UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended November 30, 1996
OR
( )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: 2-91525-NY
MARKET GUIDE INC.
(Exact name of Registrant as specified in its charter)
New York 11-2646081
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2001 Marcus Avenue
Suite South 200
Lake Success, New York 11042-1011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 327-2400
(Former name, former address and former fiscal year, if changed
since last report)
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 _______
4,196,905 Common shares, $.001 par value were issued and outstanding on
January 9, 1997.
Table of Contents
Financial Statements
Balance Sheets as of November 30, 1996 (Unaudited) and
February 29, 1996 3
Statement of Operations for the Three and Nine Months Ended
November 30, 1996 (Unaudited) and November 30, 1995
(Unaudited) 5
Statement of Cash Flows for the Nine Months Ended
November 30, 1996 (Unaudited) and November 30, 1995
(Unaudited) 6
Notes to Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations, November 30, 1996 8
Other Information 17
Signature 18
Balance Sheets Market Guide Inc.
November 30, February 29,
Fiscal Quarter Ended 1996 1996
(Unaudited)
ASSETS
Current assets:
Cash $ 889,362 $ 680,783
Accounts receivable (net of
allowance for doubtful accounts) 597,452 761,180
Prepaid expenses and other current
assets (see Note: 3) 254,325 264,411
Total current assets 1,741,139 1,706,374
Property, plant and equipment:
Furniture and equipment 669,069 593,981
Equipment held under capital leases 898,037 543,655
Leasehold improvements 17,647 -
1,584,753 1,137,636
Less: Accumulated depreciation and
amortization (including amortization of
$246,970 and $154,233 649,434 501,538
as of November 30, 1996 and February 29, 1996,
respectively, on capital leases)
Net property, plant and eqiupment 935,319 636,098
equipment
Other assets:
Computer software and product
enhancements (net of accumulated
amortization) 1,485,483 1,066,006
Deposits and other assets (see 69,739 63,226
Note: 3)
Total other assets 1,555,222 1,129,232
Total assets $ 4,231,680 $ 3,471,704
Balance Sheets - continued
Market Guide Inc.
November 30, February 29,
Fiscal Quarter Ended 1996 1996
(Unaudited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current maturities of long-term
debt and capital leases including
related party debt of $95,333 $ 235,323 $ 167,355
as of November 30, 1996 and $95,333
as of February 29, 1996 (see Note: 3)
Unearned revenues 418,397 163,371
Accounts payable and other accrued
expenses (including accrued interest 328,438 401,546
of $61,987 as of November 30, 1996
and $61,987 as of February 29, 1996)
Total current liabilities 982,158 732,272
Non-current liabilities:
Long-term debt and capital lease
obligations, less current 492,312 291,202
maturities (see Note: 3)
Total non-current liabilities 492,312 291,202
Commitments 0 0
Total liabilities 1,474,470 1,023,474
Stockholders' equity:
Common stock - $.001 par value;
20,000,000 shares authorized,
4,196,905
and 4,188,245 shares issued and
outstanding 4,196 4,188
as of November 30, 1996 and
February 29, 1996,
respectively.
Capital in excess of par value 3,645,366 3,618,910
Accumulated deficit (892,352) (1,174,868)
Total stockholders' equity 2,757,210 2,448,230
Total liabilities and $ 4,231,680 $ 3,471,704
stockholders' equity
Statement of Operations
Market Guide Inc.
For the Nine Months Ended For the Three Months Ended
November November November November
30, 1996 30, 1995 30, 1996 30, 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues:
Database vendors $ 3,104,059 $ 2,670,668 $ 1,067,546 $ 969,762
Market Guide products 355,487 204,656 173,353 77,463
Print products 45,416 48,722 15,789 15,899
Total revenues 3,504,962 2,924,046 1,256,688 1,063,124
Expenses:
Salaries, payroll
taxes and 1,956,084 1,586,121 693,961 542,683
employee benefits
Database and product 510,773 396,953 169,879 129,243
costs
General and 621,529 481,248 229,850 177,794
administrative
Advertising and 97,063 65,303 38,946 22,471
promotion
Total expenses 3,185,449 2,529,625 1,132,636 872,191
Income from operations 319,513 394,421 124,052 190,933
Interest income 22,870 18,820 7,985 6,724
Interest expenses 56,365 37,293 23,163 12,877
Income before 286,018 375,948 108,874 184,780
income taxes
Provision for 3,503 23,649 1,533 11,087
Income taxes
Net income $ 282,515 $ 352,299 $ 107,341 $ 173,693
Earnings per share $ .07 $ .09 $ .03 $ .04
Weighted average number
of shares outstanding 4,191,832 4,157,912 4,195,172 4,182,802
Fully diluted $ .06 $ .08 $ .02 $ .04
earnings per share
Fully diluted weighted
average number of shares 4,375,261 4,398,476 4,378,601 4,409,171
outstanding
Statement of Cash Flows Market Guide Inc.
