UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2010
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
Commission File No. 001-32194
EDGAR ONLINE, INC.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
Delaware
|
|
06-1447017
|
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
11200 Rockville Pike, Rockville, MD
|
|
20852
|
|
(Address of principal executive offices)
|
|
(Zip code)
|
Registrant’s telephone number, including area code:
(301) 287-0300
Securities registered pursuant to Section 12(b) of
the Act:
|
|
|
|
|
Title of each class
|
|
Name of each exchange on which registered
|
|
Common Stock, $.01 par value
|
|
The NASDAQ Stock Market LLC
|
|
Preferred Share Purchase Rights
|
|
The NASDAQ Stock Market LLC
|
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by
check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
¨
No
x
Indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act. Yes
¨
No
x
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 (§ 232.405 of this chapter) 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
x
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 the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (check one):
|
|
|
|
|
|
|
|
|
Large accelerated filer
¨
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
x
|
|
|
|
|
|
(Do not check if a smaller
reporting company)
|
|
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes
¨
No
x
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold as of June 30, 2010, was approximately $33,402,206.
As of March 1, 2011, there were
29,238,116 shares outstanding of the registrant’s common stock.
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the
registrant’s proxy statement for its 2011 annual meeting of stockholders, to be filed no later than April 30, 2011, are incorporated by reference into Part III of this Annual Report on Form 10-K.
TABLE OF CO
NTENTS
PART I
FORWARD LOOKING STATEMENTS
The discussions set forth in this Annual Report on Form 10-K contain statements concerning potential future events. Such forward-looking statements are based upon assumptions by our management, as of
the date of this Annual 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 words as “expect,” “anticipate,”
“intend,” “plan,” “believe,” “seek,” “see” or “will”, or similar words. 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 I,
Item 1A, “Risk Factors” of this Annual 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 do not undertake to update any forward-looking statements in this Annual 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.
ITEM 1. BUSINESS.
Overview
EDGAR Online, Inc. is a leading provider of XBRL (eXtensible
Business Reporting Language) filing services, data sets and analysis tools. We also create and distribute financial data and public filings for equities, mutual funds and a variety of other publicly traded assets. Our data products provide highly
detailed fundamental financial information along with the source documents and are created through the use of proprietary high speed software that automates much of the data extraction and calculation processes. Our XBRL filing service uses parts of
this same proprietary data extraction and processing software along with personnel skilled in accounting, rigorous quality processes and additional proprietary tools to assist public companies in the creation of XBRL filings for submission to the
SEC. Our XBRL analysis tool is a proprietary software tool that assists users in analyzing both our own proprietary XBRL data sets and industry standard XBRL data files. We believe we stand out in the financial information industry for our ability
to provide products across the information supply chain—from financial report creation to data aggregation and analysis.
We have developed high volume distribution techniques for managing and delivering regulatory filings and we deliver our information
products in the form of online end-user subscriptions, as well as through data licenses and bulk data feeds. Our subscriptions and data feeds are sold directly to end-users, or are embedded in other web sites sold and through a variety of data
redistributors. We produce highly detailed data that assists in the analysis of the financial, business and ownership conditions of a company or investment vehicle. Consumers of our information products are generally financial, corporate and
advisory professionals who work in 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.
In November 2010, we acquired UBmatrix, Inc. (“UBmatrix”), a leading provider of XBRL-based software solutions for
global organizations and enterprises, enabling their customers to more efficiently and effectively address the challenges of business and financial information management, governance, risk and compliance and external reporting. These software
solutions are marketed through an extensive network of independent software
1
vendors or OEM (original equipment manufacturer) partners who license software code from us to embed into their products, as well as systems integrators, or implementation partners. We believe
that our merger with UBmatrix will result in our becoming a leading global end-to-end provider of XBRL software, filings services and data.
Industry Background
The
industry in which we compete is highly competitive with low barriers to entry. Competitors to our data and subscriptions business include both large and small organizations such as Dow Jones, FactSet, Dun and Bradstreet, Bloomberg, ThomsonReuters,
Moody’s, McGraw-Hill and other more specialized players such as Interactive Data Corporation, SNL Financial and Morningstar. The subsection of the marketplace specific to financial information offers a wide range of information products and
services from broad public and private company information to highly detailed specifics on a fund, bond or other investment vehicle. Many of the providers listed above offer multiple data offerings in addition to desktop services and solutions to
manage and work with the information they provide. Competitors to our XBRL filings business include software companies such as Rivet Software, financial printers with in-house solutions and providers such as Clarity that focus on creating XBRL
internally as integrated with accounting software packages. Competitors to UBmatrix software solutions include Rivet Software and Fujitsu.
eXtensible Business Reporting Language (XBRL)
Traditionally, financial reporting on publicly traded assets had been a labor-intensive process involving the compilation of data from a variety of sources and formats. The results were documents with a
myriad of financial tables, footnotes and large amounts of text to explain the financial health and stability of a company. XBRL was created to be the solution to complicated and non-comparable financials. It is an international standard agreed upon
by members of the accounting, financial, regulatory, academic and technology professions for making financial information more standardized and machine-readable. The standard is based on eXtensible Markup Language (XML), a technology standard for
transmitting and consuming data across the Internet. XBRL provides substantial benefits in the preparation, analysis and communication of financial information by using tags based on standardized accounting industry definitions to describe and
identify different financial line items. It also can provide the speed and uniformity that has been lacking in financial reporting. It allows for the rapid identification of detailed information on a business or financial asset that is
otherwise difficult to extract from the financial reporting documents and provides machine-readable tagged data that allows faster and deeper analysis and better comparability across companies, industries and borders.
XBRL was first envisioned in 1997 to assist with corporate financial reporting. Today, the global adoption of the XBRL standard is being
driven by the increasing demand by investors and regulators for transparency and more sophisticated analytics of financial assets like equities, mutual funds, and fixed income instruments. In 2008, the SEC announced a mandatory program relating to
XBRL whereby registrants are required to furnish XBRL data in an exhibit to specified EDGAR filings. More specifically, commencing in 2009 and as detailed in the following paragraph, certain public companies became required to file tagged
disclosures, including the companies’ primary financial statements, footnotes, financial statement schedules and certain company identifier information, in an XBRL format and over the next three years, all public companies will become subject
to these requirements. In addition to furnishing XBRL tagged documents to the SEC, companies are also required to post these documents on their corporate web sites. These new disclosures will supplement, but not immediately replace or change,
disclosure using the traditional electronic filing formats in ASCII or HTML. Filing companies will include domestic and foreign companies using U.S. GAAP and, eventually, foreign private issuers using International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The SEC required companies to comply with the mandate according to
the following three-year phase-in schedule. In year one, the rules applied only to domestic and foreign large accelerated filers that use U.S. GAAP and had a worldwide public float above $5 billion. These filers were required to file quarterly
reports on Form 10-Q or annual reports on Form 20-F or Form 40-F containing financial statements beginning with the first
2
fiscal period ended on or after June 15, 2009. In year two, all other domestic and foreign large accelerated filers using U.S. GAAP became subject to XBRL data reporting. These filers were
required to file quarterly reports on Form 10-Q or annual reports on Form 20-F or Form 40-F containing financial statements beginning with the first fiscal period ended on or after June 15, 2010. In year three, all remaining filers using U.S.
GAAP, including smaller reporting companies, and all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB, will become subject to the same XBRL data reporting requirements. These filers are
required to file quarterly reports on Form 10-Q or annual reports on Form 20-F or Form 40-F containing financial statements beginning with the first fiscal period ending on or after June 15, 2011.
XBRL is a royalty-free and open global standard. It was developed by XBRL International Inc., a not-for-profit consortium of leading
companies involved in providing or using business information. EDGAR Online is a founding member of the XBRL consortium and is one of the organizations that continue to hold leadership roles in developing and refining the standard. Members of the
XBRL consortium include financial services and information providers, software and other technology providers and accounting and trade organizations. Our leadership position in this effort has enabled us to develop critical XBRL-enabled products and
services and maintain strong growth in the XBRL-related areas of our business.
The EDGAR System
EDGAR, the acronym for Electronic Data Gathering Analysis and Retrieval, is the SEC’s electronic filing system. Public entities use
this system to submit statements, reports and forms required by the SEC. The SEC established the EDGAR system to perform automated collection and acceptance of submissions and to make them available to the public. The XBRL system has supplemented
but not replaced the EDGAR system. The SEC has announced plans to replace the EDGAR system with a new XBRL enabled platform and tools but the timeframe for this move is yet to be announced. EDGAR Online licenses its name from the SEC and was the
first company to publish real-time SEC filings directly onto the Internet for consumption by individual investors.
To power
our subscription and data products, EDGAR Online subscribes to a feed of real-time SEC regulatory filings from the SEC’s dissemination agent, Keane, Inc. The data sets we extract from the raw EDGAR filings are processed independently by our
proprietary software, stored in databases, posted to our web sites and distributed in multiple formats via our production servers to clients and third parties with whom we have distribution contracts. Additionally, all company primary financial
statements are processed and tagged in XBRL within hours of their submission and available to clients in this same time frame. We maintain a historical relational database of EDGAR submissions back to 1993 that supports complex search and retrieval
mechanisms to access these filings and the data we have parsed and stored from both the SEC and that which we have integrated from other sources. Our proprietary document processing systems create multiple representations of the original SEC
documents, including XBRL, HTML, RTF, PDF and Excel. These value-added versions of the original document are a vital part of serving our customers’ needs to efficiently view, print and analyze the content reported in the SEC filings and also
allow us to provide a direct link back to the original filing for line item verification.
2010 Financing Activities
On January 28, 2010, the Company issued 120,000 shares of Series B Convertible Preferred Stock, at $100 per share, to Bain Capital
Ventures, in exchange for $12,000,000 in cash. The net proceeds to the Company, after investment banking fees, legal and other closing costs, were approximately $11.2 million. The Series B Preferred Stock contains a compounding, cumulative
11.44% per annum paid-in-kind dividend payable upon conversion of the Series B Preferred Stock. The Series B Preferred Stock is convertible into the common stock of the Company at a price of $1.10 per share of common stock. The Series B
Preferred Stock may be converted at any time, except that the Series B Preferred Stockholders may not convert their shares into common stock if such conversion then represents in excess of 19.9% of the company’s voting stock without shareholder
approval. The Company has used the funds received in this capital raise to fund ongoing operations, and ramp up its investments in personnel, infrastructure, software and hardware.
3
Acquisition of UBMatrix
On November 22, 2010, we completed a merger with UBmatrix. As a result of the merger, all of the outstanding shares of capital stock of UBmatrix were converted into the right to receive an aggregate
of 74,379 shares of our Series C Preferred Stock and an aggregate of 2,685,088 shares of the our common stock. Of these shares, all of the shares of Series C Preferred Stock and 1,063,046 shares of the Common Stock were issued at closing, while
approximately 1,622,042 shares of the Common Stock were paid into escrow to secure the post-closing indemnification obligations of the UBmatrix stockholders. Also on November 22, 2010, we sold 12,637 shares of Series C Preferred Stock to
certain shareholders of UBmatrix for $2,000,000 in cash.
Each share of Series C Preferred Stock is convertible into a number
of shares of the Common Stock determined by dividing the sum of the purchase price per share plus accrued dividends by an initial conversion price of $1.4481 per share, subject to adjustment. The holders of the Series C Preferred Stock are entitled
to the number of votes equal to the number of shares of common stock into which such holder’s Series B Preferred Stock are convertible. The Series C Preferred Stock contains a compounding, cumulative 11.66% per annum paid-in-kind dividend
payable upon conversion of the Series C Preferred Stock. Following January 28, 2015, the dividend shall no longer accrue unless declared by the Board of Directors of the Company.
PRODUCTS AND SERVICES
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. We provide services to our partners’ customer base to assist their compliance with existing and 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 fee arrangements on a ratable basis as well as per-filing fees as the services are provided. As of December 30, 2009, our relationship with one of our partners, R.R. Donnelley &
Sons, became non-exclusive for both parties. Since then, we have signed additional partnership agreements with partners such as PR Newswire and Merrill and we are exploring other potential XBRL partnerships and distribution agreements. We plan to
structure our future agreements on the model we signed with other financial printers in which we receive minimum filings fees and/or minimum conversions; however, we may on occasion sign contracts without minimums where we believe the relationship
will not be material to our capacity or revenues, or where doing so would otherwise be advantageous to our interests.
Data and Solutions
EDGAR Online produces a specialized line of data feeds, products and solutions based on content sets that we have
extracted from SEC filings and data that we receive from stock exchanges, regulators and other financial data providers. We create standard data products and customized data solutions for specific customers by leveraging our proprietary data
processing platforms and analytical tools.
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. Each of these independent content sets represents a discrete set of facts that can be delivered in various ways based on customer needs. 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. We use a network of custom data parsers, integrity
checks and auditing tools to ensure a premium level of data quality and completeness. For many of our data products we provide linkage from each individual data element back to its source document. As a result, we believe that our data quality,
detail and verifiability is among the best in the industry.
4
Both our data products and solutions consist of digital data feeds transmitted through
hosted web pages and multiple application programming interfaces, including file transfer protocol (FTP), web services, data files, RSS feeds, and customized request response mechanisms. This allows our customers to seamlessly replicate a feature or
functionality of our service inside that customer’s intranet, extranet and other proprietary products or applications. For instance, customers such as ThomsonReuters, LexisNexis and NASDAQ use this mechanism to enhance the functionality of
their own products and services.
Our data products are generally licensed on a one-year basis and we recognize the related
revenue ratably over the life of the contract. 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.
Subscriptions
We offer the following end-user subscription services across
the Internet:
I-Metrix and I-Metrix Professional
The I-Metrix products (www.imetrix.edgar-online.com) are our premium end-user subscription service. I-Metrix delivers a web only service
while I-Metrix Professional allows a user to do in-depth analysis via the web and a Microsoft Excel add-in. Both products are built on our extensive XBRL fundamental database, including historical and current information for over 12,000 companies.
This product family delivers fundamental data such as income statements, balance sheets and statements of cash flow, as well as earnings estimates, standard financial ratios, insider transactions and institutional ownership. It provides fully
customizable tools and models that allow users to search, screen and evaluate the data according to their own criteria.
EDGAR Pro and EDGAR Access
EDGAR Pro (www.pro.edgar-online.com) offers financial data, stock ownership, public offering data sets and advanced search tools. EDGAR Pro 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. Sales leads are primarily provided from the traffic to our subscription web sites from Yahoo! Finance and NASDAQ.com, and from the migration of users
from EDGAR Access.
EDGAR Access (www.access.edgar-online.com), our retail product, has fewer features than EDGAR Pro and is
available via single-seat, credit card purchase only.
Each month our products and partners generate tens of millions of
advertising impressions. Subscriptions also include ancillary advertising and e-commerce revenues from a subset of these impressions. We do this 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.
Our subscription services are generally sold as one year
contracts. We recognize subscription revenue ratably over the life of the contract. Advertising and e-commerce revenue is recognized as the services are provided.
GROWTH STRATEGY
Our growth strategy is designed to capitalize on our brand
recognition, our position as a next generation provider of information to the financial and business community, our expertise in XBRL and our powerful data solutions platform.
5
Expand Existing Alliances and Develop New Strategic Partnerships
We will seek to leverage our position as a leading source of business and financial information, and our XBRL expertise, by broadening our
existing channels and creating new strategic relationships that help us expand and redistribute all of our products. We believe that creating additional strategic relationships will allow us to reach a more diverse customer base, leverage our data
platform beyond its current internal use, strengthen our brand awareness and ensure that we remain dominant in our current and future markets. We have focused specifically on larger redistribution relationships with other data aggregators and high
volume web sites that leverage the type of data products and subscription tools that we create.
We have enhanced our
strategic relationships with a number of industry leaders including R.R. Donnelley & Sons, PR Newswire, CNW Group, ThomsonReuters, Lexis Nexis and others.
Increase Sales to New and Existing Customers
Our direct sales and
marketing organizations are focused on expanding our total customer base by directly selling our data feeds, data solutions, and analysis tools with particular emphasis on I-Metrix products and data solutions. The sales and marketing group is also
focused on expanding relationships with redistributors of data including web sites and other companies that can use our data, solutions and tools in the end-user products that they build and market directly to customers. Our lead generation programs
focus on the creation of highly qualified leads for our premium services and solutions to fill the sales pipeline on a quarterly basis.
Develop New Products and Services
As sales of our SEC filings and U.S. equities data products have grown, we have received feedback from customers and partners that indicates additional growth opportunities in other publicly traded asset
classes. We expect to leverage the platform we use to create and distribute SEC filings and equities data and increase our processing capacity to expand our product set into these other global asset classes. We hope to achieve differentiation in
these markets by delivering the same quality, speed, detail, verifiability and open accounting methodologies as our SEC filings and equities data products. We believe we can also expand the business models and products that we build on top of our
SEC filings and equities data by effectively partnering and innovating around the depth of information that we provide. In 2010, we continued the execution of our growth strategy by releasing the first “As Reported” XBRL dataset for SEC
filings. The SEC has selected this dataset and the I-Metrix toolset for the analysis of public company filings.
Pursue Strategic
Acquisitions
From time to time, we have considered and expect to continue to consider acquisition opportunities if we feel
they have strategic and shareholder value. The types of acquisitions that we would consider as strategic include those that add value to our data platform, our base of software intellectual property or our subscriber community. Our merger with
UBmatrix was such an opportunity. This transaction forms part of our strategy to create a global end-to-end provider of XBRL software, filings services and data.
SALES AND MARKETING
We believe that our primary target markets,
financial services, data integrators, corporations and advisory firms, will continue to represent an important source of revenue growth.
We promote our products and services through our direct sales organization, web sites, marketing alliances, direct marketing and events. Through these efforts, we focus on I-Metrix, enterprise
contracts for EDGAR Pro, data products and custom solutions via the direct sales force. We drive new potential EDGAR Pro and EDGAR Access customers to subscribe to our services online. Additionally, we up-sell higher value services to our existing
subscribers, whenever possible. Our direct sales efforts are focused on decision makers and end-users in
6
our primary target markets. Our marketing programs are focused on lead generation and qualification programs, promotional and educational materials including white papers, product information,
product tours and flash demos and traffic driving efforts including paid and organic search and pay-per-click advertising. Lead generation is managed using lists we acquire from third parties or names that we acquire through our own online
registration system with traffic coming from partners such as Yahoo! Finance and Google Finance. In exchange for allowing users access to a basic level of financial information on a company through these web sites and other marketing alliances, we
drive traffic to our web site that is architected to drive users to subscribe, find critical information and contact us via phone, email or live chat.
CUSTOMERS
Our customers include financial services companies such as Bank
of America, Citigroup and Morgan Stanley, stock exchanges such as NASDAQ and the New York Stock Exchange, leading information companies such as LexisNexis, Moody’s and ThomsonReuters and corporations such as Lockheed Martin, Intel and Verizon.
Through our merger with UBmatrix, our customers now include independent software vendors or OEMs such as Oracle, SAP, Information Builders and Wolters Kluwer; implementation partners, including Aguilonius Consulting, CapGemini, Ciber, CSC, Deloitte,
Kolon-Benit and NTT Data. Our customers also include service providers such as R.R. Donnelley & Sons, PR Newswire and their competitors. In 2010, R.R. Donnelley & Sons comprised 31% of our total revenue. No other one customer
accounted for more than 10% of 2010 revenue.
We have over 300 clients that license our data products and services for use in
existing intranet, extranet and other product applications. We also have over 8,700 individual users of I-Metrix Professional, EDGAR Pro and EDGAR Access. These subscribers represent a wide array of users in the financial services, accounting,
legal, corporate and other markets. In 2010, we translated over 750 documents into XBRL.
COMPETITION
We are a provider of financial and business information via subscriptions as well as data licenses and solutions. As such, we compete with
businesses that provide similar information and have greater resources and market penetration than we do. These other organizations have spent millions of dollars in sales, marketing and technology to establish strong, competitive position that
occupy end-users’ desktops and provide highly functional analysis tools. While we seek to work with these organizations, it is possible that they may use their resources to attempt to replicate the competitive advantages that we believe we
have.
We believe that competition to provide business information, tools and solutions to the customer base we described
above includes such companies as ThomsonReuters, Standard & Poor’s and FactSet. Competition for information focused on financial data includes S&P’s Capital IQ, Dun & Bradstreet, SNL and other smaller niche players.
Other competitors include companies such as Morningstar, and free portals such as MSN Money and Yahoo! Finance, which are more focused on serving individual investors.
In the XBRL filings space, there are many emerging competitors including Rivet Software, WebFilings, ThomsonReuters, Fujitsu, RRD/Bowne and others. While we believe we have unique technology with an early
lead in some key areas, there is always the potential that our technology and processes could be matched or surpassed. Competition is growing quickly and we expect the market opportunity of this expanding industry to continue to attract new players.
