Delaware
|
06-1515824
|
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification Number)
|
|
incorporation
or organization)
|
(Number
of Shares Outstanding
|
|
(Title
of Class)
|
as
of August 6, 2008)
|
Common
Stock, par value $0.01 per share
|
30,482,949
|
Part
I - FINANCIAL INFORMATION
|
1
|
|
Item
1.
|
Interim
Consolidated Financial Statements
|
1
|
Consolidated
Balance Sheets
|
1
|
|
Consolidated
Statements of Operations
|
2
|
|
Consolidated
Statements of Cash Flows
|
3
|
|
Notes
to Consolidated Financial Statements
|
4
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
36
|
Item
4.
|
Controls
and Procedures
|
36
|
PART
II - OTHER INFORMATION
|
38
|
|
Item
1.
|
Legal
Proceedings
|
38
|
Item
1A.
|
Risk
Factors
|
39
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
40
|
Item
3.
|
Defaults
Upon Senior Securities
|
40
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
40
|
Item
5.
|
Other
Information
|
41
|
Exhibits
|
42
|
|
SIGNATURES
|
44
|
June 30, 2008
|
December 31, 2007
|
||||||
(unaudited)
|
(Note 1)
|
||||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and cash equivalents
|
$
|
80,445,570
|
$
|
79,170,754
|
|||
Accounts
receivable, net of allowance for doubtful accounts of $362,936 as
of June
30, 2008 and $242,807 as of December 31, 2007
|
12,418,910
|
11,133,957
|
|||||
Other
receivables
|
1,227,468
|
1,227,144
|
|||||
Deferred
taxes
|
5,800,000
|
5,800,000
|
|||||
Prepaid
expenses and other current assets
|
2,573,372
|
1,652,608
|
|||||
Total
current assets
|
102,465,320
|
98,984,463
|
|||||
Property
and equipment, net of accumulated depreciation and amortization of
$18,982,016 as of June 30, 2008 and $17,493,847 as of December 31,
2007
|
8,671,531
|
7,730,922
|
|||||
Long
term investment
|
1,392,976
|
-
|
|||||
Other
assets
|
222,927
|
328,117
|
|||||
Goodwill
|
40,001,665
|
40,245,413
|
|||||
Other
intangibles, net
|
17,334,670
|
18,368,792
|
|||||
Deferred
taxes
|
10,200,000
|
10,200,000
|
|||||
Restricted
cash
|
618,660
|
576,951
|
|||||
Total
assets
|
$
|
180,907,749
|
$
|
176,434,658
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
payable
|
$
|
2,265,764
|
$
|
2,189,259
|
|||
Accrued
expenses
|
3,470,673
|
5,006,635
|
|||||
Deferred
revenue
|
17,199,950
|
16,240,008
|
|||||
Other
current liabilities
|
390,418
|
214,654
|
|||||
Current
liabilities of discontinued operations
|
223,925
|
232,242
|
|||||
Total
current liabilities
|
23,550,730
|
23,882,798
|
|||||
Other
liabilities
|
91,813
|
90,105
|
|||||
Total
liabilities
|
23,642,543
|
23,972,903
|
|||||
Stockholders'
Equity:
|
|||||||
Preferred
stock; $0.01 par value; 10,000,000 shares authorized; 5,500 shares
issued
and 5,500 shares outstanding as of June 30, 2008 and December 31,
2007;
the aggregate liquidation preference totals $55,000,000 as of June
30,
2008 and $55,096,424 as of December 31, 2007
|
55
|
55
|
|||||
Common
stock; $0.01 par value; 100,000,000 shares authorized; 36,262,546
shares
issued and 30,482,949 shares outstanding as of June 30, 2008, and
36,006,137 shares issued and 30,254,137 shares outstanding as of
December
31, 2007
|
362,625
|
360,061
|
|||||
Additional
paid-in capital
|
271,131,031
|
270,752,308
|
|||||
Treasury
stock at cost; 5,779,597 shares as of June 30, 2008 and 5,752,000
shares
as of December 31, 2007
|
(9,359,200
|
)
|
(9,033,471
|
)
|
|||
Accumulated
deficit
|
(104,869,305
|
)
|
(109,617,198
|
)
|
|||
Total
stockholders' equity
|
157,265,206
|
152,461,755
|
|||||
Total
liabilities and stockholders' equity
|
$
|
180,907,749
|
$
|
176,434,658
|
For
the Three Months Ended June 30,
|
For
the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
(unaudited)
|
(unaudited)
|
||||||||||||
Net
revenue:
|
|||||||||||||
Paid
services
|
$
|
10,289,939
|
$
|
9,404,349
|
$
|
21,049,408
|
$
|
18,842,900
|
|||||
Marketing
services
|
9,398,992
|
5,494,939
|
17,587,508
|
10,563,952
|
|||||||||
Total
net revenue
|
19,688,931
|
