EDGAR ONLINE INC - 10-K Annual Report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

COMMISSION FILE NO. 0-26071

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EDGAR ONLINE, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 06-1447017
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

50 WASHINGTON STREET, 06854
NORWALK CT (Zip code)
(Address of principal executive offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(203) 852-5666

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK, $0.01 PAR VALUE (TITLE OF CLASS)

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 as 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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

As of March 20, 2002, the aggregate market value of voting stock held by
non-affiliates of the registrant, based on the closing sales price for the
registrant's common stock, as reported by the Nasdaq National Market was
approximately $30,674,548 (calculated by excluding shares owned beneficially by
directors and officers).

As of March 20, 2002 there were 16,924,917 shares of the registrant's
common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

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PART I

FORWARD LOOKING STATEMENTS

Statements made in this report that relate to future plans, events,
financial results or performance are forward-looking statements as defined under
the Private Securities Litigation Reform Act of 1995. These statements are based
upon current information and expectations. Actual results may differ materially
from those anticipated as a result of certain risks and uncertainties. For
details concerning these and other risks and uncertainties, see Part I, Item 1,
"Risk Factors That May Affect Our Future Results" of this report, as well as the
Company's other periodic reports on Forms 10-K, 10-Q and 8-K subsequently filed
with the Securities and Exchange Commission (SEC) from time to time. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation to
republish revised forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Investors should also be aware that while the Company from time to time does
communicate with securities analysts, it is against the Company's policy to
disclose to them any material non-public information or other confidential
commercial information. Investors should not assume that the Company agrees with
any report issued by any analyst or with any statements, projections, forecasts
or opinions contained in any such report.

ITEM 1. BUSINESS

THE COMPANY

Overview

We are an Internet-based provider of business, financial and competitive
information about public companies. We also provide Internet-based information
and technology solutions to the financial services industry. We derive the
information we sell primarily from the SEC's EDGAR (Electronic Data Gathering
Analysis and Retrieval) filing system and provide it to corporations, Web sites
and individuals on a real-time basis. We enhance raw SEC filings by organizing
and processing them into an easily accessible and searchable format and use
proprietary software to extract specific information requested by our customers.
Our four primary sources of revenue are contracts with corporate customers for
customized data, sale of our technical services to construct and/or operate the
technical systems our customers use to incorporate our data and data from other
sources into their products and services, seat-based subscriptions to our Web
site services and advertising and other e-commerce based revenues.

EDGAR Trademark

EDGAR is a federally registered trademark of the SEC. EDGAR Online is a
product of EDGAR Online, Inc. and is neither approved by, nor affiliated with,
the SEC. The SEC has granted us a non-exclusive, royalty-free license to use the
name EDGAR in our logo and corporate name through 2009. We have applied for and
received from the U.S. Patent and Trademark Office certified registration for
our EDGAR Online trademark.

Data Sales

Our proprietary data mining technology allows us to extract and deliver in
real-time customized data derived from EDGAR filings. Corporations, financial
institutions and news organizations purchase this customized data from us. These
customers use this information on corporate intranets, private networks and Web
sites. They typically enter into contracts of at least a one-year length for our
content, which they use internally within their own organizations and/or for
incorporation into services they offer their customers. We deliver the data to
our customers as formatted data feeds or via access to our applications
programming interface. Our data customers include corporations, such as Lucent
Technologies, financial service organizations, such as Merrill Lynch and Bank of
America, and news service providers, such as Reuters and Standard & Poor's.
Within these organizations, we tailor our services to various departments
including marketing, sales, human resources, financial and legal. We also
deliver EDGAR content to other subscription Web sites, such

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as Multex.com and Scottrade Securities that bundle our content into their
service offerings to the business and investment community. These Web sites
either integrate our services into their comprehensive offerings or offer our
services as higher cost options. In 2001, our data sales were responsible for
32% of our revenue.

Technical Services

In addition to using our technical expertise to create and deliver our own
branded data and seat-based services to customers, we also sell our technical
services directly to large financial institutions who contract with us to build,
and in some cases operate, the technical systems they need to use the data we
sell them. Customers who buy these technical services from us, in some cases,
also use our services to acquire and integrate data from third party vendors
into the technical systems we operate for them. These technical services
customers include large financial organizations such as The Nasdaq Stock Market.
In 2001, these technical services were responsible for 40% of our revenue.

Seat-Based Subscriptions

Many companies, professionals and other individuals access our services by
purchasing our seat-based subscriptions. We sell these seat-based subscriptions
directly over the Internet and through our sales force in the form of contracts
typically extending for a period of three months or one year. We use the two
major public Web sites we operate at www.edgar-online.com and www.freeedgar.com,
our professional Web site www.edgarpro.com and the linking agreements we have
with other prominent Web sites such as Yahoo! and AOL to market our seat-based
services. As of March 20, 2002, we had a total of more than 24,000 subscribers
to our seat-based subscription services. Seat-based subscriptions services were
responsible for 20% of our revenue in 2001.

Advertising and E-Commerce

We also generate revenues through the sale of advertising banners and
sponsorships on our various Web sites and through e-commerce activities such as
marketing third party services to the users of our Web sites. In 2001, 8% of our
revenues came from these services.

INDUSTRY BACKGROUND AND OPPORTUNITY

The EDGAR System

The SEC began to require electronic filings of compliance documents such as
prospectuses and annual and quarterly reports in 1994 and, since May 1996, all
U.S. public companies have been required to make their SEC filings in an
electronic format through the EDGAR system. The SEC also now requires that
certain filings by foreign issuers be filed through the EDGAR system. The SEC
established this system to perform automated collection and acceptance of
submissions by companies and others who are required to file disclosure
documents with the SEC. Prior to the introduction of the EDGAR system, SEC
filings were only available on a delayed basis in costly paper or CD-ROM format
from a limited number of document providers or SEC public reference rooms.

Business Information

Today's business environment is characterized by a rapidly growing demand
for fast and easy access to corporate and financial information. As a result of
the rapid growth of the Internet, corporate and financial information can now be
delivered in a more efficient and less expensive manner. Businesses are using
their intranets, private networks and Web sites to deliver competitive and
financial information to employees, customers and shareholders. SEC filings are
a primary source of this information, and since the inception of the EDGAR
system the SEC has consistently moved to require more information to be
disclosed electronically and to have electronic information filed on a
more-timely basis. Because EDGAR Online has established itself as the preeminent
brand on the Internet for EDGAR-based information, these trends, which increase
both the number of people who are looking to gain access to EDGAR-derived data
and the amount of

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data going into the EDGAR database each year, provide a growing market for our
expertise in extracting and delivering EDGAR-derived information.

STRATEGY

Our goal is to become the leading provider of EDGAR-based business,
financial and competitive information and related technology services. We aim to
meet the increasing market demand for information on a real-time, value-added
and cost-effective basis, by providing our customers with sophisticated methods
of obtaining and using information derived from EDGAR filings and other sources.
We strive to maintain EDGAR Online as the most reliable and trusted source of
EDGAR-based information for corporate customers and users of our seat-based
subscription services. We also are seeking to convince more financial
institutions that still use predominantly manual procedures to process EDGAR
data for their own internal use to purchase services from us rather than
processing EDGAR information themselves.

Increase Corporate Sales

Our objective is to continue to increase the number of corporate customers
purchasing our services and the amount of revenue generated by each customer. We
will use our proprietary technology to extract information for our corporate
customers and tailor this information to their specific needs. We offer our
services to a broad range of business and professional customers who have a
variety of needs for the types of services we provide. We are continuing to
expand our sales force to target this market.

Expand Beyond the Internet to Reach New Customers

We believe that we have established EDGAR Online as a leading Internet
provider of EDGAR-based information. We intend to maintain this leadership
position on the Internet and are now beginning to target other existing and
emerging technologies to reach new customers. For example, we are expanding our
sales efforts to news services and data vendors that are using proprietary
private networks.

Expand Internationally

We intend to market our services more aggressively in international
markets. We intend to expand our database to include filings made outside of the
United States and provide our users with access to corporate and financial
information from these filings.

Expand Functionality and Content Offerings

We intend to introduce new value-added services to increase revenues from
our existing customer base and to attract new customers. We have sophisticated
search technology under development to further mine the data in EDGAR filings
and plan to market tailored products to specific end users. We are also
incorporating additional sources of business and financial information into the
services we offer to our clients.

Enhance Brand Recognition

We have established strong brand identity in the EDGAR-based retrieval
market, in large part due to the high quality of our services and the extensive
availability of our branded information on the Internet. We intend to continue
to encourage our brand recognition by marketing higher value services to
registered users of our Web sites, by implementing aggressive sales campaigns to
corporate clients and by entering into additional strategic distribution
relationships.

Pursue Additional Strategic Alliances and Acquisitions

We will seek additional distribution relationships to ensure that we remain
the leading provider of EDGAR-based information and related information
technology solutions on the Internet. We will also seek additional strategic
alliances or acquisitions that will enable us to offer additional services,
strengthen our

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selling efforts, improve technology and gain access to complementary services or
information that will be of interest to our customer base.

PRODUCTS AND SERVICES

Overview

We sell a variety of EDGAR Online branded data and seat-based subscription
services, and we provide a range of back office technical services to financial
institutions. Each of our service offerings is based on our ability to use the
proprietary technology we have developed and our experience in processing EDGAR
filings to extract and deliver information in standardized or customized
formats. We also sell advertising and e-commerce services targeted to the users
of our Web sites.

Data Sales

Many corporations and institutions want to see specific information
extracted from EDGAR filings as the filings enter our database. To meet this
need, and to enable these customers to integrate this information into services
they provide to their customers or information they make available directly to a
number of their employees, we also sell our services in the form of formatted
data feeds. These feeds range from a simple subset of EDGAR filings for
customers who need all the filings from only a select number of companies, to
more sophisticated extractions of selected information from certain filing types
that is formatted and delivered to match specific custom needs that vary for
each data services contract.

For customers who want the flexibility and economy of constructing the
extraction specifics themselves, or for those customers who have multiple uses
for the data they purchase from us, we offer an applications programming
interface service (API). This service enables a customer to use its own IT
services department to configure the information from our database and is used
primarily by our largest data customers.

Since many of our customers are looking for the same kinds of data
services, we have developed a number of pre-packaged data services such as our
Fundamental Data Service, our Insider Trader Data Service, our IR Web Page
Services and our Wealth ID Service to meet these needs.

Our data services are priced based on the amount of customization required
in the extraction process, the number of end-users who will have access to the
data, the amount of the data delivered and the delivery method. The majority of
these contracts range from $1,000 to $15,000 per year, however we also have
several contracts that total over $50,000 per year. These services are usually
sold as yearly contracts and may also include set-up charges.

Technical Services

In addition to using our technical expertise to create and deliver our own
branded data and seat-based services to customers, we also sell our technical
services directly to large financial institutions who contract with us to build,
and in some cases operate, the technical systems they need to use the data we
sell them. The technical services we offer our customers range from development
of simple data extraction software, through the design and development of entire
technical systems to integrate and use various data obtained from multiple data
vendors, to the hosting and support of a client's entire Internet and Intranet
sites. We have developed and deployed systems to display stock quotes and stock
charts, systems to aggregate and display news feeds, and systems to keep track
of stock symbol changes.

Each of our technical services contracts is unique based on the specific
needs of the client. We charge for our technical services primarily on a time
and materials basis. The majority of the contracts in 2001 that include hosting
services exceeded $500,000 per year.

Seat-Based Subscriptions

We offer a variety of seat-based subscription services to meet the demands
of customers who access differing quantities of EDGAR filings or have differing
needs for navigating through, searching for, downloading and printing specific
text or financial information contained in the EDGAR documents.

Our fully functioned flagship product is EDGARpro. The basic subscription
price for a single seat of EDGARpro, which allows unlimited access to all EDGAR
filings and a full range of alerting, navigation,

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searching, downloading and printing features is $600 per year. Discounts are
available for multi-seat and enterprise-wide contracts. EDGARpro is sold only
through our sales force.

A less fully functioned seat-based service, known as EDGAR Online, is
available through all of our public Web sites. This service enables users to
access a limited number of filings per month and offers fewer searching and
alerting features than our flagship EDGARpro service. The yearly price for this
service is $180, and may be purchased on www.edgar-online.com by providing a
credit card which is charged for three months worth of service in advance.

We also offer other specialized seat-based services available as
stand-alone services or services available in conjunction with the services
listed above. These specialized services include direct access to information
extracted from 13f institutional ownership filings. Customers interested in this
kind of information purchase these seat-based services to get easy access to
information we extract from multiple filings and present in formats that make it
easy to view summary information quickly. These services are priced at $900 per
seat per year, or less if purchased as a multi-seat contract or as an add-on to
a contract for EDGARpro services.

Advertising and E-Commerce Services

We have a contract with DoubleClick, an Internet advertising services
provider, to sell the advertising space on our public Web sites and on the
edgar-online and ipo-express seat-based offerings. DoubleClick markets our
advertising space to a broad cross section of industries that are attracted by
the subject matter of our Web sites and by the demographics of the users of our
Web sites. These advertisers include companies such as Datek Online Brokerage
Services, Fidelity Investments, Hewlett Packard, Toyota and Harvard Business
School Publishing. The advertising DoubleClick sells on our Web sites generally
matches services offered by other Web sites. They include banner-advertising
space, sponsorship buttons on specific pages and pop up ads. We believe that the
prices we receive for the advertising services we provide generally match those
available on other comparable financial Web sites. The contract with DoubleClick
provides for us to receive a share of the revenue received for any advertising
sold.

We also have entered into e-commerce agreements with third parties who want
to offer compatible services to the users of our public Web sites. Recent
e-commerce offerings have included credit reports, research reports, and annual
report services. These contracts usually provide for us to receive a share of
the revenue the third party providers obtain from orders placed directly from
our Web sites.

KEY CONTENT DISTRIBUTION RELATIONSHIPS

In order to enhance our brand recognition and audience reach, we provide
selected EDGAR content to major portals including Yahoo!, Lycos and America
Online. For example, we provide the Yahoo! Finance Web site with headline
information about SEC filings, the extracted Management's Discussion and
Analysis section of Forms 10-K and 10-Q and financial fundamental data. In
return, EDGAR Online sites benefit from increased traffic and advertising
revenues, which occurs when users of these sites seek additional EDGAR-related
information.

MARKETING AND SALES

Historically, we have focused on building content distribution
relationships with major search engines and financially oriented and general
information Web sites to build our brand recognition. These co-branded
relationships and our well-known presence on the Internet have allowed us to
attract seat-based subscribers and corporate data and technical services
customers.

As of March 20, 2002, we have a staff of 14 professionals dedicated to
supporting our sales and marketing efforts. The exclusive focus of our sales
staff is to market our services to corporate customers. We believe that
corporate customers will continue to represent an important source of revenue
growth in the next few years, as we continue to introduce value-added search and
extraction products and customized fee-based services to corporate purchasers of
sophisticated financial information. We intend to continue to increase the
number of sales professionals dedicated to marketing our services exclusively to
corporate accounts.

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We promote our services through on-line advertising, direct mail, trade
shows and telemarketing. We also use free-trial offers on our Web sites to
encourage registered users and visitors to subscribe to our services and to
encourage existing subscribers to purchase additional value-added services.

PROPRIETARY DATA MINING SOFTWARE

Historically, we used database technology designed for us by iXL and were
reliant on iXL personnel for design and support of our hardware and software
systems. The acquisition of Financial Insight Systems (FIS) in October 2000 has
enabled us to bring development and maintenance of our technology in-house. The
acquisition of FIS also brought us additional proprietary database technology
related to the extraction of data from EDGAR filings and the creation, operation
and maintenance of applications services used by our clients. Our proprietary
technology integrates software that was developed exclusively for us with
software systems obtained commercially. The software developed exclusively for
us includes our database of EDGAR filings, Web-based customer interfaces, data
mining capabilities and customer support and billing systems. The software
systems obtained commercially include the Great Plains Accounting System, the
Verity Search Engine and NetOwl Extractor. The nature of our proprietary system
allows us to enhance our service offerings by rapidly integrating new technology
developed by third parties.

Over the last five years we have accumulated a large set of unique software
programs that enable us to perform the many complex data mining functions
necessary to deliver our services on a real-time and cost-effective basis to
both our Web and corporate customers. We believe these proprietary programs, and
the way we integrate them into a scalable system, give us a significant
advantage over any competitors who might attempt to match our speed and accuracy
in extracting data from the EDGAR database and delivering that data to a large
number of customers in a variety of formats.

INFRASTRUCTURE, OPERATIONS AND TECHNOLOGY

Our employees now perform all of our development programming, as well as
management of our Web sites. We own all the programs that run our Web sites,
including those developed in the past by iXL. The largest portion of our
development team is located in our Rockville, Maryland office. We also have
teams of development and IT professionals located in Owings Mill, Maryland and
Norwalk, Connecticut. The Web sites developed and maintained for some of our
largest corporate customers are hosted in our offices in Rockville using
predominately Microsoft NT Operating systems. The Rockville office also hosts
the services used to provide our flagship seat-based services and our
freeedgar.com Web site.

Our EDGAR Online and IPO Express Web sites are hosted at facilities located
at Globix Corporation in New York City. Globix maintains multiple Web servers
owned by us, which run Microsoft NT operating systems and use Microsoft Internet
Information Server. Our systems are maintained on a 24 hour-a-day, 7 days-a-week
basis by our own technicians with the exception of our networking communications
for our New York City servers which are managed by Globix.

All our systems, including our accounting system, user database, database
of EDGAR filings, and all proprietary software are backed up on a daily basis
and stored offsite. Our software and databases are replicated across multiple
servers, using the clustering facilities of Microsoft Windows NT Server,
Enterprise edition. This provides us with both resilience against hardware
failure and scalability to handle increases in traffic loads.

The flow of information in and out of our Web sites operates as follows:

- The live feed of EDGAR filings comes from the SEC's dissemination agent,
TRW, which sends this feed to Globix in New York City, and our office in
Rockville, Maryland via private high speed T-1 connections; and

- The raw EDGAR filings are processed independently by our proprietary
software, stored in databases in New York City, and Rockville, and posted
to our Web sites and distributed to third parties with which we have
distribution contracts via our production servers located at Globix's
facilities and at Rockville, Maryland.
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Our services are available to users 24 hours a day, 7 days a week. Customer
service is available weekdays 9:00 AM to 5:00 PM (ET). Inquiries come in through
our Web sites and via e-mail and telephone. As of March 20, 2002, we had 26
employees engaged in customer service and network support for our public Web
sites.

