UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2011
or
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
Commission File Number:
001-33074
BANKS.COM, INC.
(Exact name of registrant as specified in its charter)
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Florida
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59-3234205
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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425 Market Street, Suite 2200, San Francisco, CA 94105
(Address of principal executive offices) (Zip Code)
(415) 962-9700
(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 has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes
x
No
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
¨
No
x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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Class
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Outstanding at July 31, 2011
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Common Stock, $.001 par value per share
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26,003,009 shares
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BANKS.COM, INC. AND SUBSIDIARIES
INDEX
BANKS.COM, INC. AND SUBSIDIARIES
PART I – FINANCIAL INFORMATION
I
TEM
1 – F
INANCIAL
S
TATEMENTS
Condensed Consolidated Balance Sheets
(in thousands, except share and par value data)
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June 30,
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December 31,
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2011
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2010
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(unaudited)
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(1)
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Assets
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Current assets:
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Cash
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$
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147
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$
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107
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Accounts receivable
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600
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656
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Prepaid expenses and other
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159
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167
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Deferred income taxes
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316
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316
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|
|
|
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Total current assets
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1,222
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1,246
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Property and equipment, net
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118
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277
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Domains and other intangibles, net
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9,952
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10,618
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Other assets
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95
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88
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Deferred income taxes
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836
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890
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Total assets
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$
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12,223
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|
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$
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13,119
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Liabilities and Stockholders’ Equity
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Current liabilities:
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Accounts payable
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$
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653
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$
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1,017
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Accrued liabilities
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305
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461
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Accrued dividends
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75
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60
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Deferred revenue
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4
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16
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Revolving line of credit
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—
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106
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Notes payable, current portion
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165
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141
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Total current liabilities
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1,202
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1,801
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Notes payable
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464
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559
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Total liabilities
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1,666
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2,360
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Stockholders’ equity:
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Preferred stock, $.001 par value, 5,000,000 shares authorized, 3,000,000 and 3,000,000 shares issued and
outstanding
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3
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3
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Common stock, $.001 par value, 125,000,000 shares authorized, 26,003,009 and 25,814,103 shares issued and
outstanding
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26
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26
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Additional paid-in capital
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10,860
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10,824
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Accumulated deficit
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(332
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)
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(94
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)
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Total stockholders’ equity
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10,557
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10,759
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Total liabilities and stockholders’ equity
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$
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12,223
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$
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13,119
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(1)
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Derived from the Company’s audited consolidated financial statements as of December 31, 2010.
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See accompanying notes to condensed consolidated financial statements.
1
BANKS.COM, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
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Three Months
Ended
June 30,
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Six Months
Ended
June 30,
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2011
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2010
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2011
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2010
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Revenues
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$
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1,416
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$
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2,919
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$
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3,359
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$
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7,088
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Operating expenses:
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Traffic acquisition costs
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461
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1,324
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1,013
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2,823
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Depreciation and amortization
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402
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427
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825
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876
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Sales and marketing
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144
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282
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315
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642
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General and administrative
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673
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1,228
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1,325
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2,242
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Total operating expenses
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1,680
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3,261
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3,478
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6,583
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(Loss) income from operations
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(264
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)
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(342
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)
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(119
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)
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505
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Other gain
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6
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—
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6
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—
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Interest expense
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(26
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)
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|
|
(30
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)
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(61
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)
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(349
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)
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(Loss) income before income taxes
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(284
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)
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(372
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)
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(174
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)
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156
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Income tax (expense) benefit
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—
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141
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(49
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)
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(90
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)
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net (loss) income
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(284
|
)
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|
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(231
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)
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(223
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)
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66
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|
|
|
|
|
|
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|
Preferred stock dividends
|
|
|
(8
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)
|
|
|
(8
|
)
|
|
|
(15
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)
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|
(15
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)
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|
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|
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|
|
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|
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Net (loss) income available to common stockholders
|
|
$
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(292
|
)
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|
$
|
(239
|
)
|
|
$
|
(238
|
)
|
|
$
|
51
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
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|
|
Net (loss) income per common share available to common stockholders:
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|
|
|
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|
|
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|
|
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|
|
|
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Basic
|
|
$
|
(.01
|
)
|
|
$
|
(.01
|
)
|
|
$
|
(.01
|
)
|
|
$
|
—
|
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|
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|
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|
|
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|
Diluted
|
|
$
|
(.01
|
)
|
|
$
|
(.01
|
)
|
|
$
|
(.01
|
)
|
|
$
|
—
|
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|
|
|
|
|
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|
|
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|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Basic
|
|
|
25,902,460
|
|
|
|
26,204,118
|
|
|
|
25,858,525
|
|
|
|
26,159,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
25,902,460
|
|
|
|
26,204,118
|
|
|
|
25,858,525
|
|
|
|
27,958,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
2
BANKS.COM, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
For the Six Months Ended June 30, 2011 and 2010
(dollars in thousands)
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Preferred Stock
|
|
|
Common Stock
|
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|
Additional
Paid-In
Capital
|
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
|
Total
Stockholders’
Equity
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2009
|
|
|
3,000,000
|
|
|
$
|
3
|
|
|
|
26,113,651
|
|
|
$
|
26
|
|
|
$
|
10,831
|
|
|
$
|
880
|
|
|
$
|
11,740
|
|
|
Preferred stock dividends (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
(15
|
)
|
|
Exercise of common stock options (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
7,500
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Common stock issued for services (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
|
|
—
|
|
|
|
25
|
|
|
|
—
|
|
|
|
25
|
|
|
Common stock issued to directors for services (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
150,000
|
|
|
|
—
|
|
|
|
54
|
|
|
|
—
|
|
|
|
54
|
|
|
Stock-based compensation (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
55
|
|
|
|
—
|
|
|
|
55
|
|
|
Net income (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
66
|
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2010 (unaudited)
|
|
|
3,000,000
|
|
|
$
|
3
|
|
|
|
26,321,151
|
|
|
$
|
26
|
|
|
$
|
10,966
|
|
|
$
|
931
|
|
|
$
|
11,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2010
|
|
|
3,000,000
|
|
|
$
|
3
|
|
|
|
25,814,103
|
|
|
$
|
26
|
|
|
$
|
10,824
|
|
|
$
|
(94
|
)
|
|
$
|
10,759
|
|
|
Preferred stock dividends (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
(15
|
)
|
|
Exercise of common stock options (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
38,906
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
5
|
|
|
Common stock issued to directors for services (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
150,000
|
|
|
|
—
|
|
|
|
20
|
|
|
|
—
|
|
|
|
20
|
|
|
Stock-based compensation (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
|
|
|
—
|
|
|
|
11
|
|
|
Net loss (unaudited)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(223
|
)
|
|
|
(223
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2011 (unaudited)
|
|
|
3,000,000
|
|
|
$
|
3
|
|
|
|
26,003,009
|
|
|
$
|
26
|
|
|
$
|
10,860
|
|
|
$
|
(332
|
)
|
|
$
|
10,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
3
BANKS.COM, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(223
|
)
|
|
$
|
66
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
159
|
|
|
|
219
|
|
|
Amortization of domains and other
|
|
|
666
|
|
|
|
657
|
|
|
Amortization of debt issuance costs
|
|
|
—
|
|
|
|
258
|
|
|
Deferred income taxes
|
|
|
54
|
|
|
|
13
|
|
|
Stock-based compensation
|
|
|
31
|
|
|
|
134
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
56
|
|
|
|
558
|
|
|
Prepaid expenses and other
|
|
|
8
|
|
|
|
57
|
|
|
Other assets
|
|
|
(7
|
)
|
|
|
(10
|
)
|
|
Accounts payable
|
|
|
(364
|
)
|
|
|
(103
|
)
|
|
Accrued liabilities
|
|
|
(156
|
)
|
|
|
(146
|
)
|
|
Deferred revenue
|
|
|
(12
|
)
|
|
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
212
|
|
|
|
1,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of equipment
|
|
|
5
|
|
|
|
—
|
|
|
Purchase of property and equipment
|
|
|
(5
|
)
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
—
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Exercise of common stock options
|
|
|
5
|
|
|
|
1
|
|
|
Net proceeds from (repayments of) revolving line of credit
|
|
|
(106
|
)
|
|
|
627
|
|
|
Payment of notes payable
|
|
|
(71
|
)
|
|
|
(2,210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(172
|
)
|
|
|
(1,582
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
|
|
|
40
|
|
|
|
20
|
|
|
|
|
|
|
Cash at beginning of period
|
|
|
107
|
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
147
|
|
|
$
|
196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
65
|
|
|
$
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
$
|
4
|
|
|
$
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncash financing and investing activities:
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends accrued
|
|
$
|
15
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
4
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
|
(1)
|
Description of Business and Basis of Presentation
|
The accompanying unaudited condensed consolidated financial statements include the accounts of
Banks.com, Inc. (“Banks.com”) and its wholly-owned subsidiaries which consist of InterSearch Corporate Services, Inc. (“ICS”), Dotted Ventures, Inc. (“Dotted”), and MyStockFund Securities, Inc.