We hope to continue to invest in our employees, software and hardware and innovate our existing products and resources in order to remain competitive.
Many of our competitors have longer operating histories, larger, more established customer bases, greater brand recognition and significantly greater resources, particularly financial resources, than do
we. As a result, they may develop products and services comparable or superior in terms of price and performance features to those developed by us or adapt more quickly than we can to new or emerging technologies and changes in
7
customer requirements. We believe that we have a first-mover advantage around XBRL and our platform, pricing, content and flexibility helps us remain highly competitive among the giants in the
financial and business information market.
We believe that the principal competitive factors in our market include the
following:
|
|
•
|
|
Accuracy and verifiability;
|
|
|
•
|
|
Detail and granularity;
|
|
|
•
|
|
Reliability of service; and
|
|
|
•
|
|
Availability of enhanced services.
|
We believe our competitive strengths include the following:
Proprietary
Platform
. EDGAR Online’s data processing, distribution and storage platform delivers accurate, verifiable, timely and reliable information. It allows us to process data more efficiently than current manual or people intensive offshore
models and when combined with our deep XBRL expertise, gives us a powerful platform upon which to grow the XBRL filings business. The same platform that we use to produce our data products and XBRL filings can be used to add value to other
companies, exchanges, agencies and financial institutions that need to produce proprietary data offerings.
Timeliness
.
Our data products are created in real-time or near real-time. As a result, our clients benefit from access to company information as it is submitted to the SEC. Subscribers to our services also receive real-time alerts based on various criteria of
importance to them. Similarly, our digital data feeds make available EDGAR documents and parsed data moments after they have been filed. We are able to generate highly detailed fundamental data from a company’s filing within as little as 15
minutes or a maximum of six trading hours. Immediate access to new information is imperative for those in the financial services market requiring real-time data for competitive decision-making.
Ease of use
. Our user interfaces are built to work within our client’s existing workflows. For example, I-Metrix enables
clients to utilize Microsoft Excel and web-based systems to analyze financial statement data extracted from SEC filings for screening and analysis. Further, our subscription services are delivered via a standard web browser in a friendly, easy to
use graphical user interface. We have worked to ensure that the data our users need to perform their jobs is typically no more than two clicks away. These efforts ensure that subscribers can begin using our services immediately, without any special
training.
Versatility and flexibility
. We can provide our customers with a web-delivered subscription service that
allows for immediate purchase, immediate use and easy access. Through our I-Metrix products, we offer an end-user solution, a web service to deliver XML or XBRL data in bulk, and a service to convert company data into standardized XBRL format. Our
data feeds allow a high degree of customization for clients that want all or part of the offered databases and functionality built into their existing applications. We also will create customized databases, data solutions, tools, extracts and
delivery mechanisms for clients with special needs.
8
INTELLECTUAL PROPERTY
On March 10, 2009, we renewed our EDGAR
®
trademark license agreement with the SEC. This agreement grants us a non-exclusive, non-assignable, royalty-free license to use the EDGAR
®
trademark as part of our name, other EDGAR-formative marks in connection with our products and services and as part
of our ticker symbol. The agreement renews our original license agreement for an additional ten-year term. The license may be renewed upon mutual consent of the Company and the SEC. We also have over 460 unique registered domain names, including
those representing our products, I-Metrix, EDGAR Pro and EDGAR Access. We have received registration for our UBmatrix, I-Metrix, EDGAR Online, EDGAR Pro, EDGAR Access, FREE EDGAR, EDGAR Explorer, EDGAR Analyst, AFO and EDGAR News trademarks from the
U.S. Patent and Trademark Office.
As a result of our merger with UBmatrix we now have U.S. Patent #6947,947, “Method for
adding Metadata to data,” which covers and protects a method for adding labels to data. The patent describes a method whereby labels, for example elements within an XBRL taxonomy, can be associated with text strings within a data file. The
patent, by example, enumerates a number of ways the method could be incorporated into an application to automate the process of transforming data into and out of XBRL using the metadata for guidance. Data formats include flat files, XML, database,
disk and display screens.
In January 2011, we were awarded a patent covering a method for populating spreadsheets with
financial data by leveraging XBRL metadata. The technology cited in the patent facilitates the rendering of machine-readable XBRL documents into spreadsheets for review and analysis. The patent recognizes and protects our method of rendering XBRL
data used across the company’s portfolio of products. The method is central to many of our products including I-Metrix Professional, a suite of interactive data and analytical tools offered by EDGAR Online that provides quick and accurate
financial statement data via Microsoft Excel, and our I-Metrix Xcelerate offering and XBRL filings business.
Our success
depends significantly upon our proprietary technology. We currently rely on a combination of copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect our proprietary rights. Our employees execute
confidentiality and non-use agreements which provide that any rights they may have in copyrightable works or patentable technologies belong to us. In addition, before entering into discussions with third parties regarding our proprietary
technologies, we typically require that they enter into a confidentiality agreement with us. If these discussions result in a license or other business relationship, we typically also require that the agreement setting forth the parties’
respective rights and obligations include provisions for the protection of our intellectual property rights.
TECHNOLOGY
We develop and maintain our technology in-house and have created new distinct databases from EDGAR data such as XBRL fundamental data
sets, initial public offering data, normalized financial data, ownership data and secondary public offering data. In addition, we can incorporate existing technologies and solutions driven by domestic and international data feeds, validation
systems, charting applications, quoting applications, and various maintenance tools that ensure our commitment to data quality.
Our proprietary technology has a framework which allows us to integrate solutions that were developed by us or by third-party vendors. We
enter into business partnerships where we deliver our data and technology embedded in other companies’ applications with little to no reference to EDGAR Online. Some of our proprietary solutions include our repository of financial information,
mutual fund e-prospectuses, web-based customer interfaces, section extraction, form-type specific data extraction systems, XBRL and XML delivery systems, permissioning systems, alerting systems and our customer support and tracking system. Software
solutions obtained commercially include the Microsoft Business Solutions—Great Plains Accounting System, Salesforce.com, the Autonomy Search Engine and the NetOwl Extractor.
9
Over the last several years, we have matured a variety of proprietary software tools that
perform the complex data mining functions necessary to deliver our services on a real-time and cost-effective basis to our customers. This software can be applied to a wide variety of data types, and asset classes. In addition, our status as a
Microsoft Certified Partner has allowed us to leverage newer technologies that support even more flexibility, cost effectiveness, and complexity—providing us with additional advantages in the market in speed, accuracy and delivery.
INFRASTRUCTURE AND OPERATIONS
Although third party development organizations are sometimes used to meet some aggressive development timelines, our employees now perform the majority of our software development, as well as manage our
content delivery processes. We own all the application level systems that serve our content delivery. The largest portion of our development team is located in our Rockville, Maryland office. In addition, the delivery solutions developed and
maintained for some of our largest corporate customers are hosted primarily in our data center in Rockville. The Rockville data center is also the primary facility that provides services used to deliver and support all of our products, data feeds
and other content delivery mechanisms.
In February 2011 we entered into an agreement with SunGard Global Services
(“SunGard”) for SunGard to provide us with off shore business outsourcing services associated with our XBRL filings business.
Availability, scalability and security have been and always will be a core focus of our support staff and executives. All of our critical systems, including our accounting system, user information
databases, repository of EDGAR filings, and all of our real-time updated data sets are backed up on at least a daily basis and then stored offsite. Additionally, we make use of various applications and techniques to ensure the availability of our
applications and data throughout the day using procedures like application or data replication, clustering, load balancing, and extensive application monitoring.
Our systems are maintained on a 24 hour-a-day, 7 day-a-week basis by our own technicians. Our services are available to users 24 hours a day, 7 days a week. Customer service is available weekdays 9:00
a.m. to 5:00 p.m. (ET). Customer and support inquiries have the availability of our web sites, e-mail and telephone options for assistance.
EMPLOYEES
As of March 1, 2011, we employed 143 people. None of our
employees is a member of a union. We believe that we have good relations with our employees.
CORPORATE HISTORY
We are a Delaware corporation formed in November 1995 under the name Cybernet Data Systems, Inc. In January 1999, we changed our name to
EDGAR Online, Inc. 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 (“FreeEDGAR”), and in October 2000, we acquired all the outstanding
equity of Financial Insight Systems, Inc. (“FIS”). In November 2010, we acquired all the outstanding equity of UBmatrix, Inc. Our executive offices are located at 11200 Rockville Pike, Rockville, MD 20852 and our telephone number is
(301) 287-0300.
AVAILABLE INFORMATION
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the
Securities Exchange Act of 1934, as amended, are available, free of charge, on our web site at www.edgar-online.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information posted
on our web site is not incorporated into this Annual Report on Form 10-K.
10
The SEC maintains an Internet site that contains reports, proxy and information statements
and other information regarding issuers that file electronically with the SEC at www.sec.gov. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
In
addition, we have made available on our web site under the heading “Investor Relations” our Code of Ethics and Code of Conduct. We intend to make available on our web site any future amendments or waivers to our Code of Ethics and Code of
Conduct within four business days after any such amendments or waivers.
ITEM 1A. RISK FACTORS.
Forward-Looking and Cautionary Statements
The consolidated financial statements and notes thereto included in this report and the related discussion describe and analyze our financial performance and condition for the periods indicated. For the
most part, this information is historical. Our prior results, however, are not necessarily indicative of our future performance and/or financial condition. We, therefore, have included the following discussion of certain factors which could affect
our future performance and/or financial condition. These factors could cause our future performance or financial condition to differ materially from its prior performance or financial condition or from management’s expectations or estimates of
our future performance or financial condition. These factors, among others, should be considered in assessing our future prospects and prior to making an investment decision with respect to our stock.
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
2011, and may incur additional losses in 2012. At December 31, 2010, we had an accumulated deficit of $76 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 and development 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 2010, to achieve profitability we will need to continue to increase revenues substantially through implementation of
our growth strategy and/or reduce expenses significantly. We cannot assure you that our revenues will grow or that we will achieve or maintain profitability in the future.
Our current financing relationship terminates March 31, 2011 and we may not be able to obtain additional financing.
On April 5, 2007, we entered into a financing agreement (“Financing Agreement”) with Rosenthal & Rosenthal, Inc. (“Rosenthal”) to provide us with 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 to us up to an additional $2.5 million under a revolving line of credit. This revolving credit
facility is subject to Rosenthal’s discretion and the maintenance of certain collateral ratios and financial covenants by us. The Financing Agreement was amended effective September 30, 2007, December 31, 2007 and
December 31, 2008 to adjust these covenants. Interest on outstanding borrowings under the Financing Agreement is payable at variable rates of interest equal to 2.5% in the case of the term loan and 2% on borrowings under the revolving
11
credit facility over the published JPMorgan Chase prime rate (with a minimum prime rate of 6%). Our obligations under the term loan are evidenced by a secured term note and all of our obligations
to Rosenthal are secured by a first priority security interest in substantially all of our assets. The balance of the term loan is due in full on March 31, 2011 which is the date that the agreement terminates. We currently anticipate that our
available cash resources combined with cash generated from operations will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. We may need to enter into a new term loan,
revolving line of credit or raise additional funds to fund potential acquisitions, more rapid expansion and to develop new or enhance existing services or to respond to competitive pressures. We cannot assure you that additional financing will be
available on terms favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, our ability to fund our expansion, take advantage of unanticipated opportunities, develop or enhance services or products or
otherwise respond to competitive pressures would be significantly limited. Our business, results of operations and financial condition could be materially adversely affected by these financing limitations.
Our business has been adversely affected by the global market crisis and economic recession.
We depend on the continued demand for the distribution of business and financial information. Therefore, our business is susceptible to
downturns in the financial services industry and the economy in general, such as the downturns that have occurred in 2008 and 2009. Many of our customers, particularly financial services companies, have been particularly affected by the economic
conditions. Decreases in the expenditures that corporations and individuals are willing to make to purchase the types of information we provide has resulted in slower growth of new customers and an increase in the cancellation of existing
customers. Any further downturn in the market or in general economic conditions could adversely affect our business, operating results and cash flows.
In 2010, we derived a significant portion of our total revenue from our partnership with R.R. Donnelley & Sons. We cannot guarantee the continuance of this revenue stream nor that, if it does
continue, it will remain as significant.
Sales to R.R. Donnelley & Sons accounted for 31% of our total revenues
for the year ended December 31, 2010 and 22% for the year ended December 31, 2009 stemming from our partnership in which we jointly offer public companies a compliance solution for financial reporting in XBRL. On October 29, 2010, the
Company entered into Amendment No. 2 to the R. R. Donnelley Services Agreement, which renewed the Agreement for the third year of its term and also extended such term through December 31, 2011. The Amendment also modified the
Agreement’s renewal conditions so that RR Donnelley must elect to renew the Agreement by September 30, 2011 for the Agreement to continue beyond calendar 2011 and sets fees and volume commitments through the remainder of the term. We
cannot assure you that the Services Agreement will continue beyond December 31, 2011 or, if it does continue, will consist of terms that will be attractive to us or material to our revenue stream.
On December 30, 2009, we amended our service agreement to make the relationship between us and R.R. Donnelley & Sons
non-exclusive for both parties. As such, we cannot guarantee that R.R. Donnelley & Sons will continue to provide us with all of their XBRL assignments, or will not chose another outside organization to translate its XBRL filings. In
addition, because R.R. Donnelley & Sons recently merged with Bowne & Co., Inc., a provider of shareholder and marketing communications services, and Bowne & Co., Inc. has an in-house XBRL solution, we cannot assure you
that R.R. Donnelley & Sons will continue to use any external XBRL provider or chose another outside organization to translate its XBRL filings.
Our costs relating to our joint XBRL compliance solution, including personnel and other resources dedicated to XBRL conversion, may make the R.R. Donnelley & Sons partnership not as profitable as
we expected. 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 or decrease in business of
12
the significant relationship 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 could have a material adverse effect on our financial results.
If we cannot generate new customers or XBRL
strategic partnerships, we may not achieve profitability.
We are actively seeking additional XBRL partnerships and
distribution agreements. We cannot assure you that we will be able to successfully enter into such agreements and, if we do, maintain those relationships in a successful or, profitable manner. To increase our revenues and achieve profitability, we
must increase our customer base significantly. We expect to generate leads for new XBRL clients, and gain more XBRL exposure, through our partenership agreements with R.R. Donnelley & Sons, PR Newswire and Merrill as well as other
partnership agreements that we are currently pursuing. We expect to generate leads for new users to our subscription and data services from our web sites and strategic partners and through our content distribution relationships from such web sites
as Yahoo! Finance, NASDAQ.com and Google Finance. These leads must be converted into work orders, subscriptions or data agreements for one or more of our products and services at a rate higher than what we have been able to achieve so far. If we
fail to do so, we may not achieve profitability. In addition, if we cannot maintain our strategic relationships with our key partners or enter into new XBRL agreements, we may not generate the business opportunities we need to achieve profitability.
Some of our revenue is non-recurring. If we cannot replace these non-recurring revenue items every quarter, we may experience a decline in
revenue.
As we engage in more large partnerships and data solutions work we are likely to generate revenue from
customization fees and revenue from billing arrangements that are based on time and materials, service level agreements or data delivery in the initial phase of the relationship. These arrangements are often one-time events where we must do work to
create or customize a data solution for a customer. These arrangements can have lower margins than our traditional revenue sources. Our strategy is to enter into these arrangements only if we can leverage some of our existing intellectual property
to be efficient in the process and if we believe that we can create a relationship or product that generates additional annual licensing, subscription or advertising revenue that could exceed the upfront lower margin work. On a quarterly basis, we
may generate some large non-recurring fees. Because our quarterly revenue base is still fairly small, this could create short-term variability in our quarterly revenues that may not be repeated in subsequent quarters or years. These short-term
variations in revenue may be viewed negatively by the market.
We may not realize all of the anticipated benefits of the UBmatrix
acquisition.
The success of the merger with UBmatrix will depend, in part, on our ability to realize the anticipated
growth opportunities and strategic synergies from combining the businesses of our company and UBmatrix. Our ability to realize these benefits, and the timing of this realization, depend upon a number of factors, including:
|
|
•
|
|
continued adoption of XBRL by regulators, filers and financial analysts in the United States and globally;
|
|
|
•
|
|
our ability to preserve and expand UBmatrix’s and EDGAR Online’s existing and potential channel partnerships;
|
|
|
•
|
|
our ability to preserve and expand important customers of data, regulatory or filing offerings;
|
|
|
•
|
|
our ability to effectively consolidate research and development operations, software development technologies and product planning functions;
|
|
|
•
|
|
the pricing the market will bear for XBRL filing, regulation systems and data;
|
|
|
•
|
|
customer acceptance of our strategy to cross sell our products and services;
|
|
|
•
|
|
other technology solutions or service offerings that develop greater market acceptance than ours;
|
13
|
|
•
|
|
prior art, prior patents or developments in intellectual property law that reduce the effectiveness of our own intellectual property positions;
|
|
|
•
|
|
unforeseen technology integration issues or additional development that must be done to improve the competitiveness of our combined offerings
|
|
|
•
|
|
the ability of our team to scale our infrastructure and resources to meet the demands of our customers, partners and new markets simultaneously;
|
|
|
•
|
|
unforeseen capital requirements, skill requirements or regulatory requirements to enter new markets;
|
|
|
•
|
|
the ability of our team to scale our infrastructure and resources using our current capital base;
|
|
|
•
|
|
retaining and attracting key employees;
|
|
|
•
|
|
consolidating corporate and administrative functions;
|
|
|
•
|
|
effective business development efforts; and
|
|
|
•
|
|
minimizing the diversion of management’s attention from ongoing business concerns.
|
As a result of the merger with UBmatrix, we possess not only all of the assets but also all of the liabilities of UBmatrix. Discovery of previously
undisclosed or unknown liabilities could have an adverse effect on the combined company’s business, operating results and financial condition.
Acquisitions involve risks, including inaccurate assessment of undisclosed, contingent or other liabilities or problems. After the merger, the surviving corporation, which is a wholly-owned subsidiary of
our company, possesses not only all of the assets, but also all of the liabilities of UBmatrix. Although we conducted a due diligence investigation of UBmatrix and its known and potential liabilities and obligations, it is possible that undisclosed,
contingent or other liabilities or problems may arise in the future, which could have an adverse effect on the combined company’s business, operating results and financial condition. The amount of such liabilities may be in excess of the value
of the shares of our common stock that will be placed into escrow until the one-year anniversary of the closing of the merger to cover the indemnification obligations of the UBmatrix stockholders under the merger agreement, or such liabilities may
not be uncovered until after such shares have been released from escrow.
Our ability to use net operating loss carryforwards to offset
future taxable income for U.S. federal income tax purposes is subject to limitation and may be limited further as a result of the merger with UBmatrix and sale of Series C stock.
In general, under Section 382 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on
its ability to utilize its pre-change net operating losses, or NOLs, to offset future taxable income. In general, an ownership change occurs if the aggregate stock ownership of certain stockholders increases by more than 50% over such
stockholders’ lowest percentage ownership during the testing period (generally three years). Since inception, we have incurred net operating losses and have incurred no federal or state income tax expense. At December 31, 2010, we had
approximately $42 million in federal net operating losses which will expire between 2011 and 2029, and approximately $40 million of state net operating loss carry forwards which will expire between 2011 and 2027. We have determined that we have
experienced multiple ownership changes since inception, but do not believe that these changes in ownership will restrict our ability to use the losses and credits within the carry forward period. Approximately $13 million of our total federal net
operating loss is currently subject to an annual limitation of approximately $1.4 million per year. If we have further ownership changes, additional annual limitations on the use of our net operating loss carry-forwards may be imposed.
In addition, as of its last fiscal year ended September 30, 2009, UBmatrix had federal net operating loss carry forwards of
approximately $21 million. We believe that UBmatrix has also experienced multiple ownership changes since its inception, and that the merger will likely result in limitations on our ability to utilize UBmatrix’s net operating losses in the
future.
14
We currently anticipate that the shares issued pursuant to the merger agreement and the
sale of Series C stock, together with certain other transactions involving our common stock within the testing period, will result in an ownership change. Even if the merger and the sale of Series C stock do not result in an immediate ownership
change, they would significantly increase the likelihood that there would be an additional ownership change in the future (which ownership change could occur as a result of transactions involving our stock that are outside of our control).
The adoption of XBRL may potentially commoditize large parts of our business.
The XBRL mandate could commoditize some of our key revenue sources. As data comes out in native format from more companies, there is the
potential that our customers may find less of a need for our XBRL dataset, analysis tools or solutions products. There will likely also be more competitors entering the market as the cost of collection is reduced. Any of these market forces could
reduce our revenues, inhibit our growth, or increase our costs as we have to build or acquire additional innovations.