14,899,288
|
38,636,916
|
29,406,852
|
|||||||||
Operating
expense:
|
|||||||||||||
Cost
of services
|
8,366,156
|
5,645,418
|
16,022,283
|
11,271,507
|
|||||||||
Sales
and marketing
|
3,630,394
|
3,055,464
|
7,393,989
|
6,385,204
|
|||||||||
General
and administrative
|
4,078,822
|
2,765,133
|
8,434,367
|
5,473,154
|
|||||||||
Depreciation
and amortization
|
1,584,780
|
435,935
|
2,848,384
|
815,142
|
|||||||||
Total
operating expense
|
17,660,152
|
11,901,950
|
34,699,023
|
23,945,007
|
|||||||||
Operating
income
|
2,028,779
|
2,997,338
|
3,937,893
|
5,461,845
|
|||||||||
Net
interest income
|
400,243
|
625,042
|
1,086,437
|
1,225,699
|
|||||||||
Income
from continuing operations before income taxes
|
2,429,022
|
3,622,380
|
5,024,330
|
6,687,544
|
|||||||||
Provision
for income taxes
|
125,693
|
72,454
|
271,621
|
133,729
|
|||||||||
Income
from continuing operations
|
2,303,329
|
3,549,926
|
4,752,709
|
6,553,815
|
|||||||||
Discontinued
operations:
|
|||||||||||||
(Loss)
income on disposal of discontinued operations
|
(2,085
|
)
|
262
|
(4,816
|
)
|
(1,123
|
)
|
||||||
(Loss)
income from discontinued operations
|
(2,085
|
)
|
262
|
(4,816
|
)
|
(1,123
|
)
|
||||||
Net
income
|
2,301,244
|
3,550,188
|
4,747,893
|
6,552,692
|
|||||||||
Preferred
stock cash dividends
|
96,424
|
-
|
192,848
|
-
|
|||||||||
Net
income attributable to common stockholders
|
$
|
2,204,820
|
$
|
3,550,188
|
$
|
4,555,045
|
$
|
6,552,692
|
|||||
Basic
net income (loss) per share
|
|||||||||||||
Income
from continuing operations
|
$
|
0.07
|
$
|
0.12
|
$
|
0.16
|
$
|
0.23
|
|||||
(Loss)
income on disposal of discontinued operations
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
(0.00
|
)
|
||||||
Net
income
|
0.07
|
0.12
|
0.16
|
0.23
|
|||||||||
Preferred
stock cash dividends
|
(0.00
|
)
|
-
|
(0.01
|
)
|
-
|
|||||||
Net
income attributable to common stockholders
|
|||||||||||||
Diluted
net income (loss) per share
|
$
|
0.07
|
$
|
0.12
|
$
|
0.15
|
$
|
0.23
|
|||||
Income
from continuing operations
|
$
|
0.07
|
$
|
0.12
|
$
|
0.14
|
$
|
0.23
|
|||||
(Loss)
income on disposal of discontinued operations
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
(0.00
|
)
|
||||||
Net
income
|
0.07
|
0.12
|
0.14
|
0.23
|
|||||||||
Preferred
stock cash dividends
|
-
|
-
|
-
|
-
|
|||||||||
Net
income attributable to common stockholders
|
$
|
0.07
|
$
|
0.12
|
$
|
0.14
|
$
|
0.23
|
|||||
Weighted
average basic shares outstanding
|
30,452,497
|
28,422,332
|
30,422,738
|
28,184,671
|
|||||||||
Weighted
average diluted shares outstanding
|
34,597,480
|
28,651,451
|
34,647,940
|
28,388,565
|
For the Six Months Ended June 30,
|
|||||||
2008
|
2007
|
||||||
(unaudited)
|
|||||||
Cash
Flows from Operating Activities:
|
|||||||
Net
income
|
$
|
4,747,893
|
$
|
6,552,692
|
|||
Loss
from discontinued operations
|
4,816
|
1,123
|
|||||
Income
from continuing operations
|
4,752,709
|
6,553,815
|
|||||
Adjustments
to reconcile income from continuing operations to net cash provided
by
operating activities:
|
|||||||
Stock-based
compensation expense
|
1,653,132
|
1,071,581
|
|||||
Provision
for doubtful accounts
|
125,000
|
-
|
|||||
Depreciation
and amortization
|
2,848,384
|
815,142
|
|||||
Deferred
rent
|
60,726
|
29,447
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(1,409,953
|
)
|
(82,154
|
)
|
|||
Other
receivables
|
(324
|
)
|
136,419
|
||||
Prepaid
expenses and other current assets
|
(833,482
|
)
|
(598,982
|
)
|
|||
Other
assets
|
50,966
|
-
|
|||||
Accounts
payable
|
76,505
|
(1,623
|
)
|
||||
Accrued
expenses
|
(1,439,538
|
)
|
(1,874,510
|
)
|
|||
Deferred
revenue
|
959,942
|
1,526,722
|
|||||
Other
current liabilities
|
175,764
|
80,957
|
|||||
Other
liabilities
|
(30,739
|
)
|
-
|
||||
Net
cash provided by continuing operations
|
6,989,092
|
7,656,814
|
|||||
Net
cash used in discontinued operations
|
(13,133
|
)
|
(1,123
|
)
|
|||
Net
cash provided by operating activities