(“MyStockFund”), collectively, the “Company”.
Banks.com operates in the pay-per-click search engine and
Internet advertising industries, and owns and maintains an Internet domain portfolio including
www.banks.com, www.irs.com
,
www.filelater.com,
and
www.look.com
.
ICS is engaged principally in the business of providing highly skilled Internet and technology focused consultants.
Dotted owns an ICANN accredited domain Registrar business.
MyStockFund is an online broker-dealer that offers an array of financial products and services with a focus on fractional share investing.
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial information and pursuant to Rule 8-03 of Regulation S-X under the Securities Act of 1933, as amended. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation
have been included. Our business is highly seasonal and operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ended December 31, 2011, or for any other
period. The condensed consolidated balance sheet at December 31, 2010 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and notes required by accounting principles
generally accepted in the United States of America for complete financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited financial statements and
accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission (the “SEC”).
Management has evaluated events occurring subsequent to the balance sheet date through the financial statement issuance
date for disclosure.
Certain reclassifications have been made to prior periods’ financial statements to
conform to the current period presentation. These reclassifications did not result in any change in previously reported net income, total assets, or shareholders equity.
|
(2)
|
Significant Accounting Policies
|
The preparation of consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reporting periods. These judgments are difficult as matters that are inherently uncertain directly impact their valuation and accounting. Actual results may vary from
management’s estimates and assumptions.
The Company’s significant accounting policies are
disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC.
5
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
|
(2)
|
Significant Accounting Policies, Continued
|
Stock-Based Compensation.
The Compensation-Stock Compensation
Topic of the FASB ASC 718 addresses the accounting for stock options. It requires that the cost of all employee, director and consultant stock options, as well as other equity-based compensation arrangements, be reflected in the financial statements
based on the estimated fair value of the awards. It is applicable to any award that is settled or measured in stock, including stock options, restricted stock, stock appreciation rights, stock units, and employee stock purchase plans.
The Company had two equity incentive plans at June 30, 2011, the 2004 Equity Incentive Plan (“2004
Plan”), and the 2005 Equity Incentive Plan (“2005 Plan”), which replaced the 2004 Plan. The termination of the 2004 Plan did not affect any outstanding options under the 2004 Plan, and all such options will continue to remain
outstanding and governed by the 2004 Plan, but no shares will be available for grant under the 2004 Plan. At June 30, 2011, 611,956 shares remained available for grant under the 2005 Plan.
A summary of the stock option activity in the Company’s equity incentive plans is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Shares
|
|
|
Weighted-
Average
Per Share
Exercise
Price
|
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
|
Aggregate
Intrinsic
Value
|
|
|
Outstanding at December 31, 2010
|
|
|
1,667,031
|
|
|
$
|
0.73
|
|
|
|
5.74 years
|
|
|
$
|
157,000
|
|
|
Granted
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Forfeited
|
|
|
(376,875
|
)
|
|
|
1.13
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
(38,906
|
)
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at June 30, 2011
|
|
|
1,251,250
|
|
|
$
|
0.63
|
|
|
|
6.94 years
|
|
|
$
|
13,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at June 30, 2011
|
|
|
898,437
|
|
|
$
|
0.76
|
|
|
|
6.63 years
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At June 30, 2011, the Company had 352,813 unvested stock options outstanding and
there was $164,000 of total unrecognized compensation expense related to unvested stock-based compensation arrangements granted under the plans. This cost is expected to be recognized monthly on a straight-line basis over the appropriate vesting
periods through January 2014. The total net fair value of stock options vested and recognized as compensation expense was $11,000 for the six months ended June 30, 2011, compared to $55,000 for the same period in 2010. The associated income tax
benefit recognized was $6,000 for the six months ended June 30, 2011, compared to $1,000 for the same period in 2010.
There were no stock options granted during the three or six months ended June 30, 2011, or the three months ended June 30, 2010. The fair value of each option granted for the six months ended
June 30, 2010 was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2010
|
|
|
Risk-free interest rate
|
|
|
5.13
|
%
|
|
Expected dividend yield
|
|
|
—
|
|
|
Expected volatility
|
|
|
167
|
%
|
|
Expected life in years
|
|
|
6.25
|
|
|
|
|
|
Grant-date fair value of options issued during the period
|
|
$
|
102,000
|
|
|
|
|
|
|
|
|
Per share value of options at grant date
|
|
$
|
0.24
|
|
|
|
|
|
|
|
6
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
|
(2)
|
Significant Accounting Policies, Continued
|
Stock-Based Compensation, Continued.
On June 24, 2010,
following the Company’s 2010 annual meeting of shareholders and the election of directors for the ensuing year, the board of directors approved an award of an aggregate of 150,000 shares of Company common stock which was granted to non-employee
directors on June 25, 2010. This item has been recorded at fair value as stock compensation and additional paid-in capital. The amount of expense recognized in connection with this transaction totaled $54,000. The associated income tax
benefit recognized was $21,000. Pursuant to our 2005 Equity Compensation Plan, on the day following our annual meeting of shareholders each year, each active non-employee director is eligible to receive an annual grant of options to purchase 45,000
shares of our Common Stock. However, each non-employee director elected to waive such non-qualified stock option award in 2010.