In connection with
the XBRL conversion services that we offer, we are made aware of information regarding our clients prior to it becoming public. If we fail to keep this information confidential, our business and reputation could be significantly and adversely
affected.
Part of our business involves the conversion of materials to XBRL format for filing with the SEC before the
information contained in the materials is made public. As such, we are frequently in possession of confidential information and documentation regarding our clients before it is made public. Securities laws and regulations in the US and elsewhere
contain penalties for misuse of material nonpublic information of the type we often possess, and violation of these laws and regulations could result in civil and criminal penalties. If we do not keep this information confidential, or misuse it in
violation of the aforementioned laws and regulations, we could be subject to civil claims by our clients or other third parties or criminal investigations by appropriate authorities. We could also damage our relationships with existing clients or
harm our ability to attract new clients.
International Financial Reporting Standards (IFRS) may be adopted more quickly than we had
expected which could increase our costs or devalue our filings solution.
The current governing accounting standard in the
U.S. is U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Many other countries have adopted International Financial Reporting Standards (“IFRS”) as their accounting standards. The SEC is currently considering a
timeline for the implementation of IFRS. A rapid adoption of IFRS for filing at the SEC for both U.S. and ADR filing companies has the potential to add costs to our business as we would have to manage multiple data sets. In addition, such an
adoption could devalue our filings solution which is currently based on U.S. GAAP XBRL taxonomies. As a result, our business and prospects could be materially affected by the adoption of IFRS.
We rely on distribution agreements and any failure to obtain or maintain such distribution relationships on reasonable terms, or failure to achieve
revenue targets, could impair our ability to fully execute our business plan.
We derive a portion of our business from
sales of our products and services through distribution channels with strategic resellers. Depending on the distributor and the agreement, these distribution arrangements may not be exclusive and may only have a short term. Some of our distributors
may not renew their distribution agreements with us. Further, some of our distributors may not achieve revenue targets outlined in our agreements. Also, in the future, existing and potential distributors may not offer distribution of our products
and services to us on reasonable terms, or at all. If we fail to obtain distribution or to obtain distribution on terms that are reasonable, or such distributors fail to achieve certain revenue targets, we may not be able to fully execute our
business plan. Our distribution channel program may result in exclusive or larger distributor relationships, which may increase our dependence on a smaller number of distributors licensing a larger amount of our
15
services. Our distributors also sell our competitors’ services, and if they favor our competitors’ services for any reason, they may fail to market our products as effectively or to
devote resources necessary to provide effective sales, which would cause our results to suffer. The financial health of these distributors and our continuing relationships with them are important to our success. Some of these distributors may be
unable to withstand adverse changes in business conditions. Our business could be seriously harmed if the financial condition of some of these distributors substantially weakens.
Some partnership or redistributor relationships could be terminated or underperform, leading to a significant decline in our revenue.
We negotiate numerous relationships where we sell our data, solutions, subscriptions, and advertising/ecommerce offerings through
partnerships or redistributors. We also negotiate partnerships where our offerings are integrated directly into another organizations’ product or service. These arrangements are efficient for us and the partner or redistributor. As we grow
sales together, we both grow in dependency on one another. As the market continues to change, it is important that we do a good job evolving our products and services to meet the needs of our customers, partners and redistributors and that our
partners/redistributors do a good job in selling and evolving their products. There is a risk that our partners or redistributors find another partner that has a higher value proposition to meet their market need and that they terminate or reduce
our relationship. There is a risk that our partners or redistributors do not keep their own products and services competitive and the value of the partnership underperforms. In all of these cases there is a risk that our revenue stream could be
reduced because of the decisions or performance of these third parties. While we attempt to negotiate contracts that require and incent the performance of our partners, there is a risk that our revenues could experience declines because of actions
of these third parties that are not in our direct control.
Some segments of the industry in which we operate are highly competitive and
have low barriers to entry. Increased competition would make profitability even more difficult to achieve.
We compete with
many providers of business and financial information in our subscription and data business including S&P’s Capital IQ, Dun & Bradstreet, ThomsonReuters, Standard & Poor’s, FactSet, Morningstar, Inc., MSN Money and
Yahoo! Finance. We also compete with XBRL software, services and data providers such as Rivet Software, Inc., Hitachi, WebFilings, Clarity Systems and others. Our industry, in general, is characterized by low barriers to entry, rapidly changing
technology, evolving industry standards, frequent new product and service introductions and changing customer demands. Many of our existing competitors have longer operating histories, name recognition, market penetration, larger customer bases and
significantly greater financial, technical and marketing resources than we do. Current competitors or new market entrants could introduce products with features that may render our products and services obsolete or uncompetitive. As an example, any
of the data providers we have listed could claim to have an XBRL data set simply by putting the veneer of XBRL tags on their existing data set. This will likely cause confusion in the market place and could de-value our data set. To be competitive
and to serve our customers effectively, we must respond on a timely and cost-efficient basis to changes in technology, industry standards and customer preferences. We must also respond with sales and marketing campaigns that educate customers
in our benefits. The cost to modify our products, services or infrastructure and to effectively market in order to adapt to these changes could be substantial and we cannot assure you that we will have the financial resources to fund these expenses.
Increased competition could result in reduced operating margins, as well as a loss of market share and brand recognition. If these events occur, they could have a material adverse effect on our revenue.
Future enhancements to the SEC’s EDGAR system may erode demand for our services and our revenues may suffer as a result.
Our future success will depend on our ability to continue to provide value-added services that distinguish our products from the type of
information available from the SEC on its web site. The SEC currently provides free access on its web site to raw EDGAR filings on a real-time basis. If the SEC were to make other changes to
16
its web site such as providing value-added services comparable to those provided by us, our results of operations and financial condition could be materially and adversely affected. Additionally,
if the SEC were to enhance or upgrade services available on its web site or the EDGAR filing system, we would need to tailor our products and services to be compatible with these new architectures or technologies, which would increase costs. If we
are unable to do this, there may be a material reduction in demand for our products and services and our revenues may suffer as a result.
Future delays or changes to the SEC mandate may impact the growth of our XBRL filings business.
Revenues generated from our XBRL filings business are based on a number of factors, including the SEC mandate. The SEC has currently
mandated phased-in XBRL filing; filers with over $5 billion in market capital in 2009, large accelerated filers in 2010, and all remaining filers in 2011. Each of the groups must start tagging their primary financial statements in their first year
of filing and expand their tagging to include detailed footnotes in the second year of the filing. The SEC, in its final adoption of XBRL as a regulatory standard, initially delayed the implementation of the mandate for U.S. filers from what we
originally expected. If the SEC changes or delays the mandate as it now stands, our revenue opportunity could be significantly restricted. Such a restriction would have a materially negative impact on our revenues and financial results.
If we fail to develop and introduce new products and services, our sales and competitive position will suffer.
Our market is characterized by rapidly changing technologies, evolving industry standards, frequent new product and service introductions
and changing customer demands. To be successful, we must continue to enhance our existing services and develop and add new services by introducing products and services embodying new technologies, such as XBRL, to address our customers’
changing demands in a timely and cost effective manner. Our business could be adversely affected if we were to incur significant costs without generating related revenues or if we cannot adapt rapidly to these changes. Our business could also be
adversely affected if we experience difficulties in introducing new or enhanced services or if these services are not favorably received by users. We may experience technical or other difficulties that could delay or prevent us from introducing new
or enhanced services. If we are not successful in developing and marketing enhancements to our existing products and services or our products and services do not incorporate new technology on a timely basis, we may become less competitive and our
revenues may suffer as a result.
Future acquisitions and business combinations that we consummate may be difficult to integrate, disrupt
our business, dilute stockholder value or divert management attention.
We may continue to expand our operations and market
presence by making acquisitions and entering into business combinations, investments, joint ventures or other strategic alliances, with other companies. We may have to issue debt or equity securities to pay for future acquisitions, which could be
dilutive to our then current stockholders. We cannot assure you that we will consummate any transactions in the future. However, these transactions create risks, such as:
|
|
•
|
|
difficulty assimilating the operations, technology and personnel of the combined companies;
|
|
|
•
|
|
disrupting our ongoing business;
|
|
|
•
|
|
problems retaining key technical and managerial personnel;
|
|
|
•
|
|
additional operating losses and expenses of acquired businesses; and
|
|
|
•
|
|
impairment of relationships with existing employees, customers and business partners.
|
Any of the events described in the foregoing paragraph could have an adverse effect on our business, financial condition and results of
operations and could cause the price of our common stock to decline.
17
We depend on key personnel, the loss of whom could threaten our ability to operate our business
successfully.
Our future success will depend to a significant extent on the continued services of our senior management
and other key personnel, particularly David Price, our Chief Financial Officer, Stefan Chopin, our Chief Technology Officer and Diana Bourke, our Chief Operations Officer, some of whom are parties to written employment agreements. The loss of the
services of any of them, or the services of other key employees, would likely have a material adverse effect on our business. We do not maintain key person life insurance for any of our personnel.
Our future success will also depend on our continuing to attract, retain and motivate other highly skilled employees. Competition for
qualified personnel in our industry is intense. We may not be able to retain our key employees or attract, assimilate or retain other highly qualified employees in the future. If we do not succeed in attracting new personnel or retaining and
motivating our current personnel, our business will be adversely affected. In addition, the employment agreements with some, but not all, of our key employees contain covenants that restrict their ability to compete against us or solicit our
customers. These restrictive covenants, or some portion of these restrictive covenants, may be deemed to be against public policy and may not be fully enforceable. If these provisions are not enforceable, these employees may be in a position to
leave us and work for our competitors or start their own competing businesses.
Certain rights granted to the holders of our Series B and
Series C Preferred Stock may make it more difficult for other stockholders to influence significant corporate decisions and may hinder a change of control.
If the Series B Preferred Stock accrues dividends in full over five years and is fully converted into common stock, Bain Capital Ventures will own 18,750,000 shares of our common stock. If the Series C
Preferred Stock accrues dividends in full through January 15, 2015 and is fully converted into common stock, the Series C stockholders will own 9,509,618 shares of our common stock This represents 41% of total common stock outstanding at
March 1, 2011 on a fully diluted basis, including options outstanding and available for grant, restricted stock, and warrants. This concentration of ownership may make it more difficult for other stockholders to influence matters requiring
stockholder approval and may have the effect of delaying, preventing or deterring a change in control of our company, thereby possibly depriving our stockholders of an opportunity to receive a premium for their common stock as part of any sale or
acquisition.
In addition, certain terms of our Series B and Series C Preferred Stock may make it more difficult for other
stockholders to influence significant corporate decisions. For example, the holders of our Series B and Series C Preferred Stock:
|
|
•
|
|
are entitled to elect directors to our Board of Directors;
|
|
|
•
|
|
can prevent our issuance of securities with equal or superior rights, preferences or privileges to those of the Series B and Series C Preferred Stock;
|
|
|
•
|
|
can prevent the payment of dividends; and
|
|
|
•
|
|
can prevent a change in control of our company.
|
These rights (and all other rights and privileges relating to the Series B and Series C Preferred Stock) may adversely affect the value (or perceived value) of our shares of common stock.
We could face liability and other costs relating to our storage and use of personal information about our users.
Users provide us with personal information, including credit card information, which we do not share without the user’s consent.
Despite this policy of obtaining consent, however, if third persons were able to
18
penetrate our network security or otherwise misappropriate our users’ personal or credit card information, we could be subject to liability, including claims for unauthorized purchases with
credit card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized marketing purposes. Privacy legislation adopted in several states may further increase this type of liability.
Furthermore, we could incur additional expenses if additional regulations regarding the use of personal information were introduced or if federal or state agencies were to investigate our privacy practices.
We may encounter risks relating to security or other system disruptions and failures that could reduce the attractiveness of our sites and that could
harm our business.
Although we have implemented in our products various security mechanisms, our business is vulnerable to
computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions, delays or loss of data. For instance, because a portion of our revenue is based on individuals using credit cards to purchase
subscriptions over the Internet and a portion from advertisers who seek to encourage people to use the Internet to purchase goods or services, our business could be adversely affected by these break-ins or disruptions. Additionally, our operations
depend on our ability to protect systems against damage from fire, earthquakes, power loss, telecommunications failure, and other events beyond our control. Moreover, our web sites and business solutions have, in the past, and may in the future,
experience slower response times or complete outages for a variety of reasons, including hardware and communication line capacity restraints, software failures or during significant increases in traffic when there have been important business or
financial news stories and during the seasonal periods of peak SEC filing activity. These strains on our system could cause customer dissatisfaction and could discourage visitors from becoming paying subscribers. We do not currently have complete
redundancy in our systems. However, we do have availability and recovery procedures in place. These procedures help us recover after minor or major failures but, in the event of a catastrophic event, we may not be able to fully recover in a
commercially reasonable time. As we continue to expand our products, services and partnerships, we are adding additional redundancy to our environment which can add increased costs. Although we have redundant feeds to our facilities, we also depend
on the Level I EDGAR feed we purchase in order to provide SEC filings on a real-time basis. Our web sites could experience disruptions or interruptions in service due to the failure or delay in the transmission or receipt of this information. These
types of occurrences could cause users to perceive our web sites and technology solutions as not functioning properly and cause them to use other methods or services of our competitors. Any disruption resulting from these actions may harm our
business and may be very expensive to remedy, may not be fully covered by our insurance and could damage our reputation and discourage new and existing users from using our products and services. Any disruptions could increase costs and make
profitability even more difficult to achieve.
If we fail to secure or protect our proprietary rights, competitors may be able to use our
technologies, which could weaken our competitive position, reduce our revenue or increase our costs.
Our trademarks and
other proprietary rights, principally our proprietary database technology and our XBRL conversion formulas, are essential to our success and our competitive position. We seek to protect our trademarks and other proprietary rights by entering into
confidentiality agreements with our employees, consultants and content distribution partners, and attempting to control access to and distribution of our proprietary information. In addition, we are in the process of securing further patents in the
area of display and manipulation of XBRL. We also believe that factors such as the technological and creative skills of our personnel, new product developments, frequent product enhancements, name recognition, and reliable product maintenance are
essential to establishing and maintaining a technology leadership position. We have relied on a combination of copyright, trade secret and trademark laws in the past; however these efforts may not adequately protect our proprietary or international
property rights.
Despite our efforts to protect our proprietary rights from unauthorized use or disclosure, third parties may
attempt to disclose, obtain or use our proprietary information. In addition, our XBRL patents may not be accepted and granted by the Patent and Trademark Office. If our patents are granted, we may decide to undertake
19
litigation to defend our position, which could be costly and possibly unsuccessful. The precautions we take may not prevent misappropriation of our proprietary rights and technology. In addition,
some of our proprietary rights may not be viable or of value in the future since the validity, enforceability and scope of protection of proprietary rights in Internet-related industries is uncertain and still evolving. Additionally, third parties
could claim that our database technology or our electronic document delivery infringes their proprietary rights. Claims of this sort and any resultant litigation, should it occur, could result in us being liable for damages and could result in our
proprietary rights being invalidated. Even if we prevail, litigation could be time-consuming and expensive, and could divert the time and attention of management, any of which could materially adversely affect our business, results of operations and
financial condition. Any claims or litigation could also result in limitations on our ability to use our trademarks and other intellectual property unless we enter into license or royalty agreements, which agreements may not be available on
commercially reasonable terms, if at all.
We may incur substantial costs enforcing or acquiring intellectual property rights and defending
against third-party claims as a result of litigation or other proceedings.
In connection with the enforcement of our own
intellectual property rights, the acquisition of third-party intellectual property rights or disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent or trade secret rights, we have been
and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation are typically very costly and can be disruptive to our business operations by diverting the attention and
energies of management and key technical personnel. Although we are not currently in intellectual property infringement litigation and disputes, we may not prevail in any future litigation and disputes. In addition, we may incur significant costs in
acquiring the necessary third party intellectual property rights for use in our products and services. Third party intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing
arrangements on unfavorable terms, prevent us from providing or licensing certain of our products, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers
including contractual provisions under various license arrangements. Any of these could seriously harm our business.
In
addition, there are a number of patents that are pending and granted in SEC filing management, XBRL and automated data collection, including our own. To date we have not been contacted about infringement and are unaware of any infringement that we
have of any of these granted or pending patents. However, as the markets for filings, XBRL and data collection continue to mature we may be subject to litigation by aggressive patent holders that may believe we infringe. This may result in costly
litigation in defense of our positions.
Legal uncertainties and government regulation of the Internet could adversely affect our business.
Many legal questions relating to the Internet remain unclear and these areas of uncertainty may be resolved in ways that
damage our business. It may take years to determine whether and how existing laws governing matters such as intellectual property, privacy, libel and taxation apply to the Internet. In addition, new laws and regulations that apply directly to
Internet communications, commerce and advertising are becoming more prevalent. As the use of the Internet grows, there may be calls for further regulation, such as more stringent consumer protection and privacy laws.
These possibilities could affect our business adversely in a number of ways. New regulations could make the Internet less attractive to
users, resulting in slower growth in its use and acceptance than is expected. We may be affected indirectly by legislation that fundamentally alters the practicality or cost-effectiveness of utilizing the Internet, including the cost of transmitting
over various forms of network architecture, such as telephone networks or cable systems, or the imposition of various forms of taxation on Internet-related activities. Complying with new regulations could result in additional cost to us, which could
reduce our profit margins or leave us at risk of potentially costly legal action.
20
We may be subject to liability for taxes by federal, state and foreign tax authorities.
In the normal course of business, our tax filings are subject to audit by federal, state and foreign tax authorities. A sales tax audit by
New York State was settled in February 2008 and we began charging and remitting sales tax going forward. There is no guarantee that we will not be subject to additional tax audits by New York State, other states, local municipalities or the federal
government. There is inherent uncertainty in the audit process. If necessary, we will record our best estimate of probable liabilities that may exist. We have no reason to believe that such audit would result in the payment of additional taxes or
penalties or both that would have a material adverse effect on our results of operations or financial position, beyond amounts that are probable and estimable.
The price of our common stock has been volatile.
The market price of our
common stock has been, and is likely to continue to be, volatile and subject to wide fluctuations. Over the 52-week period ending March 1, 2011, the highest closing sales price of our common stock was $2.12 and the lowest closing sales
price of our common stock was $0.81. We cannot be certain that we will be able to maintain the listing requirements on The NASDAQ Capital Market in the future. In addition, over the past years, and especially in the current economic crisis, the
stock market has experienced significant price and volume fluctuations, which has impacted the market prices of equity securities and viability of many small-cap companies. Some of these fluctuations appear to be unrelated or disproportionate to the
operating performance of such companies. Future market movements may materially and adversely affect the market price and listing status of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
In October 2006, we entered into a lease for approximately 5,000 square feet of office space for our former principal executive offices which are located in Norwalk, Connecticut. This lease expires in
September 2011. We also lease approximately 8,200 square feet of office space at 122 East 42nd Street, New York, New York. This facility houses our sales and administrative personnel. This lease expires in August 2012. We lease approximately 14,200
square feet of office space at 11200 Rockville Pike, Rockville, Maryland. This lease expires in August 2015. We entered into a lease for an additional 10,308 square feet of office space at the Rockville location which expires in December 2013. These
facilities house our executive offices, development and operations personnel and our computer and communications equipment. As a result of our acquisition of UBmatrix, we also lease 3,965 of office space in Bellevue, Washington, which houses
additional development personnel and 3,176 of office space in Redwood City, California, which houses sales and development personnel, which expire in December 2012 and May 2011, respectively.
We believe that our physical properties are well maintained, in good operating condition and adequate for their intended purposes.
ITEM 3. LEGAL PROCEEDINGS.
We expect to be a party, from time to time, to certain routine legal proceedings arising in the ordinary course of our business. Although we are not currently involved in any pending or threatening legal
proceedings, we cannot accurately predict the outcome of any such proceedings if they arise in the future.
ITEM 4. (REMOVED AND RESERVED)
21
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Market Price for our Common Stock
On March 1, 2011, the closing sales price of our common stock on the NASDAQ Capital Market was $1.38.
Our common stock is traded on the NASDAQ Capital Market under the symbol EDGR. Prior to August 8, 2008, our common stock was traded
on the NASDAQ Global Market. The following table sets forth the high and low closing sales prices of our common stock as quoted by the NASDAQ Markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
|
Low
|
|
|
Fiscal Year Ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
1.64
|
|
|
$
|
0.82
|
|
|
Second Quarter
|
|
$
|
1.44
|
|
|
$
|
0.83
|
|
|
Third Quarter
|
|
$
|
2.20
|
|
|
$
|
1.20
|
|
|
Fourth Quarter
|
|
$
|
1.75
|
|
|
$
|
1.10
|
|
|
Fiscal Year Ended December 31, 2010
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
1.84
|
|
|
$
|
1.10
|
|
|
Second Quarter
|
|
$
|
2.12
|
|
|
$
|
1.24
|
|
|
Third Quarter
|
|
$
|
1.46
|
|
|
$
|
0.81
|
|
|
Fourth Quarter
|
|
$
|
1.26
|
|
|
$
|
1.00
|
|
Holders
As of March 1, 2011, there were approximately 77 holders of record of our common stock.
