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 June 30, 2004
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 X NO
_____
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 August 5, 2004) 24,644,158 |
TheStreet.com, Inc.
Form 10-Q
For the Three Months Ended June 30, 2004
| 1 | |||
| Item 1. |
|
1 | |
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1 | |
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2 | |
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3 | |
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4 | |
| Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
8 |
| Item 3. |
|
21 | |
| Item 4. |
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21 | |
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| 30 | |||
| Item 1. |
|
31 | |
| Item 2. |
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Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
31 |
| Item 3. |
|
31 | |
| Item 4. |
|
31 | |
| Item 5. |
|
31 | |
| Item 6. |
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31 | |
| 33 | |||
ii
Part I – FINANCIAL INFORMATION
Interim Condensed Consolidated Financial Statements |
THESTREET.COM, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
June 30, 2004 |
|
December 31, 2003 |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
(unaudited) |
|
|
(Note 1) |
|
| ASSETS |
|
|
|
|
|
|
|
| Current Assets: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
26,252,018 |
|
$ |
22,247,400 |
|
| Restricted cash |
|
|
300,000 |
|
|
300,000 |
|
| Short-term investments |
|
|
2,005,000 |
|
|
4,010,904 |
|
| Accounts receivable, net of allowance for doubtful accounts of $137,065 as of June 30, 2004 and $129,096 as of December 31, 2003 |
|
|
1,958,814 |
|
|
1,637,822 |
|
| Other receivables |
|
|
253,187 |
|
|
202,336 |
|
| Receivables from related parties |
|
|
— |
|
|
214,788 |
|
| Prepaid expenses and other current assets |
|
|
1,722,273 |
|
|
1,303,891 |
|
|
|
|
|
|
|
|
|
|
| Total current assets |
|
|
32,491,292 |
|
|
29,917,141 |
|
| Property and equipment, net of accumulated depreciation and amortization of $12,189,471 as of June 30, 2004 and $11,744,173 as of December 31, 2003 |
|
|
2,560,005 |
|
|
2,553,063 |
|
| Other assets |
|
|
288,451 |
|
|
343,450 |
|
| Goodwill |
|
|
1,990,312 |
|
|
1,990,312 |
|
| Other intangibles, net |
|
|
493,333 |
|
|
493,333 |
|
| Restricted cash |
|
|
2,305,000 |
|
|
1,900,000 |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
40,128,393 |
|
$ |
37,197,299 |
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
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| Current Liabilities: |
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
1,095,647 |
|
$ |
787,409 |
|
| Accrued expenses |
|
|
4,372,866 |
|
|
3,144,949 |
|
| Deferred revenue |
|
|
8,627,532 |
|
|
6,839,171 |
|
| Current portion of note payable |
|
|
92,990 |
|
|
89,895 |
|
| Other current liabilities |
|
|
40,153 |
|
|
71,859 |
|
|
|
|
|
|
|
|
|
|
| Total current liabilities |
|
|
14,229,188 |
|
|
10,933,283 |
|
| Note payable |
|
|
173,987 |
|
|
221,269 |
|
| Other liabilities |
|
|
55,399 |
|
|
55,399 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
14,458,574 |
|
|
11,209,951 |
|
|
|
|
|
|
|
|
|
|
| Stockholders’ Equity |
|
|
|
|
|
|
|
| Preferred stock; $0.01 par value; 10,000,000 shares authorized; none issued and outstanding |
|
|
— |
|
|
— |
|
| Common stock; $0.01 par value; 100,000,000 shares authorized; 30,046,529 shares issued and 24,603,113 shares outstanding at June 30, 2004, and 29,463,299 shares issued and 24,041,199 shares outstanding at December 31, 2003 |
|
|
300,465 |
|
|
294,633 |
|
| Additional paid-in capital |
|
|
185,951,412 |
|
|
184,502,124 |
|