COMPETITION

The market for Internet information services and products is relatively
new, has no substantial barriers to entry and is intensely competitive and
rapidly changing. The number of Web sites competing for consumers' and
advertisers' attention and spending has proliferated, and we expect that
competition will continue to intensify. We currently compete, directly and
indirectly, for seat-based subscribers and data customers with vendors of
broadly-based financial information such as Bloomberg and Disclosure and with
Web-based providers of EDGAR information, such as 10KWizard.com and Global
Security Information's LIVEDGAR.

We also compete with other Web sites, television, radio and print media for
a share of advertisers' total advertising budgets. If advertisers perceive the
Internet in general or our Web sites in particular to be a limited or an
ineffective advertising medium, they may be reluctant to devote a portion of
their advertising budget to Internet advertising or to advertising on our Web
sites.

INTELLECTUAL PROPERTY

Our success depends significantly upon our proprietary technology. We
currently rely on a combination of copyright and trademark laws, trade secrets,
confidentiality procedures and contractual provisions to protect our proprietary
rights. All of our employees have executed confidentiality and non-use
agreements which provide that any rights they may have in copyrightable works or
patentable technologies belong to us. In addition, prior to entering into
discussions with third parties regarding our proprietary technologies, we
typically require that such parties enter into a confidentiality agreement. If
these discussions result in a license or other business relationship, we
typically also require that the agreement setting forth the parties' respective
rights and obligations include provisions for the protection of our intellectual
property rights.

The SEC has granted us a non-exclusive, royalty-free license to use the
name EDGAR in our logo and corporate name through 2009. We have applied for and
received from the U.S. Patent and Trademark Office certified registration for
our EDGAR Online trademark.

GOVERNMENT REGULATION

We are subject, both directly and indirectly, to various laws and
governmental regulations relating to our business. There are currently few laws
or regulations directly applicable to online services of the Internet. However,
due to the increasing popularity and use of commercial online services and the
Internet, it is possible that a number of laws and regulations relating to
commercial online services and the Internet may be adopted. Such laws and
regulations may cover issues such as user privacy, pricing and characteristics
and quality of products and services. Moreover, the applicability to commercial
online services and the Internet of existing laws governing issues such as
property ownership, libel and personal privacy is uncertain and could expose us
to substantial liability. Any such new legislation or regulation or the
application of existing laws and regulations to the Internet could have a
material adverse effect on our business, results of operations and financial
condition.

Tax authorities in a number of states are currently reviewing the
appropriate tax treatment of companies engaged in Internet commerce. New state
tax regulations may subject us to additional state sales and income taxes. As
our service is available over the Internet anywhere in the world, multiple
jurisdictions may claim that we are required to qualify to do business as a
foreign corporation in each such jurisdiction. The failure by us to qualify as a
foreign corporation in a jurisdiction where we are required to do so could
subject us to taxes and penalties for the failure to qualify. It is also
possible that state and foreign governments might attempt to regulate our
transmissions of content on our Web sites.

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EMPLOYEES

As of March 20, 2002, we had 99 full-time employees. We believe that we
have good relations with our employees.

CORPORATE HISTORY

We are a Delaware corporation and were formed in November 1995 under the
name Cybernet Data Systems, Inc. In January 1999, we changed our name to EDGAR
Online, Inc. Our executive offices are located at 50 Washington Street, Norwalk,
Connecticut 06854 and our telephone number is (203) 852-5666.

RISK FACTORS THAT MAY AFFECT OUR FUTURE RESULTS

The financial statements contained in pages F-1 to F-24 of this report and
the related discussion describe and analyze the Company's financial performance
and condition for the periods indicated. For the most part, this information is
historical. The Company's prior results, however, are not necessarily indicative
of the Company's future performance or financial condition. The Company
therefore has included the following discussion of certain factors which could
affect the Company's future performance or financial condition. These factors
could cause the Company's future performance or financial condition to differ
materially from its prior performance or financial condition or from
management's expectations or estimates of the Company's future performance or
financial condition. These factors, among others, should be considered in
assessing the Company's future prospects and prior to making an investment
decision with respect to the Company's stock.

OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO INCREASE REVENUES.

As a company in the new and rapidly evolving market for the delivery of
financial and business information over the Internet, we face numerous risks and
uncertainties in achieving increased revenues. We were incorporated in November
1995 and launched our EDGAR Online Web site in January 1996. During this period,
we have invested heavily in our proprietary technologies to enable us to carry
out our business plan. These expenditures, in advance of revenues, have resulted
in operating losses in each of the last three years. In order to be successful,
we must increase our revenues from the sale of our services to corporate
customers, individual subscription fees and advertising sales. In order to
increase our revenues, we must successfully:

- implement our marketing plan to (1) increase corporate sales, (2) attract
more individual online users to our services and (3) convert visitors to
paying subscribers;

- continue to improve our market position as a commercial provider of
information services based on EDGAR filings;

- maintain our current, and develop new, content distribution relationships
with popular Web sites and providers of business and financial
information;

- maintain our current, and continue to increase, advertising revenues by
increasing traffic to our Web sites and by increasing the number of
advertisers;

- respond effectively to competitive pressures from other Internet
providers of EDGAR content;

- continue to develop and upgrade our technology; and

- attract, retain and motivate qualified personnel with Internet experience
to serve in various capacities, including IT services, sales and
marketing positions.

If we are not successful in addressing these uncertainties through the
execution of our business strategy, our business, results of operations and
financial condition will be materially adversely affected.

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WE HAVE A HISTORY OF LOSSES AND CANNOT ASSURE THAT WE WILL ATTAIN PROFITABILITY.

As of December 31, 2001, we had an accumulated deficit of $30,935,000. We
incurred net losses of $2,221,000 for the year ended December 31, 1998,
$4,163,000 for the year ended December 31, 1999, $15,237,000 for the year ended
December 31, 2000 and $6,788,000 for the year ended December 31, 2001. In
addition, we expect to continue to incur significant operating costs and capital
expenditures. As a result, we will need to generate significant additional
revenues to achieve and maintain profitability. Even if we do achieve
profitability, we cannot assure you that we can sustain or increase
profitability on a quarterly or annual basis in the future. In addition, if
revenues grow slower than we anticipate, or if operating expenses exceed our
expectations or cannot be adjusted accordingly, our business, results of
operations and financial condition will be materially adversely affected. As a
result of these and other costs, we may incur operating losses in the future,
and we cannot assure you that we will attain profitability.

WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING.

We currently anticipate that our available cash resources combined with
cash generated from operations will be sufficient to meet our anticipated
working capital and capital expenditure requirements for at least the next 12
months. We may need to raise additional funds, however, to fund potential
acquisitions, more rapid expansion, to develop new or enhance existing services,
to fund payments due to note holders in connection with our acquisition of
Financial Insight Systems, Inc. (FIS) or to respond to competitive pressures. We
cannot assure you that additional financing will be available on terms favorable
to us, or at all. If adequate funds are not available or are not available on
acceptable terms, our ability to fund our expansion, take advantage of
unanticipated opportunities, develop or enhance services or products or
otherwise respond to competitive pressures would be significantly limited. Our
business, results of operations and financial condition could be materially
adversely affected by these financing limitations.

FUTURE ENHANCEMENTS TO THE SEC'S EDGAR SYSTEM MAY ERODE DEMAND FOR OUR SERVICES.

Our future success will depend on our ability to continue to provide
value-added services that distinguish our Web sites from the type of
EDGAR-information available from the SEC on its Web site. Through its Web site,
the SEC provides free access to EDGAR filings on a time-delayed basis of 24 to
72 hours. If the SEC, which has announced that it intends to modernize the EDGAR
system, were to make changes to its Web site such as providing (1) free
real-time access to EDGAR filings or (2) value-added services comparable to
those provided on our Web sites, our business, results of operations and
financial condition would be materially adversely affected.

Although the SEC recently initiated a non-exclusive pilot program to link
its sec.gov web site to our web site in order to provide users of the SEC web
site access to real time filings, there can be no assurance that the SEC will
continue this program (which is at the SEC's sole discretion) or the SEC will
not initiate similar programs with other commercial providers of EDGAR
information.

WE FACE INTENSE COMPETITION FROM OTHER PROVIDERS OF BUSINESS AND FINANCIAL
INFORMATION.

We compete with many providers of business and financial information,
including other Internet companies, for consumers' and advertisers' attention
and spending. Because our market poses no substantial barriers to entry, we
expect this competition to continue to intensify. The types of companies with
which we compete for users and advertisers include:

- traditional vendors of financial information, such as Disclosure;

- proprietary information services and Web sites targeted to business,
finance and investing needs, including those providing EDGAR content,
such as Bloomberg, and LIVEDGAR; and

- Web-based providers of free EDGAR information such as 10KWizard.com.

Our future success will depend on our ability to maintain and enhance our
market position by: (1) using technology to add value to raw EDGAR information,
(2) keeping our pricing models below those of our

9

competitors, (3) maintaining a strong corporate sales presence in the
marketplace and (4) signing high-traffic Web sites to distribution contracts.

Our potential commercial competitors include entities that currently
license our content, but which may elect to purchase a real-time EDGAR database
feed (called a Level I EDGAR feed) directly from the SEC and use it to create
value-added services, similar to services provided by us, for their own use or
for sale to others. This risk is particularly serious in light of the fact that
the cost of Level I feed has fallen significantly since we started our business.
The cost of the feed is now approximately $45,000 per year.

Many of our existing competitors, as well as a number of potential
competitors, have longer operating histories, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than we do. This may enable them to respond more quickly to new or
emerging technologies and changes in the types of services sought by users of
EDGAR-based information, or to devote greater resources to the development,
promotion and sale of their services than we can. These competitors and
potential competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to potential employees, subscribers and content distribution partners.
Our competitors may also develop services that are equal or superior to the
services offered by us or that achieve greater market acceptance than our
services. In addition, current and prospective competitors may establish
cooperative relationships among themselves or with third parties to improve
their ability to address the needs of our existing and prospective customers. If
these events occur, they could have a materially adverse effect on our revenue.
Increased competition could also result in price reductions, reduced margins or
loss of market share, any of which would adversely affect our business, results
of operations and financial condition.

OUR CONTRACTS WITH NASDAQ ACCOUNT FOR A SIGNIFICANT PERCENTAGE OF OUR NET
REVENUES.

For the year ended December 31, 2001, our contracts with Nasdaq accounted
for 38% of our net revenues. We expect that Nasdaq will continue to be a
significant client, but that sales to Nasdaq as a percentage of total revenues
will decline in future fiscal periods. Although we enjoy a satisfactory
relationship with Nasdaq, the loss of this client would have a material adverse
affect on our business, results of operations and financial conditions.

WE RISK BEING DELISTED FROM NASDAQ WHICH COULD REDUCE OUR ABILITY TO RAISE
FUNDS.

If our stock price were to drop below $1.00 per share and remain below
$1.00 share for an extended period of time, we would be in violation the
continued listing requirements of The Nasdaq Stock Market (Nasdaq) and we risk
the delisting of our shares from Nasdaq. Delisting from Nasdaq and inclusion of
our common stock on the OTC Bulletin Board or similar quotation system could
adversely affect the liquidity and price of our common stock and make it more
difficult for us to raise additional capital on favorable terms, if at all.

Even if the minimum per share bid price of our common stock is maintained,
the Company must also satisfy other listing requirements of the Nasdaq National
Market (NNM), such as maintaining equity of at least $10 million. Failure to
satisfy any of the maintenance requirements could result in our common stock
being delisted from the NNM. Although in that event we could apply to list our
shares with the Nasdaq SmallCap Market, its delisting from the NNM could
adversely affect the liquidity of our common stock. In addition, delisting from
the NNM might negatively impact the Company's reputation and, as a consequence,
its business.

THE PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE.

The market price of our common stock has been, and is likely to continue to
be, volatile, experiencing wide fluctuations. In recent years, the stock market
has experienced significant price and volume fluctuations that have particularly
affected the market prices of equity securities of many technology companies.
Some of these fluctuations appear to be unrelated or disproportionate to the
operating performance of such companies. Future market movements may materially
and adversely affect the market price of our common stock.
10

WE MAY NOT BE SUCCESSFUL IN INCREASING BRAND AWARENESS.

Our future success will depend, in part, on our ability to increase the
brand awareness of our Web-based customized corporate services. If our marketing
efforts are unsuccessful or if we cannot increase our brand awareness, our
business, financial condition and results of operations would be materially
adversely affected. In order to build our brand awareness, we must succeed in
our marketing efforts, provide high quality services and increase the number of
people who are aware of the services we offer. We have devoted significant funds
to expand our sales and marketing efforts as part of our brand-building efforts.
These efforts may not be successful.

WE MAY NOT BE SUCCESSFUL IN DEVELOPING NEW AND ENHANCED SERVICES AND FEATURES
FOR OUR WEB SITES.

Our market is characterized by rapidly changing technologies, evolving
industry standards, frequent new product and service introductions and changing
customer demands. To be successful, we must adapt to our rapidly changing market
by continually enhancing our existing services and adding new services to
address our customers' changing demands. We could incur substantial costs if we
need to modify our services or infrastructure to adapt to these changes. Our
business could be adversely affected if we were to incur significant costs
without generating related revenues or if we cannot adapt rapidly to these
changes.

Our business could also be adversely affected if we experience difficulties
in introducing new or enhanced services or if these services are not favorably
received by users. We may experience technical or other difficulties that could
delay or prevent us from introducing new or enhanced services. Furthermore,
after these services are introduced, we may discover errors in these services
which may require us to significantly modify our software or hardware
infrastructure to correct these errors.

WE ARE DEPENDENT ON THE CONTINUED GROWTH OF THE EMERGING MARKET FOR ONLINE
BUSINESS AND FINANCIAL INFORMATION.

The success of our business will depend on the growing use of the Internet
for the dissemination of business and financial information. The number of
individuals and institutions that use the Internet as a primary source of
business and financial information may not continue to grow. The market for the
distribution of business and financial information, including EDGAR-based
content, over the Internet has only recently begun to develop, is rapidly
evolving and is characterized by an increasing number of market entrants who
have introduced or developed electronic distribution services over the Internet
and private networks. As is typical of a rapidly evolving industry, demand and
market acceptance for new services are subject to a high level of uncertainty.

Because the market for our products and services is new and rapidly
evolving, it is difficult to predict with any certainty what the growth rate, if
any, and the ultimate size of this market will be. We cannot be certain that the
market for our services will continue to develop or that our services will ever
achieve a significant level of market acceptance. If the market fails to
continue to develop, develops more slowly than expected or becomes saturated
with competitors, or if our services do not achieve significant market
acceptance, or if pricing becomes subject to considerable competitive pressures,
our business, results of operations and financial condition would be materially
adversely affected.

MAINTAINING EXISTING AND ESTABLISHING NEW CONTENT DISTRIBUTION RELATIONSHIPS
WITH HIGH-TRAFFIC WEB SITES IS CRUCIAL TO OUR FUTURE SUCCESS.

Because our advertising revenues depend to a great extent on the traffic to
our Web sites, our business could be adversely affected if we do not maintain
our current, and establish additional, content distribution relationships on
commercially reasonable terms or if a significant number of our content
distribution relationships do not result in increased use of our Web sites. We
rely on establishing and maintaining content distribution relationships with
high-traffic Web sites for a significant portion of the traffic on our Web
sites. There is intense competition for placements on high-traffic Web sites,
and we may not be able to maintain our present contractual relationships or
enter into any additional relationships on commercially reasonable terms, if at
all. Even if we maintain our existing relationships or enter into new content
distribution relationships with
11

other Web sites, they themselves may not continue to attract significant numbers
of users. Therefore, our Web sites may not continue to receive significant
traffic or receive additional new users from these relationships.

OUR BUSINESS COULD BE ADVERSELY AFFECTED BY A DOWNTURN IN THE FINANCIAL SERVICES
INDUSTRY AND/OR THE BUSINESS ECONOMY IN GENERAL.

We are dependent upon the continued demand for the distribution of business
and financial information over the Internet, making our business susceptible to
a downturn in the financial services industry or the business economy in
general. For example, a decrease in the expenditures that corporations and
individuals are willing to make to purchase these types of information could
result in a decrease in the number of customers purchasing our information
services and subscribers utilizing our Web sites. This downturn could have a
material adverse effect on our business, results of operations and financial
condition.

SOME OF OUR CLIENTS MAY BE UNABLE TO RAISE ADDITIONAL CAPITAL NEEDED TO RETAIN
OUR SERVICE OR PAY US FOR SERVICES PERFORMED.

Some of our current and potential clients need to raise additional funds in
order to continue their business and operations as planned. We cannot be certain
that these companies will be able to obtain additional financing on favorable
terms or at all. As a result of their inability to raise additional financing,
some clients may be unable to pay us for services we have already provided them
or they may terminate our services earlier than planned, either of which could
have a material adverse effect on our business, financial condition and
operating results.

WE DEPEND ON DOUBLECLICK FOR ADVERTISING REVENUES.

We anticipate that our advertising revenues in any given period will
continue to depend to a significant extent upon our relationship with
DoubleClick, Inc., which has provided us with a full range of advertising
services for the last three years. DoubleClick's failure to enter into a
sufficient number of advertising contracts during a particular period could have
a material adverse effect on our business, financial condition and results of
operations. Historically, a limited number of customers, all represented by
DoubleClick, have accounted for a significant percentage of our paid advertising
revenues. For the year ended December 31, 2001, our DoubleClick-related paid
advertising revenue was 3% of our total net revenues.

Our existing agreement with DoubleClick can be canceled by either party on
90 days notice. In addition, this agreement does not prohibit DoubleClick from
selling the same type of service that we currently receive from them to Web
sites that compete with our Web sites. If DoubleClick is unable or unwilling to
provide these advertising services to us in the future, we would be required to
obtain them from another provider or perform them ourselves. We would likely
lose significant advertising revenues while we are in the process of replacing
DoubleClick's services.

WE FACE INTENSE COMPETITION FOR ADVERTISING REVENUES AND THE VIABILITY OF THE
INTERNET AS AN ADVERTISING MEDIUM IS UNCERTAIN.