Dividends
We have not
declared or paid any cash dividends on our capital stock since inception. We intend to retain any future earnings to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
On November 22, 2010, we completed the transactions contemplated by the Agreement and Plan of Merger (the “Merger
Agreement”), dated as of June 23, 2010, among us, UBM Acquisition Corp., a Washington corporation and a wholly owned subsidiary of EDGAR Online (“Acquisition Sub”), and UBmatrix, a Washington corporation . As such, upon the terms
and subject to the conditions of the Merger Agreement, Acquisition Sub merged with and into UBmatrix with UBmatrix surviving as a subsidiary of the Company (the “Merger”). At the effective time of the Merger, all of the outstanding shares
of capital stock of UBmatrix were converted into the right to receive an aggregate of 74,379 shares of our Series C Preferred Stock (the “Series C Preferred Stock”) and an aggregate of 2,685,088 shares of our common stock (the “Common
Stock”). Of these shares, all of the shares of Series C Preferred Stock and 1,063,046 shares of the Common Stock were issued at closing, while approximately 1,622,042 shares of the Common Stock were paid into escrow to secure the post-closing
indemnification obligations of the UBmatrix stockholders.
Also on November 22, 2010, we sold 12,637 shares of Series C
Preferred Stock to certain shareholders of UBmatrix pursuant to that certain Series C Preferred Stock Purchase Agreement (the “Purchase Agreement”), dated June 23, 2010, between EDGAR Online and such shareholders. The aggregate
purchase price for these shares was $2,000,000 in cash.
22
The shares of Series C Preferred Stock and the Common Stock issued to the shareholders of
UBmatrix in connection with the Merger, and the shares of Series C Preferred Stock sold under the Purchase Agreement, have been issued in a private placement exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as
amended.
Each share of Series C Preferred Stock is convertible into a number of shares of the Common Stock determined by
dividing the sum of the purchase price per share plus accrued dividends by an initial conversion price of $1.45 per share, subject to adjustment. The holders of the Series C Preferred Stock shall be entitled to the number of votes equal to the
number of shares of common stock into which such holder’s Series B Preferred Stock are convertible. The Series C Preferred Stock contains a compounding, cumulative 11.66% per annum paid-in-kind dividend payable upon conversion of the
Series C Preferred Stock. Following January 28, 2015, the dividend shall no longer accrue unless declared by the Board of Directors of EDGAR Online.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We
made no repurchases of our equity securities during the fourth quarter of the fiscal year covered by this report.
Equity Compensation Plans
The following table sets forth information as of December 31, 2010 with respect to compensation plans under which our
equity securities are authorized for issuance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Securities
To Be
Issued Upon
Exercise Of
Outstanding
Options,
Warrants
and
Rights
|
|
|
Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants
and
Rights
|
|
|
Number Of
Securities
Remaining
Available
For Future
Issuance
|
|
|
Equity compensation plans approved by stockholders
|
|
|
6,224,322
|
(1)
|
|
$
|
1.54
|
|
|
|
4,691,553
|
(2)
|
|
Equity compensation plans not approved by stockholders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,224,322
|
(1)
|
|
$
|
1.54
|
|
|
|
4,691,553
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes 27,500 options issued and outstanding in the 1996 Plan with a weighted average exercise price of $1.10 per share, 813,666 options issued and outstanding under
the 1999 Plan with a weighted average exercise price of $1.68 per share, 45,000 options issued and outstanding in the 1999 Directors Plan with a weighted average exercise price of $1.59 per share, 3,516,381 shares outstanding under the 2005 Plan
with a weighted average exercise price of $1.75 per share and 1,821,775 unvested shares of restricted stock with a weighted average exercise price of $1.09.
|
|
(2)
|
Includes Common Stock available for issuance under the 2005 Plan.
|
23
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative 5-year total return to shareholders on EDGAR Online, Inc.’s common stock relative to the
cumulative total returns of the Russell 2000 index, and a customized peer group of two companies that includes: Factset Research Systems Inc and Thestreet.com Inc. The graph assumes that the value of the investment in the Company’s common
stock, in the peer group, and the index (including reinvestment of dividends) was $100 on 12/31/2005 and tracks it through 12/31/2010.
*$100 invested on 12/31/05 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/05
|
|
|
12/06
|
|
|
12/07
|
|
|
12/08
|
|
|
12/09
|
|
|
12/10
|
|
|
|
|
|
|
|
|
|
|
EDGAR Online, Inc.
|
|
|
100.00
|
|
|
|
192.31
|
|
|
|
186.81
|
|
|
|
68.68
|
|
|
|
82.42
|
|
|
|
65.93
|
|
|
Russell 2000
|
|
|
100.00
|
|
|
|
118.37
|
|
|
|
116.51
|
|
|
|
77.15
|
|
|
|
98.11
|
|
|
|
124.46
|
|
|
Peer Group
|
|
|
100.00
|
|
|
|
136.81
|
|
|
|
144.85
|
|
|
|
102.89
|
|
|
|
152.76
|
|
|
|
219.06
|
|
The stock price performance
included in this graph is not necessarily indicative of future stock price performance.
24
ITEM 6. SELECTED FINANCIAL DATA.
The selected consolidated financial data set forth below should be read in conjunction with our consolidated financial statements, and the
related notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in this Annual Report. The statement of operations and balance sheet data presented below for, and as of the
end of, each of the years in the five-year period ended December 31, 2010 are derived from our audited consolidated financial statements. Historical results are not necessarily indicative of the results to be expected in the future.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
|
|
(in thousands, except share and per share information)
|
|
|
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
XBRL filings
|
|
$
|
606
|
|
|
$
|
517
|
|
|
$
|
1,374
|
|
|
$
|
4,151
|
|
|
$
|
6,404
|
|
|
Data and solutions
|
|
|
6,536
|
|
|
|
7,996
|
|
|
|
9,334
|
|
|
|
8,409
|
|
|
|
7,583
|
|
|
Subscriptions
|
|
|
9,104
|
|
|
|
9,395
|
|
|
|
8,755
|
|
|
|
6,614
|
|
|
|
5,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
16,246
|
|
|
|
17,908
|
|
|
|
19,463
|
|
|
|
19,174
|
|
|
|
19,468
|
|
|
Cost of revenues
|
|
|
2,464
|
|
|
|
3,019
|
|
|
|
3,140
|
|
|
|
4,653
|
|
|
|
7,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
13,782
|
|
|
|
14,889
|
|
|
|
16,323
|
|
|
|
14,521
|
|
|
|
11,641
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative and development
|
|
|
18,009
|
|
|
|
18,257
|
|
|
|
16,616
|
|
|
|
12,844
|
|
|
|
15,237
|
|
|
Severance costs (1)
|
|
|
—
|
|
|
|
2,011
|
|
|
|
40
|
|
|
|
57
|
|
|
|
438
|
|
|
Amortization and depreciation
|
|
|
1,843
|
|
|
|
1,753
|
|
|
|
1,870
|
|
|
|
2,195
|
|
|
|
2,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(6,070
|
)
|
|
|
(7,132
|
)
|
|
|
(2,203
|
)
|
|
|
(575
|
)
|
|
|
(6,947
|
)
|
|
Interest income (expense) and other, net
|
|
|
144
|
|
|
|
(231
|
)
|
|
|
(456
|
)
|
|
|
(375
|
)
|
|
|
(282
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(5,926
|
)
|
|
|
(7,363
|
)
|
|
|
(2,659
|
)
|
|
|
(950
|
)
|
|
|
(7,229
|
)
|
|
Dividends and accretion on preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,420
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss to common stockholders
|
|
$
|
(5,926
|
)
|
|
$
|
(7,363
|
)
|
|
$
|
(2,659
|
)
|
|
$
|
(950
|
)
|
|
$
|
(8,649
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss to common stockholders per share—basic and diluted
|
|
$
|
(0.23
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding—basic and diluted (2)
|
|
|
25,484
|
|
|
|
26,023
|
|
|
|
26,387
|
|
|
|
26,760
|
|
|
|
26,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
2006
|
|
|
2007
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,865
|
|
|
$
|
3,568
|
|
|
$
|
2,062
|
|
|
$
|
2,101
|
|
|
$
|
10,765
|
|
|
Investments
|
|
$
|
205
|
|
|
$
|
210
|
|
|
$
|
220
|
|
|
$
|
222
|
|
|
$
|
226
|
|
|
Working capital (deficit)
|
|
$
|
81
|
|
|
$
|
(853
|
)
|
|
$
|
(1,978
|
)
|
|
$
|
(1,485
|
)
|
|
$
|
5,413
|
|
|
Total assets
|
|
$
|
15,872
|
|
|
$
|
15,621
|
|
|
$
|
13,006
|
|
|
$
|
12,183
|
|
|
$
|
30,249
|
|
|
Long-term debt, including current portion
|
|
|
—
|
|
|
$
|
2,406
|
|
|
$
|
2,323
|
|
|
$
|
1,908
|
|
|
$
|
1,437
|
|
|
Redeemable preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
19,431
|
|
|
Stockholders’ equity
|
|
$
|
9,930
|
|
|
$
|
5,040
|
|
|
$
|
3,704
|
|
|
$
|
4,109
|
|
|
$
|
801
|
|
|
(1)
|
In 2007, we accrued $631 of severance costs related to the termination of the employment agreements of our Executive Vice President of Sales and Chairman of the Board,
$984 related to our former CEO and workforce reductions and $396 related to our former CFO and COO. In 2008 and 2009, we accrued $40 and $57, respectively, of severance costs related to workforce reductions. In 2010, we accrued $187 of severance
costs related to the resignation of our CFO and $251 related to workforce reductions.
|
|
(2)
|
Diluted loss per share has not been presented separately, as the outstanding stock options, warrants and unvested restricted stock grants are anti-dilutive for each of
the periods presented. Anti-dilutive securities outstanding numbered 3,066,269, 3,343,973, 3,732,772, 3,883,048 and 6,899,322 for the years ended December 31, 2006, 2007, 2008, 2009 and 2010, respectively.
|
25
ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (in thousands).
You should read the following discussions of our
financial condition and results of operations in conjunction with the financial statements and the notes to those statements included elsewhere in this Annual Report. This discussion may contain forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under “Risk Factors” and elsewhere in this Annual Report.
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 recognize revenue from providing the following services:
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. R.R. Donnelley & Sons is one of our partners in this channel, whereby we provide services to their customer base for compliance with existing and 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 fee arrangements on a ratable basis as well as per-filing fees as the services are provided. As of December 30, 2009,
our relationship with R.R. Donnelley & Sons became non-exclusive for both parties. Since then, we have signed an agreement with PR Newswire and we are exploring other potential XBRL partnerships and distribution agreements. We plan to
structure our future agreements on the model we signed with other financial printers in which we receive minimum filings fees and/or minimum conversions; however, we may on occasion sign contracts without minimums where we believe the relationship
will not be material to our capacity or revenues, or where doing so would otherwise be advantageous to our interests. For 2010, we have contracted minimum fee commitments totaling $5.5 million with respect to our XBRL filings channel.
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.
26
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 for corporate reports filed via the EDGAR system. 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 one year. Advertising and e-commerce revenue is recognized as the services are provided.
RESULTS OF OPERATIONS
The following table sets forth the percentage relationships of certain items from our Consolidated Statements of Operations as a
percentage of total revenue.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Total revenues
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Cost of revenues
|
|
|
16
|
|
|
|
24
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
84
|
|
|
|
76
|
|
|
|
60
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
23
|
|
|
|
16
|
|
|
|
14
|
|
|
Product development
|
|
|
21
|
|
|
|
10
|
|
|
|
10
|
|
|
General and administrative
|
|
|
42
|
|
|
|
41
|
|
|
|
55
|
|
|
Severance costs
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
Amortization and depreciation
|
|
|
10
|
|
|
|
12
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(12
|
)
|
|
|
(3
|
)
|
|
|
(36
|
)
|
|
Interest and other, net
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(14
|
)%
|
|
|
(5
|
)%
|
|
|
(37
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPARISON OF THE YEARS 2008, 2009 and 2010
REVENUES
Total revenues for the year ended December 31, 2010
increased 2% to $19,468, from $19,174 for the year ended December 31, 2009. The net increase in revenues was primarily attributable to a $2,253, or 54%, increase in XBRL filings revenues which was offset by a $1,133, or 17%, decrease in
subscriptions and a $826, or 10%, decrease in data and solutions.
Total revenues for the year ended December 31, 2009
decreased 1% to $19,174, from $19,463 for the year ended December 31, 2008. The net decrease in revenues was primarily attributable to a $2,777, or 202%, increase in XBRL filings revenues which was offset by a $2,141, or 24%, decrease in
subscriptions and a $925, or 10%, decrease in data and solutions.
XBRL Filings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Revenues
|
|
$
|
1,374
|
|
|
$
|
4,151
|
|
|
$
|
6,404
|
|
|
Percentage of total revenue
|
|
|
7
|
%
|
|
|
22
|
%
|
|
|
33
|
%
|
27
The increase in filings revenues in the year ended December 31, 2010 was due to both
an increased number of filings and the addition of more complex filings. The companies that initially began filing in 2009 increased their number of filings in 2010 as well as added detailed footnotes beginning with the quarter ended after
June 15, 2010. Also, a second tier of companies were required to start filing in XBRL beginning with the quarter ended after June 15, 2010.
The increase in filings revenue in the year ended December 31, 2009 was related to SEC rules that require certain companies to file in XBRL beginning with the quarter ended after June 15, 2009,
as well as increased exclusivity fees and XBRL conversions from companies that were not required to file with the SEC.
Data and Solutions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Revenues
|
|
$
|
9,334
|
|
|
$
|
8,409
|
|
|
$
|
7,583
|
|
|
Percentage of total revenue
|
|
|
48
|
%
|
|
|
44
|
%
|
|
|
39
|
%
|
|
Number of contracts
|
|
|
283
|
|
|
|
286
|
|
|
|
310
|
|
The decrease in data
and solutions revenues for the year ended December 31, 2010 was primarily due to a decrease in data solutions revenues resulting in reductions from one contract. Although the number of data license contracts has increased, the revenues from
data licenses has decreased from prior year as there were several large customer cancellations in 2009.
The decrease in data
and solutions revenues for the year ended December 31, 2009 was due in large part to non-recurring data solutions revenue of approximately $574 in 2008. There was also a decrease in data licenses revenue for the year ended December 31,
2009 from the year ended December 31, 2008 due to several large customer cancellations.
Subscriptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Revenues
|
|
$
|
8,755
|
|
|
$
|
6,614
|
|
|
$
|
5,481
|
|
|
Percentage of total revenue
|
|
|
45
|
%
|
|
|
34
|
%
|
|
|
28
|
%
|
|
Number of subscribers
|
|
|
11,700
|
|
|
|
9,800
|
|
|
|
8,700
|
|
The net decreases in
subscription revenues for the years ended December 31, 2010 and 2009 were due to a decrease across all of our subscription products—our premium products, EDGAR Pro and I-Metrix Professional, as well as EDGAR Access, our retail service. Our
subscription business has been impacted by unprecedented business and workforce reductions in the financial services community over the past few years and the recent and continuing economic downturn in general. While we continue to add new
subscribers to all of our subscription products, cancellations exceeded these new sales. Ancillary advertising and e-commerce sales also decreased in the years ended December 31, 2010 and 2009.
COST OF REVENUES
Cost
of revenues primarily consists of salaries and benefits of operations employees to create XBRL filings and produce data sets, 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 year ended December 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 years ended December 31, 2009
or 2010.
28
Total cost of revenues for the year ended December 31, 2010 increased $3,174, or 68%,
to $7,827 from $4,653 for the year ended December 31, 2010. The net increase in cost of revenues was primarily due to a $2,970 increase in payroll related expenses related to our XBRL filings business and a $191 increase in XBRL related
production costs.
Total cost of revenues for the year ended December 31, 2009 increased $1,513, or 48%, to $4,653, from
$3,140 for the year ended December 31, 2008. The increase in cost of revenues was primarily attributable to an $894 increase in payroll and related expenditures and $738 increase in outside XBRL related production costs which were offset by a
$144 decrease in barter advertising expenses.
GROSS PROFIT
Gross profit for the year ended December 31, 2010 decreased $2,880, or 20%, to $11,641 from $14,521 for the year ended December 31, 2009. The gross profit percentage decreased to 60% for the
year ended December 31, 2010 from 76% for the year ended December 31, 2009. The decreases in the gross profit percentages were due to the higher costs related to XBRL filings revenues which have increased as a percentage of total revenues.
We expect our gross profit percentages will continue to decline as we increase our XBRL business since the gross profit margins related to the XBRL business are lower than our historical gross profit margins from our data and subscription
businesses.
Gross profit for the year ended December 31, 2009 decreased $1,802, or 11%, to $14,521 from $16,323 for the
year ended December 31, 2008. The gross profit percentage decreased to 76% for the year ended December 31, 2009 from 84% for the year ended December 31, 2008. The decreases in the gross profit and gross profit percentages were due to
lower total revenues as well as the higher cost of revenues related to XBRL filings revenues which have increased 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 year ended December 31, 2010 decreased $404, or 13%, to
$2,713, from $3,117 for the year ended December 31, 2009. The net decrease was primarily due to a $328 decrease in payroll related expenses and a $144 decrease in stock compensation expense which were partially offset by a $73 increase in
professional fees. Sales and marketing expenses for the year ended December 31, 2009 decreased $1,428, or 31%, to $3,117, from $4,545 for the year ended December 31, 2008, primarily due to a $993 decrease in payroll and related
expenditures, a $375 decrease in advertising and marketing expenses and a $63 decrease in travel and entertainment expenses. All of these reductions resulted from cost cutting measures implemented in 2009 and 2010.
Development
. Development expenses, which consist primarily of salaries and benefits and outside development costs, for the year
ended December 31, 2010 decreased $26, or 1%, to $1,852, from $1,878 for the year ended December 31, 2009. The net decrease was primarily due to a $67 decrease in stock compensation expense and a $38 decrease in professional fees from
external vendors which were partially offset by a $78 increase in payroll related expenses. Development expenses for the year ended December 31, 2009 decreased $2,016, or 52%, to $1,878, from $3,894 for the year ended December 31, 2008.
The decrease was primarily due to a $1,010 decrease in payroll costs and a $1,002 decrease in professional fees from external vendors. Of the decrease in payroll costs, $708 was due to an increase in payroll costs that were capitalized. The
remainder of the decrease results from cost cutting measures in 2009.
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 year ended December 31, 2010 increased
$2,823, or 36%, to $10,672, from
29
$7,849 for the year ended December 31, 2009. The net increase was primarily due to approximately $620 of costs related to the UBmatrix acquisition as well as a $633 increase in stock
compensation expense, a $575 increase in payroll related expenditures, a $527 increase in other professional fees, a $151 increase in rent and a $111 increase in insurance expenses. General and administrative expenses for the year ended
December 31, 2009 decreased $328, or 4%, to $7,849, from $8,177 for the year ended December 31, 2008. The net decrease was primarily due to a $444 decrease in payroll related expenditures and a $195 decrease in professional fees which was
partially offset by a $144 increase in rent, a $100 increase in payroll and property taxes and a $94 increase in stock compensation expenses.
Severance Costs
. In the year ended December 31, 2010, we accrued $227 of severance costs related to the resignation of our former Chief Financial Officer. As part of the severance agreement,
50,000 options immediately vested. As a result, additional paid-in capital was increased by $28 to recognize previously unrecognized stock compensation expense remaining from the original grant date valuations of the options. We also recognized $211
of severance costs related to workforce reductions in July 2010.
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 year ended December 31, 2010 increased $718, or 33%, to $2,913 from $2,195
from the year ended December 31, 2009 primarily as a result of increased amortization of capitalized development costs as well as increased capital expenditures. Depreciation and amortization for the year ended December 31, 2009 increased
$325, or 17%, to $2,195 from $1,870 from the year ended December 31, 2008 primarily as a result of increased amortization of capitalized development costs as well as increased capital expenditures.