November November
For the Nine Months Ended 30, 1996 30, 1995
(Unaudited) (Unaudited)
Cash Flows From Operating
Activities:
Net Income $ 282,515 $ 352,299
Adjustments to reconcile net income to net cash provided from operating
activities:
Depreciation and amortization 368,108 264,796
Changes in assets and liabilities:
(Increase)/Decrease in accounts 163,728 (336,511)
receivable
(Increase)/Decrease in prepaid 10,086 (114,188)
assets
(Increase)/Decrease in deposits (6,513) (9,616)
and other assets
Increase/(Decrease) in accounts (73,108) 60,762
payable
Increase/(Decrease) in unearned 255,026 (27,465)
revenues
Total adjustments 717,327 (162,222)
Net cash from operating activities
Cash Flows From Investing 999,842 190,077
Activities:
(429,470) (225,812)
Payments for purchase of fixed
assets
Payments for leasehold improvements (17,647) -
Development of Computer Software
and product enhancements (639,688) (350,806)
Net cash from investing activities (1,086,805) (576,618)
Cash Flows From Financing Activities:
Payments for notes payable, long-term debt
and capital leases (111,137) (66,656)
Proceeds from capital leases 380,215 179,532
Proceeds from issuance of employee 26,464 64,129
stock plan
Proceeds from private placement of - 12,772
common stock
Proceeds from stock options - 20,679
exercised
Net cash from financing activities 295,542 210,456
Net increase/(decrease) in cash 208,579 (176,085)
Cash at beginning of period 680,783 695,135
Cash at end of period $ 889,362 $ 519,050
Market Guide Inc.
Notes to Financial Statements
November 30, 1996
Note 1 INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of Market Guide Inc. have
not been audited by independent accountants, except for the
balance sheet as of February 29, 1996. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have
been included. Operating results for the three and nine months
ended November 30, 1996 are not necessarily indicative of the
results that may be expected for the year ending February 28,
1997.
Note 2 REVERSE STOCK SPLIT
On August 31, 1995, the shareholders approved a one-for-four
reverse stock split of the Company's $.001 par value common
stock. The reverse stock split was implemented as of October 16,
1995. All references in the accompanying financial statements to
the per share amounts and earnings per share have been restated
to reflect the reverse stock split for all periods presented.
Note 3 RECLASSIFICATIONS
Capital lease obligations and deferred interest balanaces for
fiscal year ended February 29, 1996 have been reclassified to
reflect comparability with account classifications adopted for
period ended November 30, 1996 with no effect on previously
reported net income.
Market Guide Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
November 30, 1996
General
This analysis of the Company's financial condition, capital
resources and operating results should be viewed in conjunction
with the accompanying financial statements.
Business
Market Guide Inc. was incorporated in the State of New York on
March 23, 1983 as "The Unlisted Market Service Corporation." On
September 3, 1986 the current corporate name was adopted.
The Company acquires, condenses and publishes accurate, timely,
and objective financial and other information on publicly traded
corporations, and markets this information to the financial and
investment communities, as well as to independent investors, in a
cost effective manner.
The Market Guide Database covers over 7,700 companies trading on
the New York, American, Nasdaq and Over-the-Counter Stock
Exchanges. All reports created by Market Guide Inc. are derived
from information filed by the subject company with the Securities
and Exchange Commission contained in Annual Reports to
shareholders, issued in press releases or carried in other media
reports. Each company's information is updated at least four and
often more than eight times a year, as soon as the relevant
information becomes available. Pricing and trading volume
information incorporated into the database are updated daily, and
short interest statistics are updated monthly.
Market Guide adds value, distinguishes itself from the
competition, and serves its clients through its:
Flexible database design which gives users important
insights not available in competitive databases, thereby
enabling them to make better informed investment decisions,
Inclusion of auxiliary information such as earnings
estimates, price performance, relative price performance,
summary insider and institutional ownership statistics, and
short interest statistics giving users a complete
perspective on each company,
Calculation of approximately 500 popular financial ratios,
growth rates, and averages computed for the user's
convenience, and
Carefully planned, market tested display formats, including
company to industry comparisons, that allow users to quickly
and efficiently make carefully considered investment
decisions.