|
6,975,959
|
7,655,691
|
|||||
Cash
Flows from Investing Activities:
|
|||||||
Purchase
of Bankers Financial Products Corporation
|
(86,252
|
)
|
-
|
||||
Purchase
of Corsis Technology Group II LLC
|
(20,000
|
)
|
-
|
||||
Purchase
of Weiss Ratings
|
-
|
30,922
|
|||||
Purchase
of Stockpickr.com
|
-
|
(1,572,106
|
)
|
||||
Long
term investment
|
(1,392,976
|
)
|
-
|
||||
Capital
expenditures
|
(2,494,361
|
)
|
(2,558,350
|
)
|
|||
Proceeds
from the sale of fixed assets
|
28,153
|
-
|
|||||
Net
cash used in investing activities
|
(3,965,436
|
)
|
(4,099,534
|
)
|
|||
Cash
Flows from Financing Activities:
|
|||||||
Proceeds
from the exercise of stock options
|
588,874
|
1,450,528
|
|||||
Costs
associated with the sale of preferred stock
|
(125,000
|
)
|
-
|
||||
Cash
dividends paid on common stock
|
(1,542,871
|
)
|
(1,430,151
|
)
|
|||
Cash
dividends paid on preferred stock
|
(289,272
|
)
|
-
|
||||
Repayment
of note payable
|
-
|
(22,146
|
)
|
||||
Purchase
of treasury stock
|
(325,729
|
)
|
-
|
||||
Restricted
cash
|
(41,709
|
)
|
-
|
||||
Net
cash used in financing activities
|
(1,735,707
|
)
|
(1,769
|
)
|
|||
Net
increase in cash and cash equivalents
|
1,274,816
|
3,554,388
|
|||||
Cash
and cash equivalents, beginning of period
|
79,170,754
|
46,055,232
|
|||||
Cash
and cash equivalents, end of period
|
$
|
80,445,570
|
$
|
49,609,620
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
payments made for interest
|
$
|
25,057
|
$
|
13,390
|
|||
Cash
payments made for income taxes
|
$
|
488,523
|
$
|
245,916
|
For the Three Months
Ended June 30, 2007
|
For the Six Months
Ended June 30, 2007
|
||||||
Total revenue
|
$
|
18,150,740
|
$
|
38,190,946
|
|||
Net
income
|
$
|
2,346,118
|
$
|
6,390,088
|
|||
Basic
net income per share
|
$
|
0.08
|
$
|
0.22
|
|||
Diluted
net income per share
|
$
|
0.08
|
$
|
0.22
|
|||
Weighted
average basic shares outstanding
|
29,752,643
|
29,514,982
|
|||||
Weighted
average diluted shares outstanding
|
29,981,762
|
29,718,876
|
For the Six Months Ended June 30,
|
|||||||
2008
|
2007
|
||||||
Expected
option lives
|
3.5
years
|
3.5
years
|
|||||
Expected
volatility
|
47.57%
|
|
47.62%
|
|
|||
Risk-free
interest rate
|
2.37%
|
|
4.65%
|
|
|||
Expected
dividend yield
|
0.83%
|
|
0.96%
|
|
Shares
Underlying
Awards
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
($000)
|
Weighted
Average
Remaining
Contractual
Life (In
Years)
|
||||||||||
Awards outstanding at
December 31, 2007
|
1,926,354
|
$
|
6.45
|
||||||||||
Options
granted
|
399,478
|
$
|
11.24
|
||||||||||
Restricted
stock units granted
|
148,261
|
$
|
0.00
|
||||||||||
Options
exercised
|
(107,268
|
)
|
$
|
4.19
|
|||||||||
Shares
issued under restricted stock units
|
(118,041
|
)
|
$
|
0.00
|
|||||||||
Options
cancelled
|
(5,000
|
)
|
$
|
10.24
|
|||||||||
Restricted
stock units cancelled
|
(13,335
|
)
|
$
|
0.00
|
|||||||||
Awards
outstanding at March 31, 2008
|
2,230,449
|
$
|
7.36
|
||||||||||
Options
granted
|
172,628
|
$
|
8.65
|
||||||||||
Restricted
stock units granted
|
310,110
|
$
|
0.00
|
||||||||||
Options
exercised
|
(31,100
|
)
|
$
|
4.48
|
|||||||||
Options
cancelled
|
(46,835
|
)
|
$
|
10.42
|
|||||||||
Awards
outstanding at June 30, 2008
|
2,635,252
|
$
|
5,477
|
3.05
|
|||||||||
Awards
vested and expected to vest at June 30, 2008
|
2,483,780
|
$
|
6.43
|
$
|
5,298
|
2.19
|
|||||||
Options
exercisable at June 30, 2008
|
921,200
|
$
|
5.64
|
$
|
1,630
|
1.59
|
|||||||
Restricted
stock units eligible to be issued at June 30, 2008
|
0
|
$
|
0.00
|
$
|
0
|
3.28
|
Unvested Awards
|
Number of
Shares
|
Weighted
Average Grant
Date Fair Value
|
|||||
Shares underlying awards
unvested at December 31, 2007
|
1,203,127
|
$
|
4.66
|
||||
Shares
underlying options granted
|
572,106
|
$
|
3.56
|
||||
Shares
underlying restricted stock units granted
|
458,371
|
$
|
9.81
|
||||
Shares
underlying options vested
|
(342,172
|
)
|
$
|