We compete with both traditional advertising media, such as print, radio
and television, and other Web sites for a share of advertisers' total
advertising budgets. Advertising and e-commerce revenues represented 8% and 31%
of our total revenues for the years ended December 31, 2001 and December 31,
2000, respectively. If advertisers do not perceive the Internet to be an
effective advertising medium, companies like ours will be unable to compete
successfully with traditional media for advertising revenues. In addition, if we
are unable to generate sufficient traffic on our Web sites, we could potentially
lose advertising revenues to other Web sites that generate higher user traffic.
If advertising on the Web shrinks due to a general business downturn, this could
also cause us to lose advertising revenue. Because advertising sales make up a
significant component of our revenues, any of these developments could have a
significant adverse impact on our business, results of operations or financial
condition.

12

WE MAY NOT BE ABLE TO CREATE AND DEVELOP AN EFFECTIVE DIRECT SALES FORCE.

Because a significant component of our growth strategy relates to
increasing our revenues from sales of our corporate services, our business would
be adversely affected if we were unable to develop and maintain an effective
sales force to market our services to this customer group. Until mid-1999, we
had not employed any sales executives to sell our corporate services. Our sales
force now consists of 14 people. Ten of our sales people have been hired from
outside the company, six of these within the last twelve months. Our efforts to
build an effective sales force may not be successful.

WE MAY NOT BE ABLE TO SUCCESSFULLY MANAGE OUR GROWTH.

We have experienced, and with respect to certain segments of our business
are currently experiencing, a period of significant growth. If we are unable to
manage our growth effectively, our business will be adversely affected. This
growth has placed, and our anticipated future growth will continue to place, a
significant strain on our technical, financial and managerial resources. As part
of this growth, we may have to implement new operational and financial systems
and procedures and controls to expand, train and manage our employees,
especially in the areas of sales and product development.

WE FACE RISKS IN CONNECTION WITH OUR PRIOR ACQUISITIONS AND BUSINESS
COMBINATIONS THAT WE MAY CONSUMMATE.

We plan to continue to expand our operations and market presence by making
acquisitions, and entering into business combinations, investments, joint
ventures or other strategic alliances with other companies. These transactions
create risks such as:

- difficulty assimilating the operations, technology and personnel of the
combined companies;

- disruption of our ongoing business;

- problems retaining key technical and managerial personnel;

- expenses associated with amortization or impairment of goodwill and other
purchased intangible assets;

- additional operating losses and expenses of acquired businesses; and

- impairment of relationships with existing employees, customers and
business partners.

We may not succeed in addressing these risks. In addition, some of the
businesses we have acquired, and in the future may acquire, may continue to
incur operating losses.

WE DEPEND ON KEY PERSONNEL.

Our future success will depend to a significant extent on the continued
services of our senior management and other key personnel, particularly Susan
Strausberg, Chief Executive Officer, Marc Strausberg, Chairman, Tom Vos,
President and Chief Operating Officer, Greg Adams, Chief Financial Officer, Paul
Sappington, Chief Software Officer and Vice President and Jay Sears, Senior Vice
President, Strategy and Business Development, each of whom are parties to
written employment agreements. The loss of the services of these, or certain
other key employees, would likely have a material adverse effect on our
business. We do not maintain key person life insurance for any of our personnel.
Our future success will also depend on our continuing to attract, retain and
motivate other highly skilled employees. Competition for personnel in our
industry is intense. We may not be able to retain our key employees or attract,
assimilate or retain other highly qualified employees in the future. If we do
not succeed in attracting new personnel or retaining and motivating our current
personnel, our business will be adversely affected. In addition, the employment
agreements with our key employees contain restrictive covenants that restrict
their ability to compete against us or solicit our customers. These restrictive
covenants, or some portion of these restrictive covenants, may be deemed to be
against public policy and may not be fully enforceable. If these provisions are
not enforceable, these employees may be in a position to leave us and work for
our competitors or start their own competing businesses.

13

WE MAY NOT ADEQUATELY PERFORM CERTAIN ASPECTS OF OUR BUSINESS WHICH WERE
PREVIOUSLY PROVIDED BY THIRD PARTIES.

Until February 2001, we depended on third parties to develop and maintain
the software and hardware we use to operate a number of our Web sites. Prior to
this date, iXL Enterprises, Inc., an Internet strategy consulting company,
developed, maintained and upgraded our proprietary software, including those
features which enable users to locate and retrieve data, as well as one of our
databases of EDGAR filings, Web-based customer interfaces and customer support
and billing systems. Beginning in December 2000, we started to assume full
responsibility from iXL for the development and maintenance of our own software
and hardware configurations. As of the end of February 2001, we became come
solely responsible for these functions. If we are unable to perform these
services as well as iXL did previously, this could materially adversely affect
our business, results of operations and financial condition.

WE DEPEND ON THIRD PARTIES FOR IMPORTANT ASPECTS OF OUR BUSINESS OPERATIONS.

We have a hosting contract with Globix Corporation, a provider of Internet
services, pursuant to which Globix operates and maintains the Web servers owned
by us in their New York City data center. Our hosting contract with Globix
expires in July 2003. In March 2002, Globix announced that it had filed for
bankruptcy protection as part of its efforts to restructure its debt. To date,
Globix provision of services under our contract has not been affected, but this
could change unexpectedly in the future. If Globix were unable or unwilling to
provide these services, we would have to find a suitable replacement. Our
operations could be disrupted while we were in the process of finding a
replacement for Globix and the failure to find a suitable replacement or to
reach an agreement with an alternate provider on terms acceptable to us could
materially adversely affect our business, results of operations and financial
condition.

WE FACE A RISK OF SYSTEM FAILURE.

Our ability to provide EDGAR content on a real-time basis and
technology-based solutions to our corporate clients depends on the efficient and
uninterrupted operation of our computer and communications hardware and software
systems. Similarly, our ability to track, measure and report the delivery of
advertisements on our site depends on the efficient and uninterrupted operation
of a third-party system provided by DoubleClick. These systems and operations
are vulnerable to damage or interruption from human error, natural disasters,
telecommunication failures, break-ins, sabotage, computer viruses, intentional
acts of vandalism and similar events. Any system failure, including network,
software or hardware failure, that causes an interruption in our service or a
decrease in responsiveness of our Web sites could result in reduced traffic,
reduced revenue and harm to our reputation, brand and relations with
advertisers.

Our operations depend on Globix's ability to protect its and our systems in
its data center against damage from fire, power loss, water damage,
telecommunications failure, vandalism and similar unexpected adverse events.
Although Globix provides comprehensive facilities management services, including
human and technical monitoring of all production servers 24 hours-per-day, seven
days-per-week, Globix does not guarantee that our Internet access will be
uninterrupted, error-free or secure. Any disruption in the Internet access to
our Web sites provided by Globix could materially adversely affect our business,
results of operations and financial condition. Our insurance policies may not
adequately compensate us for any losses that we may incur because of any
failures in our system or interruptions in the delivery of our services. Our
business, results of operations and financial condition could be materially
adversely affected by any event, damage or failure that interrupts or delays our
operations.

THERE ARE RISKS OF INCREASED USERS STRAINING OUR SYSTEMS AND OTHER SYSTEM
MALFUNCTIONS.

In the past, our Web sites and the technology-based solutions we sell to
our corporate customers have experienced significant increases in traffic when
there have been important business or financial news stories and during the
seasonal periods of peak SEC filing activity. In addition, the number of users
of our information and technology-based solutions has continued to increase over
time and we are seeking to further increase the size of our user base and the
frequency with which they use our services. Therefore, our Web sites and

14

business solutions must accommodate an increasingly high volume of traffic and
deliver frequently updated information. Our Web sites and business solutions
have in the past, and may in the future, experience slower response times or
other problems for a variety of reasons, including hardware and communication
line capacity restraints and software failures. These strains on our system
could cause customer dissatisfaction and could discourage visitors from becoming
paying subscribers. We also depend on the Level I EDGAR feed we purchase in
order to provide SEC filings on a real-time basis. Our Web sites could
experience disruptions or interruptions in service due to the failure or delay
in the transmission or receipt of this information.

These types of occurrences could cause users to perceive our Web sites and
technology solutions as not functioning properly and cause them to use other
methods, including the SEC's Web site or services of our competitors, to obtain
EDGAR-based information and technology solutions.

WE LICENSE THE TERM EDGAR FROM THE SEC AND DEPEND ON OTHER INTELLECTUAL
PROPERTY.

Trademarks and other proprietary rights, principally our proprietary
database technology, are important to our success and our competitive position.
The SEC is the owner of a United States trademark registration covering the use
of the term EDGAR. We have obtained a non-exclusive, royalty-free license from
the SEC to use the term EDGAR in our trademarks, service marks and corporate
name. This license is due to expire in September 2009. Since we have built
significant brand recognition through the use of the term EDGAR in our service
offerings, company name and Web sites, our business, results of operations and
financial condition could be adversely affected if we were to lose the right to
use the term EDGAR in the conduct of our business.

We seek to protect our trademarks and other proprietary rights by entering
into confidentiality agreements with our employees, consultants and content
distribution partners, and attempting to control access to and distribution of
our proprietary information. Despite our efforts to protect our proprietary
rights from unauthorized use or disclosure, third parties may attempt to
disclose, obtain or use our proprietary information. The precautions we take may
not prevent this type of misappropriation. In addition, our proprietary rights
may not be viable or of value in the future since the validity, enforceability
and scope of protection of proprietary rights in Internet-related industries is
uncertain and still evolving.

Finally, third parties could claim that our database technology infringes
their proprietary rights. Although we have not been subjected to litigation
relating to these types of claims, such claims and any resultant litigation,
should it occur, could subject us to significant liability for damages and could
result in the invalidation of our proprietary rights. Even if we prevail, such
litigation could be time-consuming and expensive, and could result in the
diversion of our time and attention, any of which could materially adversely
affect our business, results of operations and financial condition. Any claims
or litigation could also result in limitations on our ability to use our
trademarks and other intellectual property unless we enter into license or
royalty agreements, which agreements may not be available on commercially
reasonable terms, if at all.

WE ARE DEPENDENT ON THE INTERNET INFRASTRUCTURE.

Our future success will depend, in significant part, upon the maintenance
of the various components of the Internet infrastructure, such as a reliable
backbone network with the necessary speed, data capacity and security, and the
timely development of enabling products, such as high-speed modems, which
provide reliable and timely Internet access and services. To the extent that the
Internet continues to experience increased numbers of users, frequency of use or
increased user bandwidth requirements, we cannot be sure that the Internet
infrastructure will continue to be able to support the demands placed on it or
that the performance or reliability of the Internet will not be adversely
affected. Furthermore, the Internet has experienced a variety of outages and
other delays as a result of damage to portions of its infrastructure or
otherwise, and such outages or delays could adversely affect our Web sites and
the Web sites of our co-branded partners, as well as the Internet service
providers and online service providers our customers use to access our services.
In addition, the Internet could lose its viability as a commercial medium due to
delays in the development or adoption of new standards and protocols that can
handle increased levels of activity. We cannot predict whether the
infrastructure and complementary products and services necessary to maintain the
Internet as a viable commercial medium will be developed or maintained.

15

WE ARE SUBJECT TO UNCERTAIN GOVERNMENT REGULATION AND OTHER LEGAL UNCERTAINTIES
RELATING TO THE INTERNET.

There are currently few laws or regulations that specifically regulate
communications or commerce on the Internet. Any new laws or regulations relating
to the Internet could adversely affect our business. In addition, current laws
and regulations may be applied and new laws and regulations may be adopted in
the future that address issues such as user privacy, pricing, taxation and the
characteristics and quality of products and services offered over the Internet.
For example, several telecommunications companies have petitioned the Federal
Communications Commission to regulate Internet service providers and online
service providers in a manner similar to long distance telephone carriers and to
impose access fees on these companies. This could increase the cost of
transmitting data over the Internet, which could increase our expenses and
discourage people from using the Internet to obtain business and financial
information. Moreover, it may take years to determine the extent to which
existing laws relating to issues such as property ownership, libel and personal
privacy are applicable to the Internet.

WE FACE WEB SECURITY CONCERNS THAT COULD HINDER INTERNET COMMERCE.

Any well-publicized compromise of Internet security could deter more people
from using the Internet or from using it to conduct transactions that involve
transmitting confidential information, such as stock trades or purchases of
goods or services. Because a portion of our revenue is based on individuals
using credit cards to purchase subscriptions over the Internet and a portion
from advertisers who seek to encourage people to use the Internet to purchase
goods or services, our business could be adversely affected by this type of
development. We may also incur significant costs to protect against the threat
of security breaches or to alleviate problems, including potential private and
governmental legal actions, caused by such breaches.

WE COULD FACE LIABILITY AND OTHER COSTS RELATING TO OUR STORAGE AND USE OF
PERSONAL INFORMATION ABOUT OUR USERS.

Our policy is not to willfully disclose any individually identifiable
information about any user to a third party without the user's consent. This
policy statement is available to users of our subscription services when they
initially register. We also alert and seek the consent of registered subscribers
and users to use some of the information that they provide to market them
additional services provided by EDGAR Online or third party providers. Despite
this policy and consent, however, if third persons were able to penetrate our
network security or otherwise misappropriate our users' personal or credit card
information, we could be subject to liability. These could include claims for
unauthorized purchases with credit card information, impersonation or other
similar fraud claims. They could also include claims for other misuses of
personal information such as for unauthorized marketing purposes. These claims
could result in litigation. In addition, the Federal Trade Commission and
several states have been investigating certain Internet companies regarding
their use of personal information. We could incur additional expenses if new
regulations regarding the use of personal information are introduced or if these
regulators chose to investigate our privacy practices.

WE MAY BE LIABLE FOR INFORMATION DISPLAYED ON OUR WEB SITES.

We may be subjected to claims for defamation, negligence, copyright or
trademark infringement, violation of the securities laws or other claims
relating to the information that we publish on our Web sites, which may
materially adversely affect our business. These types of claims have been
brought, sometimes successfully, against online services as well as other print
publications in the past. We could also be subjected to claims based upon the
content that is accessible from our Web sites through links to other Web sites.
Our general liability insurance may not cover these claims and may not be
adequate to protect us against all liabilities that may be imposed.

ITEM 2. PROPERTIES

Our principal executive offices are located in Norwalk, Connecticut, where
we lease 7,500 square feet of office space. The term of this lease expires June
2006.

16

We also lease approximately 4,900 square feet of office space at 122 East
42nd Street, New York, New York. This facility houses sales and administrative
personnel. The term of this lease expires April 2007.

We also lease an aggregate of approximately 7,200 square feet of office in
Linbrook Office Park located at 10628 NE 37th Circle and 10635 NE 38th Place,
Kirkland, Washington, pursuant to two separate lease agreements, which expire in
2003. These properties, which formerly housed FreeEDGAR, are being sublet
through the terms of the leases.

We also lease approximately 14,200 square feet of office space at 11200
Rockville Pike, Suite 310, Rockville, Maryland and approximately 2,900 square
feet of office space at 100 Painters Mill Road, Suite 208 Owings Mills,
Maryland. The term of these leases expire in October 2005 and March 2004,
respectively. The Company also leases approximately 4,835 square feet of office
space at 11200 Rockville Pike, Suite 340 on a month-to-month basis.
Collectively, these facilities house our FIS development and operations
personnel as well as the computer and communications equipment needed to operate
FIS.

We believe that, in general, our physical properties are well maintained,
in good operating condition and adequate for their intended purposes.

ITEM 3. LEGAL PROCEEDINGS

We are not party to any material legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to security holders through the solicitation of
proxies or otherwise during the fourth quarter of our fiscal year ended December
31, 2001.

17

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE FOR COMMON STOCK

Our common stock has been quoted on the Nasdaq National Market under the
symbol EDGR since our initial public offering on May 26, 1999. The following
table sets forth, for the periods indicated, the high and low sales prices per
share of common stock as reported on the Nasdaq National Market:

On March 20, 2002, the last reported sales price of the common stock on the
Nasdaq National Market was $2.65. As of March 20, 2002, there were approximately
122 holders of record of our common stock.

DIVIDEND POLICY

We have not declared or paid any cash dividends on our capital stock since
inception. We intend to retain any future earnings to finance the operation and
expansion of our business and do not anticipate paying any cash dividends in the
foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

Pursuant to the terms of an Amended and Restated Common Stock Purchase
Agreement (the "Stock Purchase Agreement"), we sold an aggregate of 2,000,000
unregistered shares of common stock, par value $0.01 ("Common Stock") to select
institutional investors at a purchase price of $2.50 per share, resulting in
gross proceeds of $5,000,000. The transaction was consummated as to 500,000
shares and $1,250,000 in proceeds on December 31, 2001 and 1,500,000 shares and
$3,750,000 in proceeds on January 8, 2002. Pursuant to this private financing,
the Company also issued the purchasers four-year warrants to purchase an
aggregate of 400,000 shares of Common Stock at an exercise price of $2.875 per
share. In connection with the transaction, the Company paid a transaction fee to
Atlas Capital Services, LLC equal to 4.625% of the gross proceeds and issued
Atlas a four-year warrant to purchase 40,000 shares of Common Stock at an
exercise price of $2.50 per share. The securities were sold pursuant to an
exemption provided in Section 4(2) of the Securities Act of 1933 on the basis
that the transaction did not involve a public offering.

18

ITEM 6. SELECTED FINANCIAL DATA

The selected data presented below for, and as of the end of, each of the
years in the five-year period ended December 31, 2001 are derived from our
audited consolidated financial statements. The financial statements for, and as
of the end of, each of the years in the three-year period ended December 31,
2001 have been audited by KPMG LLP, independent certified public accountants,
and those financial statements and the report thereon are included elsewhere in
this Form 10-K. The data set forth below should be read in connection with, and
are qualified by reference to, Management's Discussion and Analysis of Financial
Condition and Results of Operations and our financial statements and the related
notes included elsewhere in this Form 10-K.

19

- ---------------

(1) During the third quarter of 1999, development expenses were reclassified to
operating expenses from cost of revenues. In addition, during the first
quarter of 2000, the Company began recording certain advertising revenues
net of the related commissions and amounts previously recorded as stock
compensation expense have been reported within the functional expense
category for which the employee worked. Prior comparative amounts have been
reclassified to conform to the year 2000 presentation.

(2) During the third quarter of 2001, we recognized restructuring costs which
were primarily comprised of expenses associated with the shut down of the
Kirkland, WA office. These costs include severance payments, non-recoverable
lease liabilities, loss on fixed assets, and the cost of non-cancelable
service contracts for operating expenses such as phone lines and equipment
leases. Restructuring costs also include severance expenses for certain FIS
employees.