The targeted markets for Market Guide's data and related products
include investment managers, investment research departments,
financial planners, investment counselors, investment bankers,
banks, stockbrokers and brokerage firms, traders, libraries,
publications, corporations, law firms and individual investors.
The Company sells its information through four channels:
information vendors, the Internet, Market Guide for Windows (its
proprietary analytic software) and a print publication.
Vendors
Market Guide works in partnership with financial information
service vendors. The financial information service vendors
combine data from various real-time and historical information
sources with their own analytic software and data delivery
capability. Their sales forces sell the product and they also
provide customer training and support services. Market Guide
focuses on developing the highest quality information and
leveraging off the information vendor's sales force, software,
information dissemination infrastructure and customer base. The
amount of data presented, its display format, and the software's
analytic capabilities vary depending upon the way each
information provider defines its customers' needs, software
capabilities, distribution technologies and preferred pricing
strategies.
The information service vendors that currently distribute the
Market Guide Database include: Accutrade; American Association of
Individual Investors; Argus Research; Aufhauser; Automatic Data
Processing; AIQ Systems, Inc.; Bridge Information Systems Inc.;
CDA Technology; Charles Schwab and Company; Data Broadcasting
Corporation; Dow Jones Telerate; First Call Corporation; Global
Market Information; Holt Value Associates; IBM Informarket; ILX
Systems Inc.; Instinet Analytics; Interactive Data Corporation;
InvesText; Omega Research, Inc.; OneSource Information Systems,
Inc.; Pacific Brokerage Services; P.C. Quote, Inc.; Prodigy
Services Company; Quotron Systems, Inc.; Real Time Quotes, Inc.;
Securities Data Corporation; Shark Information Services, Inc.;
Telemet America, Inc.; Telescan, Inc.; Track Data Corporation;
Trans-Terra Company and Vickers Stock Research Corporation.
Contractual Developments
In July 1992, Market Guide entered into a database distribution
agreement with OneSource Information Services Inc. OneSource
distributes a "Reference" Product Line and an "Investment"
Product Line using Market Guide data. OneSource Information
Services, Inc. has multiple CD-ROM and Internet based product
lines that have different software capabilities and serve
different marketplaces. The Market Guide Database is the only
database that we are aware of that is available on three
OneSource product lines, CD/Corporate, CD/Notes and
CD/Investment.
During the 1993 and 1994 fiscal years AIQ Systems, Inc., Dial
Data, Dow Jones Telerate, First Call Corporation, Instinet
Analytics, and Interactive Data Corporation began distributing
Market Guide information.
On December 28, 1993, it was announced that Prodigy Services
Company had reached an agreement with the Company to incorporate
selected items from the Market Guide Database for use in
Prodigy's Strategic Investor product. In January, 1995 Prodigy
introduced a completely revised and greatly enhanced Company
Reports and a new "Stock Hunter" search capability that features
eight predesigned screens utilizing recognized investment
theories such as CANSLIM, One up on Wall Street, Graham and Dodd,
Wallflowers and others. There is also a "Personal Search"
feature which enables users to conduct a self-designed screen
search of Market Guide data using six pre-selected criteria. All
these Prodigy products are created from Market Guide information
and earnings estimates from Zack's Investment Services. The
Zacks information is first sent to Market Guide, integrated with
our own information and sent to Prodigy as an integrated data
feed. Company Reports, Stock Hunter and Personal Search may be
accessed by any Prodigy subscriber for a modest per access fee,
or are available to Strategic Investor users as part of their
monthly subscription.
In August, 1995 the Company announced an agreement with the
American Association of Individual Investors (AAII) whereby AAII
will incorporate Market Guide's information in their existing
screening software known as Stock Investor. AAII is an
educational not for profit corporation with approximately 110,000
members, a small percentage of whom subscribe to Stock Investor.
Market Guide's information first appeared with Stock Investor's
regular quarterly update in November, 1995.
Market Guide has developed an analytic software package, Market
Guide for Windows, introduced in fiscal year 1996, that allows
users to search the database, develop user defined reports and
download information to popular spreadsheet software packages.
The software is not patented or trademarked, but a copyright is
claimed by the Company. Market Guide for Windows is delivered
on a CD/ROM with weekly or monthly updates.
