UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2002
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number 000-29423
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FAIRMARKET, INC. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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04-3351937 |
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(State or other
jurisdiction of |
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(I.R.S. Employer |
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500 Unicorn Park Drive, Woburn, MA 01801-3341 |
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(Address of principal executive offices) (Zip Code) |
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Registrant’s telephone number, including area code: (781) 376-5600 |
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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 ý No o
The number of shares outstanding of the registrant’s common stock as of October 30, 2002 was 26,239,682
FAIRMARKET, INC.
FORM 10-Q
For the Quarter Ended September 30, 2002
INDEX
FAIRMARKET is a registered service mark, and FairMarket Network, MarketSelect and the FairMarket logo are service marks, of FairMarket, Inc. The names of other companies and products mentioned in this Report may be the trademarks of their respective owners.
2
FAIRMARKET, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share amounts)
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September
30, |
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December
31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
24,717 |
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$ |
20,329 |
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Marketable securities |
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15,981 |
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19,977 |
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Restricted cash |
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481 |
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481 |
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Accounts receivable, net of allowance for doubtful accounts of $449 and $563 at September 30, 2002 and December 31, 2001, respectively |
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976 |
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639 |
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Prepaid expenses and other current assets |
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1,429 |
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1,240 |
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Total current assets |
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43,584 |
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42,666 |
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Long-term marketable securities |
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15,003 |
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23,066 |
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Property and equipment, net |
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2,052 |
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5,718 |
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Total assets |
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$ |
60,639 |
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$ |
71,450 |
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Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
293 |
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$ |
383 |
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Accrued expenses |
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1,446 |
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1,489 |
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Deferred revenue |
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697 |
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238 |
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Current portion of accrual for unutilized office space |
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1,092 |
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— |
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Current portion of long-term lease obligation |
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52 |
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145 |
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Total current liabilities |
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3,580 |
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2,255 |
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Long-term portion of accrual for unutilized office space |
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1,750 |
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— |
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Other long-term liabilities |
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211 |
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338 |
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Total liabilities |
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5,541 |
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2,593 |
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Redeemable convertible preferred stock (liquidation preference of $2,000) |
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1,950 |
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— |
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Stockholders’ equity: |
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Preferred stock |
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— |
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— |
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Common stock |
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30 |
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29 |
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Additional paid-in capital |
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188,852 |
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189,370 |
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Treasury Stock, at cost, 3,181,000 shares in 2002 |
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(4,039 |
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— |
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Deferred compensation and equity-related charges |
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(232 |
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(10,580 |
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Accumulated other comprehensive loss, net |
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(22 |
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(13 |
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Accumulated deficit |
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(131,441 |
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(109,949 |
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Total stockholders’ equity |
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53,148 |
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68,857 |
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Total liabilities, redeemable convertible preferred stock and stockholders’ equity |
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$ |
60,639 |
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$ |
71,450 |
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See accompanying notes to condensed consolidated financial statements.
3
FAIRMARKET, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
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Three
Months Ended |
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Nine
Months Ended |
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2002 |
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2001 |
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2002 |
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2001 |
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Revenue |
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$ |
1,434 |
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$ |
2,009 |
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$ |
4,091 |
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$ |
7,234 |
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Operating expenses: |
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Cost of revenue (exclusive of $60 and $105 in 2002 and $45 and $160 in 2001, for the three- and nine-month periods, respectively, reported below as equity-related charges) |
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808 |
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1,269 |
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2,850 |
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3,884 |
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Sales and marketing (exclusive of $892 and $9,456 in 2002 and $4,329 and $15,873 in 2001, for the three- and nine-month periods, respectively, reported below as equity-related charges) |
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488 |
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1,359 |
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