FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
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ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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FOR THE QUARTERLY PERIOD ENDED: September 30, 2002 |
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OR |
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o 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: 0-30309
PINNACOR INC.
(Formerly ScreamingMedia Inc.)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE |
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13-4042678 |
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(STATE OR OTHER JURISDICTION OF |
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(I.R.S. EMPLOYER IDENTIFICATION NO.) |
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601 WEST 26TH ST., NEW YORK, NY 10001 |
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE) |
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REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 691-7900 |
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(FORMER NAME, FORMER ADDRESS, AND FORMER YEAR, IF CHANGED SINCE LAST REPORT:) |
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ScreamingMedia Inc. |
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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
Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act)
Yes o No ý
As of November 5, 2002 there were 40,519,033 shares of the Registrant’s common stock outstanding.
PINNACOR INC.
(Formerly ScreamingMedia Inc.)
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2002
TABLE OF CONTENTS
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3 |
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3 |
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Consolidated Balance Sheets – September 30, 2002 (unaudited) and December 31, 2001 |
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4 |
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5 |
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6 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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31 |
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31 |
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31 |
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31 |
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31 |
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31 |
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31 |
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32 |
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32 |
2
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
PINNACOR INC.
(Formerly ScreamingMedia Inc.)
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SEPTEMBER
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DECEMBER
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
15,679,318 |
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$ |
15,189,440 |
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Marketable securities |
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38,859,298 |
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48,925,499 |
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Accounts receivable, net of allowance for doubtful accounts of $735,000 and $1,130,000 as of September 30, 2002 and December 31, 2001, respectively |
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3,380,551 |
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5,577,430 |
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Prepaid expenses |
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1,095,490 |
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1,402,467 |
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Total current assets |
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59,014,657 |
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71,094,836 |
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PROPERTY AND EQUIPMENT–Net of accumulated depreciation and amortization |
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5,869,907 |
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11,007,497 |
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GOODWILL |
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32,609,482 |
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34,063,396 |
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OTHER INTANGIBLE ASSETS-Net of accumulated amortization |
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2,420,833 |
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-- |
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OTHER ASSETS |
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657,944 |
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1,009,224 |
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TOTAL ASSETS |
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$ |
100,572,823 |
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$ |
117,174,953 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable and accrued expenses |
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$ |
4,148,879 |
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$ |
6,217,752 |
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Accrued restructuring and other expenses |
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913,496 |
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4,452,883 |
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Deferred revenue |
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7,755,516 |
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11,036,116 |
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Current portion of capital lease obligations |
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1,715,267 |
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2,138,723 |
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Total current liabilities |
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14,533,158 |
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23,845,474 |
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NONCURRENT LIABILITIES: |
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Capital lease obligations, less current portion |
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1,450,633 |
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1,857,707 |
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Total liabilities |
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15,983,791 |
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25,703,181 |
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STOCKHOLDERS’ EQUITY: |
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Common stock, $0.01 par value, 100,000,000 shares authorized and 44,760,309 and 43,901,678 issued and 40,508,030 and 42,350,139 outstanding at September 30, 2002 and December 31, 2001 |
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447,605 |
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439,017 |
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Additional paid-in capital |
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225,132,382 |
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225,455,188 |
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Warrants |
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1,708,304 |
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1,638,388 |
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Deferred compensation |
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(380,442 |
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(1,822,393 |
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Treasury stock, 4,252,279 and 1,551,539 shares at September 30, 2002 and December 31, 2001, respectively, at cost |
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(4,074,589 |
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(968,738 |
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Accumulated deficit |
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(138,472,437 |
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(133,630,005 |
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Accumulated other comprehensive income |
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228,209 |
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360,315 |
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Total stockholders’ equity |
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84,589,032 |
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91,471,772 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
100,572,823 |
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$ |
117,174,953 |
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See accompanying notes to consolidated financial statements.
3
PINNACOR INC.
(Formerly ScreamingMedia Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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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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NET REVENUE |
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$ |
8,050,994 |
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$ |
7,244,617 |
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$ |
26,363,796 |
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$ |
21,546,751 |
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OPERATING EXPENSES: |
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Cost of services (excluding depreciation of $164,354, $155,570, $640,647 and $576,517 for the three months ended September 30, 2002 and 2001 and the nine months ended September 30, 2002 and 2001, respectively, shown below) |
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2,719,283 |
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2,238,515 |
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8,558,395 |
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6,344,427 |
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Research and development (excluding stock-based compensation of $(39,026), $161,417, $(115,609) and $(111,164) for the three months ended September 30, 2002 and 2001 and the nine months ended September 30, 2002 and 2001, respectively, shown below) |
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1,760,370 |
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