(3) During the fourth quarter of 2000, the Company performed a reassessment of
the recovery of the goodwill and other long-lived assets related to its
acquisition of Partes Corporation, owner of the FreeEDGAR.com Website and
its acquisition of certain of the assets of Individual Investor Group
including the Web site InsiderTrader.com and related user data. Based on
these reassessments, we recorded impairment charges of $6.0 million. We also
recorded an additional impairment charge of $117,000 as we discontinued the
use of the edgar.com URL.

(4) Diluted loss per share has not been presented separately, as the outstanding
stock options, warrants and convertible debenture are anti-dilutive for each
of the periods presented. Anti-dilutive securities outstanding were 413,956,
1,130,000, 1,302,758, 1,900,105 and 2,806,060 for the years ended December
31, 1997, 1998, 1999, 2000 and 2001 respectively.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The following discussion of our financial condition and results of
operations should be read together with our consolidated financial statements
and the related notes thereto. This discussion contains forward-looking
statements that involve risks and uncertainties. Our actual results may differ
materially from those anticipated in those forward-looking statements.

OVERVIEW

We are a provider of financial information derived from U.S. Securities and
Exchange Commission data and a developer of financial and business system
solutions. We sell to the corporate market and Internet portals as well as
running five destination Web sites. We were founded in November 1995 as Cybernet
Data Systems, Inc. In January 1999, we changed our corporate name to EDGAR
Online, Inc.

We derive revenues from four primary sources: contracts with corporate
customers for customized data, sale of our technical services to construct
and/or operate the technical systems our customers use to integrate our data and
data from other sources into their products and services, seat based
subscriptions to our Web site services and advertising and other e-commerce
based revenues. Revenue from data sales is recognized over the term of the
contract or, in the case of certain up-front fees, over the estimated customer
relationship period. Revenue from technical services is recognized in the period
services are rendered. Revenue from seat-based subscriptions is recognized
ratably over the subscription period, which is typically three or twelve months.
Advertising and e-commerce revenue is recognized as the services are provided.

Barter advertising revenue, which is included in advertising and e-commerce
revenue, is a non-cash item and relates to advertising placed on our Web sites
by other Internet companies in exchange for our advertising placed on their Web
sites. Barter expenses reflect the expense offset to barter revenue. The amount
of barter advertising revenue and expense is recorded at the fair market value
of the services received or provided, whichever is more objectively
determinable, in the month that banners are exchanged. We apply the provisions
of EITF 99-17, Accounting for Advertising Barter Transactions and, accordingly,
recognize barter revenues only to the extent that the Company has similar cash
transactions within a period not to exceed six months prior to the date of the
barter transaction.

We intend to increase our operating expenses to fund increased sales and
marketing, to enhance our corporate products and Web sites and to continue to
establish relationships critical to our success.

20

On October 30, 2000, the Company acquired all the outstanding equity of
Financial Insight Systems, Inc. (FIS), pursuant to the terms and conditions of
an Agreement and Plan of Merger dated October 18, 2000 for approximately $28.1
million. The purchase price included (1) the issuance of 2,450,000 restricted
shares of EDGAR Online common stock valued at approximately $9.6 million, (2)
the payment of $17,765,000 consisting of (i) a cash payment of $11,765,000 and
(ii) a series of two year 7.5% senior subordinated secured promissory notes in
the total principal amount of $6,000,000 and (3) approximately $0.8 million in
cash for the payment of fees and acquisition related expenses. The acquisition
was accounted for under the purchase method of accounting and accordingly the
estimated fair value of FIS' assets and liabilities and the operating results of
FIS from the effective date of the acquisition have been included in the
accompanying financial statements.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

Revenues

Revenues increased 75% to $17.1 million for the year ended December 31,
2001, from $9.7 million for the year ended December 31, 2000. The growth in
revenues is primarily attributable to a $2.0 million, or 60%, increase in data
sales to $5.4 million in 2001 from $3.4 million in 2000, a $5.7 million, or
503%, increase in technical services to $6.8 million in 2001 from $1.1 million
in 2000 and a $1.2 million, or 53%, increase in seat-based subscriptions to $3.4
million in 2001 from $2.2 million in 2000, offset by a $1.5 million, or 51%,
decrease in advertising and e-commerce revenues to $1.5 million in 2001 from
$3.0 million in 2000.

The $2.0 million increase in data sales is due to an increase in the number
of corporate contracts to 215 at December 31, 2001, from 152 at December 31,
2000. The addition of new products, such as fundamental data and institutional
holdings, as well as an increase in the number of salespeople also contributed
to the increase in new corporate contracts. Data sales represented 32% of
revenues for the year ended December 31, 2001, compared to 35% of revenues in
the prior year.

The $5.7 million increase in technical services resulted from new contracts
to provide these services which were assigned to us in connection with the FIS
acquisition effective November 1, 2000. Sales of our technical services were
fully reflected in the year ended December 31, 2001 as compared to only two
months in the prior year. Technical services represented 40% of revenues for the
year ended December 31, 2001, compared to 12% of revenues in the prior year.

The $1.2 million increase in seat-based subscriptions is due to the
increase in the number of seat-based contracts and from an increase in
individual accounts. The number of subscribers increased to approximately 23,500
as of December 31, 2001, from approximately 16,000 as of December 31, 2000.
Sales leads, which were primarily provided by the traffic to our Web sites and
our free to fee initiatives, contributed to the increase in new seats sold.
Seat-based subscriptions represented 20% of revenues for the year ended December
31, 2001, compared to 23% of revenues in the prior year.

The $1.5 million decrease in advertising and e-commerce revenues is
primarily due to the decrease in advertising rates and reflects the significant
decline in the online and overall advertising industry that has taken place in
the past year. Advertising and e-commerce represented 8% of revenues for the
year ended December 31, 2001, compared to 30% of revenues in the prior year.

Cost of Revenues

Cost of revenues consist primarily of fees paid to acquire the Level I
EDGAR database feed from the SEC, Web site maintenance charges, salaries and
benefits of certain employees, and the costs associated with our computer
equipment and communications lines used in conjunction with our Web sites. In
addition, for each period, online barter advertising expense is recorded equal
to the online barter advertising revenue for that period. Total cost of revenues
increased $1.4 million, or 47%, to $4.4 million for the year ended December 31,
2001, from $3.0 million for the year ended December 31, 2000. The $1.4 million
increase in cost of revenues is primarily attributable to the FIS acquisition
($2.5 million) offset by a decrease in software

21

and Web site maintenance, content feeds and communications lines. Gross margins
increased to 74% for the year ended December 31, 2001, from 69% for the year
ended December 31, 2000.

Operating Expenses

Sales and Marketing. Sales and marketing expenses consist primarily of
salaries and benefits, sales commissions, advertising expenses, public
relations, and costs of marketing materials. Sales and marketing expenses
decreased $2.2 million, or 48%, to $2.4 million for the year ended December 31,
2001, from $4.6 million for the year ended December 31, 2000. As a percentage of
revenues, sales and marketing expenses decreased to 14% for the year ended
December 31, 2001, from 47% for the year ended December 31, 2000. The $2.2
million decrease in sales and marketing expenses was due to a reduction in our
advertising spending and marketing campaign. The decrease in sales and marketing
expenses as a percentage of revenue is primarily due to the addition of revenue
from FIS which has a smaller percentage of revenue dedicated to sales and
marketing as compared to our existing business. We expect sales and marketing
expenses to increase as we continue to hire additional sales personnel.

Development. Development expenses decreased $229,000, or 10%, to $2.1
million for the year ended December 31, 2001 from $2.4 million for the year
ended December 31, 2000. As a percentage of revenues, development expenses
decreased to 13% for the year ended December 31, 2001, from 24% for the year
ended December 31, 2000. The $229,000 decrease in development expenses is due to
the closing of the Kirkland, WA office, as well as internalizing development
expenses previously outsourced. The decrease as a percentage of revenues is the
result of the addition of revenue from FIS which has a smaller percentage of
revenue dedicated to development as compared to our existing business.

General and Administrative. General and administrative expenses consist
primarily of salaries and benefits, fees for professional services, general
corporate expenses and facility expenses. General and administrative expenses
increased $2.1 million, or 33%, to $8.4 million for the year ended December 31,
2001, from $6.3 million for the year ended December 31, 2000. As a percentage of
revenues, general and administrative expenses decreased to 49% in the year ended
December 31, 2001, from 64% for the year ended December 31, 2000. The $2.1
million increase in general and administrative expenses was primarily due to the
FIS acquisition ($2.7 million) offset by a decrease in personnel, professional
service fees and general corporate expenses. The decrease in general and
administrative expenses as a percentage of revenue is due to the addition of FIS
revenue which has a smaller percentage of revenue dedicated to general and
administrative as compared to our existing business. We expect that general and
administrative expenses will continue to increase in future periods as we hire
additional personnel and incur additional costs related to the growth of our
business.

Depreciation and Amortization. Depreciation and amortization expenses
include the depreciation of property and equipment and the amortization of
goodwill and intangible assets. Depreciation and amortization increased $1.3
million, or 37%, to $4.8 million for the year ended December 31, 2001, from $3.5
for the year ended December 31, 2000. As a percentage of revenues, depreciation
and amortization decreased to 28% for the year ended December 31, 2001, from 36%
for the year ended December 31, 2000. The increase in depreciation and
amortization in dollar terms is due to the additional amortization expense
related to the FIS acquisition and the increase in property and equipment.

Loss on Investment. Loss on investment represents a one-time non-cash
charge associated with the write-off of an equity investment made in 2000 as we
have determined that the fair value of the investment is $0 due to historical
and projected declines in the operating results of the company in which the
investment was made. This investment was accounted for under the cost method.

Restructuring Costs. Restructuring costs are primarily comprised of
expenses associated with the shut down of the Kirkland, WA office. These costs
include severance payments, non-recoverable lease liabilities, loss on fixed
assets, and the cost of non-cancelable service contracts for operating expenses
such as phone lines and equipment leases. Restructuring costs also include
severance expenses for certain FIS employees.

22

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

Revenues

Revenues increased 106% to $9.7 million for the year ended December 31,
2000, from $4.7 million for the year ended December 31, 1999. The growth in
revenues is primarily attributable to a $2.3 million, or 204%, increase in data
sales to $3.4 million in 2000 from $1.1 million in 1999, a $791,000, or 55%,
increase in seat-based subscriptions to $2.2 million in 2000 from $1.4 million
in 1999, and a $826,000, or 38%, increase in advertising and e-commerce revenues
to $3.0 million in 2000 from $2.2 million in 1999, as well as the addition of
technical services revenues from contracts assigned to us in connection with the
FIS acquisition totaling $1.1 million in 2000.

The $2.3 million increase in data sales is due to an increase in the number
of contracts to 152 at December 31, 2000, from 94 at December 31, 1999. An
increase in the number of salespeople also contributed to the increase in new
corporate contracts. Data sales represented 35% of revenues for the year ended
December 2000, compared to 24% of revenues in the prior year.

The $791,000 increase in seat-based subscriptions is due to an increase in
the number of individual subscriptions to approximately 16,000 at December 31,
2000, from approximately 13,000 at December 31, 1999. Seat-based subscriptions
represented 23% of revenues for the year ended December 2001, compared to 30% of
revenues in the prior year.

The $826,000 increase in advertising and e-commerce revenues is primarily
due to the increase in the number of advertisers and ads delivered, as well as
an increase in barter revenues offset by a decrease in advertising rates.
Advertising and e-commerce represented 30% of revenues for the year ended
December 2001, compared to 46% of revenues in the prior year.

Cost of Revenues

Cost of revenues consist primarily of fees paid to acquire the Level I
EDGAR database feed from the SEC, Web site maintenance charges, salaries and
benefits of certain employees and the costs associated with our computer
equipment and communications lines used in conjunction with our Web sites. In
addition, for each period, online barter advertising expense is recorded equal
to the online barter advertising revenue for that period. Total cost of revenues
increased $1.5 million or 103% to $3.0 million for the year ended December 31,
2000, from $1.5 million for the year ended December 31, 1999. The increase in
cost of revenues is primarily attributable to the FIS acquisition and increases
in software and Web site maintenance, billed employees and communications lines
needed to handle increased traffic. Gross margins were consistent at 69% for the
year ended December 31, 2000 and for the year ended December 31, 1999.

Operating Expenses

Selling and Marketing. Sales and marketing expenses consist primarily of
salaries and benefits, sales commissions, advertising expenses, public
relations, and costs of marketing materials. Sales and marketing expenses
increased $2.3 million or 97% to $4.6 million for the year ended December 31,
2000 from $2.3 million for the year ended December 31, 1999. As a percentage of
revenues, sales and marketing expenses decreased to 47% for year ended December
31, 2000 from 49% for the year ended December 31, 1999. The increase in sales
and marketing expenses in dollar terms was due to an expansion of our sales
force and increased marketing activities.

Development. Development expenses increased $1.5 million or 182% to $2.4
million for the year ended December 31, 2000 from $842,000 for the year ended
December 31, 1999. As a percentage of revenues, development expenses increased
to 24% for the year ended December 31, 2000 from 18% for the year ended December
31, 1999. The increase in development is primarily due to the expansion of
content on our web site and the development of corporate products.

General and Administrative. General and administrative expenses consist
primarily of salaries and benefits, fees for professional services, general
corporate expenses and facility expenses. General and

23

administrative expenses increased $2.2 million or 53% to $6.3 million for the
year ended December 31, 2000 from $4.1 million for the year ended December 31,
1999. As a percentage of revenues, general and administrative expenses decreased
to 64% for the year ended December 31, 2000 from 87% for the year ended December
31, 1999. The increase in general and administrative expenses in dollar terms
was primarily due to increased personnel, professional service fees and general
corporate expenses necessary to support our growth. We expect that general and
administrative expenses will continue to increase in future periods as we hire
additional personnel and incur additional costs related to the growth or our
business and our operations as a public company.

Depreciation and Amortization. Depreciation and amortization expenses
include the depreciation of property and equipment and the amortization of
intangible assets. Depreciation and amortization increased $2.6 million or 290%
to $3.5 million for the year ended December 31, 2000 from $894,000 for the year
ended December 31, 1999. As a percentage of revenues, depreciation and
amortization increased to 36% for the year ended December 31, 2000 from 19% for
the year ended December 31, 1999. The increase is due to the additional
amortization expense related to the Partes and FIS acquisitions and the increase
in property and equipment.

During the fourth quarter of 2000, the Company performed a reassessment of
the recovery of the goodwill and other long-lived assets related to its
acquisition of Partes Corporation, owner of the FreeEDGAR.com Website. The
revaluation was triggered by the continued decline in Internet advertising
throughout 2000, which significantly impacted current and projected advertising
revenue generated from the FreeEDGAR Web site. Based on revised projections of
Partes Corporation's revenues and costs, the Company determined that the
undiscounted cash flows from the operation of the FreeEDGAR Web site, including
its estimated terminal value, were less than the remaining book value of
recorded goodwill and other long-lived assets and an other than temporary
impairment had occurred. The Company measured the amount of the impairment by
comparing the anticipated future discounted cash flow from the operation of the
FreeEDGAR Web site and terminal value to the remaining book value of recorded
goodwill and other long-lived assets and recorded an impairment charge of
$5,673,000. The methodology used to test for and measure the amount of the
impairment charge was based on the same methodology used during the Company's
initial valuation of Partes Corporation in 1999.

Also during the fourth quarter of 2000, the Company performed a
reassessment of the recovery of the goodwill and other long-lived assets related
to its acquisition of certain of the assets of Individual Investor Group
including the Web site InsiderTrader.com and related user data. The revaluation
was triggered by the lower than anticipated assimilation of historical users of
the acquired Web site which limited the future revenue potential to be generated
from the assets acquired. Based on revised projections of InsiderTrader.com's
revenues and costs, the Company determined that the undiscounted cash flows from
the operation of the InsiderTrader.com Web site and other assets were less than
the remaining book value of recorded goodwill and other long-lived assets and an
other than temporary impairment had occurred. The Company measured the amount of
the impairment by comparing the anticipated future discounted cash flow from the
operation of the InsiderTrader.com Web site to the remaining book value of
recorded goodwill and other long-lived assets and recorded an impairment charge
of $362,000. The methodology used to test for and measure the amount of the
impairment charge was based on the same methodology used during the Company's
initial acquisition valuation of InsiderTrader.com in 2000.

Lastly, during the fourth quarter of 2000, the Company discontinued the use
of the edgar.com URL which it acquired in 1999 for $150,000, and recorded an
impairment charge for the unamortized book value of $117,000.

SELECTED QUARTERLY REVENUE RESULTS

The following table sets forth unaudited revenue results for each of our
last eight fiscal quarters. In the opinion of management, this unaudited
quarterly information has been prepared on a basis consistent with our audited
consolidated financial statements and includes all adjustments (consisting of
normal and recurring adjustments) that management considers necessary for a fair
presentation of the data. These quarterly revenue

24

results are not necessarily indicative of future quarterly patterns or revenue
results. This information should be read in conjunction with our financial
statements and the related notes included elsewhere in this Form 10-K. Revenue
for the first three quarters of 2000 have been restated by reducing data sales
by $97,242, $123,735 and $169,635, respectively, as compared to amounts
previously reflected in the Company's Form 10-Q's to reflect the retroactive
application of SAB 101 as of January 1, 2000. The deferral relates to revenue
associated with certain up-front fees charged to customers to build customized
applications to access information contained in the Company's databases. At
December 31, 2001, the aggregate amount deferred is $26,389 and will be
recognized over the future estimated life of the customer relationship. The
impact of the change for the first three quarters of 2000 is to increase the net
loss by $97,242, $123,735 and $169,635, respectively. The impact of the
restatement was to increase basic and diluted net loss per share for the first
three quarters of 2000 by $(0.01), $(0.01), and $(0.01), respectively. There
were no such arrangements prior to 2000 and accordingly, there is no cumulative
effect adjustment for prior periods.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by (used in) operating activities was $64,485 and
($6,990,024) for the years ended December 31, 2001 and 2000, respectively. We
have historically financed these activities through private debt placements and
the sale of equity instruments to investors. As a result of our acquisition of
FIS, our continued focus on growing our corporate customer base, and recent
expense reductions, we expect to increase cash provided by operations and
continue to be cash flow positive throughout 2002, although no assurance can be
given in this regard.

Capital expenditures, primarily for computers, office and communications
equipment, totaled $598,832 for the year ended December 31, 2001 and $1,443,828
for the year ended December 31, 2000. The purchases were required to support our
expansion and increased infrastructure.