On June 24, 2011, following the Company’s 2011 annual meeting of shareholders and the election of directors for the ensuing year, the board of directors approved an award of an aggregate of
150,000 shares of Company common stock which was granted to non-employee directors on June 27, 2011. This item has been recorded at fair value as stock compensation and additional paid-in capital. The amount of expense recognized in
connection with this transaction totaled $20,000. The associated income tax benefit recognized was $8,000. Pursuant to our 2005 Equity Compensation Plan, on the day following our annual meeting of shareholders each year, each active non-employee
director is eligible to receive an annual grant of options to purchase 45,000 shares of our Common Stock. However, each non-employee director elected to waive such non-qualified stock option award in 2011.
Revenue Recognition.
Pay-for performance search results are recognized in the period in which the
“click-throughs” occur. “Click-throughs” are defined as the number of times a user clicks on a search result. Revenues derived from consulting services are recorded on a gross basis as services are performed and associated costs
have been incurred using employees or independent contractors of the Company. The Company has agreements with various entities, networks of Web properties that have integrated the Company’s search service into their sites, to provide
pay-for-performance search results. The Company pays these entities based on click-throughs on these listings. The revenue derived from pay-for-performance search results related to traffic supplied by these entities is reported gross of the payment
to these entities. This revenue is reported gross primarily because the Company is the primary obligor to its customers. Credits for charge backs are recorded net of accounts receivable. Estimated charge backs are included in the allowance for
doubtful accounts, if any.
Domains and Other Intangibles.
Internet domains, or URLs, are stated at
cost, less accumulated amortization. Amortization expense is computed using the straight-line method over the estimated useful lives of the assets of 5 to 15 years. The internet domain assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be recoverable. Based on the impairment tests performed there was no impairment of internet domains during the three and six months ended June 30, 2011 and 2010. However, there
can be no assurance that future internet domain impairment tests will not result in a charge to operations. Other intangibles consist primarily of customer relationships that are amortized over their estimate useful lives (generally five years).
7
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
Basic net income per share is computed on the basis of the weighted-average number of common shares
outstanding. Diluted net income per share for the three and six months ended June 30, 2011 and the six months ended June 30, 2010 was computed based on the weighted-average number of shares outstanding plus the effect of outstanding stock
options and warrants, computed using the treasury stock method, plus the effect of outstanding convertible preferred stock using the if converted method. Outstanding stock options and warrants are not considered dilutive securities for the three
months ended June 30, 2010 due to the net losses incurred by the company. Net income per common share has been computed based on the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Loss
|
|
|
Weighted-
Average
Shares
|
|
|
Per Share
Amount
|
|
|
Loss
|
|
|
Weighted-
Average
Shares
|
|
|
Per Share
Amount
|
|
|
|
|
(dollars in thousands, except share and per share amounts)
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(284
|
)
|
|
|
25,902,460
|
|
|
$
|
(.01
|
)
|
|
$
|
(231
|
)
|
|
|
26,204,118
|
|
|
$
|
(.01
|
)
|
|
Less: preferred stock dividends
|
|
|
(8
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to common stockholders
|
|
|
(292
|
)
|
|
|
25,902,460
|
|
|
|
(.01
|
)
|
|
|
(239
|
)
|
|
|
26,204,118
|
|
|
|
(.01
|
)
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumed conversion of preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Incremental shares from assumed conversion of options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to common stockholders and assumed conversions
|
|
$
|
(292
|
)
|
|
|
25,902,460
|
|
|
$
|
(.01
|
)
|
|
$
|
(239
|
)
|
|
|
26,204,118
|
|
|
$
|
(.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
Loss
|
|
|
Weighted-
Average
Shares
|
|
|
Per Share
Amount
|
|
|
Income
|
|
|
Weighted-
Average
Shares
|
|
|
Per Share
Amount
|
|
|
|
|
(dollars in thousands, except share and per share amounts)
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(223
|
)
|
|
|
25,858,525
|
|
|
$
|
(.01
|
)
|
|
$
|
66
|
|
|
|
26,159,134
|
|
|
$
|
—
|
|
|
Less: preferred stock dividends
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders
|
|
|
(238
|
)
|
|
|
25,858,525
|
|
|
|
(.01
|
)
|
|
|
51
|
|
|
|
26,159,134
|
|
|
|
—
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumed conversion of preferred stock
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
15
|
|
|
|
1,000,000
|
|
|
|
—
|
|
|
Incremental shares from assumed conversion of options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
799,715
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders and assumed conversions
|
|
$
|
(238
|
)
|
|
|
25,858,525
|
|
|
$
|
(.01
|
)
|
|
$
|
66
|
|
|
|
27,958,849
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
|
(3)
|
Net Income Per Share, Continued
|
All outstanding options and warrants were anti-dilutive for the three
and six months ended June 30, 2011 and the three month ended June 30, 2010 because of the Company’s loss positions and were therefore excluded from the earnings per share calculation. A total of 730,000 outstanding options and
6,327,435 outstanding common stock warrants were excluded from the calculation of earnings per share due to the exercise price exceeding the average market price for the six months ended June 30, 2010.
At June 30, 2011, there were 477,000 outstanding warrants to purchase the Company’s common
stock at an exercise price of $1.60, which expired on July 20, 2011.
The Company has authorized 5,000,000 shares of preferred stock. On January 6, 2009 and
January 9, 2009, the Company amended the Articles of Incorporation of the Company to designate a series of preferred stock of the Company as Series C Preferred Stock, and authorized the issuance of 3,000,000 shares of Series C Preferred Stock.
The Series C Preferred Shares are convertible, at any time at the option of the holders, into shares of the Company’s common stock on a 3:1 ratio, subject to adjustments for any stock dividends, splits, combinations and similar events. Each
share of the Series C Preferred Stock will be entitled to receive a 10% annual cumulative dividend, compounded annually. These dividends will be payable only upon a liquidation or conversion to common. For any other dividends or distributions, the
Series C Preferred Stock will participate with the common stock. On January 6, 2009, the Company’s Chief Executive Officer purchased 3,000,000 shares of Series C Preferred Stock, par value $.001 per share, for an aggregate purchase price
of $300,000 or $0.10 per share.
The Company records deferred income tax assets and liabilities to reflect the tax consequences on
future years of temporary differences between revenues and expenses reported for financial statement and those reported for income tax purposes. The Company measures deferred tax assets and liabilities using the enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be realized or settled. Valuation allowances are provided against assets which are not likely to be realized.
An income tax valuation allowance of $243,000 was established at December, 31, 2010 related to tax net operating losses
that management believes may not be utilized to offset future taxable income. At June 30, 2011, an additional valuation allowance of $109,000 was recorded to reduce the tax assets to the net value management believed was more likely than not to
be realized, resulting in a zero effective tax rate for the three months ended June 30, 2011.