SELECTED QUARTERLY REVENUE RESULTS
The following table sets forth unaudited revenue results for each of our last eight fiscal quarters. In the opinion of management, this unaudited quarterly information has been prepared on a basis
consistent with our audited consolidated financial statements and includes all adjustments (consisting of normal and recurring adjustments) that management considers necessary for a fair presentation of the data. These quarterly revenue results are
not necessarily indicative of future quarterly patterns or revenue results. This information should be read in conjunction with our financial statements and the related notes included elsewhere in this Annual Report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
2009
|
|
|
June 30,
2009
|
|
|
Sept. 30,
2009
|
|
|
Dec. 31,
2009
|
|
|
March 31,
2010
|
|
|
June 30,
2010
|
|
|
Sept. 30,
2010
|
|
|
Dec. 31,
2010
|
|
|
|
|
(UNAUDITED)
|
|
|
Revenue Sources:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
XBRL filings
|
|
$
|
243
|
|
|
$
|
768
|
|
|
$
|
1,478
|
|
|
$
|
1,662
|
|
|
$
|
950
|
|
|
$
|
1,733
|
|
|
$
|
1,959
|
|
|
$
|
1,762
|
|
|
Data and solutions
|
|
|
2,163
|
|
|
|
2,092
|
|
|
|
2,179
|
|
|
|
1,975
|
|
|
|
1,923
|
|
|
|
1,888
|
|
|
|
1,892
|
|
|
|
1,880
|
|
|
Subscriptions
|
|
|
1,829
|
|
|
|
1,707
|
|
|
|
1,585
|
|
|
|
1,493
|
|
|
|
1,493
|
|
|
|
1,399
|
|
|
|
1,307
|
|
|
|
1,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,235
|
|
|
$
|
4,567
|
|
|
$
|
5,242
|
|
|
$
|
5,130
|
|
|
$
|
4,366
|
|
|
$
|
5,020
|
|
|
$
|
5,158
|
|
|
$
|
4,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIQUIDITY AND CAPITAL RESOURCES
Net cash used by operating activities was $1,723 for the year ended December 31, 2010 compared to cash provided by operating activities of $2,312 for the year ended December 31, 2009. This was
primarily due to the increase in net loss for the year ended December 31, 2010 resulting from our increased investment in our XBRL filings business.
Net cash used in investing activities was $416 for the year ended December 31, 2010 compared to $1,851 for the year ended December 31, 2008. The decrease for the year ended December 31,
2010 was due to $2,531 cash acquired in business combinations offset by a $676 increase in capitalized product development costs and a
30
$418 increase in capital expenditures. On November 22, 2010, we acquired UBmatrix and received $2,531 of which, $2,000 related to the issuance of Series C Preferred Stock. As part of the
consideration for UBmatrix, we issued 87,016 shares of preferred stock which are convertible by dividing the purchase price per share plus accrued dividends by a conversion price of $1.45 per share. Under certain conditions, we may be required to
redeem all or part of the Series C Preferred Shares at fair value (see
Note 9, Redeemable Preferred Stock
of the accompanying notes to consolidated financial statements).
Net cash provided by financing activities was $10,803 for the year ended December 31, 2010 compared to net cash used of $422 for the
year ended December 31, 2009. On January 28, 2010 we issued 120,000 shares of our Series B Preferred Stock for $12,000, offset by fees incurred of $768. Generally, each Series B Preferred Share is convertible into shares of our common
stock determined by dividing the purchase price per share plus accrued dividends by a conversion price of $1.10 per share. Under certain conditions, we may be required to redeem all or part of the Series B Preferred Shares at fair value (see
Note
9, Redeemable Preferred Stock
of the accompanying notes to consolidated financial statements). We expect to use a substantial portion of the proceeds from the issuance to support investment in personnel, infrastructure, training and other costs
related to our XBRL filings business.
We are party to a Financing Agreement with Rosenthal and Rosenthal, Inc.
(“Rosenthal”) for additional working capital. Under the Financing Agreement, Rosenthal made a term loan in the original principal amount of $2,500 to us and has provided a revolving line of credit of up to $2,500, the entire amount of
which would have been available to us at December 31, 2010 in accordance with the provisions of the agreement. 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. 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, as amended. We were in compliance with these ratios and covenants, as amended, at December 31, 2010.
At December 31, 2010 we had sufficient cash to repay the outstanding indebtedness under the term loan. 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) and the full outstanding indebtedness is payable on that date.
At December 31, 2010, we had
cash and cash equivalents on hand of $10,765. We have no off-balance sheet arrangements at December 31, 2010. We believe that our existing capital resources will be sufficient to meet our anticipated cash needs for funding working capital
needs, capital expenditures and debt obligations for at least the next 12 months. Thereafter, if the remaining cash from the proceeds from our Series B preferred stock issuance and UBmatrix acquisition and cash generated from operations is
insufficient to satisfy our liquidity requirements, we may need to raise additional funds through public or private financings, strategic relationships or other arrangements. 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.
Our future contractual obligations,
including variable rate debt and interest estimated at 8.5%, at December 31, 2010 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments Due by Period
|
|
|
|
|
Total
|
|
|
Less than
1 Year
|
|
|
Years
1-3
|
|
|
Years
4-5
|
|
|
More than
5
Years
|
|
|
Long-term debt, including interest
|
|
$
|
1,480
|
|
|
$
|
1,480
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Operating lease obligations
|
|
|
4,258
|
|
|
|
1,439
|
|
|
|
2,481
|
|
|
|
338
|
|
|
|
—
|
|
|
Severance agreements
|
|
|
20
|
|
|
|
20
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,758
|
|
|
$
|
2,939
|
|
|
$
|
2,481
|
|
|
$
|
338
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. Actual results may vary from these estimates under different assumptions or conditions. On an on-going basis, we evaluate our estimates, including those related to the allowance
for doubtful accounts, estimated useful lives of intangible assets and the determination of restructuring obligations. We base our estimates on historical experience, business practices and corporate policies, contractual provisions and various
other assumptions that are believed to be reasonable under the circumstances.
We derive revenues from three primary sources:
XBRL processing fees, fees for data and solutions and fees for subscriptions to our web services. We recognize XBRL filings revenue from fixed fees on a ratable basis as well as per-filing fees as the services are provided. Revenue from data
licenses is recognized over the term of the underlying contracts. Our data solutions sometimes involve upfront one-time customization fees along with more traditional 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. Upfront customization fees are recognized systematically over the expected customer relationship period.
Revenue from time and materials based agreements and data delivery is recognized as the services and data are provided. Revenue from subscriptions is recognized ratably over the subscription period, which is typically twelve months.
Subscriptions revenue also includes ancillary advertising and e-commerce revenue which are recognized as the services are provided. Revenue is recognized provided acceptance and delivery, if applicable, has occurred, collection of the resulting
receivable is probable and no significant obligations remain. If amounts are received in advance of the services being performed, the amounts are recorded and presented as deferred revenues. Revenue is recognized net of any related state sales taxes
charged and sales taxes payable are included in accrued expenses.
Several of our accounting policies involve significant
judgments and uncertainties. The policies with the greatest potential effect on our results of operations and financial position include the estimated collectability of accounts receivable, the estimated useful lives and fair values of intangible
assets and the estimated fair value of goodwill. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make payments and for sales allowances. If the financial conditions of our customers
deteriorate or there are specific factors resulting from the specific type of product, or customer class inability to make payments, additional allowances will be required. We establish the estimated useful lives of our intangible assets based on a
number of factors, which is in part based on our assessments of the technology and customer relationships acquired. If these estimates change, the estimated useful lives of our intangibles may require adjustment. We test goodwill annually and
between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Our evaluation is based primarily on market capitalization as we have only one
reporting unit. Subsequent reviews may result in future periodic impairments that could have a material adverse effect on the results of operations in the period recognized.
We recognize compensation expense for all employee and director stock-based compensation awards based on estimated grant date fair values. We estimate the fair value using the Black-Scholes valuation
model which requires us to make assumptions about the expected life of options, stock price volatility, risk-free interest rates and dividend yields. We recognize the expense on a straight-line basis over the applicable vesting period. FASB ASC 718
requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Upon adopting FASB ASC 718, we estimated expected forfeitures over the life of each
individual award and included the impact of these expected forfeitures in stock-based compensation expense.
32
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be
used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred
during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this
update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption
permitted. The impact of this update on our consolidated financial statements will depend on the size and nature of future business combinations.
During October 2009, the FASB issued ASU 2009-13 which amended guidance contained within ASC Topic 605-25 related to revenue recognition for multiple-element arrangements. The amendments in this update
establish a selling price hierarchy for determining the selling price of a deliverable. These amendments also will replace the term fair value in the revenue allocation guidance with selling price to clarify that the allocation of revenue is based
on entity-specific assumptions rather than assumptions of a marketplace participant. The guidance in this update will require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the
price to sell the deliverable on a standalone basis. The amendments in this update will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The provisions
are not expected to have a material impact on our consolidated financial statements.
ITEM 7A. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Fluctuations
We generally invest in short-term, low risk instruments. We believe that any change in interest rates would not have a material effect on
our financial statements.
We experience changes in interest expense when market interest rates change as interest on our debt
is calculated as 2.5% over the published JPMorgan Chase prime rate, with a minimum prime rate of 6%. We believe that any change in interest rates would not have a material effect on our financial statements.
Currency Rate Fluctuations
Our results of operations, financial position and cash flows are not materially affected by changes in the relative values of non-U.S. currencies to the U.S. dollar. We do not use any derivative financial
instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements required by this Item 8 are set forth in Item 15 of this Annual Report. All information which has been
omitted is either inapplicable or not required.
ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
33
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation under the supervision and with the participation of our management, including our Interim Chief Executive Officer and President and our Chief Financial Officer, of
effectiveness of the design and operation of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this Annual Report. Based on this evaluation, our Interim Chief Executive Officer
and President and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable level as of December 31, 2010, to ensure that all material information required to be disclosed by us in
reports that we file or submit under the Exchange Act is accumulated and communicated to them as appropriate, to allow timely decisions regarding required disclosure and that all such information is recorded, processed, summarized and reported as
specified in the SEC rules and forms. 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.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as that
term is defined in Exchange Act Rule 13a-15(f)). To evaluate the effectiveness of our internal control over financial reporting, we use the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the “COSO Framework”). Using the COSO Framework, our management, including our Interim Chief Executive Officer and Chief Financial Officer, evaluated our internal control over financial
reporting and concluded that our internal control over financial reporting was effective as of December 31, 2010. This annual report does not include an attestation report of our independent registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only
management’s report in this annual report.
Changes in Internal Control over Financial Reporting
We hired our new Chief Financial Officer, David J. Price, effective July 6, 2010. Effective September 30, 2010, Philip D. Moyer
resigned from his duties as Chief Executive Officer and President. John M. Connolly, a member of our Board of Directors, was appointed Interim Chief Executive Officer and President as of that date. There were no other changes in our internal control
over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitation of the Effectiveness of Internal Control
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent
limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.
ITEM 9B. OTHER INFORMATION.
None.
34
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Portions of the disclosure required under this Item 10 are incorporated by reference from our proxy statement for our 2011 annual
meeting of stockholders, to be filed no later than April 30, 2011.
Executive Officers
Our current executive officers and directors and their respective ages as of March 1, 2011 are as follows:
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
|
Position
|
|
John M. Connolly
|
|
|
58
|
|
|
Interim Chief Executive Officer
|
|
David Price
|
|
|
48
|
|
|
Chief Financial Officer
|
|
Diana Bourke
|
|
|
57
|
|
|
Chief Operations Officer
|
|
Stefan Chopin
|
|
|
52
|
|
|
Chief Technology Officer
|
John M.
Connolly
was appointed Interim Chief Executive Officer on September 30, 2010 and has served on the Board of Directors since January 2010. He is also an Operating Partner at Bain Capital Ventures, a position he held since 2009. Prior to
joining Bain Capital Ventures, Mr. Connolly was President, Chief Executive Officer, and Chairman of M|C Communications. Prior to M|C, Mr. Connolly was President and Chief Executive Officer of Institutional Shareholder Services (ISS).
During his tenure, ISS doubled in revenues and realized 250% increase in profit over three years. ISS was sold to the The RiskMetrics Group in 2006. Previously, Mr. Connolly founded Mainspring Inc, a provider of strategic consulting, research,
and advisory services to Fortune 1000 companies. Under his leadership, Mainspring grew from a start up to a publicly traded company and was purchased by IBM in 2001. At IBM, Mr. Connolly built a strategy and consulting practice that eventually
led to the creation of IBM business consulting where he served as the Global General Manager. Prior to founding Mainspring, Mr. Connolly founded Course Technology, which was sold to The Thomson Corporation. Mr. Connolly received his BA
from St. Norbert College. Mr. Connolly attended the Executive Education Program at INSEAD.
David J. Price
joined
the Company as Executive Vice President and Chief Financial Officer in July, 2010. He brings more than 20 years of financial management experience to EDGAR Online. Prior to joining the Company, he was Chief Financial Officer of Cornerstone
Therapeutics, Inc., a publicly traded specialty pharmaceutical company. Previously, he held positions including Managing Director, Healthcare Sector, at two investment banking firms: Jefferies and Company, Inc. and Bear Stearns & Co., Inc.,
and Director of Mergers and Integration Practice at PricewaterhouseCoopers. He also served in the audit practices of Price Waterhouse and Arthur Andersen. Mr. Price attained an Honours degree in Accounting and Financial Management at Lancaster
University.
Diana M. Bourke
assumed the role of Chief Operations Officer in April, 2010. She is responsible for
operations, processing and infrastructure. Prior to joining the Company, Bourke held several executive positions including: President and CEO of Inveshare; CIO and SVP of Operations for CIGNA Health Services; President and COO of SCP Communications;
and SVP of Systems and Operations for ACNielsen. She also held various roles with NCH Promotional Services (a division of Dun & Bradstreet); Heller Financial, and International Harvester. Bourke is a graduate of the University of Notre
Dame. She is currently on the Board of Trudeau Institute in Saranac Lake, New York.
Stefan Chopin
was a member of the
Board of Directors from 1996 until February 2004, when he was appointed Chief Technology Officer. Mr. Chopin was previously the President of Pequot Group Inc., a technology development company for the financial services industry. From October
1998 to November 2001, Mr. Chopin was the Senior Vice President of Technology for iXL Enterprises, Inc., an e-business solutions provider.
35
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from our proxy statement for our 2011 annual meeting of stockholders, to be filed no later than April 30,
2011.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Incorporated by reference from our proxy statement for our 2011 annual meeting
of stockholders, to be filed no later than April 30, 2011.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Incorporated by reference from our proxy
statement for our 2011 annual meeting of stockholders, to be filed no later than April 30, 2011.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Incorporated by reference from our proxy statement for our 2011 annual meeting of stockholders, to be filed no later than April 30,
2011.
36
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of June 23, 2010, by and among the Registrant, UBM Acquisition Corp., UBmatrix, Inc. and the Stockholders’ Representative (as defined
therein) (22)
|
|
|
|
|
2.2
|
|
Amendment No. 1, dated as of October 20, 2010, to the Agreement and Plan of Merger, dated as of June 23, 2010, by and among the Registrant, UBM Acquisition Corp., UBmatrix, Inc.
and the Stockholders’ Representative (as defined therein) (25)
|
|
|
|
|
3.1
|
|
Certificate of Incorporation (1)
|
|
|
|
|
3.2
|
|
Amended and Restated Certificate of Incorporation (2)
|
|
|
|
|
3.3
|
|
Amended and Restated Bylaws of the Registrant, dated January 28, 2010 (20)
|
|
|
|
|
3.4
|
|
Amendment to Amended and Restated Certificate of Incorporation (4)
|
|
|
|
|
3.5
|
|
Certificate of Designation of Series A Preferred Stock of the Registrant(5)
|
|
|
|
|
3.6
|
|
Certificate of Designation of Series B Convertible Preferred Stock of the Registrant (20)
|
|
|
|
|
3.7
|
|
Certificate of Designation of Series C Convertible Preferred Stock of the Registrant (26)
|
|
|
|
|
3.8
|
|
Amendment to Amended and Restated Certificate of Incorporation @
|
|
|
|
|
4.1
|
|
Form of Specimen Stock Certificate for Registrant’s Common Stock (2)
|
|
|
|
|
4.2
|
|
Warrant to Purchase Common Stock (1)
|
|
|
|
|
4.3
|
|
Rights Agreement, dated as of March 29, 2005, by and between the Registrant and American Stock Transfer & Trust Company, as Rights Agent (5)
|
|
|
|
|
4.4
|
|
Investor Rights Agreement, dated January 28, 2010 (20)
|
|
|
|
|
4.5
|
|
Amended and Restated Investor Rights Agreement, dated November 22, 2010 @
|
|
|
|
|
10.1
|
|
Form of Indemnity Agreement entered into between the Registrant and its Directors and senior management (6)
|
|
|
|
|
10.2
|
|
Trademark License Agreement dated March 26, 1999 between the U.S. Securities and Exchange Commission and the Registrant (2)
|
|
|
|
|
10.3%
|
|
1996 Stock Option Plan (1)
|
|
|
|
|
10.4%
|
|
1999 Stock Option Plan (2)
|
|
|
|
|
10.5%
|
|
1999 Outside Directors Stock Option Plan (2)
|
|
|
|
|
10.6%
|
|
Amendment to Employment Agreement dated as of January 31, 2005 between the Registrant and Marc Strausberg (4)
|
|
|
|
|
10.7%
|
|
Amendment to Employment Agreement dated as of January 31, 2005 between the Registrant and Susan Strausberg (4)
|
|
|
|
|
10.8%
|
|
Amendment to Employment Agreement dated as of January 31, 2005 between the Registrant and Greg Adams (4)
|
37
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
10.9%
|
|
Amendment to Employment Agreement dated as of January 31, 2005 between the Registrant and Stefan Chopin (4)
|
|
|
|
|
10.10%
|
|
Amendment to Employment Agreement dated as of January 31, 2005 between the Registrant and Morton Mackof (4)
|
|
|
|
|
10.11
|
|
Third Amendment to Office Building Lease by and between PRIM Rockville Pike, LLC and the Registrant (4)
|
|
|
|
|
10.12%
|
|
2005 Stock Award and Incentive Plan (7)
|
|
|
|
|
10.13
|
|
Amendment to Office Building Lease Agreement dated June 27, 2005 by and between 122 East 42nd Street LLC and Registrant (8)
|
|
|
|
|
10.14
|
|
Lease Agreement, dated May 22, 2006, by and between Sono Equities LLC and 1122 Associates, LLC, and the Registrant (9)
|
|
|
|
|
10.15%
|
|
Employment Agreement dated as of April 9, 2007 between the Registrant and Philip D. Moyer (10)
|
|
|
|
|
10.16%
|
|
Agreement and General Release between Morton Mackof and the Registrant dated May 21, 2007 (11)
|
|
|
|
|
10.17%
|
|
Amended and Restated Employment Agreement dated June 13, 2007 between the Registrant and Susan Strausberg (12)
|
|
|
|
|
10.18
|
|
Amendment to Financing Agreement dated July 25, 2007 between Rosenthal & Rosenthal, Inc. and the Registrant (12)
|
|
|
|
|
10.19%
|
|
Agreement and Release dated August 7, 2007 between the Registrant and Susan Strausberg (11)
|
|
|
|
|
10.20
|
|
Amendment to Financing Agreement dated October 30, 2007 between Rosenthal & Rosenthal, Inc. and the Registrant (3)
|
|
|
|
|
10.21%
|
|
Separation and Release Agreement dated January 4, 2008 between the Registrant and Greg Adams (11)
|
|
|
|
|
10.22
|
|
Amendment to Financing Agreement dated January 30, 2008 between Rosenthal & Rosenthal, Inc. and the Registrant (11)
|
|
|
|
|
10.23%
|
|
Employment Agreement dated as of February 29, 2008 between the Registrant and John C. Ferrara (11)
|
|
|
|
|
10.24%
|
|
Employment Agreement dated as of March 13, 2008 between the Registrant and Stefan Chopin (11)
|
|
|
|
|
10.25
|
|
Financing Agreement dated as of April 5, 2007 between Rosenthal & Rosenthal, Inc. and the Registrant (13)
|
|
|
|
|
10.26
|
|
Amendment to Financing Agreement dated April 22, 2008 between Rosenthal & Rosenthal, Inc. and the Registrant (6)
|
|
|
|
|
10.27%
|
|
Amendment #1 to 2005 Stock Award and Incentive Plan (14)
|
|
|
|
|
10.28
|
|
Services Agreement, dated as of September 30, 2008, between the Registrant and R.R. Donnelley & Sons Company (15)+
|
|
|
|
|
10.29%
|
|
First Amendment to Employment agreement, dated December 10, 2008, between Philip Moyer and the Registrant (16)
|
|
|
|
|
10.30
|
|
Renewal Agreement to Trademark License Agreement between the Registrant and the U.S. Securities and Exchange Commission, dated as of March 10, 2009
(17)
|
38
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
10.31
|
|
Amendment to Financing Agreement dated March 13, 2009 between Rosenthal & Rosenthal, Inc. and the Registrant. (17)
|
|
|
|
|
10.32%
|
|
Amendment #2 to 2005 Stock Award and Incentive Plan, dated June 10, 2009 (18)
|
|
|
|
|
10.33
|
|
Amendment No. 1, dated December 30, 2009, to the Services Agreement, dated September 30, 2008, between the Registrant and R.R. Donnelley & Sons Company
(19)+
|
|
|
|
|
10.34
|
|
Series B Preferred Stock Purchase Agreement, dated January 28, 2010 (20)
|
|
|
|
|
10.35
|
|
Amendment to Rights Plan, dated January 27, 2010 (20)
|
|
|
|
|
10.36%
|
|
Indemnity Agreement entered into between the Registrant and John M. Connolly (21)
|
|
|
|
|
10.37%
|
|
Indemnity Agreement entered into between the Registrant and Jeffrey Schwartz (21)
|
|
|
|
|
10.38%
|
|
Amendment to Employment Agreement, dated as of January 25, 2010, between the Registrant and Stefan Chopin (21)
|
|
|
|
|
10.39%
|
|
Separation of Employment and General Release Agreement, dated as of March 19, 2010 and effective as of March 31, 2010, between the Registrant and John C. Ferrara
(21)
|
|
|
|
|
10.40
|
|
Series C Preferred Stock Purchase Agreement, dated June 23, 2010 (22)
|
|
|
|
|
10.41%
|
|
Consulting Agreement, dated as of April 12, 2010, between the Registrant and Ronald P. Fetzer (23)
|
|
|
|
|
10.42%
|
|
Agreement, dated as of October 13, 2010, between the Registrant and Philip Moyer (24)
|
|
|
|
|
10.43
|
|
Amendment No. 2, dated October 29, 2010, to the Services Agreement, dated September 30, 2008, between the Registrant and R.R. Donnelley & Sons Company@+
|
|
|
|
|
10.44
|
|
Amendment No. 3 to 2005 Stock Award and Incentive Plan, dated November 22, 2010 (27)
|
|
|
|
|
21.1
|
|
Subsidiaries of the Registrant@
|
|
|
|
|
23.1
|
|
Consent of BDO USA, LLP@
|
|
|
|
|
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.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document***
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document***
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document***
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document***
|
39
|
@
|
filed or furnished herewith
|
|
%
|
Compensatory plan or arrangement
|
|
***
|
Submitted electronically herewith
|
|
+
|
Confidential treatment has been requested for or granted as to certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
|
Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business
Reporting Language): (i) Consolidated Balance Sheets at December 31, 2009 and December 31, 2010, (ii) Consolidated Statements of Operations for the years ended December 31, 2008, 2009 and 2010, (iii) Consolidated
Statements of Changes in Stockholders’ Equity for the years ended December 31, 2008, 2009 and 2010, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2009 and 2010 and (v) Notes to
Consolidated Financial Statements. Users of these 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 Annual Report on Form 10-K 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.