In December 2001 and January 2002, we consummated a private sale of common
stock and warrants to certain institutional investors. Pursuant to these
transactions, we sold an aggregate of 2,000,000 shares of Common Stock, at a
purchase price of $2.50 per share, along with four-year warrants to purchase an
aggregate of 400,000 shares of Common Stock at an exercise price of $2.875 per
share resulting in gross proceeds of $5,000,000.

At December 31, 2001, we had cash and cash equivalents on hand of
$3,460,515. We raised an additional $3.8 million in January 2002. We believe
that our existing capital resources and cash generated from operations will be
sufficient to meet our anticipated cash needs for working capital and capital
expenditures for at least the next 12 months. Thereafter, if cash generated from
operations is insufficient to satisfy our liquidity requirements, we may need to
raise additional funds through public or private financings, strategic
relationships or other arrangements. There can be no assurance that such
additional funding, if needed, will be available on terms attractive to us, or
at all. The failure to raise capital when needed could materially adversely
affect our business, results of operations and financial condition. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of our then-current stockholders would be reduced.

25

In connection with our acquisition of FIS, we issued $6,000,000 in
promissory notes to the former owners of FIS ("FIS Notes"). The FIS Notes were
originally scheduled to mature on October 27, 2002. In March 2002, we concluded
negotiations to extend the maturity date of the FIS Notes. Based on these
negotiations, holders of $5,700,000 in principal amount of FIS Notes agreed to
amend and restate their notes to provide for, among other things, the following
schedule of principal payments: $1,900,000 on April 1, 2002, $1,900,000 on April
1, 2003 and $1,900,000 on January 2, 2004. If cash generated from operations is
insufficient to satisfy these revised debt repayment terms, we may need to raise
additional funds through public or private financings, strategic relationships
or other arrangements. There can be no assurance that such additional funding,
if needed, will be available on terms attractive to us, or at all. The failure
to raise capital when needed could materially adversely effect our business,
results of operations and financial condition. If additional funds are raised
through the issuance of equity securities, the percentage ownership of our
then-current stockholders would be reduced. Our future contractual obligations
at December 31, 2001 were as follows:

The Company intends to fund these obligations from its cash on hand at
December 31, 2001, as well as through future operating cash flows and our
private placement completed in January 2002.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of
operations is based upon our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. Actual
results may vary from these estimates under different assumptions or conditions.
On an on-going basis, we evaluate our estimates, including those related to the
allowance for doubtful accounts, estimated useful lives of intangible assets and
the determination of restructuring obligations. We base our estimates on
historical experience, business practices and corporate policies, contractual
provisions and various other assumptions that are believed to be reasonable
under the circumstances.

We believe the following critical accounting policies affect our
significant judgments and estimates used in the preparation of our financial
statements. We maintain an allowance for doubtful accounts for estimated losses
resulting from the inability of customers to make payments and for sales
allowances. If the financial conditions of our customers deteriorate or there
are specific factors resulting from the specific type of product or customer
class inability to make payments, additional allowances will be required. We
recognized restructuring obligations for involuntary termination benefits, which
resulted from actions which were implemented during the year ended December 31,
2001. The severance benefits associated with the individuals was based on the
employees terminated, or expected to be terminated, and the estimated severance
benefits which we are obligated to pay based on corporate policy. If certain
employees are not involuntarily terminated, or severance amounts are modified,
adjustments to the established restructuring obligation may be required. We
recognized facility closing costs equal to the gross obligations payable under
existing contractual terms from the closing of our Kirkland, WA office in August
2001. If the Company is unable to realize the expected sublease income from the
existing sublease arrangement, the net accrued facility closing costs may
require adjustment. We establish the estimated useful lives of our intangible
assets based on a number of factors, which is in part based on our assessments
of the technology and customer relationships acquired. If these estimates
change, the estimated useful lives of our intangibles may require adjustment. We
have reduced our deferred tax assets to an amount that we believe is more likely
than not to be realized. In so doing, we have estimated future taxable losses in
determining the valuation allowance.

26

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

INTEREST RATE FLUCTUATIONS

We are exposed to market risk primarily through our investments in
available-for-sale investments. Our policy calls for investment in short-term,
low risk investments. As of December 31, 2001, we had no available-for-sale
investments and as a result, any decrease in interest rates would not have a
material effect on our financial statements.

CURRENCY RATE FLUCTUATIONS

Our results of operations, financial position and cash flows are not
materially affected by changes in the relative values of non-U.S. currencies to
the U.S. dollar. We do not use derivative financial instruments to limit our
foreign currency risk exposure.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements required by this Item 8 are set forth in Item 14
of this Form 10-K. All information which has been omitted is either inapplicable
or not required.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

During fiscal year 2001 there were no changes in or disagreements with our
independent accountant on accounting or financial disclosure.

27

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

As of March 21, 2002, the directors and executive officers of EDGAR Online,
Inc. were as follows:

- ---------------

(1) Member of the Outside Directors Compensation Committee.

(2) Member of the Compensation Committee.

(3) Member of the Audit Committee.

Susan Strausberg, a co-founder of EDGAR Online, has served as a member of
the Board of Directors, Chief Executive Officer and Secretary since EDGAR Online
was formed in November 1995. From December 1994 until the formation of EDGAR
Online, Ms. Strausberg was a consultant to Internet Financial Network. Ms.
Strausberg served on the Board of Directors of RKO Pictures from December 1998
to May 2001. Ms. Strausberg, the wife of Mr. Strausberg, EDGAR Online's
Chairman, holds a B.A. degree from Sarah Lawrence College.

Marc Strausberg, a co-founder of EDGAR Online, has served as Chairman of
the Board of Directors and President since EDGAR Online was formed in November
1995. Mr. Strausberg resigned as President upon the election of Tom Vos to this
position in March 1999. In December 1994, Mr. Strausberg co-founded Internet
Financial Network, an EDGAR based financial information vendor and served as
IFN's co-chairman until founding EDGAR Online. From 1992 to 1994, Mr. Strausberg
was the publisher of the Livermore Report, a newsletter that focused on the
valuation of initial public offerings. From August 1987 to December 1994, Mr.
Strausberg served as Chairman and President of Sindex Inc., which provided
computer-based trading systems to hedge funds and brokerage firms. Mr.
Strausberg, the husband of Ms. Strausberg, EDGAR Online's Chief Executive
Officer, holds a B.A. degree from Muhlenberg College.

Tom Vos joined EDGAR Online as a Director in August 1996 and was elected
Chief Operating Officer in March 1998. Mr. Vos was elected President in March
1999. From September 1986 until March 1998, Mr. Vos was Vice President of
Marketing at Bowne & Co., Inc ("Bowne"). In that capacity, Mr. Vos was
responsible for strategic planning, acquisitions and new product development.
While at Bowne, Mr. Vos was also responsible for advertising and public
relations and for the development of both Bowne's Web site and its EDGAR
services department. Mr. Vos holds a B.S. degree in Physics from Notre Dame
University, an M.S. degree in Electrical Engineering from Ohio State University
and an M.B.A. degree from Pace University.

Greg D. Adams joined EDGAR Online as Chief Financial Officer in March 1999.
Mr. Adams is a Certified Public Accountant with diversified business experience
in both the public and private sectors. Prior to joining EDGAR Online, Mr. Adams
served as Senior Vice President -- Finance and Administration of PRT Group Inc.,
a technology solutions and services company. From 1994 to 1996, Mr. Adams was
the Chief Financial Officer of the Blenheim Group Inc., a publicly held UK
information technology exposition and conference management company. Prior to
that, Mr. Adams worked for 11 years as an accountant with KPMG Peat Marwick. He
is a member of the New York State Society of Certified Public Accountants and
28

the American Institute of Certified Public Accountants. Mr. Adams holds a B.B.A.
degree in Accounting from the College of William & Mary.

Albert E. Girod joined EDGAR Online as a Director, Chief Technology Officer
and Executive Vice President following EDGAR Online's acquisition of Financial
Insight Systems, Inc. ("FIS") in October 2000. Mr. Girod served in these
capacities until his resignation as Chief Technology Officer and Executive Vice
President on March 21, 2002. Mr. Girod continues to serve as a Director. Mr.
Girod founded FIS in 1995 and served as President and Chief Executive Officer
from 1995 until October 2000. Mr. Girod also served as Chief Executive Officer
(1992-1995) and Vice President (1982-1992) of CDA Investment Technologies, Inc.,
a provider of computer related financial services to the institutional
community. From 1976 until 1982, Mr. Girod served as Vice President of Product
Development for SEI Corporation, a provider of automated trust accounting and
banking services and a registered investment advisor. Mr. Girod holds a B.S.
degree from Villanova University.

Paul Sappington joined EDGAR Online as Vice President following EDGAR
Online's acquisition of FIS in October 2000 and was named Chief Software Officer
of EDGAR Online in August 2001. Mr. Sappington joined FIS in 1999 and served as
Senior Project Manger from 1999 until October 2000. Mr. Sappington also served
as Project Manger (1997-1999), Manager of Software Development (1992-1997) and
Senior Software Engineer (1987-1992) of the Research division of Thomson
Financial (formally CDA Investment Technologies Inc.), a provider of computer
related financial services to the institutional community. Mr. Sappington holds
a B.S. degree from Bridgewater College.

Jay Sears joined EDGAR Online as Vice President of Marketing Business and
Development in May 1997. He is currently Senior Vice President of Business
Strategy and Development for EDGAR Online. From September 1995 to April 1997,
Mr. Sears was Vice President of Marketing for Wolff Media, a publisher of
Internet and printed guides to the Internet. From July 1991 to August 1995, Mr.
Sears was a Senior Account Supervisor at Creamer Dickson Basford, an
international marketing, communications and public relations firm. Mr. Sears
holds B.A. degree from Kenyon College.

Bruce Bezpa joined EDGAR Online as a member of the Board of Directors in
March 1999. Mr. Bezpa is currently Vice President of Marketing for Command
Financial Press, a leading financial printer. Prior to joining Command in
October of 2001, Mr. Bezpa provided consulting services with a focus on
strategic development and helping companies create value. Previously, he had
worked for Bowne & Co., Inc., a New York based financial printer for 15 years in
various capacities including as Vice President of Strategic Development from
July 1996 to October 1999, Director of Mutual Funds Services from August 1994 to
June 1996 and Director of Marketing from April 1989 to July 1994. Mr. Bezpa
holds B.A. and M.B.A. degrees from Rutgers University.

Stefan Chopin joined EDGAR Online as a member of the Board of Directors in
1996. He is currently a technology consultant to Hudson Ventures, a New York
based venture capital firm that focuses on operating and growing technology
companies. Previously, Mr. Chopin was the Senior Vice President of Technology
for iXL Enterprises, Inc., an e-business solutions provider. Prior to joining
iXL in 1998, Mr. Chopin was the founder and President of Pequot Systems, a
software development and consulting firm. In October 1998, Pequot was acquired
by iXL Enterprises, Inc. which formed the basis of the iXL Financial Services
Industry Practices. Prior to founding Pequot Systems in November 1995, Mr.
Chopin served as the Vice President of Engineering for Micrognosis, Inc., a
leading provider of trading room systems.

Mark Maged joined EDGAR Online as a member of the Board of Directors in
March 1999. Since 1992, Mr. Maged, either individually or as Chairman of MJM
Associates, LLC, has engaged in various private investment banking activities in
the United States and internationally. From September 1995 through May 2000, he
was chairman of Internet Tradeline, Inc. From 1975 through 1983, he served as
President and Chief Executive Officer of Schroder's Incorporated, which operated
banking, investment banking and investment management businesses as the United
States arm of Schroders PLC, an international merchant bank. He is currently a
member of the Boards of Directors of Commodore Holdings Limited.

29

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act generally requires the Company's
executive officers and directors, and persons who own more than ten percent of
the Company's Common Stock, to file reports of beneficial ownership and changes
in beneficial ownership with the SEC. The Company became subject to the
requirements of Section 16(a) on May 26, 1999. Regulations promulgated by the
SEC require the Company to disclose in this Form 10-K any reporting violations
with respect to the 2001 fiscal year which came to the Company's attention based
on a review of the applicable filings required by the SEC to report the status
of an officer or director, or such changes in beneficial ownership as submitted
to the Company. Based solely on review of such forms received by the Company,
Marc Strausberg, Susan Strausberg and TheBean LLC have made late filings under
Section 16(a) during the 2001 fiscal year as follows. Mr. Strausberg, Ms.
Strausberg and TheBean LLC filed Form 4's on October 15, 2001, to report
seven(7) purchase transactions relating to the Company's Common Stock that were
consummated in September 2001 by Mr. Strausberg. These transactions were
required to be reported by Mr. Strausberg, as a direct beneficial owner of such
shares, and Ms. Strausberg and TheBean LLC, as indirect beneficial owners, on
Form 4's by October 10, 2001. This statement is based solely on a review of the
copies of such reports furnished to the Company by its officers, directors and
security holders and their written representations that such reports accurately
reflect all reportable transactions and holdings.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued for
the fiscal years ended December 31, 2001 and 2000 by our Chief Executive Officer
and our six most highly compensated executive officers (other than our Chief
Executive Officer) (collectively, the Named Executive Officers).

SUMMARY COMPENSATION TABLE

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(1) Mr. Girod joined EDGAR Online as Executive Vice President and Chief
Technology Officer on October 30, 2000 at a salary of $150,000 per annum.
Mr. Girod resigned from these positions effective March 21, 2002.

30

(2) Mr. Sappington joined EDGAR Online as Chief Software Officer and Vice
President on October 30, 2000 at a salary of $140,000 per annum.

(3) These bonuses have been awarded as deferred compensation.

(4) Mr. Adams joined EDGAR Online as Chief Financial Officer in May 1999 at the
salary rate of $125,000 per annum.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information regarding stock options
granted to the Named Executive Officers during 2001. We have never granted any
stock appreciation rights.

- ---------------

(1) Each option represents the right to purchase one share of common stock. The
options shown in this table were all granted under our 1999 Stock Option
Plan, as amended.

(2) In the year ended December 31, 2001, we granted options to employees to
purchase an aggregate of 1,016,050 shares of common stock.

(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are mandated
by the rules of the SEC and do not represent our estimate or projection of
future common stock price growth. These amounts represent certain assumed
rates of appreciation in the value of our common stock from the fair market
value on the date of grant. Actual gains, if any, on stock option exercises
are dependent on the future performance of the common stock and overall
stock market conditions. The amounts reflected in the table may not
necessarily be achieved.

31

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

The following table sets forth information concerning the exercise of stock
options during the fiscal year ended December 31, 2001 by each of the Named
Executive Officers and the fiscal year-end value of unexercised options. No
options were exercised by any of the Named Executive Officers during this
period.

- ---------------

(1) The fair market value of the common stock as of December 31, 2001 was $3.10.

EMPLOYMENT AGREEMENTS

We entered into a five-year amended and restated employment agreement dated
as of May 6, 1999 with Susan Strausberg. The agreement extends automatically for
an additional year at the end of the initial term and each anniversary
thereafter unless 30-day prior notice of termination is provided by either Ms.
Strausberg or EDGAR Online. The agreement provides for an annual salary of
$150,000, and an annual bonus at the discretion of the Board. In the event there
is a change of control (as defined in the agreement) and Ms. Strausberg's
employment is terminated (either by her or the employer) within one year
thereafter, Ms. Strausberg will receive a severance benefit equal to the product
of 2.99 times the sum of (1) her then applicable annual base salary and (2) the
average of her last two annual cash bonuses. Additionally, the agreement
contains non-compete and non-solicitation provisions effective during the term
of her employment and for one year thereafter.

We entered into a five-year amended and restated employment agreement dated
as of May 6, 1999 with Marc Strausberg. The agreement extends automatically for
an additional year at the end of the initial term and each anniversary
thereafter unless 30-day prior notice of termination is provided by either Mr.
Strausberg or EDGAR Online. The agreement provides for an annual salary of
$150,000, and an annual bonus at the discretion of the Board. In the event there
is a change of control (as defined in the agreement) and Mr. Strausberg's
employment is terminated (either by him or the employer) within one year
thereafter, Mr. Strausberg will receive a severance benefit equal to the product
of 2.99 times the sum of (1) his then applicable annual base salary and (2) the
average of his last two annual cash bonuses. Additionally, the agreement
contains non-compete and non-solicitation provisions effective during the term
of his employment and for one year thereafter.

We entered into a five-year amended and restated employment agreement dated
June 29, 2001 with Tom Vos to serve as President and Chief Operating Officer.
The agreement extends automatically for an additional year at the end of the
initial term and each anniversary thereafter unless 30-day prior notice of
termination is provided by either Mr. Vos or EDGAR Online. The agreement
provides Mr. Vos with an annual salary of $150,000 and an annual bonus at the
discretion of the Board. In the event there is a change of control (as defined
in the agreement) and Mr. Vos' employment is terminated (either by him or the
employer) within one year thereafter, Mr. Vos will receive a severance benefit
equal to the product of 2.99 times the sum of (1) his then applicable annual
base salary and (2) the average of his last two annual cash bonuses.
Additionally, the agreement contains non-compete and non-solicitation provisions
effective during the term of his employment and for one year thereafter.

32

We entered into a three-year amended and restated employment agreement
dated February 1, 2002 with Greg Adams to serve as Chief Financial Officer. The
agreement extends automatically for an additional year at the end of the initial
term and each anniversary thereafter unless 30-day prior notice of termination
is provided by either Mr. Adams or EDGAR Online. The agreement provides Mr.
Adams with an annual salary of $150,000, and an annual bonus at the discretion
of the Board. In the event there is a change of control (as defined in the
agreement) and Mr. Adams's employment is terminated (either by him or the
employer) within one year thereafter, Mr. Adams will receive a severance benefit
equal to the product of 2.99 times the sum of (1) his then applicable annual
base salary and (2) the average of his last two annual cash bonuses.
Additionally, the agreement contains non-compete and non-solicitation provisions
effective during the term of his employment and for one year thereafter.