On December 7, 2010, the Company entered into a sale-leaseback arrangement with Domain Capital,
LLC, (“Domain Capital”) consisting of an agreement to assign the domain name, Banks.com, to Domain Capital in exchange for $600,000 in cash and a lease agreement to lease back the domain name from Domain Capital for a five year term with
an effective interest rate of 15%. At the same time, the parties also entered into an Exclusive Option to Purchase whereby Domain Capital granted the Company an option to purchase the Banks.com domain name for a nominal amount at the end of the
lease. The lease agreement was effective as of the close of the assignment of the domain name and provides for monthly payments of $14,274. The Company accounts for this transaction as a financing due to the Company’s continuing involvement and
bargain purchase at end of the lease. The lease agreement provides for customary events of default, including, among other things, nonpayment, failure to comply with the other agreements in the lease agreement within certain specified periods of
time, and events of bankruptcy, insolvency and reorganization. The Company may pre-pay the balance of the lease payments at any time by paying to Domain Capital the pre-payment amount as described in the lease agreement, provided that if certain
events of default have occurred and are continuing, the Company must exercise its right to pre-pay within 15 days following its receipt of notice of such default from Domain Capital and must also pay any then outstanding lease payments. The capital
lease obligation had a balance of $558,065 at June 30, 2011, of which approximately $94,000 is classified in current liabilities with the remainder being classified as long term debt.
9
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
|
(7)
|
Notes Payable, Continued
|
Effective as of December 21, 2010, the Company issued an unsecured
promissory note in the amount of $100,000 (the “Note”) to the Company’s Chief Executive Officer, Daniel M. O’Donnell, and his wife, Kimberly L. O’Donnell, pursuant to which they loaned such amount to the Company. The Note
bears interest commencing December 1, 2010, at the following rates: 20.00% per annum during the first six month period (December 2010 – May 2011); 15.00% per annum during the second six month period (June – November 2011);
and 17.50% per annum during the third six month period (December 2011 – May 2012). Commencing December 31, 2010 and ending May 31, 2011, the Company must make monthly payments of approximately $1,667, consisting solely of accrued
interest on the outstanding principal amount of the Note. On May 31, 2011, a principal payment of $25,000 was due and paid on the Note. During the period commencing June 1, 2011 and ending May 31, 2012, the Company must make monthly
principal payments averaging approximately $4,167 plus accrued interest on the outstanding principal amount of the Note. On May 31, 2012, the remaining unpaid principal balance of the Note will be due and payable. The Note is unsecured and
subordinated to any of the Company’s existing and future indebtedness to Silicon Valley Bank. The Note had a balance of $71,112 at June 30, 2011, which is classified in current liabilities.
|
(8)
|
Revolving Line of Credit
|
In March 2010, the Company established a $2.5 million revolving line of credit with Silicon Valley
Bank (“SVB”) for a term of one year with interest at prime plus 2.50% to 3.25%. Under the terms of the loan agreement between the Company and SVB (the “Loan Agreement”), SVB could advance funds to the Company collateralized by
certain receivables not to exceed $3,125,000. On March 5, 2010, SVB advanced approximately $1,850,000 to the Company, which was used to pay the outstanding balance on the Company’s Senior Subordinated Notes. An amendment to the Loan
Agreement on November 24, 2010, among other things, decreased the facility amount to $1,250,000. On March 2, 2011, another amendment decreased the facility amount to $175,000, and extended the term of the Loan Agreement to April 1,
2011, when it ultimately terminated. As of June 30, 2011, the Company had no revolving line of credit.
The Company incurred losses of $944,000 and $223,000 in calendar year 2010 and for the six months
ended June 30, 2011 respectively. While the Company believes its current funds will be sufficient to enable it to meet its planned expenditures through at least January 1, 2012, if anticipated operating results are not achieved, management
has the intent and believes it has the ability to delay or reduce expenditures so as not to require additional financing sources. Failure to generate sufficient cash flows from operations, obtain a line of credit or reduce certain discretionary
spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives.
On June 20, 2011, the Company received a letter from the NYSE Amex LLC (“NYSE Amex” or
the “Exchange”) indicating that the Company is not in compliance with Section 1003(f)(v) of the Exchange’s Company Guide (the “Company Guide”) in that the Exchange is concerned that, as a result of its low selling price
over the last thirty trading days, the Company’s common stock may not be suitable for auction market trading. Therefore, the Company’s continued listing is predicated on it effecting a reverse stock split of its common stock within a
reasonable period of time, which the Exchange has determined to be no later than November 18, 2011. In setting this truncated deadline for compliance, the Exchange applied Section 1009(h) of the Company Guide, which provides that they may
truncate the continued listing evaluation and follow-up procedures if a company, within 12 months of the end of a plan period, is again determined to be below continued listing standards.
The Company previously reported its receipt of a similar notice from the Exchange on September 17, 2009, of a
continued listing deficiency due to the Company’s non-compliance with Section 1003(f)(v) of the Company Guide. The Company’s plan period with respect to the foregoing notice ended on October 14, 2010. On October 6, 2010, the
Exchange notified the Company that the continued listing deficiency described in the Exchange’s letter of September 17, 2009 had been resolved.
10
BANKS.COM, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
|
(11)
|
Economic Dependence, Accounts Receivable and Concentration of Risk
|
A substantial portion of the Company’s revenues have historically been generated by a limited
number of advertising network partners. The Company is paid when search results generated by these partners are clicked on one of the Company’s web properties. The expiration of one or more of these contracts has historically adversely impacted
the operations of the Company. Our contractual relationship with InfoSpace, Inc. was consummated in the fourth quarter of 2007 and accounted for a substantial portion of the Company’s revenues during the six months ended June 30, 2011 and
2010, totaling $1,065,000 and $4,701,000, respectively. This agreement will automatically renew on December 31, 2011 for successive one year terms unless either party provides the other written notice of termination at least thirty
(30) days prior to the end of the then current term. Accounts receivable at June 30, 2011 and December 31, 2010, respectively, included $246,000 and $144,000 due from this advertising network partner. The Company is taking proactive
measures to both expand this relationship and develop new partnerships with alternative providers of online search and advertising. In addition, the change in the Company’s business model to diversify its strategy to include customer
acquisition through offering financial products and services is expected to gradually reduce the Company’s reliance on advertising network partners.
InfoSpace, the Company’s primary advertising network partner, provides the Company with paid search results from Google, Yahoo and other providers and is the source of a majority of the
Company’s revenue. The Company has had instances in the past where it has not been paid for all of the revenue it generated and the Company cannot be assured that this will not happen in the future. In these instances, Google, Yahoo
and others have retroactively charged the Company back for revenue generated that they deemed to be questionable. Although the Company takes proactive measures to mitigate these instances through the use of tools to gauge traffic quality, these
credits to revenue come with little or no substantiation and/or support with limited recourse. In these instances, the Company has already incurred traffic acquisition costs that are not likely to be recovered. Revenue credits recorded for the
three and six months ended June 30, 2011 were $179,000 and $379,000, respectively, and $237,000 for the three and six months ended June 30, 2010.