|
(1)
|
Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (the “Registration Statement”), as filed with the Commission on March 30,
1999, and incorporated by reference herein.
|
|
(2)
|
Filed as an exhibit to Amendment No. 1 to the Registration Statement, as filed with the Commission on May 7, 1999, and incorporated by reference herein.
|
|
(3)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, and incorporated by reference herein.
|
|
(4)
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004, and incorporated by reference herein.
|
|
(5)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated March 29, 2005, and incorporated by reference herein.
|
|
(6)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, and incorporated by reference herein.
|
|
(7)
|
Filed as an exhibit to the Registrant’s Definitive Proxy Statement on Schedule 14A dated May 31, 2005, and incorporated by reference herein.
|
|
(8)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, and incorporated by reference herein.
|
|
(9)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, and incorporated by reference herein.
|
|
(10)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, and incorporated by reference herein.
|
|
(11)
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007 and incorporated by reference herein.
|
|
(12)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, and incorporated by reference herein.
|
|
(13)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed April 9, 2007, and incorporated by reference herein.
|
|
(14)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, and incorporated by reference herein.
|
40
|
(15)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, and incorporated by reference herein.
|
|
(16)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated December 10, 2008, and incorporated by reference herein.
|
|
(17)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 and incorporated by reference herein.
|
|
(18)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and incorporated by reference herein.
|
|
(19)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed January 4, 2010 and incorporated by reference herein.
|
|
(20)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated January 29, 2010, and incorporated by reference herein.
|
|
(21)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated by reference herein.
|
|
(22)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated June 29, 2010, and incorporated by reference herein.
|
|
(23)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 and incorporated by reference herein.
|
|
(24)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated October 14, 2010, and incorporated by reference herein.
|
|
(25)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated October 21, 2010, and incorporated by reference herein.
|
|
(26)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K dated November 26, 2010, and incorporated by reference herein.
|
|
(27)
|
Files as Annex C to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Commission on October 20, 2010, and incorporated by
reference herein.
|
(b) Financial Statements and Financial Statement Schedules
Our consolidated financial statements filed as part of this Form 10-K are filed on pages F-1 to F-22 to this Form 10-K. The financial
statement schedule required by Regulation S-X follows.
41
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
EDGAR ONLINE, INC.
Financial Statement Schedule
Valuation and Qualifying Accounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Balance at
Beginning
of Period
|
|
|
Charged To
Costs and
Expenses
|
|
|
Deductions (1)
|
|
|
Balance at
End of Period
|
|
|
|
|
(in thousands)
|
|
|
Allowance for Doubtful Accounts Receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2008
|
|
$
|
255
|
|
|
|
570
|
|
|
|
(513
|
)
|
|
$
|
312
|
|
|
Year ended December 31, 2009
|
|
$
|
312
|
|
|
|
590
|
|
|
|
(558
|
)
|
|
$
|
344
|
|
|
Year ended December 31, 2010
|
|
$
|
344
|
|
|
|
540
|
|
|
|
(357
|
)
|
|
$
|
527
|
|
|
(1)
|
Write-offs of receivables.
|
All
other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because they are not required under the related instructions or are inapplicable, or because the
information has been provided in the Financial Statement or the Notes thereto.
42
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
|
|
|
|
|
EDGAR Online, Inc.
|
|
|
|
|
By:
|
|
/
S
/ J
OHN
M.
C
ONNOLLY
|
|
|
|
John M. Connolly
|
|
|
|
Interim Chief Executive Officer
Date: March 14, 2011
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been duly signed below by the following persons on behalf of the registrant and in the capacities and on the dates
indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ J
OHN
M.
C
ONNOLLY
John M. Connolly
|
|
Interim Chief Executive Officer and Director
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ D
AVID
J.
P
RICE
David J. Price
|
|
Chief Financial Officer
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ M
ARK
M
AGED
Mark Maged
|
|
Chairman of the Board of Directors
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ A
LFRED
R.
B
ERKELEY
III
Alfred R. Berkeley III
|
|
Director
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ R
ICHARD
L.
F
EINSTEIN
Richard L. Feinstein
|
|
Director
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ W
ILLIAM
J.
O’N
EILL
J
R
.
William J. O’Neill
Jr.
|
|
Director
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ J
EFFREY
S
CHWARTZ
Jeffrey Schwartz
|
|
Director
|
|
March 14, 2011
|
|
|
|
|
|
/
S
/ B
ARRY
S
CHULER
Barry Schuler
|
|
Director
|
|
March 14, 2011
|
43
EDGAR ONLINE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
EDGAR Online, Inc.
Rockville, Maryland
We have audited the accompanying consolidated balance sheets of EDGAR Online, Inc. and subsidiaries (the “Company”) as of
December 31, 2009 and 2010 and the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2010. We have also audited the financial
statement schedule listed under Item 15(b). These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements and financial statement schedule based on our audits.
We conducted our audit in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial statement schedule are free of
material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial statement schedule, assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement and financial statement schedule presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EDGAR Online, Inc. and subsidiaries at December 31, 2009
and 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States.
Also in our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set forth therein.
|
|
|
/S/ BDO USA, LLP
|
|
BDO USA, LLP
|
|
New York, New York
|
|
March 14, 2011
|
F-2
EDGAR ONLINE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2009
|
|
|
December 31,
2010
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,101
|
|
|
$
|
10,765
|
|
|
Short-term investments
|
|
|
222
|
|
|
|
226
|
|
|
Accounts receivable, less allowance of $344 at December 31, 2009 and $527 at December 31, 2010
|
|
|
2,360
|
|
|
|
3,988
|
|
|
Other current assets
|
|
|
248
|
|
|
|
218
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
4,931
|
|
|
|
15,197
|
|
|
Property and equipment, net
|
|
|
2,726
|
|
|
|
3,863
|
|
|
Goodwill
|
|
|
2,189
|
|
|
|
7,665
|
|
|
Intangible assets, net
|
|
|
1,706
|
|
|
|
3,066
|
|
|
Other assets
|
|
|
631
|
|
|
|
458
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
12,183
|
|
|
$
|
30,249
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
803
|
|
|
$
|
2,033
|
|
|
Accrued expenses
|
|
|
1,743
|
|
|
|
1,846
|
|
|
Deferred revenues
|
|
|
3,370
|
|
|
|
4,468
|
|
|
Current portion of long-term debt
|
|
|
500
|
|
|
|
1,437
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
6,416
|
|
|
|
9,784
|
|
|
Long-term debt
|
|
|
1,408
|
|
|
|
—
|
|
|
Other long-term liabilities
|
|
|
250
|
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
8,074
|
|
|
|
10,017
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
—
|
|
|
|
—
|
|
|
Redeemable preferred stock—Series B, convertible, $100 par value, no shares authorized or outstanding at December 31,
2009 and 120,000 shares authorized and outstanding at December 31, 2010; face value of $13,267 and liquidation preference of $14,474 at December 31, 2010
|
|
|
—
|
|
|
|
12,299
|
|
|
Redeemable preferred stock—Series C, convertible, $.01 par value, no shares authorized or outstanding at December 31,
2009 and 90,000 shares authorized and 87,016 outstanding at December 31, 2010; liquidation preference of $7,291 at December 31, 2010
|
|
|
—
|
|
|
|
7,132
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
Preferred stock—Series A, $0.01 par value, 1,000,000 shares authorized at December 31, 2009 and 790,000 shares
authorized at December 31, 2010; no shares issued or outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Common stock, $0.01 par value, 50,000,000 shares authorized, 27,846,902 shares issued and 26,855,150 shares outstanding at
December 31, 2009, and 75,000,000 shares authorized, 29,441,339 shares issued and 28,482,921 shares outstanding at December 31, 2010
|
|
|
279
|
|
|
|
294
|
|
|
Additional paid-in capital
|
|
|
74,347
|
|
|
|
78,201
|
|
|
Accumulated deficit
|
|
|
(68,786
|
)
|
|
|
(76,015
|
)
|
|
Treasury stock, at cost, 991,752 shares at December 31, 2009 and 958,418 shares at December 31, 2010
|
|
|
(1,731
|
)
|
|
|
(1,679
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
4,109
|
|
|
|
801
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities, redeemable preferred stock and stockholders’ equity
|
|
$
|
12,183
|
|
|
$
|
30,249
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
F-3
EDGAR ONLINE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEARS ENDED DECEMBER 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
XBRL filings
|
|
$
|
1,374
|
|
|
$
|
4,151
|
|
|
$
|
6,404
|
|
|
Data and solutions
|
|
|
9,334
|
|
|
|
8,409
|
|
|
|
7,583
|
|
|
Subscriptions
|
|
|
8,755
|
|
|
|
6,614
|
|
|
|
5,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,463
|
|
|
|
19,174
|
|
|
|
19,468
|
|
|
Cost of revenues
|
|
|
3,140
|
|
|
|
4,653
|
|
|
|
7,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
16,323
|
|
|
|
14,521
|
|
|
|
11,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
4,545
|
|
|
|
3,117
|
|
|
|
2,713
|
|
|
Product development
|
|
|
3,894
|
|
|
|
1,878
|
|
|
|
1,852
|
|
|
General and administrative
|
|
|
8,177
|
|
|
|
7,849
|
|
|
|
10,672
|
|
|
Severance costs
|
|
|
40
|
|
|
|
57
|
|
|
|
438
|
|
|
Amortization and depreciation
|
|
|
1,870
|
|
|
|
2,195
|
|
|
|
2,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,526
|
|
|
|
15,096
|
|
|
|
18,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(2,203
|
)
|
|
|
(575
|
)
|
|
|
(6,947
|
)
|
|
Interest income
|
|
|
37
|
|
|
|
—
|
|
|
|
9
|
|
|
Interest expense
|
|
|
(493
|
)
|
|
|
(375
|
)
|
|
|
(291
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(2,659
|
)
|
|
|
(950
|
)
|
|
|
(7,229
|
)
|
|
Dividends on preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,353
|
)
|
|
Accretion on preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
(67
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss to common stockholders
|
|
$
|
(2,659
|
)
|
|
$
|
(950
|
)
|
|
$
|
(8,649
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss to common stockholders per share—basic
|
|
$
|
(0.10
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss to common stockholders per share—diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding—basic
|
|
|
26,387
|
|
|
|
26,760
|
|
|
|
26,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding—diluted
|
|
|
26,387
|
|
|
|
26,760
|
|
|
|
26,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
F-4
EDGAR ONLINE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON STOCK
|
|
|
TREASURY STOCK
|
|
|
ADDITIONAL
PAID-IN
CAPITAL
|
|
|
ACCUMULATED
DEFICIT
|
|
|
|
|
|
|
|
SHARES
|
|
|
AMOUNT
|
|
|
SHARES
|
|
|
AMOUNT
|
|
|
|
|
TOTAL
|
|
|
Balance at December 31, 2007
|
|
|
27,378,804
|
|
|
$
|
274
|
|
|
|
1,117,943
|
|
|
$
|
(1,959
|
)
|
|
$
|
71,902
|
|
|
$
|
(65,177
|
)
|
|
$
|
5,040
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,659
|
)
|
|
|
(2,659
|
)
|
|
Exercise of stock options
|
|
|
86,742
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
115
|
|
|
|
—
|
|
|
|
116
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,207
|
|
|
|
—
|
|
|
|
1,207
|
|
|
Restricted stock issued
|
|
|
89,167
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Treasury stock issued
|
|
|
—
|
|
|
|
—
|
|
|
|
(69,048
|
)
|
|
|
131
|
|
|
|
(131
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2008
|
|
|
27,554,713
|
|
|
|
276
|
|
|
|
1,048,895
|
|
|
|
(1,828
|
)
|
|
|
73,092
|
|
|
|
(67,836
|
)
|
|
|
3,704
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(950
|
)
|
|
|
(950
|
)
|
|
Exercise of stock options
|
|
|
20,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
16
|
|
|
|
—
|
|
|
|
16
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,339
|
|
|
|
—
|
|
|
|
1,339
|
|
|
Restricted stock issued
|
|
|
272,189
|
|
|
|
3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Treasury stock issued
|
|
|
—
|
|
|
|
—
|
|
|
|
(57,143
|
)
|
|
|
97
|
|
|
|
(97
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2009
|
|
|
27,846,902
|
|
|
|
279
|
|
|
|
991,752
|
|
|
|
(1,731
|
)
|
|
|
74,347
|
|
|
|
(68,786
|
)
|
|
|
4,109
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(7,229
|
)
|
|
|
(7,229
|
)
|
|
Accrued dividends on Series B and Series C Preferred Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,353
|
)
|
|
|
—
|
|
|
|
(1,353
|
)
|
|
Accretion of issuance costs and beneficial conversion discount on Series B Preferred Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(67
|
)
|
|
|
—
|
|
|
|
(67
|
)
|
|
Fair value of beneficial conversion discount on Series B Preferred Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
268
|
|
|
|
—
|
|
|
|
268
|
|
|
Exercise of stock options
|
|
|
51,334
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
71
|
|
|
|
—
|
|
|
|
71
|
|
|
Equity-based severance charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
28
|
|
|
|
—
|
|
|
|
28
|
|
|
Stock-based compensation
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,744
|
|
|
|
—
|
|
|
|
1,744
|
|
|
Restricted stock granted for compensation payable to employees of acquired company
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,767
|
|
|
|
—
|
|
|
|
1,767
|
|
|
Restricted stock issued
|
|
|
108,657
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
Issuance of common stock
|
|
|
1,434,446
|
|
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
1,449
|
|
|
|
|
|
|
|
1,463
|
|
|
Treasury stock issued
|
|
|
—
|
|
|
|
—
|
|
|
|
(33,334
|
)
|
|
|
52
|
|
|
|
(52
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2010
|
|
|
29,441,339
|
|
|
$
|
294
|
|
|
|
958,418
|
|
|
$
|
(1,679
|
)
|
|
$
|
78,201
|
|
|
$
|
(76,015
|
)
|
|
$
|
801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
F-5
EDGAR ONLINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEARS ENDED DECEMBER 31,
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Cash flow from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,659
|
)
|
|
$
|
(950
|
)
|
|
$
|
(7,229
|
)
|
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of capitalized product costs
|
|
|
218
|
|
|
|
218
|
|
|
|
158
|
|
|
Amortization of intangible assets
|
|
|
1,246
|
|
|
|
1,246
|
|
|
|
1,094
|
|
|
Amortization of deferred financing costs and discount
|
|
|
121
|
|
|
|
67
|
|
|
|
73
|
|
|
Equity-based severance charges
|
|
|
—
|
|
|
|
—
|
|
|
|
28
|
|
|
Depreciation and amortization of property and equipment
|
|
|
624
|
|
|
|
949
|
|
|
|
1,819
|
|
|
Stock-based compensation
|
|
|
1,207
|
|
|
|
1,339
|
|
|
|
1,744
|
|
|
Provision for losses on trade accounts receivable
|
|
|
570
|
|
|
|
590
|
|
|
|
540
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(341
|
)
|
|
|
(380
|
)
|
|
|
(2,061
|
)
|
|
Accounts payable and accrued expenses
|
|
|
(1,015
|
)
|
|
|
139
|
|
|
|
1,024
|
|
|
Other long-term payables
|
|
|
(304
|
)
|
|
|
(83
|
)
|
|
|
(17
|
)
|
|
Deferred revenues
|
|
|
123
|
|
|
|
(869
|
)
|
|
|
1,043
|
|
|
Other, net
|
|
|
(19
|
)
|
|
|
46
|
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
2,430
|
|
|
|
3,262
|
|
|
|
5,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities
|
|
|
(229
|
)
|
|
|
2,312
|
|
|
|
(1,723
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(511
|
)
|
|
|
(394
|
)
|
|
|
(812
|
)
|
|
Capitalized product development costs
|
|
|
(747
|
)
|
|
|
(1,455
|
)
|
|
|
(2,131
|
)
|
|
Cash acquired in connection with business combinations
|
|
|
—
|
|
|
|
—
|
|
|
|
2,531
|
|
|
Short-term investments
|
|
|
(10
|
)
|
|
|
(2
|
)
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(1,268
|
)
|
|
|
(1,851
|
)
|
|
|
(416
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of Series B Preferred Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
12,000
|
|
|
Costs incurred in connection with issuance of Series B Preferred Stock
|
|
|
—
|
|
|
|
—
|
|
|
|
(768
|
)
|
|
Payments of notes payable
|
|
|
(125
|
)
|
|
|
(438
|
)
|
|
|
(500
|
)
|
|
Proceeds from exercise of stock options and warrants
|
|
|
116
|
|
|
|
16
|
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities
|
|
|
(9
|
)
|
|
|
(422
|
)
|
|
|
10,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(1,506
|
)
|
|
|
39
|
|
|
|
8,664
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
3,568
|
|
|
|
2,062
|
|
|
|
2,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
2,062
|
|
|
$
|
2,101
|
|
|
$
|
10,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
219
|
|
|
$
|
190
|
|
|
$
|
147
|
|
|
Supplemental disclosure of non-cash information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued dividends on Series B and Series C Preferred Stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,353
|
|
|
Fair value of beneficial conversion discount on Series B Preferred Stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
268
|
|
|
Accretion of issuance costs and beneficial conversion discount on Series B Preferred Stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
Net assets of acquired company
|
|
|
—
|
|
|
|
—
|
|
|
|
7,978
|
|
See accompanying notes
to consolidated financial statements.