We entered into a two-year employment agreement dated as of October 1, 2000
with Albert E. Girod. The agreement provides for an annual salary of $150,000,
and an annual bonus at the discretion of the Board. In the event there is a
change of control (as defined in the agreement) and Mr. Girod's employment is
terminated (either by him or the employer) within one year thereafter, Mr. Girod
will receive a severance benefit equal to the product of 2.00 times the sum of
(1) his then applicable annual base salary and (2) the average of his last two
annual cash bonuses. Additionally, the agreement contains non-compete and non-
solicitation provisions effective during the term of his employment and for one
year thereafter. In March 2002, the Company, FIS and Mr. Girod entered into an
amendment to his employment agreement pursuant to which Mr. Girod's full-time
employment with the Company will terminate as of the close of business on March
30, 2002. In addition, Mr. Girod resigned from all of his executive officer
positions with the Company and FIS effective March 21, 2002. Mr. Girod will
continue as an employee of the Company and will devote one (1) day per week (at
the offices of FIS) during the period commencing April 1, 2002 and ending on
October 5, 2002 (the "Transition Period") in furtherance of the business affairs
of the Company. Additionally, during the Transition Period, Mr. Girod has agreed
to make himself available to the Company on a reasonable as-needed basis. Mr.
Girod will continue to receive his present salary and benefits throughout the
Transition Period, except the last week ending on October 5, 2002 when he will
be paid for only one day of such week.

We entered into a three-year amended and restated employment agreement
dated April 13, 2001 with Jay Sears. The agreement provides Mr. Sears with an
annual salary of $135,000 and an annual bonus at the discretion of the Board. If
Mr. Sears' employment is terminated without cause, or in the event of a change
of control (as defined in the agreement) we will pay him eighteen months of his
total annual compensation. Additionally, the agreement contains non-compete and
non-solicitation provisions effective during the term of his employment and for
six months thereafter in the case of the non-compete provision and one year
thereafter in the case of the non-solicitation provision.

We entered into a three-year amended and restated employment agreement
dated August 1, 2001 with Paul Sappington. The agreement provides Mr. Sappington
with an annual salary of $140,000 and an annual bonus at the discretion of the
Board. If Mr. Sappington's employment is terminated without cause, or in the
event of a change of control (as defined in the agreement) we will pay him a
severance benefit equal to the product of 1.5 times his annual salary plus the
average of his last two annual cash bonuses. Additionally, the agreement
contains non-compete and non-solicitation provisions effective during the term
of his employment and for one year thereafter in the case of the non-compete
provision and one year thereafter in the case of the non-solicitation provision.

STOCK OPTION PLANS

EDGAR Online's currently active stock option plans include our 1996 Stock
Option Plan, 1999 Stock Option Plan, as amended, and 1999 Outside Directors
Stock Option Plan. Each of the plans, except for the 1999 Outside Directors
Stock Option Plan, provide for:

- the grant of incentive stock options and non-qualified stock options; and

- the current administration of the plans by the Compensation Committee.

33

The exercise price of options granted under each plan are determined by the
Compensation Committee, except that the exercise price of incentive stock
options must be at least as equal to the fair market value of EDGAR Online's
common stock on the date of grant. Each of the plans authorizes the Board to
provide for option vesting to accelerate and become fully vested in the event of
certain significant corporate transactions if the options are not assumed or
substituted by a successor corporation.

The 1996 Stock Option Plan (the 1996 Plan), which provides for the granting
of options to purchase up to an aggregate of 800,000 shares of our authorized
but unissued common stock (subject to adjustment in certain cases, including
stock splits, recapitalization and reorganizations) to our officers, directors,
employees and consultants, was ratified and confirmed in November 1998. The 1999
Stock Option Plan (the 1999 Plan), which provided for the granting of options to
purchase up to an aggregate of 800,000 shares of our authorized but unissued
common stock (subject to adjustment in certain cases, including stock splits,
recapitalization and reorganizations) to our officers, directors, employees and
consultants, was adopted in March 1999 and amended to increase the number of
shares reserved for issuance under the Plan from 800,000 to 1,400,000 at the
Annual Shareholder Meeting held on August 1, 2000 and to 1,900,000 at the Annual
Shareholder meeting held August 1, 2001 . The 1996 and 1999 Stock Option Plans
are intended as an incentive to encourage stock ownership by officers and
certain of our other employees in order to increase their proprietary interest
in our continued growth and success and to encourage such employees to remain in
the employ of EDGAR Online.

No incentive stock option may be granted to an individual who, at the time
the option is granted, owns, directly or indirectly, stock possessing more than
10% of the total combined voting power of all classes of our common stock,
unless (1) such option has an exercise price of at least 110% of the fair market
value of the common stock on the date of the grant of such option and (2) such
option cannot be exercised more than five years after the date it is granted.

Under the 1999 Outside Directors Stock Option Plan, there are up to 100,000
shares authorized for issuance. Each new non-employee director will be granted,
at the time of his or her appointment and on each third anniversary thereafter,
a nonstatutory option to purchase 7,500 shares of common stock. The exercise
price of each of these options will be equal to the fair market value of our
common stock on the date of grant. These options will vest equally over a
three-year period. Under the 1999 Outside Directors Stock Option Plan, our
existing non-employee directors will not be eligible for options grants until
the date of our annual stockholders' meeting to be held in 2002.

As of March 20, 2002, 800,000 options were authorized under the 1996 Plan
and options to purchase 726,600 shares were outstanding and 47,400 options were
available for future grants. As of March 20, 2002, 1,900,000 options were
authorized under the 1999 Plan, options to purchase 1,875,955 shares were
outstanding and 24,045 options were available for future grants. As of March 20,
2002, 100,000 options were authorized under the 1999 Outside Directors Stock
Option Plan, no options to purchase shares had been granted and 100,000 options
were available for future grants. As of March 20, 2002, 100,000 options were
authorized under the FreeEDGAR Stock Option Plan and 23,784 shares were
outstanding. No future grants will be made under the FreeEDGAR Stock Option
Plan.

RULE 10b5-1 PLANS

Rule 10b5-1(b) under the Securities Exchange Act of 1934 prohibits trading
by an insider of a company when the insider is in possession of material inside
information. To address concerns about the breadth of this standard, the SEC has
provided guidance that a person is not liable if a trade was made pursuant to a
preexisting trading plan adopted in good faith. Thus, if an insider adopts a
trading plan when the insider was not aware of material nonpublic information,
which plan contains the amounts, prices, and times of the stock sales to be made
in the future, a stock sale made pursuant to the plan is not improper even if
the insider later became aware of material nonpublic information.

Based on this guidance from the SEC, Albert E. Girod, a Director of the
Company and former Chief Technology Officer and Executive Vice President, has
established a trading plan pursuant to Rule 10b5-1 that provides for the
periodic sale of common stock held by him. The plan contains a trading formula
that sets forth the dates, times, and amounts of the stock sales to be made
under the plan. The plan is also established with a
34

brokerage firm, which is instructed to make the trades in accordance with the
trading formula set forth in the plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

No interlocking relationships exist between any members of EDGAR Online's
Board of Directors or Compensation Committee and the board of directors or
compensation committee of any other company, nor has any such interlocking
relationship existed in the past. The Company has business and financial
relationships with iXL Enterprises, Inc. Stefan Chopin served as a Vice
President of iXL Enterprises, Inc during 2001. Our relationship with iXL is
described below.

PEQUOT SYSTEMS (iXL)

From April 1997 through May 1999, we shared equally the costs of a single
lease on 6,600 square feet of space in Norwalk, Connecticut with Pequot Systems
("Pequot") pursuant to which we occupied half of this space and were jointly
obligated with Pequot under a lease agreement. This arrangement with Pequot
ended in June 1999, when we entered into a separate lease for our portion of
these premises, in which we continue to manage our Norwalk operations. From our
inception through February 2001, we outsourced our technology development to
Pequot. During 1995, in partial payment for services rendered, Pequot received
warrants to purchase shares of common stock at an exercise price of $.05 per
share. The warrants were exercised in May 1997. In March 1998, Pequot agreed to
accept shares of our common stock valued at $1.25 per share in partial payment
for services rendered. As a result of these two transactions, Pequot received
359,384 shares of common stock. In 2001, 2000 and 1999, we paid Pequot a total
of $164,216, $2,725,770 and, $989,368, respectively, for services provided. As a
result of the acquisition of Pequot by iXL, an unrelated company, in 1998, the
shares owned by Pequot were transferred to Pequot's founders, including Stefan
Chopin, the founder and President of Pequot. Mr. Chopin has been a member of our
Board of Directors since 1996 and serves as a member of the Compensation
Committee and Audit Committee. We believe that the terms of our agreements with
Pequot have been beneficial to EDGAR Online and no less favorable to EDGAR
Online than terms which might be available to us from unaffiliated third
parties.

DIRECTOR COMPENSATION

No cash compensation has ever been paid to any of the directors of EDGAR
Online for service in such capacity. However, directors are currently eligible
to receive stock options every three years under EDGAR Online's 1999 Stock
Option Plan. In March 1999, each of our non-employee directors was granted
options to purchase 10,000 shares of common stock at an exercise price of $4.50
per share. In August 2000, each of our non-employee directors was granted
options to purchase 7,500 shares of common stock at an exercise price of $3.50
per share. Following our 2002 Annual Meeting of Shareholders, non-employee
directors of EDGAR Online will be eligible to receive non-discretionary,
automatic grants of options to purchase common stock as part of our 1999 Outside
Directors Stock Option Plan.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of March 20, 2002 by (1) each of our
directors, including our Chief Executive Officer, (2) our six most highly
compensated executive officers, other than our Chief Executive Officer, who were
serving as executive officers at the end of 2001, (3) all our executive officers
and directors as a group and (4) each person who we know owns beneficially more
than 5% of our common stock. Unless otherwise indicated, the

35

address of each beneficial owner listed below is c/o EDGAR Online, Inc., 50
Washington Street, Norwalk, CT 06854.

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* Represents beneficial ownership of less than 1%.

(1) Shares of common stock subject to options currently exercisable or
exercisable within 60 days of March 20, 2002 are deemed outstanding for
the purpose of computing the percentage ownership of the person holding
such options but are not deemed outstanding for computing the percentage
ownership of any other person. Unless otherwise indicated below, the
persons and entities named in this table have sole voting and sole
investment power with respect to all shares beneficially owned, subject to
community property laws where applicable.

(2) Includes 163,600 shares owned by Ms. Strausberg's husband, Marc
Strausberg, EDGAR Online's Chairman of the Board and 2,550,426 shares
owned by TheBean LLC as well as 20,001 shares issuable upon exercise of
options exercisable within 60 days of March 20, 2002 and 20,001 shares
issuable upon exercise of options exercisable within 60 days of March 20,
2002 owned by Ms. Strausberg's husband, Marc Strausberg. Ms. Strausberg is
a managing member of TheBean LLC and as such she may be

36

deemed to be the beneficial owner of all the shares held by TheBean LLC.
Ms. Strausberg disclaims beneficial ownership of the shares owned by her
husband.

(3) Includes 51,200 owned by Mr. Strausberg's wife, Susan Strausberg, EDGAR
Online's Chief Executive Officer and 2,550,426 shares owned by TheBean LLC
as well as 20,001 shares issuable upon exercise of options exercisable
within 60 days of March 20, 2002 and 20,001 shares issuable upon exercise
of options exercisable within 60 days of March 20, 2002 owned by Mr.
Strausberg's wife, Susan Strausberg. Mr. Strausberg is a managing member
of TheBean LLC and as such he may be deemed to be the beneficial owner of
all the shares held by TheBean LLC. Mr. Strausberg disclaims beneficial
ownership of the shares owned by his wife.

(4) Includes 345,001 shares issuable upon exercise of options exercisable
within 60 days of March 20, 2002.

(5) Includes 168,372 shares issuable upon exercise of options exercisable
within 60 days of March 20, 2002.

(6) Includes 8,334 shares issuable upon exercise of options exercisable within
60 days of March 20, 2002.

(7) Includes 130,001 shares issuable upon exercise of options exercisable
within 60 days of March 20, 2002.

(8) Includes 5,000 shares issuable upon exercise of options exercisable within
60 days of March 20, 2002.

(9) Includes shares owned jointly with Barbara Chopin, his wife.

(10) Includes 12,500 shares issuable upon exercise of options exercisable within
60 days of March 20, 2002.

(11) Reflects amount derived from this entity's Schedule 13G filed with the SEC
on February 14, 2002.

(12) Consists of the following: 750,000 shares of common stock and 150,000
shares of common stock issuable upon exercise of warrants exercisable
within 60 days of March 20, 2002 owned by Special Situations Fund III, L.P
and 500,000 shares of common stock, and 100,000 shares of common stock
issuable upon exercise of warrants exercisable within 60 days of March 20,
2002 owned by Special Situations Private Equity Fund, L.P. AWM Investment
Company, Inc. is the general partner of MGP Advisers Limited Partnership,
the general partner of Special Situations Fund III, L.P. MG Advisors,
L.L.C. is the general partner of and investment advisor to Special
Situations Private Equity Fund, L.P. Austin W. Marx and David M. Greenhouse
are the principal owners of AWM Investment Company, Inc., MGP Advisers
Limited Partnership and MG Advisors, L.L.C.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

EMPLOYEE LOANS

In January 2001, we loaned the sum of $400,000 to certain executives,
employees and outside directors of the Company for the purpose of purchasing
shares of our common stock from TheBean LLC, an entity in which Susan
Strausberg, our Chief Executive Officer and Marc Strausberg, our Chairman of the
Board are beneficial owners. The common stock was purchased at a price of $1.75
per share, the closing Nasdaq market price on the date of sale. The loan was
evidenced by separate loan and pledge agreements with, and three-year promissory
notes of, each of the borrowers. The promissory notes are full recourse and
secured by the common stock purchased with the proceeds of the individual loans.
The executive officers and outside directors participating in this transaction
were Tom Vos ($175,000 Note and 100,000 shares), Greg Adams ($115,001 Note and
65,715 shares), Bruce Bezpa ($10,001 Note and 5,715 shares) and Mark Maged
($30,000 Note and 17,143 shares). The shares of common stock referenced in this
paragraph were registered for resale pursuant to a Registration Statement on
Form S-3 which was declared effective in February, 2002.

PEQUOT SYSTEMS (iXL)

For information regarding our relationship with iXL, see Item 11. Executive
Compensation -- Compensation Committee Interlocks and Insider Participation.
Susan Strausberg And Marc Strausberg

37

INDEBTEDNESS OF MANAGEMENT

From time to time, we have received cash loans from and have made cash
advances to Susan Strausberg and Marc Strausberg, our founders. In December
2000, we advanced the Strausbergs $250,000 which was subsequently repaid in
January 2001. In July 2001, we advanced the Strausbergs $200,000 which was
subsequently repaid in September 2001.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) Exhibits.

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(1) Incorporated by reference to exhibit with corresponding number filed with
the Registrant's Registration Statement on Form S-1 (the Registration
Statement), as filed with the Commission on March 30, 1999.

(2) Incorporated by reference to exhibit with corresponding number filed with
Amendment No. 1 to the Registration Statement, as filed with the Commission
on May 7, 1999.

(3) Incorporated by reference to exhibit with corresponding number filed with
Amendment No. 2 to the Registration Statement, as filed with the Commission
on May 19, 1999.

(4) Incorporated by reference to exhibit with corresponding number filed with
the Registrant's Annual Report on Form 10-K for the year ended December 31,
1999.

39

(5) Incorporated by reference to exhibit with corresponding number filed with
the Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 2000.

(6) Incorporated by reference to exhibit with corresponding number filed with
Registrant's Current Report on Form 8-K dated November 9, 2000.

(7) Incorporated by reference to exhibit with corresponding number filed with
Registrant's Current Report on Form 8-K dated September 24, 1999.

(8) Incorporated by reference to exhibit with corresponding number filed with
Registrant's Annual Report on Form 10-K for the year ended December 31,
2000.

(9) Incorporated by reference to exhibit with corresponding number filed with
the Company's Current Report on Form 8-K dated January 11, 2002.

(10) Incorporated by reference to exhibit with corresponding number filed with
the Company's Current Report on Form 8-K date March 22, 2002.

(b) Reports on Form 8-K

The following report on Form 8-K was filed during the quarter ended
December 31, 2001: Report on Form 8-K dated November 27, 2001 filed with the
Securities and Exchange Commission reporting two press releases.

(c) Financial Statements and Financial Statement Schedules

The consolidated financial statements of the Company filed as part of this
Form 10-K are filed on pages F-1 to F-22 to this Form 10-K. The financial
statement schedule required by Regulation S-X follows.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

EDGAR ONLINE, INC.
FINANCIAL STATEMENT SCHEDULE

VALUATION AND QUALIFYING ACCOUNTS

- ---------------

(1) Write-offs of receivables.

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted because they are not required under the related instructions or are
inapplicable, or because the information has been provided in the Financial
Statement or the Notes thereto.

40

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

EDGAR ONLINE, INC.

By: /s/ SUSAN STRAUSBERG
------------------------------------
Susan Strausberg
Chief Executive Officer

Pursuant to the requirements of Section 13 or 15(d) 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.

/s/ SUSAN STRAUSBERG Chief Executive Officer, and March 20, 2002
------------------------------------------------ Director
Susan Strausberg

/s/ GREG D. ADAMS Chief Financial Officer March 20, 2002
------------------------------------------------
Greg D. Adams

/s/ MARC STRAUSBERG Chairman of the Board March 20, 2002
------------------------------------------------
Marc Strausberg

/s/ TOM VOS President, Director March 20, 2002
------------------------------------------------
Tom Vos

/s/ ALBERT E. GIROD Chief Technology Officer, March 20, 2002
------------------------------------------------ Executive Vice President and
Albert E. Girod Director

/s/ STEFAN CHOPIN Director March 20, 2002
------------------------------------------------
Stefan Chopin

/s/ MARK MAGED Director March 20, 2002
------------------------------------------------
Mark Maged

/s/ BRUCE BEZPA Director March 20, 2002
------------------------------------------------
Bruce Bezpa

41

EDGAR ONLINE, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
EDGAR Online, Inc.:

We have audited the accompanying consolidated balance sheets of EDGAR
Online, Inc. as of December 31, 2001 and 2000 and the related consolidated
statements of operations, changes in stockholders' equity (deficit), and cash
flows for each of the years in the three-year period ended December 31, 2001. In
connection with our audits of the consolidated financial statements, we also
have audited the financial statement schedule listed under Item 14(c). These
consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of EDGAR
Online, Inc. and subsidiaries as of December 31, 2001 and 2000 and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the
related financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

KPMG LLP

New York, NY
January 29, 2002, except for note 16 which is as of March 21, 2002

F-2

EDGAR ONLINE, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2001

See accompanying notes to consolidated financial statements.
F-3

EDGAR ONLINE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

DECEMBER 31, 2001

See accompanying notes to consolidated financial statements.
F-4

EDGAR ONLINE, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

DECEMBER 31, 2001

See accompanying notes to consolidated financial statements.