11
I
TEM
2 – M
ANAGEMENT
’
S
D
ISCUSSION
AND
A
NALYSIS
OF
F
INANCIAL
C
ONDITION
AND
R
ESULTS
OF
O
PERATIONS
When reading this section of this Quarterly Report, it is important that you also read the financial statements and related notes
included elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. This section of this Quarterly Report contains forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. All forward-looking
statements, including, but not limited to, statements regarding our future operating results, financial position, prospects, business strategy, expectations regarding our growth and the growth of the industry in which we operate, and plans and
objectives of management for future operations, are inherently uncertain as they are based on our expectations and assumptions concerning future events. Any or all of our forward-looking statements in this report may turn out to be inaccurate for
many reasons. Our forward-looking statements may be affected by inaccurate assumptions we make or by known or unknown risks and uncertainties, including the risks, uncertainties and assumptions described in this report, in Part II, Item 1A
under the caption “Risk Factors” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2010 and those described from time to time in our subsequent filings with the SEC. Among the factors
that could cause future results to differ materially from those provided herein are: (i) we may be unable to execute and implement our growth strategy, (ii) we cannot be certain of our ability to generate sufficient cash flow to meet our
obligations on a timely basis; (iii) we may be unable to achieve our targeted performance goals for our business; and (iv) other unforeseen events may impact our business, financial condition or operating results. The forward-looking
statements speak only as of the date hereof. We disclaim any obligation to update or alter our forward-looking statements, except as may be required by law.
OVERVIEW
General
We own and operate Internet media properties including:
banks.com, irs.com, filelater.com and mystockfund.com.
Our
properties provide users with relevant finance-related content and services and provide vendors targeted online advertising opportunities. Through
banks.com
, we provide access to current financial content, including financial news,
business articles, interest-rate tables, stock quotes, stock tracking and financial calculators. We also provide users access to tax related financial services including online tax preparation through
irs.com
and online tax
extensions through
filelater.com
, a business we acquired in late 2010, as well as online stock brokerage services through
mystockfund.com
. We believe that focusing our content and services in the high-traffic financial services
vertical will allow us to provide our advertisers access to highly relevant, typed in and search engine optimization generated traffic. We also operate proprietary search and shopping websites, including
look.com
and
searchexplorer.com.
We generate revenue on these sites primarily through search engine marketing efforts. In late 2009, we launched a premium pay-per-click advertising network known as the
InterSearch AdNet
, which currently serves
over 10 billion advertising impressions per month on our proprietary websites, as well as a high quality publishing distribution network. In addition, we provide Internet technology professional services to Fortune 500 and other companies operating
in the financial services sector.
We review our operations based on both our financial results and non-financial measures.
Our primary source of revenue is our Internet advertising services; although we continue to expand our other revenue we derive from sources such as tax preparation, tax extension and stock brokerage services. For our Internet advertising services we
review revenue-per-click and cost-per-click. When an Internet user clicks-through on a sponsored listing through our distribution network, our arrangements with our advertising network partners and direct advertisers provide that we receive a fixed
percentage of their related advertising revenue. A significant reduction in click-throughs or an advertising network partner exerting significant pricing pressures on us would have a material adverse effect on our results of operations. Our largest
expense is traffic acquisition costs, which consist primarily of Internet advertising costs. We are continuing our search engine optimization efforts and taking advantage of the absence of traffic acquisition costs associated with this traffic and
increasing page yield through better monetization as a result of insight gained through our proprietary analytics.
We
currently depend, and expect to continue to depend for the foreseeable future, upon a relatively small number of advertising network partners and direct advertisers for a significant percentage of our revenues. In October 2008, we entered into a
distribution agreement with InfoSpace, Inc. to provide paid meta-search results from Google, Yahoo, Microsoft and/or Ask.com on the
banks.com
and
look.com
properties. This agreement will automatically renew on December 31, 2011
for a one year term and thereafter for successive one year terms, unless either party provides the other written notice of termination at least thirty (30) days prior to the end of the then current term. InfoSpace, Inc. represented 32% of our
revenues for the six months ended June 30, 2011 and 67% of our revenues for the six months ended June 30, 2010.
12
For the 2011 tax season, we opted to emphasize customer acquisition strategy through the
marketing of our white label tax preparation service in lieu of selling that inventory to a direct tax preparation advertiser. We believe that the revenue derived through our customer acquisition efforts generally results in higher revenue per click
and margins in the long term due to year over year retention of customers we acquire, but has an adverse affect on revenue per click in the short term. Depending on business conditions, we have employed one or both strategies in past tax seasons and
will likely continue to employ one or both during future tax seasons. Also, in 2010, we acquired the tax extension business of FileLater.com with 2011 being the initial tax season under our ownership. Our pro forma, year over year, tax extension
related revenue was up 73%.
Our recent financial performance has been negatively impacted by a series of revenue charge backs
from our advertising network partners in our non tax related, search business, due to questionable traffic quality. The revenue associated with these charge backs also has significant corresponding traffic acquisition costs that are often not
recoverable from these partners. Revenue credits recorded for the three and six months ended June 30, 2011 were $179,000 and $379,000, respectively, and $237,000 for the three and six months ended June 30, 2010. As a result, we reduced our
marketing efforts in our search business in the fourth quarter of 2010 and reduced our cost structure in an effort to become less reliant on this business line during the off U.S. tax season. Our decision to reduce our reliance and exposure in our
search business resulted in decreased search engine marketing efforts and a reduction in our revenues for the period ended June 30, 2011. We expect that our reduced emphasis on our search business will continue to adversely impact our revenues
for the foreseeable future. As a result, we are focused on increasing our revenues from sources such as tax preparation, tax extension and stock brokerage services and reducing our traffic acquisition costs through search engine optimization efforts
and other internally developed analytics. Our ability to grow also depends on our ability to continue to increase the number of advertisers who use our services and the amount these advertisers spend on our services.
NYSE Amex Listing
On
June 20, 2011, we received a letter from the NYSE Amex LLC (“NYSE Amex” or the “Exchange”) indicating that we are not in compliance with Section 1003(f)(v) of the Exchange’s Company Guide (the “Company
Guide”) in that the Exchange is concerned that, as a result of its low selling price over the last thirty trading days, our common stock may not be suitable for auction market trading. Therefore, our continued listing is predicated on us
effecting a reverse stock split of our common stock within a reasonable period of time, which the Exchange has determined to be no later than November 18, 2011. In setting this truncated deadline for compliance, the Exchange applied
Section 1009(h) of the Company Guide, which provides that they may truncate the continued listing evaluation and follow-up procedures if a company, within 12 months of the end of a plan period, is again determined to be below continued listing
standards.
We previously reported our receipt of a similar notice from the Exchange on September 17, 2009, of a
continued listing deficiency due to our non-compliance with Section 1003(f)(v) of the Company Guide. Our plan period with respect to the foregoing notice ended on October 14, 2010. On October 6, 2010, the Exchange notified us that the
continued listing deficiency described in the Exchange’s letter of September 17, 2009 had been resolved, but our continued listing eligibility would be assessed on an ongoing basis and we had become subject to the provisions of
Section 1009(h) of the Company Guide, which are described above.