2.73
|
|||
Shares
underlying restricted stock units vested
|
(118,041
|
)
|
$
|
8.59
|
|||
Shares
underlying options cancelled
|
(46,001
|
)
|
$
|
3.98
|
|||
Shares
underlying restricted stock units cancelled
|
(13,335
|
)
|
$
|
9.38
|
|||
Shares
underlying awards unvested at June 30, 2008
|
1,714,055
|
$
|
5.77
|
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Basic
net income (loss) per share
|
|||||||||||||
Numerator:
|
|||||||||||||
Income
from continuing operations
|
$
|
2,303,329
|
$
|
3,549,926
|
$
|
4,752,709
|
$
|
6,553,815
|
|||||
(Loss)
income on disposal of discontinued operations
|
(2,085
|
)
|
262
|
(4,816
|
)
|
(1,123
|
)
|
||||||
Preferred
stock cash dividends
|
(96,424
|
)
|
-
|
(192,848
|
)
|
-
|
|||||||
Numerator
for basic earnings per share -
|
|||||||||||||
Net
income available to common stockholders
|
$
|
2,204,820
|
$
|
3,550,188
|
$
|
4,555,045
|
$
|
6,552,692
|
|||||
Denominator:
|
|||||||||||||
Weighted
average basic shares outstanding
|
30,452,497
|
28,422,332
|
30,422,738
|
28,184,671
|
|||||||||
Net
income (loss) per basic share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.07
|
$
|
0.12
|
$
|
0.16
|
$
|
0.23
|
|||||
(Loss)
income on disposal of discontinued operations
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
(0.00
|
)
|
||||||
Preferred
stock cash dividends
|
(0.00
|
)
|
-
|
(0.01
|
)
|
-
|
|||||||
Net
income available to common stockholders
|
$
|
0.07
|
$
|
0.12
|
$
|
0.15
|
$
|
0.23
|
|||||
Dilutive
net income (loss) per share
|
|||||||||||||
Numerator:
|
|||||||||||||
Income
from continuing operations
|
$
|
2,303,329
|
$
|
3,549,926
|
$
|
4,752,709
|
$
|
6,553,815
|
|||||
(Loss)
income on disposal of discontinued operations
|
(2,085
|
)
|
262
|
(4,816
|
)
|
(1,123
|
)
|
||||||
Preferred
stock cash dividends
|
-
|
-
|
-
|
-
|
|||||||||
Numerator
for diluted earnings per share -
|
|||||||||||||
Net
income available to common stockholders
|
$
|
2,301,244
|
$
|
3,550,188
|
$
|
4,747,893
|
$
|
6,552,692
|
|||||
Denominator:
|
|||||||||||||
Weighted
average basic shares outstanding
|
30,452,497
|
28,422,332
|
30,422,738
|
28,184,671
|
|||||||||
Weighted
average effect of dilutive securities:
|
|||||||||||||
Employee
stock options and restricted stock units
|
288,041
|
229,119
|
368,260
|
203,894
|
|||||||||
Convertible
preferred stock
|
3,856,942
|
-
|
3,856,942
|
-
|
|||||||||
Weighted
average diluted shares outstanding
|
34,597,480
|
28,651,451
|
34,647,940
|
28,388,565
|
|||||||||
Net
income (loss) per diluted share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.07
|
$
|
0.12
|
$
|
0.14
|
$
|
0.23
|
|||||
(Loss)
income on disposal of discontinued operations
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
(0.00
|
)
|
||||||
Preferred
stock cash dividends
|
-
|
-
|
-
|
-
|
|||||||||
Net
income available to common stockholders
|
$
|
0.07
|
$
|
0.12
|
$
|
0.14
|
$
|
0.23
|
June
30,
|
December
31,
|
||||||
2008
|
2007
|
||||||
Other
liabilities
|
$
|
992,988
|
$
|
921,650
|
|||
Software
|
477,168
|
18,520
|
|||||
Payroll
and related costs
|
473,095
|
821,529
|
|||||
Professional
fees
|
439,753
|
830,831
|
|||||
Advertising
fees
|
296,038
|
242,242
|
|||||
Insurance
|
240,075
|
222,207
|
|||||
Third
party content and data costs
|
224,122
|
197,319
|
|||||
Tax
related costs
|
109,922
|
331,198
|
|||||
Distribution
fees
|
92,917
|
270,378
|
|||||
Consulting
fees
|
66,080
|
39,232
|
|||||
Bonus
|
29,632
|
1,001,885
|
|||||
Statistical
services fees
|
28,883
|
109,644
|
|||||
Total
accrued expenses
|
$
|
3,470,673
|
$
|
5,006,635
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
•
|
A
broader range of content to our audience, including personal finance,
real
estate, politics, entrepreneurship, small business, and luxury living
across a growing network of Web sites;
and
|
•
|
Innovative,
interactive solutions for our advertisers, across our full range
of
distribution platforms.