In June, 1996 the Company announced a multi-year contract with
Reuters Limited which grants Reuters' worldwide use of Market
Guide's financial database. To date, this agreement represents
the largest single contract in Market Guide's history
The Company has an Internet site that has been in operation since
the second quarter of fiscal 1997. It is anticipated that this
site will broaden the Company's ability to sell and service its
products directly to end users. The address to our site is
http://www.marketguide.com.
The same Market Guide for Windows software with a smaller
information set is sold over the internet to individual investors
under the name StockQuest. StockQuest was introduced in August,
1996.
Publications
A quarterly print product called The Market Guide - Select Over
the Counter Stock Edition is a single volume of 800 one-page
reports on fast growing, profitable over-the-counter companies.
The book also has a detailed company index listing 15 key
statistics on each company in a tabular format. This index is
very useful to investors searching for attractive investment
opportunities.
Market Guide attempts to provide continuity of coverage so that
subscribers to the book can keep following companies in which
they have an interest. However, from time-to-time the companies
covered do change. The most common reasons for deletion of
coverage are:
The company has been acquired in a merger or a leveraged
buyout,
The company has not filed a financial statement with
the Securities and Exchange Commission for two or more
reporting periods,
The company has exhibited significant deterioration in
its financial condition,
The company has been deleted from the National
Association of Security Dealers Automatic Quotation
System (Nasdaq) and has fewer than three Market Makers,
The company now trades on the New York or American
Stock Exchange, and no longer qualifies for the OTC
edition.
Companies dropped from the book are replaced by companies which
are selected by using proprietary Market Guide selection
criteria. The companies in the book have regularly outperformed
the Nasdaq composite.
Database Enhancements
The Company continuously expands, enhances and improves the
Market Guide Database based on customer suggestions and employee
feedback. In 1988, the Company added the New York and American
Stock Exchange companies to its then current universe of Nasdaq
and "pink sheet" companies.
In 1990, Market Guide decided to expand the database to include
complete detailed quarterly financial statements. The Company
engaged in a series of dialogues with current or potential
vendors and customers to determine the market potential, to
identify the Company's perceived strengths and weaknesses, and to
research market needs and the appropriateness of the Company's
methodologies and objectives. The results of this analysis were
the commitment of resources to more than double the amount of
information collected and maintained on each subject company. In
fiscal years 1990, 1991 and 1992 the Company added the Annual
Statement of Cash Flows and complete Quarterly Income Statements,
Balance Sheets and Statements of Cash Flows on all the companies
in the database. This has allowed Market Guide to serve new
markets and to bid on services for which Market Guide did not
previously qualify.
In 1993 the Company entered a redistribution agreement with
Zack's Investment Research. Under the terms of this agreement,
Market Guide may, after consulting Zacks on a case-by-case basis,
redistribute Zacks' Earnings Estimate information to selected
vendors.
In late 1993 the Company began to track short interest
information published monthly by the exchanges.
In early 1994 the Company began subscribing to and processing the
Securities and Exchange Commission's (SEC's) Electronic Data
Gathering Analysis and Reporting (EDGAR) service. This has given
our analysts access to source documents (10-Ks, 10-Qs, etc.) ten
days to two weeks earlier than in previous years. This has
resulted in record levels of timeliness measures for the Market
Guide Database.
In the fall of 1994, Market Guide introduced completely new
industry and sector classifications that reflect the current
economy and are being incorporated into all of Market Guide's
products.
These new industry and sector classifications will help
investors:
Identify which industry and sectors are outperforming
the market or have fallen from favor,
Compare companies to a well defined peer group,
Permit investors to construct and analyze industry aggregate
financial characteristics,
Properly construct portfolios to ensure adequate
diversification, and
Make well reasoned asset allocation decisions.
In the fall of 1995, the Company completed development of a
historical pricing database to complement the financial
information it has compiled. The pricing database contains both
historical and current information for all issues trading on the
New York and American stock exchanges, the Nasdaq stock market,
and selected OTC Bulletin Board Companies. The Market Guide
pricing database contains Open, High, Low, Close and Volume
information on a daily basis beginning in 1986, with daily
updates occurring each trading day.
In order to satisfy institutional investors' needs for extensive
historical financial information, Market Guide increased the
number of years of historical annual financial statements in the
Market Guide database. With the culmination of the Big Ten
project, Market Guide now has annual financial statement going
back to 1983 for most companies on its database. As a result of
the Big Ten project, Market Guide is now able to compete for
other business where at least ten years of historical data is
required. The information is currently being distributed within
the OneSource US Equities product.