Quarterly Results May Fluctuate
Our quarterly results have fluctuated in the past and will continue to do so in the future due to our concentration in the online
tax-related business. Our reliance on revenues generated through our ownership of the Internet domains
irs.com
and
filelater.com
will continue to cause our revenues to be largely seasonal in nature, with peak revenues occurring during
the U.S. tax filing season of January through April. Therefore, our first and second quarter results are not indicative of results for the entire fiscal year.
13
RESULTS OF OPERATIONS
The following table sets forth information for the three and six months ended June 30, 2011 and 2010 derived from our unaudited condensed consolidated financial statements which, in the opinion of
our management, reflect all adjustments, which are of a normal recurring nature, necessary to present such information fairly (dollars in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Statements of Operations Data:
|
|
|
|
|
|
Revenues
|
|
$
|
1,416
|
|
|
|
100
|
%
|
|
$
|
2,919
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traffic acquisition costs
|
|
|
461
|
|
|
|
33
|
|
|
|
1,324
|
|
|
|
45
|
|
|
Depreciation and amortization
|
|
|
402
|
|
|
|
28
|
|
|
|
427
|
|
|
|
15
|
|
|
Sales and marketing
|
|
|
144
|
|
|
|
10
|
|
|
|
282
|
|
|
|
10
|
|
|
General and administrative
|
|
|
673
|
|
|
|
47
|
|
|
|
1,228
|
|
|
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
1,680
|
|
|
|
118
|
|
|
|
3,261
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(264
|
)
|
|
|
(18
|
)
|
|
|
(342
|
)
|
|
|
(12
|
)
|
|
Other gain
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest expense
|
|
|
(26
|
)
|
|
|
(2
|
)
|
|
|
(30
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(284
|
)
|
|
|
(20
|
)
|
|
|
(372
|
)
|
|
|
(13
|
)
|
|
Income tax benefit
|
|
|
—
|
|
|
|
—
|
|
|
|
141
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(284
|
)
|
|
|
(20
|
)
|
|
|
(231
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(8
|
)
|
|
|
—
|
|
|
|
(8
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to common stockholders
|
|
$
|
(292
|
)
|
|
|
(20
|
)%
|
|
$
|
(239
|
)
|
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Statements of Operations Data:
|
|
|
|
|
|
Revenues
|
|
$
|
3,359
|
|
|
|
100
|
%
|
|
$
|
7,088
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Traffic acquisition costs
|
|
|
1,013
|
|
|
|
30
|
|
|
|
2,823
|
|
|
|
40
|
|
|
Depreciation and amortization
|
|
|
825
|
|
|
|
25
|
|
|
|
876
|
|
|
|
12
|
|
|
Sales and marketing
|
|
|
315
|
|
|
|
9
|
|
|
|
642
|
|
|
|
9
|
|
|
General and administrative
|
|
|
1,325
|
|
|
|
39
|
|
|
|
2,242
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
3,478
|
|
|
|
103
|
|
|
|
6,583
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
|
|
(119
|
)
|
|
|
(3
|
)
|
|
|
505
|
|
|
|
7
|
|
|
Other gain
|
|
|
6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Interest expense
|
|
|
(61
|
)
|
|
|
(2
|
)
|
|
|
(349
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
|
|
(174
|
)
|
|
|
(5
|
)
|
|
|
156
|
|
|
|
2
|
|
|
Income tax expense
|
|
|
(49
|
)
|
|
|
(2
|
)
|
|
|
(90
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(223
|
)
|
|
|
(7
|
)
|
|
|
66
|
|
|
|
1
|
|
|
|
|
|
|
|
|
Preferred stock dividends
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
(15
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common stockholders
|
|
$
|
(238
|
)
|
|
|
(7
|
)%
|
|
$
|
51
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
Three Months Ended June 30, 2011 Compared to Three Months Ended June 30, 2010
Revenues.
Revenues of $1.4 million for the three months ended June 30, 2011 were adversely impacted by a reduction in our
search engine marketing efforts resulting from our decision to reduce our emphasis and reliance on our search business, advertising network partner charge backs of approximately $179,000, our emphasis on customer acquisition in our tax preparation
business, and the absence of a direct online tax preparation advertiser. This compares to revenues of $2.9 million for the same period in 2010, which were not affected by any of these factors, except for charge backs of $237,000.
Traffic Acquisition Costs.
Traffic acquisition costs were $461,000 for the three months ended June 30, 2011 compared to $1.3
million for the same period in 2010. The 65% decrease was primarily attributable to a reduction in our search engine marketing efforts resulting from our decision to reduce our emphasis and reliance on our search business.
Depreciation and Amortization.
Depreciation and amortization decreased to $402,000 for the three months ended June 30, 2011
from $427,000 for the same period in 2010. The 6% decrease was primarily attributable to certain assets being fully depreciated in 2010.
Sales and Marketing.
Sales and marketing expense was $144,000 for the three months ended June 30, 2011 compared to $282,000 for the same period in 2010. The 49% decrease was due primarily to a
decrease in sales commission expenses.
General and Administrative.
General and administrative expenses decreased to
$673,000 for the three months ended June 30, 2011 from $1.2 million for the same period in 2010. The 45% decrease is due primarily to the reduction in personnel headcount and in other general and administrative expenses we initiated in the
fourth quarter of 2010 to better align our cost structure with our reduced emphasis and reliance on our search business.
Interest Expense.
Interest expense was $26,000 for the three months ended June 30, 2011 compared to $30,000 for the same
period in 2010.
Income Tax Expense.
Income tax expense was zero for the three months ended June 30, 2011 compared
to $141,000 for the same period in 2010. This decrease is primarily a result of pretax loss of $284,000 for the three months ended June 30, 2011 compared to pretax loss of $372,000 for the same period in 2010. In 2010, any differences from the
statutory federal income tax rate are a result of state taxes and permanent tax differences, such as stock compensation and an income tax valuation allowance where management believed that a tax benefit was more likely or not to be realized. In
2011, any deferred tax benefit related to the 2011 loss was offset by an equal increase in the deferred tax asset valuation allowance.
Net Income.
Net loss available to common stockholders for the three months ended June 30, 2011 was $292,000, or $.01 per basic and diluted share, compared to net loss of $239,000, or $.01 per
basic and diluted share, for the same period in 2010.
Six Months Ended June 30, 2011 Compared to Six Months Ended June 30,
2010
Revenues.
Revenues of $3.4 million for the six months ended June 30, 2011 were adversely impacted by
a reduction in our search engine marketing efforts resulting from our decision to reduce our emphasis and reliance on our search business, advertising network partner charge backs of approximately $379,000, our emphasis on customer acquisition in
our tax preparation business, and the absence of a direct online tax preparation advertiser. This compares to revenues of $7.1 million for the same period in 2010, which were not affected by any of these factors, except for charge backs of $237,000.
Traffic Acquisition Costs.
Traffic acquisition costs were $1 million for the six months ended June 30, 2011
compared to $2.8 million for the same period in 2010. The 64% decrease was primarily attributable to a reduction in our search engine marketing efforts resulting from our decision to reduce our emphasis and reliance on our search business.