|
•
|
Banner,
tile and interactive advertisement and sponsorship placements in
our
advertising-supported Web sites, TheStreet.com,
Stockpickr.com,
BankingMyWay.com
and MainStreet.com,
as well as on our paid subscription site, RealMoney.com;
|
•
|
Advertisement
placements in our free email
newsletters;
|
•
|
Stand-alone
emails sent on behalf of our advertisers to our registered users;
and
|
•
|
Advertisements
in TheStreet.com
TV
and in our Podcasts.
|
•
|
New
York Press Club Journalism Award in the Business Internet
category;
|
|
•
|
New
York Press Club Journalism Award in the Political Coverage Internet
category;
|
|
•
|
Webby
Award nomination for the Company's recently launched personal finance
Web
site MainStreet.com
(www.mainstreet.com) for the Best Business Blog of
2008;
|
•
|
Society
of American Editors and Writers Award for Enterprise Reporting;
and
|
•
|
Society
of American Editors and Writers Award for
Commentary.
|
•
|
2007
Media Industry Newsletter “Best of the Web Award,” winner for Editor of a
Web site (David Morrow, the Company’s
editor-in-chief);
|
•
|
2007
Media Industry Newsletter “Best of the Web Award” finalist, Best Premium
Web site for RealMoney
Silver;
|
•
|
2007
Media Industry Newsletter “Best of the Web Award” finalist, Best Mobile
Application for TheStreet.com
Mobile;
|
•
|
2007
Codie Awards finalist for “Best Online News Service,” recognizing the
excellence of TheStreet.com,
the Company’s free, flagship Web site;
and
|
•
|
2007
Codie Awards finalist for “Best Financial Blog” for Jim Cramer’s Daily
Booyahs, a column that appears regularly on RealMoney,
one of the Company’s subscription Web
sites.
|
For the Six Months Ended
June 30,
|
|||||||
2008
|
2007
|
||||||
Expected
option lives
|
3.5
years
|
3.5
years
|
|||||
Expected
volatility
|
47.57
|
%
|
47.62
|
%
|
|||
Risk-free
interest rate
|
2.37
|
%
|
4.65
|
%
|
|||
Expected
dividend yield
|
0.83
|
%
|
0.96
|
%
|
For the Three Months Ended June 30,
|
||||||||||||||||
2008
|
Percent
of Total
Revenue
|
2007
|
Percent
of Total
Revenue
|
Percent
Change
|
||||||||||||
Revenue:
|
||||||||||||||||
Paid
services
|
$
|
10,289,939
|
52
|
%
|
$
|
9,404,349
|
63
|
%
|
9
|
%
|
||||||
Marketing
services
|
9,398,992
|
48
|
%
|
5,494,939
|
37
|
%
|
71
|
%
|
||||||||
Total
revenue
|
$
|
19,688,931
|
100
|
%
|
$
|
14,899,288
|
100
|
%
|
32
|
%
|
For the Three Months Ended
June 30,
|
|
Percent
|
|
|||||||
|
|
2008
|
|
2007
|
|
Change
|
||||
Paid services:
|
||||||||||
Subscription
|
$
|
7,635,191
|
$
|
8,567,803
|
-11
|
%
|
||||
Syndication,
licensing and
information services
|
2,654,748
|
836,546
|
217
|
%
|
||||||
Total
|
$
|
10,289,939
|
$
|
9,404,349
|
9
|
%
|
For the Three Months Ended
June 30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Marketing
services:
|
||||||||||
Advertising
|
$
|
6,377,852
|
$
|
5,494,939
|
16
|
%
|
||||
Interactive
marketing services
|
3,021,140
|
-
|
N/A
|
|||||||
Total
|
$
|
9,398,992
|
$
|
5,494,939
|
71
|
%
|
For
the Three Months Ended
June
30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Operating
expense:
|
||||||||||
Cost
of services
|
$
|
8,366,156
|
$
|
5,645,418
|
48
|
%
|
||||
Sales
and marketing
|
3,630,394
|
3,055,464
|
19
|
%
|
||||||
General
and administrative
|
4,078,822
|
2,765,133
|
48
|
%
|
||||||
Depreciation
and amortization
|
1,584,780
|
435,935
|
264
|
%
|
||||||
Total
operating expense
|
$
|
17,660,152
|
$
|
11,901,950
|
48
|
%
|
For the Three Months Ended
June 30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Net
interest income
|
$