F-5

EDGAR ONLINE, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY -- (CONTINUED)

DECEMBER 31, 2001

See accompanying notes to consolidated financial statements.
F-6

EDGAR ONLINE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

DECEMBER 31, 2001

See accompanying notes to consolidated financial statements.
F-7

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2001

(1) DESCRIPTION OF BUSINESS

EDGAR Online, Inc. (EDGAR Online or the Company), formerly Cybernet Data
Systems, Inc., was incorporated in the State of Delaware in November 1995 and
launched its EDGAR Online Internet Web site in January 1996. EDGAR Online is a
provider of financial information derived from U.S. Securities and Exchange
Commission (SEC) data and developer of financial and business system solutions.
The Company sells to the corporate market and Internet portals as well as
running five destination Web sites. The Company has entered into several
arrangements with other Internet service providers to market financial
information services.

Inherent in the Company's mission are various risks and uncertainties,
including its limited operating history, unproven business model and the limited
history of commerce on the Internet. The Company's success may depend in part
upon the emergence and acceptance of the Internet as a communication and
information medium, prospective project development efforts and the acceptance
by the market place of the Company's products and services.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) REVENUE RECOGNITION

We derive revenues from four primary sources: contracts with corporate
customers for customized data, sale of our technical services to construct
and/or operate the technical systems our customers use to integrate our data and
data from other sources into their products and services, seat based
subscriptions to our Web site services and advertising and other e-commerce
based revenues. Revenue from data sales is recognized over the term of the
contract or, in the case of certain up-front fees, over the estimated customer
relationship period. Revenue from technical services, consisting primarily of
time and materials based contracts, is recognized in the period services are
rendered. Revenue from seat-based subscriptions is recognized ratably over the
subscription period, which is typically three or twelve months. Advertising and
e-commerce revenue is recognized as the services are provided.

Revenue is recognized provided acceptance, or delivery if applicable, has
occurred, collection of the resulting receivable is probable and no significant
obligations remain. If amounts are received in advance of the services being
performed, the amounts are recorded and presented as deferred revenues.

(b) BARTER TRANSACTIONS

Barter advertising revenue relates to advertising placed on the Company's
Web site by other Internet companies in exchange for the Company's advertising
placed on their Web sites. Barter expenses reflect the expense offset to barter
revenue. The amount of barter advertising revenue and expense is recorded at the
estimated fair value of the services received or the services provided,
whichever is more objectively determinable, in the month that banners are
exchanged. The Company applies the provisions of EITF 99-17, Accounting for
Advertising Barter Transactions and, accordingly, recognizes barter revenues
only to the extent that the Company has similar cash transactions within a
period not to exceed six months prior to the date of the barter transaction.
Barter revenues totaled $643,724, $1,201,576, and $1,125,720 in the years ended
December 31, 2001, 2000, and 1999, respectively.

(c) WEB SITE DEVELOPMENT COSTS

In accordance with Emerging Task Force Issue No. 2000-2, Accounting for Web
Site Development Costs, and Statement of Position 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use (SOP 98-1), the
Company capitalizes certain Web site costs for computer software developed or
obtained for internal use. Capitalized software development costs totaled
$528,598 and $507,898,
F-8

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

at December 31, 2001 and 2000, respectively, and are being amortized over their
estimated useful life of three years. Related amortization expense totaled
$170,726, $130,946, and $0 in the years ended December 31, 2001, 2000 and 1999,
respectively.

(d) CASH AND CASH EQUIVALENTS

The Company considers cash and all highly liquid investments with original
maturities of ninety days or less to be cash and cash equivalents.

(e) AVAILABLE-FOR-SALE INVESTMENTS

The Company's investments are comprised of government and corporate
obligations and foreign and domestic marketable securities. At December 31,
2000, all of the Company's investments were classified as available-for-sale
and, accordingly, unrealized gains and losses are included as a separate
component of shareholders' equity, net of any related tax effect. Realized gains
and losses are recognized on the specific identification basis.

(f) PROPERTY AND EQUIPMENT

Property and equipment are stated at cost or at estimated fair value if
part of a barter transaction. Depreciation is computed using the straight-line
method over the estimated useful lives of the related assets, generally three to
seven years. Leasehold improvements are amortized using the straight-line method
over the estimated useful lives of the assets or the term of the leases,
whichever is shorter.

(g) LONG-LIVED ASSETS

The Company accounts for long-lived assets in accordance with the
provisions of Statement of Financial Accounting Standards (SFAS) No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. This Statement requires that long-lived assets and certain
intangibles assets, including goodwill, be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future undiscounted cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the discounted cash flows of the assets.
Assets to be disposed of are reported at the lower of the carrying amount or
fair value less costs to sell.

(h) ADVERTISING EXPENSES

The Company expenses advertising costs as incurred. Advertising expenses
were $124,208, $2,473,213, and $1,022,664 for the years ended December 31, 2001,
2000, and 1999, respectively.

(i) INCOME TAXES

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, and for operating loss and tax credit carryforwards. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.
F-9

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

(j) DEFERRED FINANCING COSTS

Deferred financing costs related to the issuance of a convertible debenture
and were being amortized over the term of the related debt, using the effective
interest method. Amortization expense was $0, $0 and $77,018 for the year ended
December 31, 2001, 2000 and 1999, respectively.

(k) STOCK-BASED TRANSACTIONS

The Company accounts for stock-based transactions in accordance with SFAS
No. 123, Accounting for Stock-Based Compensation. In accordance with SFAS No.
123, the Company has elected to measure stock-based employee compensation
arrangements in accordance with the provisions of Accounting Principles Board
(APB) No. 25, Accounting for Stock Issued to Employees, and comply with the
disclosure provisions of SFAS No. 123. Under APB No. 25, compensation cost is
recognized based on the difference, if any, on the date of grant between the
fair value of the Company's common stock and the exercise price. The Company
accounts for the issuance of equity instruments to non-employees in exchange for
services at either the fair value of the equity instrument given or the fair
value of the services rendered, whichever is more reliably measurable.

(l) CONCENTRATION OF RISK AND FINANCIAL INSTRUMENTS

Financial instruments that potentially subject the Company to significant
concentration of credit risk consist primarily of accounts receivable. The most
significant concentration of credit risk relates to NASDAQ, which comprised 17%
and 31%, and DoubleClick, which comprised 5% and 14% of the Company's total
gross receivable balance at December 31, 2001 and 2000, respectively. No other
customer accounted for more than 10% of accounts receivable at December 31, 2001
or 2000. NASDAQ comprised 38% of the company's total revenue during 2001. The
other customers are geographically dispersed throughout the United States with
no one customer accounting for more than 10% of revenues during 2001, 2000 or
1999. In addition, the Company has not experienced any significant credit losses
to date from any one customer.

The fair value of the Company's cash and cash equivalents, accounts
receivable, accounts payable and accrued liabilities at December 31, 2001 and
2000, approximate their financial statement carrying value because of the
short-term maturity of these instruments. The fair values of the Company's
long-term obligations are discussed in notes 9 and 14.

(m) LOSS PER SHARE

Loss per share is presented in accordance with the provisions of SFAS No.
128, Earnings Per Share, and the Securities and Exchange Commission (SEC) Staff
Accounting Bulletin No. 98. Under SFAS No. 128, Basic EPS excludes dilution for
common stock equivalents and is computed by dividing income or loss available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
and resulted in the issuance of common stock. Basic earnings per share are
computed using the weighted average number of common shares outstanding during
the period.

Diluted loss per share has not been presented separately, as the
outstanding stock options, warrants and convertible debentures are anti-dilutive
for each of the periods presented. Anti-dilutive securities outstanding were
2,806,060, 1,900,105, and 1,302,758, for the years ended December 31, 2001,
2000, and 1999, respectively.

F-10

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

(n) BUSINESS SEGMENTS

In June 1997, the Financial Accounting Standard Board (FASB) issued SFAS
No. 131, Disclosure about Segments of an Enterprise and Related Information.
SFAS No. 131 establishes standards for the way that public business enterprises
report information about operating segments. It also establishes standards for
related disclosures about products and services, geographic areas and major
customers. The Company has determined that it does not have any separately
reportable business segments as management does not manage its operations by the
different product and service offerings, but instead views the Company as one
operating segment when making business decisions, with the one operating
decision making group.

(O) COMPREHENSIVE INCOME

The Company adopted the provisions of SFAS No. 130, Reporting Comprehensive
Income during 1998. SFAS No. 130 requires the Company to report in its financial
statements, in addition to its net income (loss), comprehensive income (loss),
which includes all changes in equity during a period from non-owner sources
including, as applicable, foreign currency items, minimum pension liability
adjustments and unrealized gains and losses on certain investments in debt and
equity securities. Comprehensive income (loss) is presented within the statement
of changes in stockholders' equity (deficit).

(P) USE OF ESTIMATES IN FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally
accepted accounting principles 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 financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Significant estimates embedded in the consolidated financial
statements for the periods presented concern the allowance for doubtful
accounts, fair values and useful lives of goodwill and other intangible assets,
and the length of certain customer relationships. Actual results could differ
from those estimates.

(Q) RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that
the purchase method of accounting be used for all business combinations
initiated or completed after June 30, 2001. SFAS No. 141 also specifies the
criteria that intangible assets acquired in a business combination must meet to
be recognized and reported apart from goodwill. SFAS No. 142 requires that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually. SFAS No. 142
also requires that intangible assets with definite useful lives be amortized
over their respective estimated useful lives to their estimated residual values,
and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
(SFAS No. 121).

SFAS No. 141 is effective immediately, except with regard to business
combinations that were initiated prior to July 1, 2001, which the Company
accounted for using the purchase method of accounting. SFAS No. 142 will be
effective for fiscal years beginning after December 15, 2001, and was adopted by
the Company on January 1, 2002. The adoption of these accounting standards will
eliminate amortization of goodwill commencing January 1, 2002. However,
impairment reviews may result in future periodic write-downs that could have a
material adverse effect on the results of operations in the period recognized.
SFAS No. 142 will also require the Company to perform a transitional assessment
by June 30, 2002, to determine whether there is an impairment of goodwill. Any
such transitional impairment loss will be recognized as a change in accounting

F-11

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

principle in the consolidated statement of operations. The Company has not yet
performed the initial goodwill impairment test prescribed in SFAS No. 142.

On October 3, 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 is effective for
financial statements issued for fiscal years beginning after December 15, 2001
and interim periods within those fiscal years. This statement supercedes SFAS
No. 121, and amends APB 30 "Reporting the Results of Operations -- Reporting the
Effects of Disposal of a Segment of a Business." SFAS No. 144 requires that
long-lived assets that are to be disposed of by sale be measured at the lower of
book value or fair value less cost to sell. Additionally, SFAS No. 144 expands
the scope of discontinued operations to include all components of an entity with
operations that (1) can be distinguished from the rest of the entity and (2)
will be eliminated from the ongoing operations of the entity in a disposal
transaction. The Company does not expect that the adoption of SFAS No. 144 will
have a significant impact on its consolidated financial statements.

(R) RECLASSIFICATIONS

During the third quarter of 1999, development expenses were reclassified to
operating expenses from cost of revenues. In addition, during the first quarter
of 2000, the Company began recording certain advertising revenues net of the
related commissions and amounts previously recorded as stock compensation
expense have been reported within the functional expense category for which the
employee worked. In 2001, the Company reclassified revenues into data sales,
technical services, seat-based subscriptions and advertising and e-commerce
revenues. Prior comparative amounts have been reclassified to conform to the
year 2001 presentation.

(3) ACQUISITIONS

On October 30, 2000, the Company acquired all the outstanding equity of
Financial Insight Systems, Inc. (FIS), pursuant to the terms and conditions of
an agreement and plan of merger dated October 18, 2000 for $28,148,575. The
purchase price included (1) the issuance of 2,450,000 restricted shares of EDGAR
Online common stock valued at $9,579,500, (2) the payment of $17,765,000
consisting of (i) a cash payment of $11,765,000 and (ii) a series of two year
7.5% senior subordinated secured promissory notes in the total principal amount
of $6,000,000 (see note 16 for subsequent restructuring of these notes) and (3)
$804,075 for the payment of fees and acquisition related expenses which were
paid in 2001. Of this amount, $586,538 was included in accounts payable at
December 31, 2000.

The aggregate purchase price of $28,148,575 has been allocated to the
purchased assets and liabilities based on their relative fair market values at
the date of acquisition. The excess purchase price over the estimated fair value
of the tangible assets acquired has been allocated as follows: (1) $9,124,338 to
accumulated knowhow with an estimated useful life of 10 years, (2) $4,044,645 to
customer based intangibles with an estimated useful life of 12 years, (3)
$4,194,264 to accumulated work force with an estimated useful life of 5 years
and (4) $8,796,406 to goodwill with an estimated useful life of 12 years. Since
the acquisition was a tax free transaction, the $17,363,247 allocated to
identifiable intangible assets created a book tax difference for which a
corresponding deferred tax liability of $6,945,299 was established at the
acquisition date. In addition, at the date of acquisition, the Company had net
deferred tax assets of approximately $6,120,373 for which a valuation allowance
of like amount had been recorded. The establishment of the FIS deferred tax
liability eliminated the need for substantially all of the valuation allowance
on the Company's deferred tax assets and resulted in a purchase accounting
adjustment to reduce the Company's valuation allowance by the amount of the FIS
deferred tax liability. This purchase accounting adjustment was recorded in 2001
when the valuation of the intangible assets acquired was finalized. The
recognition of the FIS deferred

F-12

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

tax liability and the reduction in the Company's valuation allowance increased
and decreased goodwill by a like amount.

On September 10, 1999, the Company acquired Partes Corporation (Partes),
owner of the FreeEDGAR.com Web site. Under the terms of the agreement, the
Company purchased all of the outstanding equity of Partes for $9,901,054. The
purchase price included (1) the issuance of 908,877 shares of EDGAR Online
common stock valued at $7,804,981, (2) the issuance of 75,039 EDGAR Online stock
options and warrants, with a fair value of $259,176, in exchange for all
outstanding Partes stock options, (3) the assumption of net liabilities totaling
$847,786 and (4) $989,111 in fees and acquisition related expenses. Subsequent
to the acquisition, the Company repaid Partes bank indebtedness of $919,879.

The aggregate purchase price of $9,901,054 has been allocated to the
purchased assets and liabilities based on their relative fair market value on
the date of acquisition. The excess purchase price over the estimated fair value
of the tangible net liabilities acquired has been allocated as follows: (1)
$2,496,246 to customer lists with an estimated useful life of 5 years, (2)
$3,155,966 to technology with an estimated useful life of 5 years, (3) $699,280
to established workforce with a useful life of 3 years and (4) $3,549,562 to
goodwill with an estimated useful life of 6 years. Since the acquisition was a
tax-free transaction, the $6,351,492 allocated to identifiable intangible assets
created a book-tax basis difference for which a corresponding deferred tax
liability of $2,540,000 was established at the acquisition date. In addition, at
the date of acquisition, the Company had net deferred tax assets of
approximately $4,719,592 for which a valuation allowance of like amount had been
recorded. The establishment of the FreeEDGAR tax liability eliminated the need
for substantially all of the valuation allowance on the Company's deferred tax
assets and resulted in a purchase accounting adjustment to reduce the Company's
valuation allowance by the amount of the FreeEDGAR deferred tax liability. The
recognition of the FreeEDGAR deferred tax liability and the reduction in the
Company's valuation allowance increased and decreased goodwill by a like amount.
See note 4 for a discussion of subsequent intangible asset impairment.

The acquisitions were accounted for under the purchase method of accounting
and accordingly the estimated fair value of FIS' and Partes' assets and
liabilities and the operating results of FIS and Partes from the effective dates
of the acquisition have been included in the accompanying consolidated financial
statements.

The following unaudited pro forma results of operations assume the
acquisitions occurred as of January 1, 1999 and include amortization of
intangibles. The pro forma financial information is not necessarily indicative
of operating results that would have occurred had the acquisitions been
consummated as of January 1, 1999 nor of future operating results. Pro forma
results for the year ended December 31, 2001 are not presented as the
transactions are fully reflected in the Company's results of operations for the
period.

(4) IMPAIRMENTS OF LONG-LIVED ASSETS

The Company's management performs on-going business reviews and, based on
quantitative and qualitative measures, assesses the need to record impairment
losses on long-lived assets when impairment

F-13

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

indicators are present. Where impairment indicators were identified, management
determined the amount of the impairment charge by comparing the carrying value
of long-lived assets to their fair value.

During the second quarter of 2001, the Company recorded a $275,000 loss on
investment related to an equity investment made in 2000. This investment was
accounted for under the cost method. The company in which the investment was
made had lower than expected financial results over the previous several
quarters as compared to those forecasted at the time of the investment and these
results were not expected to improve in the foreseeable future. As a result, the
carrying amount has been reduced to $0.

During the fourth quarter of 2000, the Company performed a reassessment of
the recovery of the goodwill and other long-lived assets related to its
acquisition of Partes Corporation, owner of the FreeEDGAR.com Website. The
revaluation was triggered by the continued decline in Internet advertising
throughout the year ended December 31, 2000, which significantly impacted
current and projected advertising revenue generated from the FreeEDGAR Web site.
Based on revised projections of Partes Corporation's revenues and costs, the
Company determined that the undiscounted cash flows from the operation of the
FreeEDGAR Web site, including its estimated terminal value, were less than the
remaining book value of recorded goodwill and other long-lived assets and an
other than temporary impairment had occurred. The Company measured the amount of
the impairment by comparing the anticipated future discounted cash flow from the
operation of the FreeEDGAR Web site and terminal value to the remaining book
value of recorded goodwill and other long-lived assets and recorded an
impairment charge of $5,673,000. The methodology used to test for and measure
the amount of the impairment charge was based on the same methodology used
during the Company's initial valuation of Partes Corporation in 1999.

Also during the fourth quarter of 2000, the Company performed a
reassessment of the recovery of the goodwill and other long-lived assets related
to its acquisition of certain of the assets of Individual Investor Group
including the Web site InsiderTrader.com and related user data. The revaluation
was triggered by the lower than anticipated assimilation of historical users of
the acquired Web site which limited the future revenue potential to be generated
from the assets acquired. Based on revised projections of InsiderTrader.com's
revenues and costs, the Company determined that the undiscounted cash flows from
the operation of the InsiderTrader.com Web site and other assets were less than
the remaining book value of recorded goodwill and other long-lived assets and an
other than temporary impairment had occurred. The Company measured the amount of
the impairment by comparing the anticipated future discounted cash flow from the
operation of the InsiderTrader.com Web site to the remaining book value of
recorded goodwill and other long-lived assets and recorded an impairment charge
of $362,000. The methodology used to test for and measure the amount of the
impairment charge was based on the same methodology used during the Company's
initial acquisition valuation of InsiderTrader.com in 2000.