Depreciation and Amortization.
Depreciation and amortization decreased to $825,000 for the six months ended
June 30, 2011 from $876,000 for the same period in 2010. The 6% decrease was primarily attributable to certain assets being fully depreciated in 2010.
Sales and Marketing.
Sales and marketing expense was $315,000 for the six months ended June 30, 2011 compared to $642,000 for the same period in 2010. The 51% decrease was due primarily to a
decrease in sales commission expenses.
General and Administrative.
General and administrative expenses decreased to
$1.3 million for the six months ended June 30, 2011 from $2.2 million for the same period in 2010. The 41% decrease is due primarily to the reduction in personnel headcount and in other general and administrative expenses we initiated in the
fourth quarter of 2010 to better align our cost structure with our reduced emphasis and reliance on our search business.
Interest Expense.
Interest expense was $61,000 for the six months ended June 30, 2011 compared to $349,000 for the same
period in 2010. The 83 % decrease is primarily a result of the payoff of our 13.5% Senior Subordinated Notes on March 5, 2010.
15
Income Tax Expense.
Income tax expense was $49,000 for the six months ended
June 30, 2011 compared to $90,000 for the same period in 2010. This decrease is primarily a result of pretax loss of $174,000 for the six months ended June 30, 2011 compared to pretax income of $156,000 for the same period in 2010. In
2010, any differences from the statutory federal income tax rate are a result of state taxes and permanent tax differences, such as stock compensation and an income tax valuation allowance where management believed that a tax benefit was more likely
or not to be realized. In 2011, the tax expense reflects an increase in the Company’s deferred tax assets valuation allowance.
Net Income.
Net loss available to common stockholders for the six months ended June 30, 2011 was $238,000, or $.01 per basic and diluted share, compared to net income of $51,000, or zero per
basic and diluted share, for the same period in 2010.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, we have primarily financed our operations through internally generated funds, debt financing, and the use of our line of
credit when available. We have engaged in private sales of our common stock and debt financing in order to fund the purchase price of some of our acquisitions. As of June 30, 2011, we had $147,000 in cash compared to $107,000 at
December 31, 2010. As of June 30, 2011, our working capital was $20,000 compared to a working capital deficit of $555,000 on December 31, 2010.
In March 2010, we established a $2.5 million revolving line of credit with Silicon Valley Bank (“SVB”) for a term of one year. The loan agreement between us and SVB (the “Loan
Agreement”) was executed and effective on March 3, 2010 and initially funded on March 5, 2010. The proceeds were utilized to retire the outstanding principal balance of approximately $1.92 million on our senior debt. Under the terms
of the Loan Agreement, SVB could advance funds to us to finance certain Eligible Accounts (as defined in the Loan Agreement). When SVB made an advance, the Eligible Account became a Financed Receivable (as described in additional detail in the Loan
Agreement). The aggregate face amount of all Financed Receivables outstanding at any time under the Loan Agreement could not exceed $3,125,000 (the “Facility Amount”). An amendment to the Loan Agreement on November 24, 2010, among
other things, decreased the Facility Amount to $1,250,000. On March 2, 2011, another amendment decreased the facility amount to $175,000 and extended the term of the Loan Agreement to April 1, 2011, when it ultimately terminated. As of
June 30, 2011, we had no revolving line of credit with SVB. We may pursue a new credit facility to help alleviate any potential shortfalls in cash flow that we may experience, although there is no guarantee we will ultimately pursue and/or
secure such a facility. We generated $212,000 in operating cash flow during the six months ended June 30, 2011, compared to $1.6 million for the same period in 2010. Since the first quarter of 2010, our liquidity has been negatively impacted by
revenue charge backs, as well as by an increase in legal expenses related to litigation with two of our former officers, which has been settled. As such, we entered into the transactions described below to improve our liquidity position and to fund
the acquisition of
FileLater.com.
On December 7, 2010, we entered into a sale-leaseback arrangement with
Domain Capital, LLC, (“Domain Capital”), consisting of an agreement to assign the domain name, Banks.com, to Domain Capital in exchange for $600,000 in cash and a lease agreement to lease back the domain name from Domain Capital for a five
year term. At the same time, the parties also entered into an Exclusive Option to Purchase whereby Domain Capital granted us an option to purchase the Banks.com domain name for a nominal amount at the end of the lease. The lease agreement was
effective as of the close of the assignment of the domain name and provides for monthly rent payments of $14,274. The lease agreement provides for customary events of default, including, among other things, nonpayment, failure to comply with the
other agreements in the lease agreement within certain specified periods of time, and events of bankruptcy, insolvency and reorganization. We may pre-pay the balance of the lease payments at any time by paying to Domain Capital the pre-payment
amount as described in the lease agreement, provided that if certain events of default have occurred and are continuing, we must exercise our right to pre-pay within 15 days following our receipt of notice of such default from Domain Capital and
must also pay any then outstanding lease payments. The capital lease obligation had a balance of $558,065 at June 30, 2011, of which approximately $94,000 is classified in current liabilities with the remainder being classified as long term
debt.
On December 21, 2010, we issued an unsecured promissory note in the amount of $100,000 (the “Note”) to
our Chief Executive Officer, Daniel M. O’Donnell, and his wife, Kimberly L. O’Donnell, pursuant to which they loaned such amount to us. The Note bears interest commencing December 1, 2010, at the following rates: 20.00% per annum
during the first six month period (December 2010 – May 2011); 15.00% per annum during the second six month period (June – November 2011); and 17.50% per annum during the third six month period (December 2011 – May 2012).
Commencing December 31, 2010 and ending May 31, 2011, we must make monthly payments of approximately $1,667, consisting solely of accrued interest on the outstanding principal amount of the Note. On May 31, 2011, a principal payment
of $25,000 was paid. During the period commencing June 1, 2011 and ending May 31, 2012, we must make monthly principal payments averaging approximately $4,167 plus accrued interest on the outstanding principal amount of the Note. On
May 31, 2012, the remaining unpaid principal balance of the Note will be due and payable. The Note had a balance of $71,112 at June 30, 2011, which is classified in current liabilities.
16
We continually review our capital requirements to ensure that we have sufficient funding
available to support our anticipated levels of operations, obligations and growth strategies. We believe cash flow will be sufficient to fund anticipated levels of operations for the next 12 months. In the event our cash flow becomes insufficient to
fund our ongoing operations, we anticipate selling non-core assets or alternatively, raising new equity and/or debt capital. Additional equity and debt financing may be needed to support our growth strategy and our long-term obligations. If
additional financing is necessary, it may not be available to us on acceptable terms or at all. Failure to generate sufficient revenue or raise additional capital could have a material adverse effect on our ability to continue as a going concern and
to achieve our intended business objectives.
Cash Flows for the Six Months Ended June 30, 2011
Net cash provided by operating activities
for the six months ended June 30, 2011 was $212,000 consisting primarily of net loss
of $223,000, increased by depreciation and amortization of $825,000, partially offset by a decrease in accounts payable and accrued liabilities of $520,000.