|
400,243
|
$
|
625,042
|
-36
|
%
|
|
For the Three Months Ended
June 30,
|
|
Percent
|
|
||||||
|
|
2008
|
|
2007
|
|
Change
|
|
|||
(Loss) gain on
disposal of discontinued operations
|
$
|
(2,085
|
)
|
$
|
262
|
N/A
|
June 30, 2008
|
December 31, 2007
|
||||||
Current
liabilities
|
$
|
223,925
|
$
|
232,242
|
For the Three Months Ended
June 30,
|
|||||||
2008
|
2007
|
||||||
Net
income
|
$
|
2,301,244
|
$
|
3,550,188
|
|||
Less
net interest income
|
(400,243
|
)
|
(625,042
|
)
|
|||
Add
taxes
|
125,693
|
106,697
|
|||||
Add
depreciation and amortization
|
1,584,780
|
435,935
|
|||||
EBITDA
|
$
|
3,611,474
|
$
|
3,467,778
|
For the Six Months Ended June 30,
|
||||||||||||||||
2008
|
Percent
of Total
Revenue
|
2007
|
Percent
of Total
Revenue
|
Percent
Change
|
||||||||||||
Revenue:
|
||||||||||||||||
Paid
services
|
$
|
21,049,408
|
54
|
%
|
$
|
18,842,900
|
64
|
%
|
12
|
%
|
||||||
Marketing
services
|
17,587,508
|
46
|
%
|
10,563,952
|
36
|
%
|
66
|
%
|
||||||||
Total
revenue
|
$
|
38,636,916
|
100
|
%
|
$
|
29,406,852
|
100
|
%
|
31
|
%
|
For the Six Months Ended
June
30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Paid
services:
|
||||||||||
Subscription
|
$
|
15,681,581
|
$
|
17,310,818
|
-9
|
%
|
||||
Syndication, licensing and information services
|
5,367,827
|
1,532,082
|
250
|
%
|
||||||
Total
|
$
|
21,049,408
|
$
|
18,842,900
|
12
|
%
|
For the Six Months Ended
June 30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Marketing services:
|
||||||||||
Advertising
|
$
|
12,340,597
|
$
|
10,563,952
|
17
|
%
|
||||
Interactive
marketing services
|
5,246,911
|
-
|
N/A
|
|||||||
Total
|
$
|
17,587,508
|
$
|
10,563,952
|
66
|
%
|
For the Six Months Ended
June 30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Operating expense:
|
||||||||||
Cost
of services
|
$
|
16,022,283
|
$
|
11,271,507
|
42
|
%
|
||||
Sales
and marketing
|
7,393,989
|
6,385,204
|
16
|
%
|
||||||
General
and administrative
|
8,434,367
|
5,473,154
|
54
|
%
|
||||||
Depreciation
and amortization
|
2,848,384
|
815,142
|
249
|
%
|
||||||
Total
operating expense
|
$
|
34,699,023
|
$
|
23,945,007
|
45
|
%
|
For the Six Months Ended
June 30,
|
Percent
|
|||||||||
2008
|
2007
|
Change
|
||||||||
Net
interest income
|
$
|
1,086,437
|
$
|
1,225,699
|
-11
|
%
|
|
|
For the Six Months Ended
June 30,
|
Percent
|
|||||||
2008
|
2007
|
Change
|
||||||||
Loss
on disposal of discontinued operations
|
$
|
(4,816
|
)
|
$
|
(1,123
|
)
|
329
|
%
|
June 30, 2008
|
December 31, 2007
|
||||||
Current
liabilities
|
$
|
223,925
|
$
|
232,242
|
For the Six Months Ended
June 30,
|
|||||||
2008
|
2007
|
||||||
Net
income
|
$
|
4,747,893
|
$
|
6,552,692
|
|||
Less
net interest income
|
(1,086,437
|
)
|
(1,225,699
|
)
|
|||
Add
taxes
|
271,621
|
213,596
|
|||||
Add
depreciation and amortization
|
2,848,384
|
815,142
|
|||||
EBITDA
|
$
|
6,781,461
|
$
|
6,355,731
|
·
|
An
increase in the overall growth of receivables in the six months ended
June
30, 2008, as compared to the six months ended June 30, 2007 primarily
related to higher revenue;
|
·
|
A
slow-down in the overall growth of deferred revenue in the six months
ended June 30, 2008, as compared to the six months ended June 30,
2007
primarily related to a reduction in the number of subscribers to
our
subscription products; and
|
·
|
An
increase in the overall growth of prepaid expenses and other current
assets in the six months ended June 30, 2008, as compared to the
six
months ended June 30, 2007 primarily related to the overall growth
of the
Company.