Credit Risk Monitor
Market Guide's newest division, Credit Risk Monitor (CRM), is a
new online financial information and news service that follows
more than 375 U.S. publicly and privately held domestic retail
chains and wholesalers. This online service will be accessible
through the Internet (www.creditriskmonitor.com) and is being
designed to provide corporate credit managers with the
analytical tools necessary to follow, on a daily basis, all the
public companies they do business with.
CRM was formed specifically to leverage Market Guide's comprehensive
database and state-of-the-art technology through sales to a new market.
CRM will provide, the credit community, with a cost efficient,
online credit and financial information service.
The CRM information service consists of, CRM Company Reports, the
CRM Alert Notification Service and the CRM Real-Time News
Service. The CRM web site is expected to be up and running by
the first quarter of fiscal year 1998.
Business Facilities
In October, 1994 the Company relocated to new headquarters in
Lake Success, New York. Lake Success is on the Queens (New York
City) - Nassau County (Long Island) border, and is closer to New
York City than our previous location. The new facility, at
approximately 13,500 square feet, is three times larger than our
former location and is equipped with state of the art network and
digital telephone technology to support current and future needs
in the evolving "information super highway" and "multi-media"
environments.
In January 1997, the company leased an additional 5,500 square
feet in the same building. This space will be used for our new
division, Credit Risk Monitor, and for our internal programmers.
Reverse Stock Split
In September, 1995 the Company announced shareholder approval of
a one-for-four reverse stock split at its August 31, 1995 annual
meeting. The reverse split became effective October 16, 1995,
and will allow the Company to meet one of the major qualification
criteria for inclusion on the Nasdaq "Small Cap" market.
Corporate Incentives
At the August 30, 1995 shareholders' meeting, shareholders
approved an Employee Stock Purchase Plan, a Key Employee
Incentive Plan and an Outside Directors' Incentive Plan. The
Employee Stock Purchase Plan was put into effect on September 1,
1995. The incentive plans are currently being put into effect.
Results of Operations
For the three months ended November 30, 1996 compared to November
30, 1995
Total revenues for the three months ended November 30, 1996
increased 18% to $1,256,688. Despite a reduction in revenues from
InvesText, database vendor revenues increased 10% to $1,067,546
which accounted for the one half of the increase in total revenues.
The Company continues to benefit from an increase in the number of
vendors providing the Market Guide database as well as increased sales
penetration among several existing vendors. Market Guide product
sales increased 124% to $173,353 reflecting new Market Guide for
Windows sales, Internet sales of individual Market Guide research
reports (http://www.marketguide.com), and a significant increase
in the number of Internet vendors distributing the Market Guide
database. Print product revenues decreased less than 1% to $15,789
and will continue to decline as a percentage of overall revenues due
to management's concentration on distributing its electronic products.
Total operating expenses for the three months ended November 30,
1996 increased 30% to $1,132,636. The growth in operating
expenses resulted primarily from higher salaries & benefits,
database & product, and general & administrative expenses.
Salaries and employee benefits increased 28% to $693,961
reflecting the hiring of additional sales personnel, programmers,
analysts, and research assistants to support faster anticipated
growth. Database and product costs increased 31% to $169,879
reflecting an increase in amortization expense and costs relating
to integrating third party data into the Market Guide reports.
General & administrative expenses rose 29% to $229,850 due to
increases in occupancy, communication and depreciation expenses.
Income from operations for the three months ended November 30,
1996 decreased 35% to $124,052. The decline in operating income
reflects a reduction in revenues received from InvesText. The
revised InvesText agreement became effective on June 1, 1996.
Interest expense for the three months ended November 30, 1996
increased 80% to $23,163. This increase is attributable to
additional financing through capitalized leases used to purchase
office equipment and computer hardware, and a one time adjustment
of $8,700 to properly record all capital leases (see Note 3).
Net income for the three months ended November 30, 1996 decreased
38% to $107,341. The decrease reflects a reduction in revenues
from the revised InvesText agreement.
For the nine months ended November 30, 1996 compared to November
30, 1995
Total revenues for the nine months ended November 30, 1996
increased 20% to $3,504,962. Despite a reduction in revenues
from InvesText, database vendor revenues increased 16% to
$3,104,059 which accounted for the majority of the increase.