Net cash provided by investing activities
for the six months ended June 30, 2011 was zero consisting of proceeds from the sale of furniture and equipment, offset by the purchase of computer
hardware.
Net cash used in financing activities
for the six months ended June 30, 2011 of $172,000 was primarily
attributable to a reduction of $106,000 in our revolving line of credit, and payment of notes payable.
Cash Flows for the Six Months
Ended June 30, 2010
Net cash provided by operating activities
for the six months ended June 30, 2010
was $1.6 million consisting primarily of net earnings of $66,000, increased by depreciation and amortization of $876,000, stock compensation expense of $134,000, and a decrease in accounts receivable of $558,000.
Net cash used in investing activities
for the six months ended June 30, 2010 of $12,000 was primarily for the purchase of
computer hardware.
Net cash used in financing activities
for the six months ended June 30, 2010 of $1.6 million
was primarily attributable to a decrease in notes payable of $2.2 million resulting from the payoff of our Notes, partially offset by an increase of $627,000 in our revolving line of credit.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our management’s
discussion and analysis are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial
statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and
expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our significant accounting policies are discussed in Note 2 to our unaudited condensed consolidated financial statements appearing at the
beginning of this Quarterly Report and are fully disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC.
I
TEM
3 – Q
UANTITATIVE
AND
Q
UALITATIVE
D
ISCLOSURES
A
BOUT
M
ARKET
R
ISK
Not applicable.
I
TEM
4 – C
ONTROLS
AND
P
ROCEDURES
Our Chief Executive Officer (principal executive officer and principal financial officer), Daniel M. O’Donnell, evaluated the
effectiveness of our disclosure controls and procedures as of the end of the period covered by this report (the “Evaluation Date”), and, based on such evaluation, concluded that, as of the Evaluation Date, our disclosure controls and
procedures were effective to ensure that information we are required to disclose in our reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the
time periods specified in the SEC’s rules and forms, and to ensure that information we are required to disclose in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. There have been no changes in our internal control over financial reporting that occurred during the period covered by this
report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
17
PART II – OTHER INFORMATION
I
TEM
1 – L
EGAL
P
ROCEEDINGS
Not applicable.
I
TEM
1A – R
ISK
F
ACTORS
As of the date of this filing, there
have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K filed for the year ended December 31, 2010, except as set forth below.
If we are unable to regain compliance with certain of the NYSE Amex continued listing standards within the timeframe granted to us by the NYSE Amex, then our common stock could be subject to delisting,
which may make it more difficult for investors to sell shares of our common stock.
We previously reported our receipt of
a notice from NYSE Amex LLC (the “Exchange”) on September 17, 2009, of a continued listing deficiency due to our non-compliance with Section 1003(f)(v) of the Exchange’s Company Guide (the “Company Guide”). Our
plan period with respect to the foregoing notice ended on October 14, 2010. On October 6, 2010, the Exchange notified us that the continued listing deficiency described in the Exchange’s letter of September 17, 2009 had been
resolved, but our continued listing eligibility would be assessed on an ongoing basis and we had become subject to the provisions of Section 1009(h) of the Company Guide, which states that if we, within 12 months of the end of the plan period,
are again determined to be below continued listing standards, the Exchange will review the circumstances and take appropriate action, which may include truncating the continued listing evaluation and follow-up procedures or immediately initiating
delisting proceedings.
On June 20, 2011, we received a letter from the Exchange indicating that we are again not in
compliance with Section 1003(f)(v) of the Company Guide in that the Exchange is concerned that, as a result of the low selling price of our common stock, our common stock may not be suitable for auction market trading. Therefore, our continued
listing is predicated on us effecting a reverse stock split of our common stock within a reasonable period of time, which the Exchange has determined to be no later than November 18, 2011. In setting this truncated deadline for compliance, the
Exchange applied Section 1009(h) of the Company Guide. Failure to regain compliance within the given timeframe may result in the Exchange initiating delisting proceedings against us. Furthermore, there is no assurance that implementing a
reverse stock split of our common stock will result in a per-share trading price for our common stock sufficient to regain compliance with the Exchange’s listing qualifications or that any increase in the per-share trading price of our common
stock can be sustained.
If our common stock ceases to be listed for trading on the Exchange or another national securities
exchange for any reason, it may harm our stock price, increase the volatility of our stock price and make it more difficult for investors to sell shares of our common stock. Such delisting could also adversely affect our ability to obtain financing
for the continuation of our operations. In the event our common stock is delisted from the Exchange, we currently expect that our common stock would be eligible for listing on the OTC Bulletin Board or Pink Sheets. In addition, if we are not
listed on the Exchange, we will be limited in our ability to use one or more registration statements on SEC Form S-3.
I
TEM
2 – U
NREGISTERED
S
ALES
OF
E
QUITY
S
ECURITIES
AND
U
SE
OF
P
ROCEEDS
The Silicon Valley Bank Loan and Security Agreement, dated March 3, 2010, between Silicon Valley Bank (“SVB”), on the one
hand, and Banks.com, Inc., Corporate Consulting Services, Inc., and Dotted Ventures, Inc. (together referred to as “Borrower”), on the other hand, which expired on April 1, 2011, prohibited us from paying any dividends or making any
distribution or payment without the prior written consent of SVB. Under that agreement, we were required to obtain prior written consent from SVB to redeem, retire or purchase any capital stock other than permitted distributions, which were:
(a) purchases of capital stock from former employees, consultants and directors pursuant to repurchase agreements or other similar agreements in an aggregate amount not to exceed $100,000 in any fiscal year, provided that at the time of such
purchase no event of default had occurred and was continuing; (b) distributions or dividends consisting solely of Borrower’s capital stock; and (c) purchases of fractional shares of capital stock arising out of stock dividends, splits
or combinations or business combinations.
I
TEM
3 – D
EFAULTS
U
PON
S
ENIOR
S
ECURITIES
Not applicable.
I
TEM
4 –
(Removed and Reserved.)
I
TEM
5 – O
THER
I
NFORMATION
Not applicable.
18
I
TEM
6 – E
XHIBITS
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Incorporated by Reference
|
|
Filed
Herewith
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
No.
|
|
Filing
Date
|
|
|
|
|
|
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31.1
|
|
Certification by Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
|
|
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X
|
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32.1
|
|
Certification by Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of
2002
|
|
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X
|
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101.INS*
|
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XBRL Instance Document
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X
|
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101.SCH*
|
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XBRL Taxonomy Extension Schema
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X
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101.CAL*
|
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XBRL Taxonomy Extension Calculation Linkbase
|
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X
|
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101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
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|
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|
X
|
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|
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101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
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|
|
|
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|
X
|
|
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101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
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|
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|
X
|
|
*
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for
purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
19
SIGNATURES
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.
|
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|
|
BANKS.COM, INC.
|
|
|
|
|
|
Date: August 15, 2011
|
|
By
|
|
/s/ Daniel M. O’Donnell
|
|
|
|
|
|
Daniel M. O’Donnell
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
(Principal Executive Officer, Principal Financial and Accounting Officer)
|
20
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