|
·
|
lower
annual incentive compensation payments during the six months ended
June
30, 2008 related to the 2007 fiscal year, as compared to payments
made
during the six months ended June 30, 2007 related to the 2006 fiscal
year;
and
|
·
|
increased
noncash expenses, particularly related to amortization of intangible
assets associated with the acquisitions of Stockpickr LLC, Corsis
Technology Group II LLC (renamed Promotions.com LLC) and Bankers
Financial
Products Corporation.
|
Payments Due by Period
|
||||||||||||||||
Less Than
|
After
|
|||||||||||||||
Contractual obligations:
|
Total
|
1 Year
|
1 - 3 Years
|
4 - 5 Years
|
5 Years
|
|||||||||||
Operating
leases
|
$
|
5,135,106
|
$
|
1,817,093
|
$
|
1,743,825
|
$
|
963,861
|
$
|
610,327
|
||||||
Employment
agreements
|
8,101,779
|
4,324,050
|
3,777,729
|
-
|
-
|
|||||||||||
Outside
contributor agreements
|
301,788
|
301,788
|
-
|
-
|
-
|
|||||||||||
Leases
payable
|
85,468
|
42,748
|
42,720
|
-
|
-
|
|||||||||||
Total
contractual cash obligations
|
$
|
13,624,141
|
$
|
6,485,679
|
$
|
5,564,274
|
$
|
963,861
|
$
|
610,327
|
Period
|
(a) Total
Number
of Shares
(or Units)
Purchased
|
(b)
Average
Price
Paid per
Share
(or Unit)
|
(c) Total Number
of Shares (or
Units) Purchased
as Part of Publicly
Announced Plans
or Programs
|
(d) Maximum Number
(or Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
*
|
|||||||||
April
1 – 30, 2008
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
|||||||
May
1 – 31, 2008
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
|||||||
June
1 – 30, 2008
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
|||||||
Total
|
-
|
$
|
-
|
-
|
$
|
2,678,878
|
·
|
The
election of Thomas J. Clarke, Jr. (votes for: 30,643,300; withheld:
1,718,545) and Dr. Jeffrey A. Sonnenfeld (votes for: 28,815,505;
withheld:
3,546,340) as Class III directors of the Company, to serve until
the
annual meeting in 2011 or until their successors are elected and
qualified;
|
·
|
A
proposal to amend the TheStreet.com, Inc. 2007 Performance Incentive
Plan
to increase the number of shares available for awards by an additional
1,000,000 shares of Common Stock (votes for: 26,780,747; votes against:
1,784,047; abstain: 10,015); and
|
· |
The
ratification of the appointment of Marcum & Kliegman LLP as the
Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2008 (votes for: 31,626,657; votes against:
731,049; abstain: 4,339).
|
Exhibit
Number
|
Description
|
|
*3.1
|
Amended
and Restated Certificate of Incorporation of the Company, incorporated
by
reference to the Exhibits to the Company’s Registration Statement on Form
S-1 filed February 23, 1999.
|
|
*3.2
|
Certificate
of Designation of the Company’s Series B Preferred Stock, as filed with
the Secretary of State of the State of Delaware on November 15,
2007,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*3.3
|
Amended
and Restated Bylaws of the Company, incorporated by reference to
the
Exhibits to the Company’s Annual Report on Form 10-K filed March 30,
2000.
|
|
*4.1
|
Amended
and Restated Registration Rights Agreement dated December 21, 1998,
by and
among the Company and the stockholders named therein, incorporated
by
reference to the Exhibits to the Company’s Registration Statement on Form
S-1 filed February 23, 1999.
|
|
*4.2
|
Form
of Rights Agreement incorporated by reference to the Exhibits to
the
Company’s Registration Statement on Form S-1 filed February 23,
1999.
|
|
*4.3
|
Amendment
No. 1 to the Rights Agreement dated August 7, 2000, incorporated
by
reference to the Exhibits to the Company’s Annual Report on Form 10-K
filed April 2, 2001.
|
|
*4.4
|
Amendment
No. 2 to the Rights Agreement dated November 15, 2007 by and between
the
Company and American Stock Transfer & Trust Company, as Rights Agent,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*4.5
|
Option
to Purchase Common Stock dated November 1, 2007, incorporated by
reference
to the Company’s Current Report on Form 8-K filed November 6,
2007.
|
|
*4.6
|
Investor
Rights Agreement dated November 15, 2007 by and among the Company,
TCV VI,
L.P. and TCV Member Fund, L.P., incorporated by reference to the
Exhibits
to the Company’s Current Report on Form 8-K filed November 20,
2007.
|
|
*4.7
|
Warrant
dated November 15, 2007 issued by the Company to TCV VI, L.P.,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*4.8
|
Warrant
dated November 15, 2007 issued by the Company to TCV Member Fund,
L.P.,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*4.9
|
Specimen
certificate for the Company’s shares of common stock, incorporated by
reference to the Exhibits to Amendment 3 to the Company’s Registration
Statement on Form S-1 filed April 19, 1999.