F-6
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
(1) DESCRIPTION OF BUSINESS
EDGAR Online, Inc. (“EDGAR Online” or “the Company”) 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. EDGAR Online is a leading provider of XBRL (eXtensible Business Reporting Language) filing services, data sets and analysis tools. The Company’s data products provide highly
detailed fundamental financial information along with the source documents and are created through the use of proprietary high speed software that automates much of the data extraction and calculation processes. The Company’s XBRL Filing
service uses parts of this same proprietary data extraction and processing software along with personnel skilled in accounting, rigorous quality processes and additional proprietary tools to assist public companies in the creation of XBRL filings
for submission to the U.S. Securities and Exchange Commission. The Company’s XBRL analysis tool is a proprietary software tool that assists users in analyzing both the Company’s own proprietary XBRL data sets and industry standard XBRL
data files. EDGAR Online delivers its data and analysis products via online subscriptions, as data licenses directly to end-users, embedded in other web sites and through a variety of redistributors. The Company delivers its XBRL filings services
primarily through partnerships with financial printers and other providers of SEC compliance services. Consumers of the Company’s 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.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) REVENUE RECOGNITION
The Company derives revenues from three
primary sources: XBRL processing fees, fees for data and solutions and fees for subscriptions to its web services. The Company recognizes XBRL filings revenue from fixed fees on a ratable basis as well as per-filing fees as the services are
provided. Revenue from data licenses is recognized over the term of the underlying contracts. The Company’s data solutions sometimes involve upfront one-time customization fees along with more traditional data licensing arrangements for the
ongoing delivery of the data solution. In addition, some of the Company’s data solutions are billed on a time and materials basis, per service level agreements or for delivery of data. Upfront customization fees are recognized
systematically over the expected customer relationship period. Revenue from time and materials based agreements and data delivery is recognized as the services and data are provided. Revenue from subscriptions is recognized ratably over the
subscription period, which is typically twelve months. Subscriptions revenue also includes ancillary advertising and e-commerce revenue which are recognized as the services are provided and totaled $544, $143 and $129 in the years ended December 31,
2008, 2009 and 2010, respectively.
Revenue is recognized provided acceptance and delivery, if applicable, has occurred,
collection of the resulting receivable is probable and no significant obligations remain. If amounts are received in advance of the services being performed, the amounts are recorded and presented as deferred revenues. Revenue is recognized net of
any related state sales taxes charged and sales taxes payable are included in accrued expenses.
(b) 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. These costs are applicable to all of the Company’s revenue sources. In addition, for each
period, online barter advertising expense is recorded equal to the online barter advertising revenue for that period.
F-7
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
(c) SOFTWARE DEVELOPMENT COSTS
The Company capitalizes software development costs in accordance with Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 985-20 (previously Statement of Financial Accounting Standards (“SFAS”) No. 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 $197 and $39 at December 31, 2009 and 2010, respectively. Related amortization expense, included in cost of revenues,
totaled $218 in each of the years ended December 31, 2008 and 2009 and $158 in the year ended December 31, 2010.
The Company capitalizes internal-use software development costs in accordance with ASC Topic 350-40 (previously Statement of Position
No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use”). The Company capitalizes internal-use software development 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. The Company’s 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 $1,784 and $2,707 at December 31, 2009 and December 31, 2010, respectively. Related amortization expense totaled $22, $396 and $1,208 in the years ended December 31, 2008, 2009 and 2010, respectively.
(d) CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
The Company considers cash and all highly liquid investments, such as money market accounts or CDs with original maturities of ninety days
or less to be cash and cash equivalents. Any liquid investments with original maturities of over ninety days, but under one year, are included in short-term investments. Short-term investments at December 31, 2009 included a CD for $222 which
accrues interest at 1% and matured in May 2010. Short-term investments at December 31, 2010 included a CD for $226 which accrues interest at 0.5% and matures in May 2011.
The Company maintains a cash balance at one financial institution with balances insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, the balance at such financial institution
exceeds the FDIC insured limits. The financial statement carrying value of the Company’s long-term debt approximates its fair value based on interest rates currently available to the Company for borrowings with similar characteristics and
maturities.
(e) ACCOUNTS RECEIVABLE AND CREDIT POLICIES
The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s best estimate of the
amounts that will not be collected. In addition to reviewing delinquent accounts receivable, management considers many factors in estimating its general allowance, including historical data, experience, customer types, credit worthiness, and
economic trends. From time to time, management may adjust its assumptions for anticipated changes in any of those or other factors expected to affect collectability.
(f) ACQUISITION ACCOUNTING
The Company uses the acquisition method
to account for business combinations, whereby the total purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed,
F-8
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
including contingent consideration, based upon their respective fair values at the date of acquisition. The purchase price in excess of the fair value of the net assets and liabilities, if
any, is recorded as goodwill. The allocation of the purchase price is dependent upon certain valuations and other studies, which contain estimates and assumptions. Effective with acquisitions consummated after December 31, 2008, costs
related to the Company’s acquisitions are expensed as incurred.
(g) LONG-LIVED ASSETS
Goodwill is calculated as the excess of the cost of purchased businesses over the fair value of their underlying net assets. Goodwill is
not amortized, but is subject to annual impairment tests. The Company completes goodwill impairment tests at least annually as of December 31 each year. The Company estimates fair value of its reporting unit and compares the valuation with the
respective carrying value for the reporting unit to determine whether any goodwill impairment exists. This evaluation is based primarily on market capitalization. The Company completed the annual test and determined that there was no impairment of
goodwill as of December 31, 2010. If the Company determines through the impairment review process that goodwill is impaired, the Company will record an impairment charge in its consolidated statement of income.
Definite-lived intangible assets primarily consist of customer based intangibles, accumulated know-how and tradenames, which are
amortized on a straight-line basis over their estimated useful lives. Definite-lived intangible assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable
through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets are written down to fair value. The Company has reassessed the estimated useful lives of its intangible assets and
no changes have been deemed necessary.
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the related assets, generally three to seven years. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the assets or the term of the leases,
whichever is shorter.
(h) INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The provisions of ASC Topic 740-10 (previously FIN 48) were adopted by the Company on January 1, 2007 and had no effect on the
Company’s financial position, cash flows or results of operations upon adoption, as the Company did not have any unrecognized tax benefits. The Company also evaluated its tax positions in later years through December 31, 2010 and reached
the same conclusion. In certain cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. The Company files U.S. and state income tax returns in jurisdictions with
varying statutes of limitations. With limited exceptions and due to the impact of net operating loss and other credit carryforwards, the Company may be
F-9
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
effectively subject to U.S. federal income tax examinations for periods after 1996. The Company is subject to examination by state and local tax authorities generally for the period mandated by
statute. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2009 and 2010, the Company had no accrued interest or penalties.
(i) STOCK-BASED COMPENSATION
The Company records stock-based compensation expense under the provisions of FASB ASC Topic 718 (previously SFAS No. 123 (R), “Share-Based Payment”). The Company is required to recognize
compensation expense for all employee and director stock-based compensation awards, which have historically been primarily comprised of stock options, based on estimated grant date fair values.
The Company recognizes stock-based compensation expense on a straight-line basis over the applicable vesting period. Forfeitures are
estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Additionally, the estimated forfeiture rate is applied and the cumulative effect determined for all prior periods in
which stock-based compensation costs have been recorded. The Company estimated expected forfeitures over the life of each individual award and has included the impact of these expected forfeitures of $230, $165, and $120 in stock-based compensation
expense for the years ended December 31, 2008, 2009 and 2010, respectively.
Stock-Based Compensation Expense
Stock-based compensation expense for the years ended December 31, 2008, 2009 and 2010 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
Cost of revenues
|
|
$
|
49
|
|
|
$
|
51
|
|
|
$
|
34
|
|
|
Sales and marketing
|
|
|
338
|
|
|
|
371
|
|
|
|
234
|
|
|
Development
|
|
|
150
|
|
|
|
153
|
|
|
|
80
|
|
|
General and administrative
|
|
|
670
|
|
|
|
764
|
|
|
|
1,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expense
|
|
$
|
1,207
|
|
|
$
|
1,339
|
|
|
$
|
1,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense per share
|
|
$
|
(0.05
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The estimated per share weighted average grant-date fair values of stock options granted during the years
ended December 31, 2008, 2009 and 2010 were $1.51, $0.99 and $0.88, respectively. Amounts were determined using the Black-Scholes-Merton option pricing model based on the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2009
|
|
2010
|
|
Expected dividend yield
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
Expected average volatility
|
|
76%
|
|
74%
|
|
74%
|
|
Risk-free interest rate
|
|
2.54-3.86%
|
|
1.92-2.04%
|
|
2.63-4.63%
|
|
Expected life in years
|
|
6
|
|
6
|
|
6
|
F-10
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
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 number of years of
the expected life of the stock option awards;
|
|
|
•
|
|
Risk-free interest rate
—based on the yield available on United States 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.
|
(j) CONCENTRATION OF RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of accounts
receivable. R.R. Donnelley and Sons accounted for 27% and 26% of accounts receivable at December 31, 2009 and 2010, respectively. PR Newswire accounted for 0% and 26% of accounts receivable at December 31, 2009 and 2010, respectively.
There was no other one customer that accounted for more than 10% of accounts receivable at December 31, 2009 or 2010.
R.R. Donnelley and Sons comprised 7%, 22% and 31% of the Company’s total revenue during 2008, 2009 and 2010, respectively. NASDAQ
comprised 10%, 6% and 3% of the Company’s total revenue during 2008, 2009 and 2010, respectively. The Company’s other customers are geographically dispersed throughout the world with no other one customer accounting for more than 10% of
revenues during 2008, 2009 or 2010. In addition, the Company has not experienced any significant credit losses to date from any one customer.
The financial statement carrying value of the Company’s cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities at December 31, 2009 and
2010 approximate their fair value because of the immediate or short-term maturity of these instruments. The financial statement carrying value of the Company’s debt approximates its fair value based on interest rates currently available to the
Company for borrowings with similar characteristics and maturities.
(k) LOSS PER SHARE
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 loss 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. Anti-dilutive securities outstanding numbered 3,732,772, 3,883,048 and 6,899,322 for the years ended
December 31, 2008, 2009 and 2010, respectively.
(l) BUSINESS SEGMENTS
The Company has determined that it does not have any separately reportable business segments as management does not manage its operations
by the different product and service offerings, but instead views the Company as one operating segment when making business decisions, with one operating decision making group.
F-11
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
(m) COMPREHENSIVE LOSS
Comprehensive loss includes all changes in equity during a period from non-owner sources including, as applicable, foreign currency items,
minimum pension liability adjustments and unrealized gains and losses on certain investments in debt and equity securities. The Company’s comprehensive loss is comprised solely of net loss.
(n) USE OF ESTIMATES IN FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted accounting principles requires management 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. Significant estimates embedded in the consolidated financial
statements for the periods presented include the allowance for doubtful accounts, fair values and useful lives of goodwill and other intangible assets, and the length of certain customer relationships. Actual results could differ from those
estimates.
(o) RECENT ACCOUNTING PRONOUNCEMENTS
In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be
used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred
during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this
update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption
permitted. The impact of this update on the Company’s consolidated financial statements will depend on the size and nature of future business combinations.
During October 2009, the FASB issued ASU 2009-13 which amended guidance contained within ASC Topic 605-25 related to revenue recognition for multiple-element arrangements. The amendments in this update
establish a selling price hierarchy for determining the selling price of a deliverable. These amendments also will replace the term fair value in the revenue allocation guidance with selling price to clarify that the allocation of revenue is based
on entity-specific assumptions rather than assumptions of a marketplace participant. The guidance in this update will require that a vendor determine its best estimate of selling price in a manner that is consistent with that used to determine the
price to sell the deliverable on a standalone basis. The amendments in this update will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The provisions
are not expected to have a material impact on the Company’s consolidated financial statements.
(3) ACQUISITIONS
On November 22, 2010 (“the Acquisition Date”), the Company completed a merger with UBmatrix, Inc., a Washington corporation (“UBmatrix”). As a result, all of the outstanding
shares of capital stock of UBmatrix were converted into the right to receive an aggregate of 74,379 shares of the Company’s Series C Preferred Stock (the “Series C Preferred Stock”) and an aggregate of 2,685,088 shares of the
Company’s common stock (the “Common Stock”). Of these shares, all of the shares of Series C Preferred Stock and 1,063,046 shares of the Common Stock were issued at closing, while 1,622,042 shares of the Common Stock were paid into
escrow to
F-12
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
secure the post-closing indemnification obligations of the UBmatrix stockholders. The common stock issued in connection with the merger includes 1,190,056 shares issuable to certain employees of
UBmatrix who will be joining our company as of the closing and 1,495,032 shares issuable to the stockholders, current Chief Financial Officer and service providers of UBmatrix. The shares issuable to the UBmatrix employees will be issued pursuant to
our 2005 Stock Award and Incentive Plan, and, except in one case as described in the following sentence, will be subject to restrictions on vesting that will last through the recipients’ initial 12 months of employment with us. The stock to be
issued without restriction consists of 60,586 shares of our common stock to be issued to the current Chief Financial Officer of UBmatrix, who was only employed by the combined entity through February 2011, and is being issued as payment for unpaid
past bonuses. Also in connection with the merger, the Company entered into a purchase agreement with certain stockholders of UBmatrix to issue and sell 12,637 shares of the Company’s Series C Preferred Stock for an aggregate purchase price of
$2,000. In recording the purchase, we combined the merger and the stock purchase as if they were a single transaction in estimating the value of the shares issued as they were mutually dependent.
The results of UBmatrix’s operations have been included in the consolidated financial statements since the Acquisition Date.
UBmatrix is a leading provider of XBRL-based software solutions for global organizations and enterprises, enabling them to more efficiently and effectively address the challenges of business and financial information management, governance, risk and
compliance and external reporting. As a result of the merger, the Company has become a global end-to-end provider of XBRL software, filings services and data. Additional benefits of the merger include the opportunity to accelerate the Company’s
development plans and time to market for new solutions within the highly competitive XBRL market, the potential synergies of combining the XBRL skills, development teams, and sales and marketing organizations of the two companies, and the potential
for realizing annual cost savings through consolidation of administrative functions.
The acquisition date fair value of the
consideration given by the Company to acquire UBmatrix consisted of the following:
|
|
|
|
|
|
|
Common stock (1,434,446 shares)
|
|
$
|
1,463
|
|
|
Preferred stock (87,016 shares)
|
|
|
7,046
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,509
|
|
|
|
|
|
|
|
The fair value of the common stock issued was determined based on the closing market price of the
Company’s common shares on the acquisition date. The fair value of the preferred stock issued was determined based on the results of a third-party valuation.
The following table summarizes the fair value of the assets acquired and the liabilities assumed as of the acquisition date. The value of the intangible assets is based on a third-party valuation.
|
|
|
|
|
|
|
Cash
|
|
$
|
2,531
|
|
|
Accounts receivable
|
|
|
98
|
|
|
Property and equipment
|
|
|
16
|
|
|
Other assets
|
|
|
64
|
|
|
Intangible assets
|
|
|
2,455
|
|
|
|
|
|
|
|
|
Total identifiable assets
|
|
|
5,164
|
|
|
Current liabilities
|
|
|
2,131
|
|
|
|
|
|
|
|
|
Net identifiable assets
|
|
|
3,033
|
|
|
Goodwill
|
|
|
5,476
|
|
|
|
|
|
|
|
|
Net assets acquired
|
|
$
|
8,509
|
|
|
|
|
|
|
|
F-13
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
The intangible assets represent software and licenses included in customer based
intangibles, and tradenames which will be amortized over 7.5, 3.33 and 10 years, respectively. The goodwill recognized is primarily attributable to expected synergies and the assembled workforce of UBmatrix. Current liabilities includes $1,767 which
is the value of compensation payable to employees of UBmatrix that were settled with the issuance of EDGAR common stock upon the closing of the Merger pursuant to certain vesting and escrow provisions. Upon the closing of the merger, this liability
was reclassified as additional paid in capital.
The Company recorded $620 of costs related to the acquisition which are
included in general and administrative expenses.
The financial information in the table below summarizes the combined results
of the Company and UBmatrix on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the
results of operations that would have been achieved if the acquisition had taken place on January 1, 2009 or 2010 or of results that may occur in the future.
The following unaudited pro forma financial information for fiscal 2009 and 2010 combines the historical results of the Company for the years ended December 31, 2009 and 2010 and the historical
results of UBmatrix for the years ended September 30, 2009 and 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
|
Revenues
|
|
$
|
23,117
|
|
|
$
|
21,478
|
|
|
Net loss
|
|
$
|
(5,055
|
)
|
|
$
|
(14,086
|
)
|
|
Net loss per share
|
|
$
|
(0.17
|
)
|
|
$
|
(0.47
|
)
|
|
Weighted average shares outstanding
|
|
|
29,445
|
|
|
|
29,659
|
|
(4) GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill is comprised of goodwill from its acquisition of FIS in 2001 and its merger with UBmatrix in 2010. There were no changes to the carrying amount of FIS goodwill of $2,189 in the
years ended December 31, 2009 or 2010. Goodwill from the Company’s merger with UBmatrix totaled $5,476 which was determined on the acquisition date of November 22, 2010. There was no change to the carrying amount of UBmatrix goodwill
in the year ended December 31, 2010.
Intangible assets consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009
|
|
|
December 31, 2010
|
|
|
|
|
Cost
|
|
|
Accumulated
Amortization
|
|
|
Cost
|
|
|
Accumulated
Amortization
|
|
|
Accumulated know-how
|
|
$
|
9,460
|
|
|
$
|
8,700
|
|
|
$
|
9,460
|
|
|
$
|
9,460
|
|
|
Tradenames
|
|
|
—
|
|
|
|
—
|
|
|
|
375
|
|
|
|
—
|
|
|
Customer based intangibles
|
|
|
4,496
|
|
|
|
3,550
|
|
|
|
6,575
|
|
|
|
3,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13,956
|
|
|
$
|
12,250
|
|
|
$
|
16,410
|
|
|
$
|
13,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The weighted average useful life of accumulated know-how, tradenames and customer based intangibles is 9.5
years, 10 years and 8.1 years, respectively. Amortization of other intangible assets was $1,246 in each of the years ended December 31, 2008 and 2009 and $1,094 in the year ended Decenber 31, 2010. The annual amortization expense expected for
each of the years through December 31, 2015 is $803, $828, $550, $268 and $127, respectively.
F-14
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
(5) PROPERTY AND EQUIPMENT
Property and equipment at December 31, 2009 and 2010 is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DECEMBER 31,
|
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
|
ESTIMATED USEFUL LIVES
|
|
|
Equipment
|
|
$
|
5,548
|
|
|
$
|
6,465
|
|
|
|
3 - 5 years
|
|
|
Furniture and fixtures
|
|
|
533
|
|
|
|
660
|
|
|
|
7 years
|
|
|
Purchased software
|
|
|
734
|
|
|
|
746
|
|
|
|
3 years
|
|
|
Software development costs
|
|
|
2,920
|
|
|
|
5,050
|
|
|
|
3 years
|
|
|
Leasehold improvements
|
|
|
602
|
|
|
|
637
|
|
|
|
3 - 7 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
10,337
|
|
|
|
13,558
|
|
|
|
|
|
|
Less accumulated depreciation and amortization
|
|
|
(7,611
|
)
|
|
|
(9,695
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,726
|
|
|
$
|
3,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense for the years ended December 31, 2008, 2009 and 2010
was $624, $949 and $1,819 respectively. There were no disposals in the years ended December 31, 2008, 2009 or 2010.
(6) ACCRUED EXPENSES
Accrued expenses consist of the following at December 31, 2009 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
DECEMBER 31,
|
|
|
|
|
2009
|
|
|
2010
|
|
|
Compensation and related benefits
|
|
$
|
1,086
|
|
|
$
|
1,384
|
|
|
Severance accrual (i)
|
|
|
128
|
|
|
|
20
|
|
|
Professional fees
|
|
|
439
|
|
|
|
336
|
|
|
Other
|
|
|
90
|
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,743
|
|
|
$
|
1,846
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
See note 7 for further discussion of severance costs
|
(7) SEVERANCE COSTS
On March 31, 2010, our former Chief Financial Officer resigned from the Company. As part of the separation and release agreement, the Company will pay $187 and continue medical benefits for a
ten-month period. In addition, as part of the agreement, options to purchase 50,000 shares of the Company’s common stock immediately vested. As a result, the Company recorded severance costs totaling $227 and additional paid-in capital was
increased by $28 to recognize previously unrecognized stock compensation expense remaining from the original grant date valuations of the options. In July 2010, the Company effected a workforce reduction and recorded $211 of severance costs. At
December 31, 2010, there were $20 of severance costs payable through January 2011 included in accrued expenses.
(8) 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,
F-15
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
Rosenthal made a term loan in the original principal amount of $2,500 to the Company and 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 pursuant to the Financing Agreement. The Company was in compliance with the amended terms at December 31, 2010.
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 expired unexercised 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 was amortized over the term of the warrant. 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 which is being amortized over the term of the loan.
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
December 31, 2010, the entire balance of $1,437 was classified as the current portion of long-term debt and there were $11 of unamortized deferred financing costs included in other current assets. The Company has not received any funding under
the revolving line of credit as of December 31, 2010. Interest expense under the Agreement, totaled $396, $322 and $266 for the years ended December 31, 2008, 2009 and 2010, respectively, and included $121, $67 and $73 respectively, of
amortization of deferred financing costs and warrant discount.
(9) INCOME TAXES
Since its inception, the Company has incurred net operating losses and has incurred no federal or state income tax expense. At December 31, 2010, the Company has approximately $42,000 in federal net
operating losses, which will expire between 2012 and 2030, and approximately $40,000 of state net operating loss carry forwards, which will expire between 2011 and 2028.
The Company did not record any provision for income taxes for the years ended December 31, 2008, 2009 or 2010 due to net operating loss carryforwards and changes in the federal valuation allowance.
F-16
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
The Company’s deferred tax assets and liabilities and related valuation allowance
as of December 31, 2009 and 2010 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
|
Net operating loss carry forwards
|
|
$
|
15,876
|
|
|
$
|
19,132
|
|
|
Severance costs
|
|
|
51
|
|
|
|
10
|
|
|
Accruals and other, net
|
|
|
410
|
|
|
|
461
|
|
|
Stock compensation expense
|
|
|
632
|
|
|
|
1,096
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets
|
|
|
16,969
|
|
|
|
20,699
|
|
|
Federal and state valuation allowance
|
|
|
(16,239
|
)
|
|
|
(19,575
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets
|
|
$
|
730
|
|
|
$
|
1,124
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
|
Identifiable intangibles
|
|
$
|
(730
|
)
|
|
$
|
(1,124
|
)
|
|
|
|
|
|
|
|
|
|
|
Realization of the net operating loss carry forward and other future deductible differences is dependent on
the Company being able to generate sufficient taxable income prior to the expiration of the operating loss carry forwards. Due to the Company’s continuing losses, a valuation allowance has been recorded for the entire amount of the net deferred
tax asset as the Company has concluded that it is not more likely than not that there will be future taxable income sufficient to realize the future taxable temporary differences and operating loss carry forwards prior to their expiration.
Under Section 382 of the Internal Revenue Code of 1986, as amended, the utilization of net operating loss carry forwards
is subject to limitations based on past and future changes in ownership of the Company. The Company has determined that it has experienced multiple ownership changes since inception, but does not believe that these past changes in ownership will
restrict its ability to use its losses and credits within the carry forward period. Approximately $13,000 of the total federal net operating loss is currently subject to an annual limitation of approximately $1,400 per year. If we have further
ownership changes, additional annual limitations on the use of our net operating loss carry-forwards may be imposed.
(10) REDEEMABLE PREFERRED STOCK
Series B Preferred Stock
On January 28, 2010, The Company sold
120,000 shares of Series B Preferred Stock to Bain Capital Venture Integral Investors, LLC (“Bain”) at $100 per share for total proceeds of $12,000. The carrying value of the Series B Preferred Stock is reduced by the stock issuance costs
and any beneficial conversion feature discounts related to preferred dividends and is then accreted back to redemption value over the eight year redemption period.
F-17
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
Each share of Series B Preferred Stock is convertible into a number of shares of the
Company’s common stock determined by dividing the purchase price per share plus accrued dividends by an initial conversion price of $1.10 per share, subject to standard antidilution adjustments. However, the shares of Series B Preferred Stock
are not convertible to the extent that such conversion would result in the Purchaser and its affiliates owning in excess of 19.9% of the shares of the Company’s voting power. The Company evaluated the conversion feature and determined that it
did not have to be recorded as a liability. The holders of Series B Preferred Stock are entitled to the number of votes equal to the number of shares of common stock into which such holder’s Series B Preferred Stock are convertible, subject to
the same limitations on conversion as set forth in the preceding sentence. The Series B Preferred Stock contains a compounding, cumulative 11.44% per annum dividend paid-in-kind payable upon conversion of the Series C Preferred Stock.
Following the fifth anniversary of the issuance of the Series B Preferred Stock, the dividend will no longer accrue unless declared by the Board of Directors of the Company. The dividends will be cumulative, whether or not declared, accrue daily and
compound annually. No cash dividends are payable unless cash dividends are declared on common shares.
On or at any time after
the eighth anniversary of the Purchase Agreement (January 28, 2018), if requested by holders of at least a majority of the then outstanding Series B Preferred Stock, each holder of Series B Preferred Stock shall have the right to require the Company
to redeem all the Series B Preferred Stock, for cash, at a redemption price equal to the original purchase price plus all accrued and unpaid dividends thereon.
In the event of a liquidation, dissolution or wind up of the Company, the holders of the Series B Preferred Stock are entitled to a liquidation preference equal to the greater of (i) the original
purchase price plus all accrued and unpaid dividends thereon, or (ii) the amount that would be payable in respect of a share of common stock if all outstanding shares of Series B Preferred Stock were converted into common stock immediately
prior to such liquidation (without regard as to whether sufficient shares of common stock are available out of the Company’s authorized but unissued stock, for the purpose of effecting the conversion of the Series B Preferred Stock). The amount
of liquidation preference calculated in accordance with the provisions of item (ii) of this paragraph at December 31, 2010 is approximately $14,474 based on the market price of the Company’s common stock on December 31,
2010.
In the event of a change in control of the Company as defined in the agreement, each holder of Series B Preferred Stock
shall have the right to require the Company to redeem all or a portion of such holder’s Series B Preferred Stock for cash, if the consideration in such change of control transaction is cash, but otherwise for consideration in the same form as
all other stockholders will receive in such transaction, at a redemption price per share of Series B Preferred Stock equal to the greater of (i) the fair market value per share valued as of the date of the change of control determined on an
as-converted to common stock basis (without regard as to whether sufficient shares of common stock are available out of the Company’s authorized but unissued stock, for the purpose of effecting the conversion of the Series B Preferred Stock)
and (ii) the original purchase price plus all accrued and unpaid dividends thereon, provided, however, that in the event of a change of control prior to the fifth anniversary of the issue date, accrued and unpaid dividends will include all
dividends that would have accrued thereon from the issue date through and including the fifth anniversary of the issue date. The amount payable to the Series B stockholders calculated in accordance with the provisions of item (ii) of this
paragraph at December 31, 2010 would have been approximately $22,500 based on the market price of the Company’s common stock on that date.
F-18
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
The redemption value of the Series B Preferred Stock, representing the original
purchase price plus accrued and unpaid dividends, and the number of common shares issuable in the event the conversion provisions are exercised, at December 31 of each of the succeeding five year periods and at the fifth anniversary of the
Agreement is expected to be as follows:
|
|
|
|
|
|
|
|
|
|
|
YEAR
|
|
REDEMPTION VALUE
|
|
|
COMMON SHARES ISSUABLE
UPON CONVERSION
|
|
|
2010
|
|
$
|
13,267
|
|
|
|
12,061,364
|
|
|
2011
|
|
$
|
14,785
|
|
|
|
13,441,182
|
|
|
2012
|
|
$
|
16,481
|
|
|
|
14,983,182
|
|
|
2013
|
|
$
|
18,367
|
|
|
|
16,697,273
|
|
|
2014
|
|
$
|
20,468
|
|
|
|
18,607,545
|
|
|
January 28, 2015
|
|
$
|
20,625
|
|
|
|
18,750,000
|
|
Series C Preferred
Stock
On November 22, 2010, the Company issued a total of 87,016 shares of Series C Preferred Stock, par value $0.01,
as a result of the merger with UBmatrix. Each share of Series C Preferred Stock is convertible into a number of shares of the Company’s common stock determined by dividing the sum of the purchase price per share plus accrued dividends by an
initial conversion price of $1.45 per share, subject to adjustment. The holders of the Series C Preferred Stock shall be entitled to the number of votes equal to the number of shares of common stock into which such holder’s Series C Preferred
Stock are convertible. These shares were initially convertible into 6,001,119 shares of the Company’s common stock.
Each
share of Series C Preferred Stock is convertible at any time at the option of the holder thereof into shares of common stock. The number of shares of common stock into which the Series C Preferred Stock is convertible is equal to (i) the
original purchase price per share of $100.00 plus all accrued and unpaid dividends divided by (ii) a conversion price of $1.45, subject to adjustments for stock splits and combinations, dividends and distributions, reclassifications, exchanges
or substitutions, mergers or reorganizations, and similar events. The Company evaluated the conversion feature and determined that it did not have to be recorded as a liability. To the extent that at any time sufficient shares of common stock are
not available for the purpose of effecting the conversion of Series C Preferred Stock, a holder of Series C Preferred Stock may elect to require the Company to redeem such holder’s shares of Series C Preferred Stock (but only to the extent
sufficient shares of common stock are not available). As the average market price for the period outstanding was less than the conversion price, there is no beneficial conversion feature recorded for the Series C Preferred Stock.
The Series C Preferred Stock contains a compounding, cumulative 11.66% per annum paid-in-kind dividend payable upon conversion of
the Series C Preferred Stock. The dividends accrue daily. Following January 28, 2015, the dividend will no longer accrue unless declared by the Board of Directors of the Company. Through January 28, 2015, the Series C Preferred stock will
receive paid-in-kind dividends that will result in those shares being convertible into an additional 3,508,499 shares of our common stock. No cash dividends are payable unless cash dividends are declared on common shares.
In the event of a liquidation, dissolution or winding up of our company, before any distribution is made to the holders of any security
junior to the Series C Preferred Stock, the holders of the Series C Preferred Stock are entitled to be paid out of the assets of the Company available for distribution an amount equal to the greater of (1) $100.00 per share of Series C
Preferred Stock plus all accrued but unpaid dividends on the Series C Preferred Stock, and (2) the amount payable with respect to such shares of Series C Preferred Stock as if they had been converted into common stock. The amount of liquidation
preference calculated in accordance with the provisions of item (ii) of this paragraph at December 31, 2010 is approximately $7,291 based on the market price of the Company’s common stock on December 31, 2010.
F-19
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
At any time after the earlier of the holders of the Series C Stock notifying the
Company of their election to require the redemption of the Series C Stock or the eighth anniversary of the issuance date of the Series C Stock, the holders of a majority of the then outstanding shares of Series C Stock shall have the right to
require the Company to redeem such shares of Series C Stock for cash at a price per share equal to the original purchase price of $100.00 plus all accrued and unpaid dividends.
In the event of a change of control, each holder of Series C Stock shall have the right to require the Company to redeem such
holder’s shares for cash at a price per share equal to the greater of the (i) the fair market value per share valued as of the date of change of control determined on an as-converted to common stock basis and (ii) the original
purchase price of $100.00 plus all accrued and unpaid dividends. The amount payable to the Series C stockholders calculated in accordance with the provisions of item (ii) of this paragraph at December 31, 2010 would have been approximately
$11,412 based on the market price of the Company’s common stock on that date.
The redemption value of the Series C
Preferred Stock, representing the original purchase price plus accrued and unpaid dividends, and the number of common shares issuable in the event the conversion provisions are exercised, at December 31 of each of the succeeding five year
periods and at the fifth anniversary of the Agreement is expected to be as follows:
|
|
|
|
|
|
|
|
|
|
|
YEAR
|
|
REDEMPTION VALUE
|
|
|
COMMON SHARES ISSUABLE
UPON CONVERSION
|
|
|
2010
|
|
$
|
8,810
|
|
|
|
6,075,862
|
|
|
2011
|
|
$
|
9,834
|
|
|
|
6,781,901
|
|
|
2012
|
|
$
|
10,976
|
|
|
|
7,570,243
|
|
|
2013
|
|
$
|
12,253
|
|
|
|
8,450,223
|
|
|
2014
|
|
$
|
13,672
|
|
|
|
9,429,027
|
|
|
January 28, 2015
|
|
$
|
13,789
|
|
|
|
9,509,618
|
|
(11) STOCKHOLDERS’ EQUITY
Since its inception, the Company has issued warrants to purchase common stock only in connection with certain debt and equity financings.
Warrant activity during the periods indicated is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF
WARRANTS
|
|
|
WEIGHTED
AVERAGE
EXERCISE PRICE
|
|
|
Outstanding at December 31, 2007
|
|
|
105,382
|
|
|
$
|
3.79
|
|
|
Issued
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
Cancelled
|
|
|
(5,382
|
)
|
|
$
|
21.98
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2008
|
|
|
100,000
|
|
|
$
|
2.81
|
|
|
Issued
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
Cancelled
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2009
|
|
|
100,000
|
|
|
$
|
2.81
|
|
|
Issued
|
|
|
—
|
|
|
|
—
|
|
|
Exercised
|
|
|
—
|
|
|
|
—
|
|
|
Cancelled
|
|
|
(100,000
|
)
|
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2010
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
F-20
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
The weighted average contractual life of warrants outstanding at December 31, 2009
was 0.33 years. There are no warrants outstanding at December 31, 2010.
(12) STOCK PLANS
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 4,100,000 shares of the Company’s common stock since the Company’s inception. All remaining available shares under the Company’s prior stock option plans became available under the 2005 Plan upon its adoption. 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. At the Annual Meeting of Stockholders held on June 10, 2009, the
2005 Plan was amended to increase the number of shares available for grant by an additional 1,000,000 shares. At the Annual Meeting of Stockholders held on November 18, 2010, the 2005 Plan was amended to increase the number of shares available
for grant by an additional 5,955,109 shares. The 2009 amendment also makes clear that under the 2005 Plan the Company may not reprice stock options or stock appreciation rights without shareholder approval.
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 all
Plans during the periods indicated is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUMBER OF
OPTIONS
|
|
|
WEIGHTED
AVERAGE
EXERCISE PRICE
|
|
|
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
TERM
|
|
|
AGGREGATE
INTRINSIC
VALUE
|
|
|
Outstanding at December 31, 2007
|
|
|
2,894,924
|
|
|
$
|
2.57
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
786,500
|
|
|
$
|
2.21
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(86,742
|
)
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
|
Cancelled
|
|
|
(232,466
|
)
|
|
$
|
3.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2008
|
|
|
3,362,216
|
|
|
$
|
2.47
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
519,230
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(20,000
|
)
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
Cancelled
|
|
|
(243,084
|
)
|
|
$
|
4.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2009
|
|
|
3,618,362
|
|
|
$
|
2.12
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
1,600,000
|
|
|
$
|
1.27
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(51,334
|
)
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
Cancelled
|
|
|
(764,481
|
)
|
|
$
|
1.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at December 31, 2010
|
|
|
4,402,547
|
|
|
$
|
1.25
|
|
|
|
6.86
|
|
|
$
|
189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at December 31, 2010
|
|
|
2,518,557
|
|
|
$
|
2.04
|
|
|
|
4.90
|
|
|
$
|
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 December 31, 2010. During the years ended December 31, 2008, 2009 and 2010, the aggregate
F-21
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
intrinsic value of options exercised under the Company’s stock option plans was $88, $4 and $33, respectively, determined as of the date of exercise. Cash received from option exercises for
the years ended December 31, 2008, 2009 and 2010 was $116, $16 and $71, respectively.
In addition, the Company granted
restricted shares under the 2005 Plan during the years ended December 31, 2008, 2009 and 2010. The Company also granted restricted shares out of treasury, and not under the 2005 Plan, to David Price, our Chief Financial Officer, during the year
ended December 31, 2010. 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, 2007
|
|
|
343,667
|
|
|
$
|
2.92
|
|
|
|
|
|
|
Granted under 2005 Plan
|
|
|
95,904
|
|
|
$
|
2.55
|
|
|
|
|
|
|
Granted from treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Vested
|
|
|
(158,215
|
)
|
|
$
|
2.83
|
|
|
|
|
|
|
Cancelled
|
|
|
(10,800
|
)
|
|
$
|
2.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested at December 31, 2008
|
|
|
270,556
|
|
|
$
|
2.82
|
|
|
|
|
|
|
Granted under 2005 Plan
|
|
|
228,462
|
|
|
$
|
1.10
|
|
|
|
|
|
|
Granted from treasury shares
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
Vested
|
|
|
(329,332
|
)
|
|
$
|
1.71
|
|
|
|
|
|
|
Cancelled
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested at December 31, 2009
|
|
|
169,686
|
|
|
$
|
2.47
|
|
|
|
|
|
|
Granted under 2005 Plan
|
|
|
1,851,222
|
|
|
$
|
1.07
|
|
|
|
|
|
|
Granted from treasury shares
|
|
|
675,000
|
|
|
$
|
1.42
|
|
|
|
|
|
|
Vested
|
|
|
(141,991
|
)
|
|
$
|
1.86
|
|
|
|
|
|
|
Cancelled
|
|
|
(57,142
|
)
|
|
$
|
2.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested at December 31, 2010
|
|
|
2,496,775
|
|
|
$
|
1.18
|
|
|
$
|
2,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The aggregate intrinsic value was calculated based on the market price of the Company’s
common stock at December 31, 2010. During the year ended December 31, 2010, the aggregate intrinsic value of shares vested was $193, determined based on the market price of the Company’s common stock on the respective vesting date.
As of December 31, 2010, there was $1,827 of total unrecognized compensation cost related to nonvested share-based
compensation arrangements granted under the plans. That cost is expected to be recognized over a weighted average period of 1.01 years. In addition, there was $719 of total unrecognized compensation related to nonvested shares granted from treasury
which will be recognized over a weighted average period of 1.38 years.
At December 31, 2010, 4,691,553 shares are
available for grant under the Company’s 2005 Plan.
F-22
EDGAR ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data)
(13) COMMITMENTS
The Company leases space in Norwalk, Connecticut, New York, New York, Rockville, Maryland, Bellevue, Washington and Redwood City, California for its primary offices. Rent expense totaled $1,058, $1,202
and $1,333 for the years ended December 31, 2008, 2009 and 2010, respectively.
Future minimum payments under these
operating leases as of December 31, 2010 are as follows:
|
|
|
|
|
|
|
YEAR ENDING DECEMBER 31,
|
|
OPERATING LEASES
|
|
|
2011
|
|
$
|
1,439
|
|
|
2012
|
|
|
1,183
|
|
|
2013
|
|
|
794
|
|
|
2014
|
|
|
504
|
|
|
2015
|
|
|
338
|
|
|
Thereafter
|
|
|
—
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
4,258
|
|
|
|
|
|
|
|
(14) SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following is a summary of the quarterly results of operations for the years ended December 31, 2009 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
SECOND
QUARTER
|
|
|
THIRD
QUARTER
|
|
|
FOURTH
QUARTER
|
|
|
Year Ended December 31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
4,235
|
|
|
$
|
4,567
|
|
|
$
|
5,242
|
|
|
$
|
5,130
|
|
|
Gross profit
|
|
$
|
3,084
|
|
|
$
|
3,386
|
|
|
$
|
4,095
|
|
|
$
|
3,956
|
|
|
Income (loss) from operations
|
|
$
|
(987
|
)
|
|
$
|
(292
|
)
|
|
$
|
451
|
|
|
$
|
253
|
|
|
Net income (loss)
|
|
$
|
(1,097
|
)
|
|
$
|
(383
|
)
|
|
$
|
360
|
|
|
$
|
170
|
|
|
Net income (loss) per share—basic (i)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
Net income (loss) per share—diluted (i)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
Weighted average shares outstanding—basic
|
|
|
26,659
|
|
|
|
26,759
|
|
|
|
26,775
|
|
|
|
26,848
|
|
|
Weighted average shares outstanding—diluted
|
|
|
26,659
|
|
|
|
26,759
|
|
|
|
27,437
|
|
|
|
27,264
|
|
|
Year Ended December 31, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
4,366
|
|
|
$
|
5,020
|
|
|
$
|
5,158
|
|
|
$
|
4,924
|
|
|
Gross profit
|
|
$
|
2,936
|
|
|
$
|
2,988
|
|
|
$
|
2,914
|
|
|
$
|
2,803
|
|
|
Loss from operations
|
|
$
|
(879
|
)
|
|
$
|
(1,245
|
)
|
|
$
|
(1,699
|
)
|
|
$
|
(3,124
|
)
|
|
Net loss to common stockholders
|
|
$
|
(1,189
|
)
|
|
$
|
(1,694
|
)
|
|
$
|
(2,129
|
)
|
|
$
|
(3,637
|
)
|
|
Net loss to common stockholders per share—basic (i)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.13
|
)
|
|
Net loss to common stockholders per share—diluted (i)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.13
|
)
|
|
Weighted average shares outstanding—basic
|
|
|
26,874
|
|
|
|
26,942
|
|
|
|
26,972
|
|
|
|
27,110
|
|
|
Weighted average shares outstanding—diluted
|
|
|
26,874
|
|
|
|
26,942
|
|
|
|
26,972
|
|
|
|
27,110
|
|
|
(i)
|
Net loss to common stockholders per share data is computed independently for each of the periods presented; therefore the sum of the loss per share amounts for the
quarters may not equal the total for the year.
|
F-23
Edgar Online (NASDAQ:EDGR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Edgar Online (NASDAQ:EDGR)
Historical Stock Chart
From Jul 2023 to Jul 2024
