings under the revolving credit facility. Our obligations under the term loan are evidenced by a secured Term Note
and are secured by a first priority security interest in substantially all of our assets. We are required to maintain certain collateral ratios and financial covenants under the agreement. On April 22, 2008, the ratios and covenants were
amended effective as of December 31, 2007. On March 13, 2009, the ratios and covenants were further amended effective December 31, 2008. In addition, the maturity date was extended to March 30, 2011 and the renewal date was
extended to March 31, 2011. We were in compliance with these ratios and covenants, as amended, at March 31, 2009 and we believe that we will be in compliance throughout 2009. The Financing Agreement, as amended, terminates on
March 30, 2011 unless sooner terminated by either party in accordance with the terms of the Financing Agreement. In connection with the Financing Agreement, we issued a warrant to purchase 100,000 shares of our common stock at an exercise price
equal to $2.81 (the market price of our common stock on the closing date of the transaction) to Rosenthal. The warrant expires on April 30, 2010. Also in connection with this transaction, we paid our financial advisor $125,000, which represents
3% of the gross principal amount of the term loan and 2% of the gross principal amount of the revolving credit.
At March 31, 2009, we had cash and
cash equivalents on hand of $1,730. We have no off-balance sheet arrangements at March 31, 2009. We believe that our existing capital resources will be sufficient to meet our anticipated cash needs for working capital and capital expenditures
for at least the next 12 months. Thereafter, if cash generated from operations is insufficient to satisfy our liquidity requirements, we may need to raise additional funds through public or private debt or equity financings, strategic relationships
or other arrangements. We may also consider such financings prior to such time if conditions suggest engaging in such a financing would be advantageous to us. There can be no assurance that such additional funding, if needed, will be available on
terms attractive to us, or at all. The failure to raise capital when needed could materially adversely affect our business, results of operations and financial condition. If additional funds are raised through the issuance of equity securities, the
percentage ownership of our then-current stockholders would be reduced.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
There
have been no material changes in our exposure to market risk from that disclosed in Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2008.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
Conclusion Regarding Effectiveness of
Disclosure Controls and Procedures
We carried out an evaluation under the supervision and with the participation of our management, including our Chief
Executive Officer and Chief Financial Officer, of the design and effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of Exchange Act, as of the end of the period covered by this Quarterly Report.
Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective
to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and
that information required to be disclosed by us in the reports we file or submit under the Exchange Act , is accumulated and communicated
- 13 -
to our management, including our principle executive and financial officers, or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and can therefore only provide reasonable, not absolute, assurance
that the design will succeed in achieving its stated goals.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal controls over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.
Inherent Limitations of Controls
Because of their inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
- 14 -
PART II. OTHER INFORMATION.
|
ITEM 1.
|
LEGAL PROCEEDINGS.
|
None
The following risk factors, which were included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, have been updated with respect to results from the period covered by this report. Other than those below, there were no other material changes from the risk factors
previously reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Please refer to Item I of our Annual Report for 2008 for disclosures regarding other risks and uncertainties related to our business.
We have a history of losses and we expect to incur losses for the foreseeable future. If we are unable to achieve profitability, our business will suffer and our
stock price is likely to decline.
We have never operated at a profit and we anticipate incurring a loss in 2009, and may incur additional losses in
2010. At March 31, 2009, we had an accumulated deficit of $68.9 million. As a result, we will need to significantly increase our revenues to achieve and sustain profitability. If revenues grow more slowly than we anticipate, or if operating
expenses exceed our expectations or cannot be adjusted accordingly, we may incur further losses in the future. We are highly likely to incur additional costs as we expand our product offerings and increase our intellectual property portfolio which
reduces our chances of attaining profitability. We cannot assure you that we will be able to achieve or sustain profitability.
If we fail to increase
revenues, we will not achieve or maintain profitability.
Even though our revenues have increased from $14.2 million in 2005 to $19.5 million in 2008,
to achieve profitability, we will need to continue to increase revenues substantially through implementation of our growth strategy and/or reduce expenses significantly. Revenues for the three months ended March 31, 2009 totaled $4.2 million.
We cannot assure you that our revenues will grow or that we will achieve or maintain profitability in the future.
NASDAQ accounts for a significant
portion of our total revenues but we expect this percentage to decline in the future.
A significant portion of our total revenues over the last three
fiscal years has been attributable to the numerous work orders that we have performed under our agreements with NASDAQ. Sales to NASDAQ accounted for 8% and 10% of our total revenue during the years ended December 31, 2007 and 2008,
respectively. However, we expect revenue from NASDAQ in 2009 to decline compared to prior years. Sales to NASDAQ accounted for 7% of our total revenue during the three months ended March 31, 2009. We will need to expand our business
relationship into new product areas in order to maintain our current level of business with NASDAQ. The complete loss of a significant customer such as NASDAQ or the loss of a substantial portion of the business would have a material adverse effect
on our revenues.
We expect to derive a significant portion of our total revenue from our partnership with R.R. Donnelley & Sons Company.
We expect a significant portion of our future revenues to be attributable to our partnership with R.R. Donnelley & Sons in which we jointly offer
public companies a compliance solution for financial reporting in XBRL. Although our agreement is for an initial term of three years, if we and R.R. Donnelley & Sons cannot agree on annual and other fees each year, the agreement may not
continue as we originally anticipated. In addition, our costs relating to the joint XBRL compliance solution, including personnel and other resources dedicated to XBRL conversion, may make the partnership not as profitable as we expected. Also any
variance or uncertainty in R.R. Donnelley & Sons’ position as one of the market leaders in the printing industry could compromise our position in the compliance market. The loss of a significant relationship like we have with R.R.
Donnelley & Sons, a decline in the success of R.R. Donnelley & Sons as an industry leader, or if the partnership is not as long or lucrative as we expected, it could have a material adverse effect on our financial results.
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
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
- 15 -
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
10.1
|
|
Renewal Agreement to Trademark License Agreement between the Registrant and the U.S. Securities and Exchange Commission, dated as of March 10, 2009.*
|
|
|
|
|
10.2
|
|
Amendment to Financing Agreement between the Registrant and Rosenthal & Rosenthal, Inc., dated as of March 13, 2009.*
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
|
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
|
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.**
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.**
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document.**
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document.**
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document.**
|
|
**
|
submitted electronically herewith
|
Attached as Exhibit 101 to this report
are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three months ended March 31, 2009 and 2008, (ii) Condensed Consolidated Balance Sheets at
March 31, 2009 and December 31, 2008, (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008 and (iv) Notes to Condensed Consolidated Financial Statements. Users of this data
are advised pursuant to Rule 401 of Regulation S-T that the information contained in the XBRL documents is unaudited and these are not the official publicly filed financial statements of the Company. The purpose of submitting these XBRL formatted
documents is to test the related format and technology and, as a result, investors should continue to rely on the official filed version of the furnished documents and not rely on this information in making investment decisions.
In accordance with Rule 402 of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be
“filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act
or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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 thereunto duly authorized.
|
|
|
|
|
|
|
|
|
Date: May 14, 2009
|
|
|
|
EDGAR ONLINE, INC.
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Philip D. Moyer
|
|
|
|
|
|
|
|
Philip D. Moyer
|
|
|
|
|
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ John C. Ferrara
|
|
|
|
|
|
|
|
John C. Ferrara
|
|
|
|
|
|
|
|
Chief Financial Officer
|
- 16 -
Edgar Online (NASDAQ:EDGR)
Historical Stock Chart
From Sep 2024 to Oct 2024
Edgar Online (NASDAQ:EDGR)
Historical Stock Chart
From Oct 2023 to Oct 2024