Lastly, during the fourth quarter of 2000, the Company discontinued the use
of the edgar.com URL which it acquired in 1999 for $150,000, and recorded an
impairment charge for the unamortized book value of $117,000.

Among other factors, when assessing evidence of impairment, management
considers the proximity of its original investment to the date of evaluation,
the Company's commitments to provide ongoing financing, and the expectations at
the time of investment of operating results to be achieved. Where impairment
indicators are identified, management determines the amount of any impairment
charge by comparing the carrying value of the investment and other intangible
assets to their fair value. The Company's monitoring process will continue on a
prospective basis and the impairment factors evaluated by management may change
in subsequent periods given that the Company operates in a volatile business
environment. This could result in material impairment charges in future periods.

F-14

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

(5) RESTRUCTURING COSTS

In 2001, the Company closed the Kirkland, WA office. The office closing
completed the Company's consolidation of its technical operations, which is
expected to save $1.5 million on an annual basis. During the second quarter of
2001, the Company recorded a $912,000 pre-tax charge which is included in
operating expenses in the consolidated statement of operations. These
restructuring costs included employment termination charges for 14 employees, 11
of which were discharged. In September 2001, the Company incurred $84,000 of
additional severance costs related to restructuring at FIS. These restructuring
costs included employment termination charges for 12 employees, all of which
were discharged. Restructuring costs include the following:

All restructuring obligations are included in accrued expenses at December
31, 2001.

(6) AVAILABLE-FOR-SALE INVESTMENTS

The Company's investment in available-for-sale investments at December 31,
2000 was comprised of corporate bonds and commercial paper. These instruments
had a cost of $1,500,000 and a fair value of $1,497,930 at December 31, 2000.
Individual unrealized gains and unrealized losses were not significant at
December 31, 2000. These investments were sold in 2001 for $1,500,000 resulting
in no gain or loss. The Company held no available-for-sale investments at
December 31, 2001.

(7) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2001 and 2000 is summarized as
follows:

F-15

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

Depreciation expense for the years ended December 31, 2001, 2000 and 1999
was $1,248,924, $949,480 and $312,431, respectively.

At December 31, 2001 and 2000, the Company had $114,832 and $246,350,
respectively, of equipment under capital leases included in equipment and
related accumulated amortization of $46,001 and $93,029, respectively.
Amortization of these assets recorded under capital leases is included in
depreciation expense.

(8) ACCRUED EXPENSES

Accrued expenses consist of the following at December 31, 2001 and 2000:

(9) NOTES PAYABLE

Notes payable consist of the following at December 31, 2001 and 2000:

In connection with the FIS acquisition, the Company issued a series of
two-year senior subordinated secured promissory notes with a total principal
amount of $6,000,000. Interest accrues at 7.5% annually and is payable quarterly
in arrears on January 27, April 27, July 27 and October 27. Interest expense for
the years ended December 31, 2001 and 2000 was $450,000 and $75,000,
respectively. The fair value of the senior subordinated secured promissory notes
at December 31, 2001 was estimated at approximately $6,000,000 based on the
amount of future cash flows associated with the notes, discounted using an
appropriate interest rate. See note 16 for subsequent restructuring of these
notes.

In October 1998, FIS entered into an agreement with a bank for a $200,000
line of credit. This agreement was increased in April 2000 to $500,000. At
December 31, 2001, $346,000 was outstanding under the facility and is repayable
on demand. The interest rate at December 31, 2001 was 5 1/2% which is 1/2% over
the bank's prime rate of interest. Interest expense for the years ended December
31, 2001 and 2000 was $36,094 and $5,049, respectively. The fair value of the
line of credit at December 31, 2001 approximated its carrying value given the
variable nature of the interest rate. At December 31, 2001, the Company was in
default of one of the covenants under this note and received subsequent waiver
of that covenant from the bank.

F-16

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

In July 1998, the Company received $1,000,000 in exchange for a $1,000,000
Convertible Debenture due July 2001 with interest accruing at 10% in years two
and three. The terms of this financing enabled the lender to convert the
debenture into 670,000 shares of the Company's common stock. The lender also
received a warrant, expiring July 23, 1999, to purchase an additional 666,667
shares of the Company's common stock at $1.50 per share. The Company estimated
the fair value of the warrant at the date of issue and recorded $102,708 of the
consideration received as a credit to additional paid-in capital. On May 11,
1999, in connection with the Company's IPO, the holder of the Company's
$1,000,000 face amount Convertible Debenture exercised its right to convert the
Convertible Debenture into 670,000 shares of Company common stock. In addition,
the holder exercised their warrant to purchase 666,667 shares of Company common
stock at $1.50 per share. Interest expense for 1999 includes $27,778 of
accretion of the debt discount resulting from the fair value of the warrants.

In January 1997, the Company entered into an agreement with a stockholder
for a $500,000 line of credit, which was originally due on December 31, 1997,
but was extended to February 28, 2000. Interest accrued at 12% of the face
amount annually. All borrowings were guaranteed by a principal stockholder of
the Company. The agreement originally provided that the outstanding borrowings
could be converted at the sole discretion of the lending stockholder into common
stock at a conversion rate of $1.50 worth of common stock for each $1.00 of
borrowings converted. The favorable conversion rate represented a beneficial
conversion feature and, accordingly, $250,000 was recorded as a credit to
additional paid-in capital at the issue date. Additional interest expense of
$250,000 was recorded in 1997, as the original maturity of the borrowing was
December 31, 1997. In July 1998, the conversion feature was deleted in
connection with the issuance of the Convertible Debenture. The note was repaid
using proceeds from the IPO in June 1999.

In connection with a $100,000 loan under a line of credit established in
December 1995, the Company had arranged with the lender to apply a portion of
the proceeds of credit card payments processed by the lender for the Company to
the loan balance. The loan was further reduced by the offsetting of balances due
from the lender for its monthly subscription charge for use of the Company's
Internet service. Interest accrued at 2% over the prime established by a
financial institution. The loan was repaid during 1999.

Interest expense and other financing charges for the years ended December
31, 2001, 2000, and 1999, totaled $497,450, $95,027, and $149,436 respectively.

(10) INCOME TAXES

Since its inception, the Company has incurred net operating losses and has
incurred no federal or state income tax expense. The net provision for income
taxes for the years ended December 31, 2001, 2000 and 1999 consists primarily of
State of Connecticut capital tax in the amount of $35,727, $40,212, and $250,
respectively. At December 31, 2001, the Company has approximately $24 million in
federal net operating losses, which will expire between 2010 and 2022, and
approximately $11 million of state net operating loss carry forwards, which will
expire between 2002 and 2017.

As discussed in note 3, the Company allocated $17,363,247 of the FIS
purchase price to identifiable intangible assets creating a book-tax difference
for which a corresponding deferred tax liability of $6,945,299 was established
at the acquisition date. In addition, at the date of acquisition, the Company
had deferred tax assets of approximately $6,120,373 for which a valuation
allowance of a like amount had been recorded. The establishment of the FIS
deferred tax liability eliminated the need for the valuation allowance on the
Company's net deferred tax assets and resulted in a purchase accounting
adjustment to reduce the Company's valuation allowance. The federal and state
deferred tax provision for the years ended December 31, 2001, 2000 and 1999
includes a tax benefit of approximately $788,783, $115,754 and $0, respectively,
representing the decrease in FIS' deferred tax liability as a result of the
amortization and impairment write-off of the FIS

F-17

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

intangible assets offset by a like amount of expense to increase the valuation
allowance necessitated by the decrease in the FIS deferred tax liability.

As discussed in note 3, the Company allocated $6,351,492 of the FreeEdgar
purchase price to identifiable intangible assets creating a book-tax difference
for which a corresponding deferred tax liability of $2,540,000 was established
at the acquisition date. In addition, at the date of acquisition, the Company
had deferred tax assets of approximately $4,719,592 for which a valuation
allowance of a like amount had been recorded. The establishment of the FreeEdgar
deferred tax liability eliminated the need for $2,540,000 of the valuation
allowance on the Company's net deferred tax assets and resulted in a purchase
accounting adjustment to reduce the Company's valuation allowance. The federal
and state deferred tax provision for the years ended December 31, 2001, 2000 and
1999 includes a tax benefit of approximately $207,156, $1,693,572 and $159,079,
respectively, representing the decrease in the FreeEdgar deferred tax liability
as a result of the amortization and impairment write-off of the FreeEdgar
intangible assets offset by a like amount of expense to increase the valuation
allowance necessitated by the decrease in the FreeEdgar deferred tax liability.

The Company's tax provision differed from the amount computed using the
federal statutory rate of 35% in 2001 and 34% in 2000 and 1999 as follows:

The Company's deferred tax assets and liabilities and related valuation
allowance as of December 31, 2001 and 2000 are as follows:

Realization of the net operating loss carry forward and other future
deductible differences is dependent on the Company being able to generate
sufficient taxable income prior to the expiration of the operating loss carry
forwards. Due to the Company's short operating history, a valuation allowance
has been recorded for the entire amount of the net deferred tax asset as the
Company has concluded that it is not more likely than not that there will be
future taxable income sufficient to realize the future taxable temporary
differences and operating loss carry forwards prior to their expiration.

F-18

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

Under Section 382 of the Internal Revenue Code of 1986, as amended, the
utilization of net operating loss carry forwards may be limited under the change
in stock ownership rules. The company has not yet determined whether such an
ownership change has occurred.

(11) STOCKHOLDERS' EQUITY

Common Stock

On March 25, 1999, the Board of Directors of the Company declared and
approved an increase in the number of authorized shares of common stock to
30,000,000, par value $0.01 per share, and authorized 1,000,000 shares of
preferred stock, par value $0.01 per share. There are no preferred shares issued
or outstanding at December 31, 1999.

On March 30, 1999, the Company completed the sale of an aggregate of
240,000 shares of its common stock to three investors at $4.50 per share
resulting in net proceeds of $1,055,250.

On May 26, 1999, the Company sold 3,600,000 shares of its common stock to
the public (IPO) at $9.50 per share for net proceeds of $30,448,815. In
connection with this offering, the Company, its underwriters and the holder of
the Convertible Debenture agreed that such holders would convert the Convertible
Debenture into 670,000 shares of the Company's common stock prior to the close
of the IPO. In addition, certain holders of warrants to purchase Company common
stock also agreed to exercise the warrants into an aggregate of 696,667 shares
of common stock prior to the close of the IPO.

During 2001, 2000 and 1999, additional shares were issued in connection
with the exercise of stock options totaling 13,000, 928 and 11,155,
respectively.

In addition, during 2000 and 1999, 2,450,000 and 908,877 shares were issued
in connection with purchase business combinations.

In December 2001, the Company initiated a private placement of 2,000,000
shares of its common stock at $2.50 per share as well as 400,000 four-year
warrants with an exercise price of $2.875 per share. 500,000 shares and 100,000
warrants were sold prior to December 31, 2001 which resulted in proceeds of
$1,250,000. The remaining shares and warrants were sold on January 8, 2002. See
note 16 on subsequent events.

Stock Warrants

Since its inception, the Company has issued warrants to purchase Company
common stock in return for various services rendered or in connection with
certain debt and equity financings.

Warrants issued in exchange for services totaled 23,167 for the year ended
December 31, 1999. Based on estimated fair values at the respective dates of
issuance the Company has recorded professional services expense and additional
paid-in capital of $26,197 in 1999.

In 1998, the Company issued 706,668 warrants in connection with debt
financings which have been fair valued at their date of issuance. Additional
interest expense has been recorded for the year ended December 31, 1999 of
$27,778. The related debt was repaid during 1999.

During 1999, the Company issued 11,299 warrants in connection with the
Partes acquisition and 523,500 warrants in connection with equity financing,
including the Company's IPO.

In December 2001, the Company issued 100,000 four-year warrants with an
exercise price of $2.875 in connection with the private placement of 500,000
shares of its common stock.

F-19

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

Warrant activity during the periods indicated is as follows:

The weighted average contractual life of warrants outstanding at December
31, 2001 and 2000 was 2.76 and 3.41 years, respectively.

(12) STOCK OPTION PLANS

In November 1998, the Company adopted the 1996 Stock Option Plan (the 1996
Plan) whereby the Company's Board of Directors may grant stock options to
officers, employees, directors and consultants. The 1996 Plan authorizes the
issuance of options to purchase up to 800,000 shares of the Company's common
stock. Options granted may be either incentive stock options (ISOs) or
non-qualified stock options. The exercise price and vesting schedule of the
options will be established on the grant date. However, the established exercise
price for ISOs may not be less than the fair market value of the Company's
common stock on the grant date. The 1996 Plan also provides that no options will
have a term of longer than ten years.

On March 25, 1999, the Company adopted the 1999 Stock Option Plan (the 1999
Plan) and the 1999 Outside Directors Stock Option Plan (the 1999 Directors
Plan). The 1999 Plan originally authorized the issuance of options to purchase
up to 600,000 shares of the Company's common stock under the same provisions as
the 1996 Plan. At the Annual Shareholder Meetings held on August 1, 2001 and
August 1, 2000, the Plan was amended to increase the number of shares available
for grant by 500,000 and 800,000, respectively. As of December 31, 2001,
1,900,000 options are authorized under the 1999 Plan. The 1999 Directors Plan
authorizes the issuance of options to purchase up to 100,000 shares of the
Company's common stock.

F-20

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

Option activity for the 1996 Plan, the 1999 Plan and the 1999 Directors
Plan during the periods indicated is as follows:

The Company recorded $10,000, $10,000 and $7,665 of compensation expense in
the years ended December 31, 2001, 2000 and 1999, respectively, calculated as
the difference between the exercise price and the estimated fair value of stock
options at the grant date, allocated over the vesting periods of the options.
These amounts have been included within sales and marketing expenses. At
December 31, 2001, $2,335 of this amount is deferred and included as an offset
within additional paid in capital

Options outstanding and exercisable at December 31, 2001 are as follows:

OPTIONS OUTSTANDING

F-21

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

OPTIONS EXERCISABLE

At December 31, 2001, 520,156 options are available for grant.

As discussed in note 2, the Company has elected to continue to use APB No.
25 to measure compensation expense related to employee stock options and has
recorded compensation expense where the exercise price of the option was less
than the fair value of the stock on the date of grant. Had the Company
determined compensation expense based on the fair value of the option on the
grant date under SFAS No. 123, the Company's results of operations for the years
ended December 31, 2001, 2000 and 1999 would have been as follows:

The fair value of the options granted to employees in 2001, 2000, and 1999
as calculated under SFAS 123, ranged from $1.08 to $3.37, $1.62 to $8.70, and
$0.12 to $9.40, respectively, with a weighted average fair value of $1.80,
$5.49, and $2.35, respectively. The following assumptions were used in the
calculations:

(13) COMMITMENTS AND CONTINGENCIES

The Company leases space in Norwalk, Connecticut, New York, New York, and
Kirkland, Washington for its primary offices. Rent expense totaled $1,243,278,
$589,239 and $149,308 for the years ended December 31, 2001, 2000 and 1999,
respectively.

F-22

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

Future minimum lease payments under non-cancelable operating leases and
capital leases (with initial or remaining lease terms in excess of one year) as
of December 31, 2001 are as follows:

The amounts above include payments due under the lease on the former
FreeEDGAR facilities, net of contractual sublease payments, which have been
accrued in restructuring costs.

(14) RELATED PARTY TRANSACTIONS

The Company provides services in the normal course of business to three
shareholders. Revenues from these related parties totaled $788,281, $709,200 and
$383,000 in 2001, 2000 and 1999, respectively. Of the revenues received, $75,000
in 1999 was used to satisfy a note payable and related accrued interest to one
shareholder. The Company also purchased services in the normal course of
business from three shareholders, only one of which was included in the group of
shareholders to whom we provide services which totaled $417,138 $3,078,741 and
$1,535,479 in 2001, 2000 and 1999, respectively.

The Company entered into compensation agreements with its two founding
stockholders that provide for combined annual compensation of $300,000
commencing in January 1996, payment of which is dependent upon the availability
of cash and other factors.

In January 2001, we loaned the sum of $400,000 to certain executives,
employees and outside directors of the Company for the purpose of purchasing
shares of our common stock from The Bean LLC, an entity in which Susan
Strausberg, our Chief Executive Officer and Marc Strausberg, our Chairman of the
Board are beneficial owners. The common stock was purchased at a price of $1.75
per share, the closing Nasdaq market price on the date of sale. The loan was
evidenced by separate loan and pledge agreements with, and three-year promissory
notes of, each of the borrowers. The promissory notes are full recourse and
secured by the common stock purchased with the proceeds of the individual loans.
The fair value of these notes at December 31, 2001 was estimated at
approximately $400,000 based on the amount of future cash flows associated with
the notes, discounted using an appropriate interest rate.

F-23

EDGAR ONLINE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

DECEMBER 31, 2001

(15) SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of the quarterly results of operations for the
years ended December 31, 2001 and 2000 (in thousands, except for per share
data):

Loss per share data are computed independently for each of the periods
presented; therefore the sum of the loss per share amounts for the quarters may
not equal the total for the year.

(16) SUBSEQUENT EVENTS

In connection with our acquisition of FIS, the Company issued $6,000,000 in
promissory notes to the former owners of FIS ("FIS Notes"). The FIS Notes were
originally scheduled to mature on October 27, 2002. On March 21, 2002, the
Company concluded negotiations to extend the maturity date of certain of the FIS
Notes. The holders of $5,700,000 in principal amount of FIS Notes agreed to
amend and restate their notes to provide for the following schedule of principal
payments: $1,900,000 on April 1, 2002, $1,900,000 on April 1, 2003 and
$1,900,000 on January 2, 2004. Interest will remain at 7.5% and will be payable
according to the original terms.

In January 2002, the Company completed a private sale of 2,000,000 shares
of common stock at a purchase price of $2.50 and 400,000 four-year warrants at
an exercise price of $2.875 per share to certain institutional investors which
resulted in gross proceeds of $5,000,000. 500,000 shares and 100,000 warrants
were sold prior to December 31, 2001 which resulted in proceeds of $1,250,000
which is included in cash on the accompanying balance sheet. The remaining
1,500,000 shares and 300,000 warrants were sold on January 8, 2002.

F-24