The Company continues to benefit from an increase in the number of
vendors providing the Market Guide database as well as increased
sales penetration among several existing vendors. Market Guide
product sales increased 74% to $355,487 reflecting new Market
Guide for Windows sales, Internet sales of individual Market
Guide research reports (http://www.marketguide.com), and a
significant increase in the number of Internet vendors
distributing the Market Guide database.
Print product revenues decreased 7% to $45,416 and will continue
to decline as a percentage of overall revenues due to
management's concentration on distributing its electronic
products.
Total operating expenses for the nine months ended November 30,
1996 increased 26% to $3,185,449. The growth in operating
expenses resulted from higher salaries & benefits, database &
product, and general & administrative expenses. Salaries and
employee benefits increased 23% to $1,956,084 reflecting the
hiring of additional sales personnel, programmers, analysts, and
research assistants to support faster anticipated growth.
Database and product costs increased 29% to $510,773 reflecting
an increase in amortization expense and higher data acquisition
costs. General & administrative expenses rose 29% to $621,529 due
to costs associated with recruiting and hiring additional personnel,
opening a Chicago sales office, and responding to customer and
shareholder inquiries.
Income from operations for the nine months ended November 30,
1996 decreased 19% to $319,513. The decline in operating income
reflects a reduction in revenues from the renegotiation of the
InvesText agreement which was effective in June of 1996.
Interest expense for the nine months ended November 30, 1996
increased 51% to $56,365. This increase is attributable to
additional financing through capitalized leases used to purchase
office equipment and computer hardware, and a one time adjustment
of $8,700 in the third quarter to properly record all capital leases
(see Note 3).
Net income for the nine months ended November 30, 1996 decreased
20% to $282,515. The decrease reflects a reduction in revenues
from the InvesText agreement.
Liquidity and Capital Resources
As of November 30, 1996 the Company's working capital (current
assets less current liabilities) decreased 22% to $758,981. The
Company's cash and cash equivalents increased 31% to $889,362.
For the nine months ended November 30, 1996, net cash provided by
operating activities increased from $190,077 to $999,842. The
gain reflects higher depreciation and amortization expenses and
an increase in unearned revenue, as well as a lower accounts
receivable balance.
For the nine months ended November 30, 1996, net cash used in
investing activities increased 88% to $1,086,805. The increase
reflects the Company's continued investment in product
enhancements and the continued development of three products:
Market Guide for Windows, StockQuest, and an internet site that
will result in added value to our users and strengthen our
competitive position, as well as the development costs incurred
with the new division, CreditRisk Monitor.
For the nine months ended November 30, 1996, net cash provided by
financing activities increased 40% to $295,542. The increase
reflects proceeds from capital leases and the Employee Stock
Purchase Plan.
The Company did not engage in any borrowing other than
capitalized leases and did not maintain any credit lines during
the year.
The Company believes its current liquidity is sufficient to meet
its obligations during the next twelve months.
Management is anticipating completing a private placement by the
end of the fourth fiscal quarter. Proceeds from the private placement
will be used to fund expansion of the database, development of new
products and services, and a stepped up marketing and sales program.
Other Information
Item 1 Legal Proceeding
The Company has commenced litigation in the United States
District Court for the Eastern District of New York against
Information Clearinghouse, Inc. d/b/a F&D Reports ("ICI") and
Lawrence Sarf. The Company's complaint alleges claims of
trademark infringement, unfair competition, deceptive trade
practices and conversion in connection with defendants' theft and
use of the Company's newly designed proprietary slogan "On-Line,
On-Time, On-Target," developed for use with its Internet credit
reporting system. The Company seeks injunctive relief, an
accounting, monetary and punitive damages. Contemporaneously, an
action was commenced in the Nassau County Supreme Court by ICI
against the Company, and primarily, three newly engaged
employees. ICI claims misappropriation of proprietary
information and trade secrets by the newly engaged employees,
unfair competition, breach of fiduciary duty and tortious
interference. While ICI requests injunctive relief as well as
money damages, no request for any temporary relief has been
sought. Discovery has not commenced in either action.
Management does not believe the pending actions will have a
material effect on the business activities of the Company.
Item 2 Changes in Securities None
Item 3 Defaults Upon Senior Securities None
Item 4 Submission of Matters to Vote of Security Holders None
Item 5 Exhibits and Reports on Form 8-K None
Signature
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MARKET GUIDE INC.
(Registrant)
___________________________ __________________________________
Date HOMI M. BYRAMJI