|
|
*10.1
|
Employment
Agreement dated April 9, 2008, as amended on July 30, 2008 by and
between
James Cramer and the Company, incorporated by reference to the
Exhibits to
the Company’s Current Reports on Form 8-K filed April 9, 2008 and July 30,
2008, respectively.
|
|
*10.2
|
Employment
Agreement dated May 15, 2008, by and between Teresa Santos and
the
Company, incorporated by reference to the Exhibits to the Company’s
Current Report on Form 8-K filed May 15,
2008.
|
*10.3
|
Employment
Agreement dated June 30, 2008, by and between Eric Ashman and the
Company,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed June 30, 2008.
|
|
31.1
|
Rule
13a-14(a) Certification of CEO.
|
|
31.2
|
Rule
13a-14(a) Certification of CFO.
|
|
32.1
|
Section
1350 Certification of CEO.
|
|
32.2
|
Section
1350 Certification of CFO.
|
|
* Incorporated by Reference |
THESTREET.COM,
INC.
|
|||
Date:
August 8, 2008
|
By:
|
/s/
Thomas J. Clarke, Jr.
|
|
Name:
Thomas J. Clarke, Jr.
|
|||
Title:
Chairman of the Board and Chief Executive Officer
|
|||
Date:
August 8, 2008
|
By:
|
/s/
Eric Ashman
|
|
Name:
Eric Ashman
|
|||
Title:
Chief Financial Officer
|
Exhibit
Number
|
Description
|
|
*3.1
|
Amended
and Restated Certificate of Incorporation of the Company, incorporated
by
reference to the Exhibits to the Company’s Registration Statement on Form
S-1 filed February 23, 1999.
|
|
*3.2
|
Certificate
of Designation of the Company’s Series B Preferred Stock, as filed with
the Secretary of State of the State of Delaware on November 15,
2007,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*3.3
|
Amended
and Restated Bylaws of the Company, incorporated by reference to
the
Exhibits to the Company’s Annual Report on Form 10-K filed March 30,
2000.
|
|
*4.1
|
Amended
and Restated Registration Rights Agreement dated December 21, 1998,
by and
among the Company and the stockholders named therein, incorporated
by
reference to the Exhibits to the Company’s Registration Statement on Form
S-1 filed February 23, 1999.
|
|
*4.2
|
Form
of Rights Agreement incorporated by reference to the Exhibits to
the
Company’s Registration Statement on Form S-1 filed February 23,
1999.
|
|
*4.3
|
Amendment
No. 1 to the Rights Agreement dated August 7, 2000, incorporated
by
reference to the Exhibits to the Company’s Annual Report on Form 10-K
filed April 2, 2001.
|
|
*4.4
|
Amendment
No. 2 to the Rights Agreement dated November 15, 2007 by and between
the
Company and American Stock Transfer & Trust Company, as Rights Agent,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*4.5
|
Option
to Purchase Common Stock dated November 1, 2007, incorporated by
reference
to the Company’s Current Report on Form 8-K filed November 6,
2007.
|
|
*4.6
|
Investor
Rights Agreement dated November 15, 2007 by and among the Company,
TCV VI,
L.P. and TCV Member Fund, L.P., incorporated by reference to the
Exhibits
to the Company’s Current Report on Form 8-K filed November 20,
2007.
|
|
*4.7
|
Warrant
dated November 15, 2007 issued by the Company to TCV VI, L.P.,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*4.8
|
Warrant
dated November 15, 2007 issued by the Company to TCV Member Fund,
L.P.,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed November 20, 2007.
|
|
*4.9
|
Specimen
certificate for the Company’s shares of common stock, incorporated by
reference to the Exhibits to Amendment 3 to the Company’s Registration
Statement on Form S-1 filed April 19, 1999.
|
|
*10.1
|
Employment
Agreement dated April 9, 2008, as amended on July 30, 2008 by and
between
James Cramer and the Company, incorporated by reference to the
Exhibits to
the Company’s Current Reports on Form 8-K filed April 9, 2008 and July 30,
2008, respectively.
|
|
*10.2
|
Employment
Agreement dated May 15, 2008, by and between Teresa Santos and
the
Company, incorporated by reference to the Exhibits to the Company’s
Current Report on Form 8-K filed May 15, 2008.
|
|
*10.3
|
Employment
Agreement dated June 30, 2008, by and between Eric Ashman and the
Company,
incorporated by reference to the Exhibits to the Company’s Current Report
on Form 8-K filed June 30,
2008.
|
31.1
|
Rule
13a-14(a) Certification of CEO.
|
|
31.2
|
Rule
13a-14(a) Certification of CFO.
|
|
32.1
|
Section
1350 Certification of CEO.
|
|
32.2
|
Section
1350 Certification of CFO.
|
|
* Incorporated by Reference |