| Treasury stock at cost; 5,443,416 shares at June 30, 2004 and 5,422,100 shares at December 31, 2003 |
|
|
(7,289,822 |
) |
|
(7,215,410 |
) |
| Accumulated deficit |
|
|
(153,292,236 |
) |
|
(151,593,999 |
) |
|
|
|
|
|
|
|
|
|
| Total stockholders’ equity |
|
|
25,669,819 |
|
|
25,987,348 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities and stockholders’ equity |
|
$ |
40,128,393 |
|
$ |
37,197,299 |
|
|
|
|
|
|
|
|
|
|
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
|
|
|
For
the Three Months Ended |
|
For the Six Months Ended |
| ||||||||
|
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|
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| ||||||||
|
|
|
2004 |
|
2003 |
|
2004 |
|
2003 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
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|
(unaudited) |
|
|
(unaudited) |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
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|
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Net revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription |
|
$ |
5,687,179 |
|
$ |
4,349,720 |
|
$ |
11,096,674 |
|
$ |
8,622,609 |
|
|
Advertising |
|
|
1,915,072 |
|
|
1,476,076 |
|
|
3,343,046 |
|
|
2,676,819 |
|
|
Commission |
|
|
1,208,801 |
|
|
167,076 |
|
|
1,985,591 |
|
|
167,076 |
|
|
Other |
|
|
331,544 |
|
|
401,295 |
|
|
637,587 |
|
|
583,905 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenue |
|
|
9,142,596 |
|
|
6,394,167 |
|
|
17,062,898 |
|
|
12,050,409 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
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|
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|
|
|
Operating expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
4,005,470 |
|
|
3,581,633 |
|
|
8,082,830 |
|
|
6,993,250 |
|
|
Sales and marketing |
|
|
3,114,509 |
|
|
1,694,571 |
|
|
6,195,704 |
|
|
3,352,804 |
|
|
General and administrative |
|
|
2,028,391 |
|
|
1,860,265 |
|
|
4,217,552 |
|
|
3,615,596 |
|
|
Depreciation and amortization |
|
|
196,629 |
|
|
606,754 |
|
|
408,534 |
|
|
1,372,712 |
|
|
Noncash compensation |
|
|
— |
|
|
32,985 |
|
|
— |
|
|
271,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expense |
|
|
9,344,999 |
|
|
7,776,208 |
|
|
18,904,620 |
|
|
15,605,767 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(202,403 |
) |
|
(1,382,041 |
) |
|
(1,841,722 |
) |
|
(3,555,358 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
72,082 |
|
|
109,174 |
|
|
143,485 |
|
|
226,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(130,321 |
) |
$ |
(1,272,867 |
) |
$ |
(1,698,237 |
) |
$ |
(3,328,511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted: |
|
$ |
(0.01 |
) |
$ |
(0.05 |
) |
$ |
(0.07 |
) |
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic and diluted shares outstanding |
|
|
24,569,299 |
|
|
23,852,528 |
|
|
24,404,721 |
|
|
23,752,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
For the Six Months Ended June 30, |
| ||||
|
|
|
|
| ||||
|
|
|
2004 |
|
2003 |
| ||
|
|
|
|
|
|
| ||
|
|
|
(unaudited) |
| ||||
| Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
| Net loss |
|
$ |
(1,698,237 |
) |
$ |
(3,328,511 |
) |
|
Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
| Noncash compensation expense |
|
|
— |
|
|
271,405 |
|
| Provision for (recovery of) doubtful accounts |
|
|
8,000 |
|
|
(43,839 |
) |
| Depreciation and amortization |
|
|
408,534 |
|
|
1,372,712 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
| Accounts receivable |
|
|
(328,992 |
) |
|
271,064 |
|
| Other receivables |
|
|
(50,851 |
) |
|
(63,636 |
) |
| Receivables from related parties |
|
|
214,788 |
|
|
31,109 |
|
| Prepaid expenses and other current assets |
|
|
(418,382 |
) |
|
(443,727 |
) |
| Other assets</ | |||||||