UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
Commission File Number 000-25779
TheStreet.com, Inc.
(Exact name of Registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
06-1515824 (I.R.S. Employer Identification Number) |
14 Wall Street
New York, New York 10005
(Address of principal executive offices, including zip code)
(212) 321-5000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. YES X NO
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES NO X
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
(Title of Class) Common Stock, par value $0.01 per share |
(Number of Shares Outstanding as of November 5, 2003) 23,978,056 |
TheStreet.com, Inc.
Form 10-Q
For the Three and Nine Months Ended September 30, 2003
| PART I |
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1 | |
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| Item 1. |
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3 | |
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4 | |
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| Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 |
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| Item 3. |
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17 | |
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| Item 4. |
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17 | |
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| PART II |
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26 | |
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| Item 1. |
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26 | |
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| Item 2. |
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26 | |
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| Item 3. |
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26 | |
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| Item 4. |
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26 | |
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| Item 5. |
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| Item 6. |
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27 |
| 28 |
ii
PART I – FINANCIAL INFORMATION
Interim Condensed Consolidated Financial Statements |
THESTREET.COM, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30, 2003 |
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December 31, 2002 |
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(unaudited) |
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(Note 1) |
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| ASSETS |
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| Current Assets: |
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| Cash and cash equivalents |
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$ |
22,039,222 |
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$ |
21,565,018 |
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| Restricted cash |
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200,000 |
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372,629 |
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| Short-term investments |
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4,009,453 |
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4,811,164 |
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| Accounts receivable, net of allowance for doubtful |
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1,292,453 |
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1,676,974 |
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| Other receivables |
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137,869 |
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91,622 |
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| Receivables from related parties |
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276,861 |
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105,439 |
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| Prepaid expenses and other current assets |
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1,215,312 |
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1,020,433 |
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| Total current assets |
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29,171,170 |
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29,643,279 |
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| Property and equipment, net of accumulated depreciation |
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2,726,675 |
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3,643,275 |
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| Other assets |
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407,446 |
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491,875 |
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| Receivables from related parties |
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— |
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206,222 |
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| Goodwill |
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1,990,312 |
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1,990,312 |
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| Other intangibles, net |
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658,333 |
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1,153,333 |
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| Restricted cash |
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2,300,000 |
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2,300,000 |
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| Total assets |
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$ |
37,253,936 |
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$ |
39,428,296 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current Liabilities: |
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| Accounts payable |
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$ |
634,454 |
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$ |
733,409 |
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| Accrued expenses |
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3,534,558 |
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3,660,029 |
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| Deferred revenue |
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6,903,531 |
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5,512,669 |
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| Current portion of note payable |
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88,386 |
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84,010 |
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| Other current liabilities |
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68,913 |
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18,127 |
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| Total current liabilities |
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11,229,842 |
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10,008,244 |
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| Note payable |
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244,317 |
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311,164 |
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| Other liabilities |
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55,399 |
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— |
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| Total liabilities |
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11,529,558 |
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10,319,408 |
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| Stockholders’ Equity |
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| Preferred stock; $0.01 par value; 10,000,000 shares |
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— |
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— |
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| Common stock; $0.01 par value; 100,000,000 shares |
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294,002 |
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290,074 |
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| Additional paid-in capital |
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184,393,997 |
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183,794,159 |
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| Deferred compensation |
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— |
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(205,434 |
) |
| Treasury stock at cost; 5,422,100 shares at September 30, |
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(7,215,410 |
) |
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(7,215,410 |
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| Accumulated deficit |
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(151,748,211 |
) |
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(147,554,501 |
) |
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| Total stockholders’ equity |
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25,724,378 |
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29,108,888 |
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| Total liabilities and stockholders’ equity |
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$ |
37,253,936 |
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$ |
39,428,296 |
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The accompanying notes to the condensed consolidated financial statements are an integral part of these statements
1
THESTREET.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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For the Three Months Ended |
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For the Nine Months Ended |
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2003 |
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2002 |
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2003 |
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2002 |
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(unaudited) |
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(unaudited) |
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| Net revenue: |
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| Subscription |
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$ |
4,826,585 |
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$ |
3,983,517 |
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$ |
13,449,194 |
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$ |
10,636,688 |
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| Advertising |
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1,222,386 |
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1,057,959 |
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3,899,205 |
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3,004,227 |
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| Commission |
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313,155 |
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— |
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480,231 |
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— |
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| Other |
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303,884 |
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292,051 |
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887,789 |
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1,252,694 |
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| Total net revenue |
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6,666,010 |
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5,333,527 |
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18,716,419 |
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14,893,609 |
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| Operating expense: |
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| Cost of services |
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3,483,057 |
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2,757,278 |
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10,476,307 |
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9,125,455 |
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| Sales and marketing |
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1,855,782 |
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1,720,255 |
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5,208,586 |
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4,650,550 |
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| General and administrative |
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1,763,126 |
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1,830,846 |
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5,378,722 |
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5,679,970 |
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| Depreciation and amortization |
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465,596 |
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954,649 |
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1,838,308 |
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3,149,884 |
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| Noncash compensation |
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32,986 |
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236,488 |
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304,391 |
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716,113 |
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| Restructuring |
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— |
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— |
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— |
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18,558 |
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| Total expense |
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7,600,547 |
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7,499,516 |
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23,206,314 |
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23,340,530 |
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| Net interest income |
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69,338 |
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129,041 |
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296,185 |
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533,022 |
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| Gain on sale of investment |
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— |
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184,667 |
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— |
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184,667 |
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| Net loss from continuing operations |
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(865,199 |
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(1,852,281 |
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(4,193,710 |
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(7,729,232 |
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| Gain on disposal of discontinued operations |
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— |
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2,609 |
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— |
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200,323 |
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| Net loss |
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$ |
(865,199 |
) |
$ |
(1,849,672 |
) |
$ |
(4,193,710 |
) |
$ |
(7,528,909 |
) |
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| Net (loss) income per share - basic and diluted: |
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| Continuing operations |
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$ |
(0.04 |
) |
$ |
(0.08 |
) |
$ |
(0.18 |
) |
$ |
(0.33 |
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| Discontinued operations |
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— |
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— |
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— |
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0.01 |
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| Net loss |
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$ |
(0.04 |
) |
$ |
(0.08 |
) |
$ |
(0.18 |
) |
$ |
(0.32 |
) |
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| Weighted average basic and diluted shares outstanding |
|
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23,947,440 |
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23,553,428 |
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23,818,398 |
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23,554,046 |
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The accompanying notes to the condensed consolidated financial statements are an integral part of these statements
2
THESTREET.COM, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS