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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED SEPTEMBER 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO __________
COMMISSION FILE NUMBER 000-25943
JMXI, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 11-3374729
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
900 WEST SHORE ROAD
PORT WASHINGTON, NEW YORK 11050
(Address of principal executive offices) (Zip Code)
(516) 625-4656
(Registrant's telephone number, including area code)
JMXI, INC.
2 HUNTINGTON QUADRANGLE; SUITE 3S2
MELVILLE, NEW YORK 11747
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of November 7, 2002, there were 36,015,489 shares of the registrant's
common stock, $.01 par value, outstanding.
JMXI, INC.
INDEX
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (Unaudited) ............................... 3
Consolidated Balance Sheets -- September 30, 2002 and December 31, 2001 .. 3
Consolidated Statements of Operations -- Three and Nine Months Ended
September 30, 2002 and 2001 ........................................... 4
Consolidated Statement of Stockholders' Equity -- Nine Months Ended
September 30, 2002 .................................................... 5
Consolidated Statements of Cash Flows -- Nine Months Ended
September 30, 2002 and 2001 ........................................... 6
Notes to Consolidated Financial Statements ............................... 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations .................................................... 11
Item 3. Quantitative and Qualitative Disclosures of Market Risk ..................... 16
Item 4. Controls and Procedures ..................................................... 18
PART II OTHER INFORMATION
Item 1. Legal Proceedings ........................................................... 18
Item 2. Changes in Securities and Use of Proceeds ................................... 19
Item 3. Defaults Upon Senior Securities ............................................. 19
Item 4. Submission of Matters to a Vote of Security Holders ......................... 19
Item 5. Other Information ........................................................... 19
Item 6. Exhibits and Reports on Form 8-K ............................................ 19
Signatures ........................................................................... 21
2
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JMXI, INC. AND SUBSIDIARIES
(FORMERLY JUPITER MEDIA METRIX, INC.)
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
SEPTEMBER 30, DECEMBER 31,
2002 2001
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents .............. $ 14,628 $ 14,920
Marketable securities .................. -- 1,003
Accounts receivable, less allowance
for doubtful accounts of $1,668
in 2002 and $3,038 in 2001 ........... 165 18,492
Prepaid expenses and other current
assets ............................... 1,630 2,777
--------- ---------
Total current assets ..................... 16,423 37,192
Property and equipment at cost, net ...... -- 24,773
Goodwill ................................. -- 51,042
Other intangibles, net ................... -- 5,109
Restricted cash and other assets ......... 2,472 7,730
--------- ---------
Total assets ............................. $ 18,895 $ 125,846
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities .......................... $ 6,045 $ 28,969
Due to related parties ................. 86 1,364
Advance billings to clients ............ -- 14,770
--------- ---------
Total current liabilities ................ 6,131 45,103
Long-term restructuring liabilities
and other .............................. -- 23,085
Commitments and contingencies ............ -- --
Stockholders' equity:
Preferred stock, $.01 par value --
shares authorized:
10,000,000 in 2002 and 2001, none
issued and outstanding .............. -- --
Common stock, $.01 par value --
shares authorized:
150,000,000 in 2002 and 2001;
shares issued and outstanding:
36,015,489 in 2002 and
35,869,051 in 2001 .................. 360 359
Additional paid-in capital ............. 680,742 684,623
Accumulated other comprehensive
income ............................... 225 132
Accumulated deficit .................... (667,676) (620,624)
Deferred compensation .................. (887) (6,832)
--------- ---------
Total stockholders' equity ............... 12,764 57,658
--------- ---------
Total liabilities and stockholders'
equity ................................. $ 18,895 $ 125,846
========= =========
See accompanying notes.
3
JMXI, INC. AND SUBSIDIARIES
(FORMERLY JUPITER MEDIA METRIX, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Continuing operations:
Operating expenses:
General and administrative .... $ 234 $ 274 $ 469 $ 547
--------- --------- --------- ---------
Total operating expenses ........ 234 274 469 547
--------- --------- --------- ---------
Loss from continuing operations
before items listed below ..... (234) (274) (469) (547)
Interest expense, net ........... (55) (249) (171) (2,146)
--------- --------- --------- ---------
Loss from continuing operations . (289) (523) (640) (2,693)
--------- --------- --------- ---------
Discontinued operations:
Income (loss) from operations
of discontinued operations,
net of $15 million
settlement of patent
litigation in May 2002 ...... 6,083 (395,638) (4,200) (495,788)
Income (loss) on disposal of
businesses .................. 281 -- (6,312) --
--------- --------- --------- ---------
Income (loss) from discontinued
operations .................... 6,364 (395,638) (10,512) (495,788)
--------- --------- --------- ---------
Income (loss) before cumulative
effect of change in accounting
principle ..................... 6,075 (396,161) (11,152) (498,481)
Cumulative effect of change in
accounting principle .......... -- -- (35,900) --
--------- --------- --------- ---------
Net income (loss) ............... $ 6,075 $(396,161) $ (47,052) $(498,481)
========= ========= ========= =========
Basic and diluted net income
(loss) per share:
Income (loss) from continuing
operations .................. $ (0.01) $ (0.01) $ (0.02) $ (0.08)
Income (loss) from
discontinued operations ..... 0.18 (11.15) (0.29) (13.99)
--------- --------- --------- ---------
Income (loss) before
cumulative effect of change
in accounting principle ..... 0.17 (11.16) (0.31) (14.07)
Cumulative effect of change in
accounting principle ........ -- -- (1.00) --
--------- --------- --------- ---------
Net income (loss) ............. $ 0.17 $ (11.16) $ (1.31) $ (14.07)
--------- --------- --------- ---------
Shares used in the calculation
of basic and diluted net income
(loss) per share ................ 35,967 35,496 35,907 35,432
========= ========= ========= =========
See accompanying notes.
4
JMXI, INC. AND SUBSIDIARIES
(FORMERLY JUPITER MEDIA METRIX, INC.)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2002
(UNAUDITED)
(IN THOUSANDS)
Accumulated
Common Stock Additional Other Total
---------------------- Paid-in Comprehensive Accumulated Deferred Stockholders'
Shares Amount Capital Income Deficit Compensation Equity
--------- --------- --------- --------- --------- --------- ---------
Consolidated Balance, December
31, 2001 ..................... 35,869 $ 359 $ 684,623 $ 132 $(620,624) $ (6,832) $ 57,658
Comprehensive loss: --
Net loss ................... -- -- -- -- (47,052) -- (47,052)
Unrealized loss on
marketable securities .... -- -- -- 9 -- -- 9
Foreign currency translation -- -- -- 84 -- -- 84
---------
Total comprehensive loss ..... -- -- -- -- -- -- (46,959)
Exercise of options and
warrants ................... 146 1 7 -- -- -- 8
Amortization of deferred
compensation ............... -- -- -- -- -- 2,057 2,057
Reversal of deferred
compensation of options
forfeited .................. -- -- (3,888) -- -- 3,888 --
--------- --------- --------- --------- --------- --------- ---------
Consolidated Balance,
September 30, 2002 ......... 36,015 $ 360 $ 680,742 $ 225 $(667,676) $ (887) $ 12,764
========= ========= ========= ========= ========= ========= =========
See accompanying notes.
5
JMXI, INC. AND SUBSIDIARIES
(FORMERLY JUPITER MEDIA METRIX, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
2002 2001
--------- ---------
OPERATING ACTIVITIES
Net loss ................................. $ (47,052) $(498,481)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Restructuring and other charges
(reversal) ........................... (13,659) 51,259
Loss on disposal of businesses and
sale of subsidiaries ................. 6,312 664
Loss on write-off of investments ....... -- 5,477
Cumulative effect of change in
accounting principle ................. 35,900 --
Loss on disposal of fixed assets ....... 862 --
Realized loss on sale of marketable
securities ........................... 9 --
(Reversal of) provision for bad
debts ................................ (150) 2,545
Depreciation and amortization and
impairment writedown of property
and equipment ........................ 12,046 7,097
Amortization of deferred
compensation and other
stock-based compensation ............. 2,057 4,678
Amortization and impairment of
intangibles .......................... 8,641 402,171
Minority interests ..................... -- (2,055)
Deferred rent .......................... 267 379
Changes in operating assets and
liabilities
Receivables ........................... 11,547 9,657
Prepaid expenses and other current
assets .............................. 549 1,874
Other assets .......................... -- 1,457
Accounts payable and accrued
liabilities ......................... (21,518) (15,365)
Advance billings to clients ........... (6,362) (22,211)
Due to related parties ................ (1,279) (1,204)
--------- ---------
Net cash used in operating activities .... (11,830) (52,058)
--------- ---------
INVESTING ACTIVITIES
Sale of marketable securities ............ 1,002 13,939
Net cash received from disposal of
businesses ............................. 11,055 --
Additions to property and equipment ...... (519) (9,918)
Acquisition earn-out payment ............. -- (4,918)
Purchase of license ...................... -- (1,000)
Security deposits ........................ (92) --
--------- ---------
Net cash provided by (used in)
investing activities ................... 11,446 (1,897)
--------- ---------
FINANCING ACTIVITIES
Repayment of notes payable ............... -- (773)
Proceeds from exercise of stock
options ................................ 8 346
Contributions from minority interests .... -- 3,227
--------- ---------
Net cash provided by financing
activities ............................. 8 2,800
--------- ---------
Effect of exchange rate changes on
cash ................................... 84 224
--------- ---------
Net decrease in cash and cash
equivalents ............................ (292) (50,931)
Cash and cash equivalents at
beginning of period .................... 14,920 74,133
--------- ---------
Cash and cash equivalents at end of
period ................................. $ 14,628 $ 23,202
========= =========
SUPPLEMENTAL INFORMATION
Interest paid ............................ $ 10 $ 125
========= =========
See accompanying notes.
6
JMXI, INC. AND SUBSIDIARIES
(FORMERLY JUPITER MEDIA METRIX, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements for JMXI,
Inc. (the "Company"), formerly Jupiter Media Metrix, Inc., have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine-month
periods ended September 30, 2002 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2002.
The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the United
States for complete financial statements.
For further information, refer to the financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001, as filed with the Securities and Exchange Commission.
The auditor's report on the foregoing consolidated financial statements of
the Company for the fiscal year ended December 31, 2001 states that because of
operating losses and a working capital deficiency, there is substantial doubt
about our ability to continue as a going concern. A "going concern" opinion
indicates that the financial statements have been prepared assuming we will
continue as a going concern and do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome
of this uncertainty.
Certain balances in prior year have been reclassified to conform to the
current year presentation.
B. DISCONTINUED OPERATIONS
During the nine months ended September 30, 2002, the Company disposed of
Media Metrix, AdRelevance and LiveMetrix, which composed its measurement
division, as well as its Jupiter Research unit and Events unit. The disposal of
these units represent discontinued operations and, accordingly, the accompanying
financial statements have been restated to reflect the measurement, research and
events divisions' operations as discontinued.
Effective April 30, 2002, the Company discontinued offering its LiveMetrix
product and terminated the exclusive reseller agreement with LiveTechnology
Holdings, Inc. ("LiveTech") and license to the underlying technology. In
exchange for a payment of $275,000 and the transfer of certain equipment to
LiveTech, the Company terminated the remaining cash license fee of approximately
$1.8 million owed to LiveTech and cancelled options held by LiveTech to purchase
1,750,000 shares of common stock.
On April 7, 2002, the Company sold substantially all of the assets of
AdRelevance, its advertising measurement unit, to NetRatings, Inc.
("NetRatings") for approximately $8.2 million, of which $340,000 was held in
escrow at September 30, 2002.
7
The Company's audience measurement business unit, Media Metrix, was sold
in two separate transactions. On May 7, 2002, the Company entered into an Asset
Purchase Agreement with NetRatings pursuant to which NetRatings acquired certain
assets of its European operations for $2.0 million. In connection with the sale
of certain of its European Internet audience measurement assets, the Company
also agreed to purchase the equity interests held by its two remaining partners
in its European joint venture for a total of $560,000. On June 6, 2002, the
assets of the Company's North American audience measurement unit was sold to
comScore Networks, Inc. for a total purchase price of approximately $1.5
million.
On June 21, 2002, the Company sold its research and events business units
to INT Media Group, Inc. now known as Jupitermedia Corporation for $250,000 in
cash. On July 31, 2002, the stockholders of the Company approved the sale to
Jupitermedia and the sale was consummated.
In connection with the disposal of the businesses discussed above, the
Company recorded a loss of $6.3 million, which is recorded as income (loss) on
disposal of businesses in the accompanying statement of operations.
Revenues for the Company's measurement division were $9.6 million for the
three months ended September 30, 2001, and $8.3 million and $36.0 million for
the nine months ended September 30, 2002 and 2001, respectively. Revenues for
the Company's research and events division were $452,000 and $9.0 million for
the three months ended September 30, 2002 and 2001, respectively, and $9.1
million and $35.4 million for the nine months ended September 30, 2002 and 2001,
respectively.
On July 31, 2002, the stockholders of the Company approved the Company's
Plan of Liquidation and Dissolution. As of July 31, 2002, the Company ceased all
activities other than activities incidental to the wind-up and liquidation of
the Company; however, the Company has not filed a Certificate of Dissolution
with the Secretary of State of the State of Delaware, and, accordingly, has not
yet adopted the liquidation basis of accounting.
C. RESTRUCTURING AND OTHER CHARGES (REVERSAL)
During the year ended December 31, 2001, the Company announced and
implemented a series of restructuring plans which resulted in a charge of
approximately $51.3 million. The Company's goal was to significantly reduce
operating expenses by realigning resources around its core product initiatives,
and by reducing sales and marketing, product development, administrative and
technology expenses. The restructuring charge included $8.2 million related to
severance and other employee costs associated with the elimination of
approximately 480 positions across a number of business functions, job
categories and regions. Costs associated with the employee terminations included
severance pay, medical and other benefits. The restructuring charge also
included $37.7 million for facilities that were consolidated or closed,
including offices in New York, Atlanta, Los Altos, Berkeley, San Francisco and
London. This amount includes a portion of the remaining contractual obligations
under facility leases from the date of closure to the end of the lease term, as
well as a write-down of leasehold improvements in connection with the closure or
consolidation of such facilities. The Company continued to record monthly rent
expense on these facilities as an operating expense until the facilities were
closed. In addition, the Company recorded approximately $869,000 of
restructuring charges related to the discontinuation of certain international
operations, panel shutdown costs and cancellation of a note receivable.
The Company also recorded approximately $2.7 million in other charges
related to the cancellation of scheduled conferences by its Events business
unit, primarily consisting of cancellation fees charged by facility providers
and other vendors, and wrote down approximately $1.9 million of abandoned
equipment during the year ended December 31, 2001.
During the nine months ended September 30, 2002, the Company recorded a
reversal to restructuring charges of $13.7 million related to the discontinued
operations, primarily due to the settlement of its lease commitment at 21 Astor
Place (see Note D).
Of the total $51.3 million of restructuring and other charges recorded,
$9.9 million was paid, and $12.9 million of property, plant and equipment and
other current assets were written-off, which left an accrual of $28.5 million at
December 31, 2001, of which $20.3 million was related to severance and lease
payments and is included in long-term liabilities. Of the $28.5 million accrual
remaining at December 31, 2001, $11.3 million was paid, and $13.7 million was
reversed during the nine months ended September
8
30, 2002, leaving an accrual of $3.5 million at September 30, 2002. The Company
expects to pay out the remainder during the next twelve months. The reversal of
$13.7 million is primarily related to the settlement of its lease commitment at
21 Astor Place (see Note D).
D. LEASE TERMINATION
On May 3, 2002, the Company entered into a lease termination agreement
with its landlord for leased space at 21 Astor Place, New York, New York.
Pursuant to the terms thereof, the Company relinquished a $4.5 million letter of
credit to secure the lease and had prepaid rent through August 15, 2002 of
approximately $1.1 million. This termination agreement resulted in a reversal of
approximately $9.8 million of a restructuring accrual recorded during 2001.
E. LITIGATION SETTLEMENT
On May 7, 2002, the Company entered into a Settlement Agreement and
Intellectual Property Agreement with NetRatings pursuant to which the Company
agreed to discontinue the pending patent infringement lawsuit against NetRatings
and to transfer to NetRatings our patents for computer use tracking in exchange
for the payment of $15.0 million. In addition, as part of the settlement,
NetRatings granted the Company a non-exclusive, assignable license to use the
computer use tracking patents transferred to NetRatings in its domestic Internet
audience measurement business until June 30, 2005. The license fee payable to
NetRatings was $125,000 per month for the period July 1 through September 30,
2002, and $375,000 for the fourth quarter 2002. In connection with the sale of
the Media Metrix business (see Note B), the Company gave notice that it intended
to terminate the license. The $15 million patent settlement is included in
income (loss) from operations of discontinued operations in the accompanying
statement of operations.
F. ACCOUNTING FOR GOODWILL AND OTHER INTANGIBLE ASSETS
Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets". These statements established financial
accounting and reporting standards for acquired goodwill and other intangible
assets. Specifically, the standards address how acquired intangible assets
should be accounted for both at the time of acquisition and after they have been
recognized in the financial statements. The provisions of SFAS No. 141 apply to
all business combinations initiated after June 30, 2001. In accordance with SFAS
No. 142, intangible assets, including purchased goodwill, must be evaluated for
impairment. Those intangible assets that will continue to be classified as
goodwill or as other intangibles with indefinite lives are no longer amortized.
Finite lived intangibles will continued to be amortized over their estimated
useful lives. SFAS No. 142 prescribes a two-phase process for impairment testing
of goodwill: (i) the determination of impairment, based upon the fair value of a
reporting unit as compared to its carrying value, and (ii) if there is an
impairment, this step measures the amount of impairment loss by comparing the
implied fair value of goodwill with the carrying amount of that goodwill. The
Company completed its phase one impairment analysis during the first quarter of
2002, which indicated that the carrying value was greater than the fair value
and that an impairment existed. The Company also completed the second phase of
the testing during the first quarter of 2002 using the market approach to
determine the fair value which resulted in an impairment charge of $34.9
million. In addition, the Company completed its testing of intangible assets
using discounted cash flows and recorded an impairment on a trademark of $1.0
million. The impairment charges have been reported as the cumulative effect of a
change in accounting principle, as of January 1, 2002, in the accompanying
consolidated statements of operations. Of the total impairment charges of $35.9
million, $9.0 million relates to the AdRelevance reporting unit, $26.9 million
to the Jupiter research and events units.
In addition, during the second quarter of 2002, the Company wrote off an
additional $8.4 million related to goodwill as a result of a reduction in the
value of the Jupiter research and events businesses.
9
Property and equipment was also written down by $8.5 million to reflect
its reductions in value.
In accordance with SFAS 142, the effect of this change is reflected
prospectively. The following table reflects consolidated results of operations
adjusted as though the adoption of SFAS No. 141 and 142 occurred as of January
1, 2001 (in thousands):
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Net income (loss) before cumulative
effective of accounting change:
As reported* ................. $ 6,075 $(396,161) $ (11,152) $(498,481)
Goodwill and
indefinite-lived
intangibles
amortization ................. -- 27,288 -- 82,171
--------- --------- --------- ---------
As adjusted .................. $ 6,075 $(368,873) $ (11,152) $(416,310)
========= ========= ========= =========
Basic and diluted income (loss) per
common share before cumulative
effective of accounting change:
As reported .................. $ 0.17 $ (11.16) $ (0.31) $ (14.07)
========= ========= ========= =========
As adjusted .................. $ 0.17 $ (10.39) $ (0.31) $ (11.75)
========= ========= ========= =========
* The as reported amounts for 2001 include the $320.0 million impairment
recorded in the third quarter of 2001.
G. SUBSEQUENT EVENTS
On October 8, 2002, the Company was served notice of a suit filed in the
United States District Court for the Western District of Washington in Seattle
by two former employees of the Company alleging the Company violated Washington
State and Federal securities laws in connection with the purchase by the Company
of AdRelevance, Inc. and otherwise breached contractual and other obligations
allegedly owed by the Company to such employees with respect to their receipt of
shares and options to purchase shares of the Company's common stock. The Company
believes the lawsuit is without merit and intends to vigorously defend the
action.
On October 25, 2002 the Company entered into an Agreement and a Surrender
Agreement, as amended as of October 31, 2002, with its landlord for leased space
at 2 Huntington Quadrangle, Melville, New York. Pursuant to the terms thereof,
the Company deposited approximately $690,000 in escrow and has paid rent through
November 30, 2002 in exchange for which its landlord has agreed to terminate the
lease and relinquish a $120,000 letter of credit to secure the lease, contingent
upon such landlord's ability to relet the premise on or prior to November 30,
2002. In the event the premises is not relet by such date, the escrow will be
returned to the Company, and the agreement and surrender agreement shall
terminate.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
You should read the following discussion of our financial condition and
results of operations with the unaudited financial statements and the notes to
the unaudited financial statements included elsewhere in this Quarterly Report
on Form 10-Q. This discussion contains forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, based on our
current expectations, assumptions, estimates and projections. These
forward-looking statements involve risks and uncertainties. Our actual results
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, as more fully described in the "Risk
Factors" section and elsewhere in this Quarterly Report on Form 10-Q, and in
other reports and documents filed from time to time with the Securities and
Exchange Commission. We undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
OVERVIEW
As of July 31, 2002, JMXI, Inc., formerly known as Jupiter Media Metrix,
Inc., effectively ceased all business operations. For the first seven months of
2002, we were a provider of innovative and comprehensive research and
measurement products and services that analyzed the impact of the Internet and
new technologies on commerce and marketing and our services included Media
Metrix, Jupiter Research and Jupiter Events.
In April 2002, we sold substantially all of the assets of our advertising
measurement division, AdRelevance, to NetRatings, Inc. for a purchase price of
$8.2 million. Effective April 30, 2002, we also discontinued offering our
LiveMetrix product and terminated our exclusive reseller agreement with
LiveTechnology Holdings, Inc. ("LiveTech") and the license to the underlying
technology. In exchange for the payment of $275,000 and the transfer of certain
equipment to LiveTech, we terminated the remaining cash license fee of
approximately $1.8 million owed to LiveTech and cancelled options held by
LiveTech to purchase 1,750,000 shares of our common stock.
On May 3, 2002, we entered into a lease termination agreement with our
landlord for leased space at 21 Astor Place, New York, New York. Pursuant to the
terms thereof, we relinquished a $4.5 million letter of credit to secure the
lease, prepaid rent through August 15, 2002 of approximately $1.1 million and
vacated the premises on August 15, 2002.
On May 7, 2002 we entered into a Settlement Agreement and Intellectual
Property Agreement with NetRatings, Inc. pursuant to which we agreed to
discontinue our pending patent infringement lawsuit against NetRatings and to
transfer to NetRatings our patents for computer use tracking in exchange for the
payment of $15.0 million. In addition, as part of the settlement, NetRatings
granted us a non-exclusive, assignable license to use the computer use tracking
patents transferred to NetRatings in its domestic Internet audience measurement
business until June 30, 2005. The license fee payable to NetRatings was to be
$125,000 per month for the period July 1 through September 30, 2002, and
$375,000 for the fourth quarter 2002. In connection with the sale of our Media
Metrix business described below, we gave notice that we intended to terminate
the license. In a separate transaction on May 7, 2002, we entered into an Asset
Purchase Agreement with NetRatings pursuant to which NetRatings acquired certain
assets of our European operations for $2.0 million. In connection with the
foregoing sale of certain of our European Internet audience measurement assets,
we also agreed to purchase the equity interests held by its two remaining
partners in its European joint venture for a total of $560,000.
11
On June 6, 2002, we sold substantially all of the assets of our North
American audience measurement division, Media Metrix, to comScore Networks, Inc.
for a purchase price of approximately $1.5 million.
On June 25, 2002, our board of directors approved and adopted our proposed
plan of dissolution and liquidation. The plan was subsequently approved by our
stockholders on July 31, 2002. The board, in its sole and absolute discretion,
may abandon the plan at any time prior to the filing of a certificate of
dissolution with the State of Delaware. Since the adoption of the plan, the
board and management have effectively terminated our operations. Following
approval of the plan by our stockholders, our activities have become limited to
winding up our affairs, taking such action as may be necessary to preserve the
value of our assets and distributing our assets. As we have not filed a
Certificate of Dissolution with the Secretary of State of the State of Delaware,
we have not yet adopted the liquidation basis of accounting. We will seek to
distribute or liquidate all of our assets in such manner and upon such terms as
the board of directors determines to be in the best interests of our
stockholders. Although our board of directors believes the liquidation program
disclosed in our proxy statement dated July 9, 2002 is achievable, there is
currently no firm timetable for the distribution of proceeds to our stockholders
because of contingencies inherent in winding up our business. There can be no
assurance that we will have sufficient cash available following the wind down of
our business to pay any cash to our shareholders.
On July 31, 2002, we sold substantially all of the assets of our remaining
operating business, Jupiter Research and Jupiter Events, to INT Media Group,
Inc., now known as Jupitermedia Corporation, for a total purchase price of
approximately $250,000, including our customer contracts and intellectual
property, and assigned certain related liabilities.
As discussed in Note B to the financial statements, the accompanying
statement of operations have been restated to reflect the disposal of the
measurement, research and events businesses.
As of July 31, 2002, all of our businesses were discontinued, and we
ceased all operating activities other than limited activities incidental to our
wind-up.
Our revenues from discontinued operations consisted of measurement,
research and events products and services. Our measurement offerings, which
consisted of the products and services from the Media Metrix, AdRelevance and
LiveMetrix units, included both syndicated measurement products and customized
measurement products. We recognized revenues for the syndicated measurement
products and services over the term of the related contract as services are
provided. Revenues for customized measurement products and services were
recognized in the period in which the product or service was delivered. Our
research offerings, which consisted of the products and services from our
Jupiter Research unit, were a combination of proprietary written analysis,
supporting data and access to our research analysts. We recognized revenues for
our Jupiter Research products and services over the term of the related contract
as services were provided. Revenues from these services were recognized upon the
sale of the study or completion of the project. Our events offerings, consisted
of revenues from (i) individual attendees, (ii) sponsors, which displayed their
logo in our conference program and/or host a reception, and (iii) exhibitors,
which received a booth to promote their companies. Other revenues were derived
primarily from the sale of Web sponsorships, which were discontinued during the
year ended December 31, 2001. Revenues attributable to our conferences and other
services were recognized upon the completion of the event and over the term of
the Web sponsorship.
CRITICAL ACCOUNTING POLICIES
Our consolidated financial statements and related public financial
information are based on the application of accounting principles generally
accepted in the United States ("GAAP"). The preparation
12
of financial statements under GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities as of the date of the financial
statements, and the reported amounts of revenue and expenses during the periods.
We believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. Estimates have been made
by management in several areas, including, but not limited to, accounts
receivable allowances, valuation of long-lived and intangible assets and
restructuring reserves. We have based our estimates on historical experience and
on various other assumptions that we believe to be reasonable under the
circumstances and review valuations based on estimates for reasonableness and
conservatism on a consistent basis. Actual results may differ materially from
these estimates under different assumptions or conditions.
Other than that discussed below, no other changes in accounting policies
took place in the nine months ended September 30, 2002.
As discussed in Note F to the financial statements, we adopted FASB
Statement 142, "Goodwill and Other Intangible Assets", as of January 1, 2002 and
have performed the required impairment tests of goodwill and indefinite lived
intangible assets and have recognized an impairment loss of $35.9 million
resulting from the cumulative effect of the change in accounting principle
during the nine months ended September 30, 2002.
RESULTS OF OPERATIONS FOR CONTINUING OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2001
Loss from Continuing Operations. Loss from operations was $289,000 for the
three months ended September 30, 2002. Loss from operations was $523,000 for the
three months ended September 30, 2001. We recognized a smaller loss from
operations in the three months ended September 30, 2002 due primarily to
decreases in operating expenses due to the cessation of all operating activities
other than limited activities incidental to our wind-up. Operating expenses in
connection with our limited activities incidental to our wind-up are comprised
of general and administrative expenses of $234,000 for the three months ended
September 30, 2002.
NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001
Loss from Continuing Operations. Loss from continuing operations was
approximately $640,000 for the nine months ended September 30, 2002. Our loss
from operations was $2.7 million for the nine months ended September 30, 2001.
We recognized a smaller loss from operations in the nine months ended September
30, 2002 due primarily to decreases in interest expense and operating expenses
due to the cessation of all operating activities other than limited activities
incidental to our wind-up. Operating expenses are comprised of general and
administrative expenses of $469,000 for the nine months ended September 30,
2002.
Cumulative effect of change in accounting principle. In connection with
our adoption of FASB Statement 142, "Goodwill and Other Intangible Assets", as
of January 1, 2002 and the performance of the required impairment tests of
goodwill and indefinite lived intangible assets, we recognized an impairment
loss of $35.9 million resulting from the cumulative effect of the change in
accounting principle during the nine months ended September 30, 2002.
13
DISCONTINUED OPERATIONS
During the nine months ended September 30, 2002, we disposed of our Media
Metrix, AdRelevance and LiveMetrix units which composed our measurement division
as well as our Jupiter Research unit and our Events unit. The disposal of these
units represent discontinued operations and accordingly, our financial
statements have been restated to reflect such divisions' operations as
discontinued.
In connection with the disposal of our measurement business, we recorded a
loss of $1.8 million, and in connection with the disposal of our research and
events businesses, we recorded a loss of $4.5 million, which are recorded as
loss on disposal of businesses in our statement of operations of $6.3 million.
Revenues for our measurement division were $9.6 million for the three
months ended September 30, 2001, and $8.3 million and $36.0 million for the nine
months ended September 30, 2002 and 2001, respectively. Revenues for our
research and events division were $452,000 and $9.0 million for the three months
ended September 30, 2002 and 2001, respectively, and $9.1 million and $35.4
million for the nine months ended September 30, 2002 and 2001, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2002, we had approximately $14.6 million of cash and
cash equivalents. In addition, at September 30, 2002, we held approximately $1.3
million of cash in accounts collateralizing letters of credit issued in lieu of
security deposits under our real estate leases. Because we have ceased all
operating activities other than limited activities incidental to our wind-up, we
do not anticipate that operating expenses will be a material use of our cash
resources. Our activities have become limited to winding up our affairs, taking
such action as may be necessary to preserve the value of our assets and
distributing our assets. We have incurred and will continue to incur legal
expenses in connection current and future litigation, including the legal
proceedings set forth in Part II, Item 1, Legal Proceedings. We will seek to
distribute or liquidate all of our assets in such manner and upon such terms as
the board of directors determines to be in the best interests of our
stockholders. Although our board of directors believes the liquidation program
disclosed in our proxy statement dated July 9, 2002 is achievable, there is
currently no firm timetable for the distribution of proceeds to our stockholders
because of contingencies inherent in winding up our business.
Net cash used in operating activities was $11.8 million for the nine
months ended September 30, 2002, compared to $52.1 million for the nine months
ended September 30, 2001. The variance for the nine months ended September 30,
2002 compared to the nine months ended September 30, 2001 was primarily due to a
lower net loss for 2002 due to the restructuring activities initiated in
2001, as well as the cessation of operations discussed above.
Net cash provided by (used in) investing activities was $11.4 million for
the nine months ended September 30, 2002, compared to ($1.9) million for the
nine months ended September 30, 2001. Cash provided by investing activities for
the nine months ended September 30, 2002 was due primarily to net proceeds
received from the sale of the measurement business. Cash used in investing
activities for the nine months ended September 30, 2001 was due primarily to
proceeds received from the sale of marketable securities offset by acquisition
earn-out payments, property and equipment additions and the purchase of a
license to proprietary technology.
Net cash provided by financing activities was $8,000 for the nine months
ended September 30, 2002 compared to $2.8 million for the nine months ended
September 30, 2001. Cash provided by
14
financing activities for the nine months ended September 30, 2002 was due to the
proceeds received from the exercise of stock options and warrants. Cash provided
by financing activities for the nine months ended September 30, 2001 was due
primarily to contributions received from minority interests of $3.2 million and
to the proceeds received from the exercise of stock options of $346,000, offset
by the repayment of long term debt of $773,000.
During the year ended December 31, 2001, JMXI recorded restructuring and
other charges of $51.3 million. Of the total $51.3 million of restructuring and
other charges recorded, $9.9 million was paid, and $12.9 million of property,
plant and equipment and other current assets were written-off, which left an
accrual of $28.5 million at December 31, 2001, of which $20.3 million was
related to severance and lease payments and is included in long-term
liabilities. Of the $28.5 million accrual remaining at December 31, 2001, $11.3
million was paid, and $13.7 million was reversed during the nine months ended
September 30, 2002, leaving an accrual of $3.5 million at September 30, 2002.
The Company expects to pay out the remainder during the next twelve months.
We lease office space in the United States and other countries. At
September 30, 2002, our future minimum lease payments under non-cancelable
operating leases with initial or remaining lease terms in excess of one year are
$1.1 million for the remainder of 2002, $4.2 million for 2003, $3.9 million for
2004, $3.4 million for 2005, $2.7 million for 2006 and $16.7 million thereafter.
Future minimum lease payments have not been reduced by future minimum sublease
rentals of $8.7 million under operating leases. Rent expense approximated
$7,000,000, $3,000,000 and $861,000 for the years ended December 31, 2001, 2000
and 1999, respectively.
We have incurred significant net losses from operations since our
inception. As of September 30, 2002, we had an accumulated deficit of
approximately $667.7 million.
15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
The carrying values of financial instruments including cash and cash
equivalents, accounts receivable, accounts payable and notes payable,
approximate fair value because of the short maturity of these instruments.
We have historically had very low exposure to changes in foreign currency
exchange rates, therefore we have not used derivative financial instruments to
manage foreign currency fluctuation risk. We no longer conduct business
internationally.
RISK FACTORS
OUR AUDITORS HAVE ISSUED A "GOING CONCERN" AUDIT OPINION.
The auditor's report on our consolidated financial statements for the
fiscal year ended December 31, 2001 states that because of operating losses and
a working capital deficiency, there is substantial doubt about our ability to
continue as a going concern. A "going concern" opinion indicates that the
financial statements have been prepared assuming we will continue as a going
concern and do not include any adjustments to reflect the possible future
effects on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this
uncertainty.
WE MAY BE UNABLE TO NEGOTIATE SETTLEMENTS WITH RESPECT TO OUR REMAINING
LIABILITIES.
We are currently in the process of negotiating settlements with respect to
our remaining obligations and liabilities which include without limitation
building and facilities leases and tax obligations. If we are unable to
successfully negotiate termination of these obligations, we will have fewer or
no cash proceeds to distribute to our stockholders.
WE MAY BE FORCED TO SEEK BANKRUPTCY PROTECTION IN ORDER TO MAXIMIZE SHAREHOLDER
VALUE.
Although the plan of liquidation and dissolution has been approved by our
stockholders, our board of directors intends to continue exploring alternatives
to maximize shareholder value. One of our possible alternatives include seeking
bankruptcy protection. At this time, the board of directors does not know which
alternatives might be considered, or what impact any alternative might have on
stockholder value.
AFTER OUR WIND-DOWN THERE MAY BE NO ADDITIONAL CASH TO DISTRIBUTE TO OUR
STOCKHOLDERS AND IF THERE IS ADDITIONAL CASH TO DISTRIBUTE, THE TIMING OF ANY
SUCH FUTURE DISTRIBUTION IS UNCERTAIN.
Although our board of directors believes the liquidation program disclosed
in our proxy statement dated July 9, 2002 is achievable, there is currently no
firm timetable for the distribution of proceeds to our stockholders because of
contingencies inherent in winding up our business. We are currently unable to
predict the precise nature, amount or timing of any future distribution to
stockholders. The actual nature, amount and timing of all distributions will be
determined by our board of directors, in its sole discretion, and will depend in
part upon our ability to resolve our remaining contingencies.
Uncertainties as to the precise net value of our non-cash assets and the
ultimate amount of our liabilities make it impractical to predict the aggregate
net value ultimately distributable to stockholders. Claims, liabilities and
expenses from winding down our affairs will continue to be incurred. These
expenses will reduce the amount of cash available for ultimate distribution to
stockholders. However, no assurances can be given that available cash and
amounts received on the sale of assets will be adequate to
16
provide for our obligations, liabilities, expenses and claims and to make cash
distributions to stockholders. If such available cash and amounts received from
the sale of assets are not adequate to provide for our obligations, liabilities,
expenses and claims, we may not be able to distribute meaningful cash, or any
cash, to our stockholders.
STOCKHOLDERS MAY BE LIABLE TO CREDITORS OF THE COMPANY FOR UP TO AMOUNTS
RECEIVED FROM THE COMPANY IF THE COMPANY'S RESERVES ARE INADEQUATE.
Our board of directors and our stockholders have approved our plan of
liquidation and dissolution. Our board of directors, in their discretion, may
file a Certificate of Dissolution with the State of Delaware dissolving us.
Pursuant to the Delaware General Corporation Law, we will continue to exist for
three years after the dissolution becomes effective or for such longer period as
the Delaware Court of Chancery shall direct, for the purpose of prosecuting and
defending suits against us and enabling us to gradually to close our business,
to dispose of our property, to discharge our liabilities and to distribute to
our stockholders any remaining assets. Under the Delaware General Corporation
Law, in the event we fail to create an adequate contingency reserve for payment
of our expenses and liabilities during this three-year period, each stockholder
could be held liable for payment to our creditors for such stockholder's pro
rata share of amounts owed to creditors in excess of the contingency reserve.
The liability of any stockholder would be limited, however, to the amounts
previously received by such stockholder from us (and from any liquidating trust
or trusts). Accordingly, in such event a stockholder could be required to return
all distributions previously made to such stockholder. In such event, a
stockholder could receive nothing from us under the Plan of Liquidation and
Dissolution. Moreover, in the event a stockholder has paid taxes on amounts
previously received, a repayment of all or a portion of such amount could result
in a stockholder incurring a net tax cost if the stockholder's repayment of an
amount previously distributed does not cause a commensurate reduction in taxes
payable. In the event of our dissolution, there can be no assurance that the
contingency reserve maintained by us will be adequate to cover any expenses and
liabilities.
SUCCESS OF OUR ORDERLY WIND DOWN OF OPERATIONS DEPENDS ON QUALIFIED PERSONNEL TO
EXECUTE IT.
The success of our wind down depends in large part upon our ability to
retain the services of qualified personnel to handle the sale of our remaining
assets and settlement of remaining liabilities. Although we have retained a very
limited number of qualified employees for this purpose, the retention of
qualified personnel is particularly difficult under our current circumstances.
OUR STOCK TRANSFER BOOKS WILL BE CLOSED UPON THE FILING OF OUR CERTIFICATE OF
DISSOLUTION WITH THE STATE OF DELAWARE, AFTER WHICH ANY TRADES WILL NOT BE
RECORDED BY US.
We will close our stock transfer books and discontinue recording transfers
of our common stock on the date we file our Certificate of Dissolution with the
Delaware Secretary of State, also known as the final record date. Thereafter,
certificates representing the common stock will not be assignable or
transferable on our books except by will, intestate succession or operation of
law. The proportionate interests of all of our stockholders will become fixed on
the basis of their respective stock holdings at the close of business on the
final record date, and any distributions made by us will be made solely to the
stockholders of record at the close of business on the final record date, except
as may be necessary to reflect subsequent transfers recorded on our books as a
result of any assignments by will, intestate succession or operation of law. For
any other trades after the final record date, the seller and purchaser of the
common stock will need to negotiate and rely on due-bill contractual obligations
between themselves with respect to the allocation of stockholder proceeds
arising from ownership of the shares.
17
OUR STOCK WAS DELISTED FROM THE NASDAQ STOCK MARKET ON AUGUST 7, 2002 AND IS
SIGNIFICANTLY LESS LIQUID THAN BEFORE.
Our common stock was delisted from trading on the Nasdaq Stock Market on
August 7, 2002 due to our inability to meet the minimum requirements for
continued listing on the Nasdaq Stock Market. As a result of the delisting, the
ability of our stockholders to buy and sell our shares has been materially
impaired, and is limited primarily to over-the-counter quotation services, such
as Pink Sheets, that handle high-risk ventures and are not regulated by the
Securities and Exchange Commission.
WE WILL CONTINUE TO INCUR THE EXPENSE OF COMPLYING WITH PUBLIC COMPANY REPORTING
REQUIREMENTS.
We have an obligation to continue to comply with the applicable reporting
requirements of the Securities Exchange Act of 1934, as amended, even though
compliance with such reporting requirements is economically burdensome. In order
to curtail expenses, after filing our Certificate of Dissolution we will seek
relief from the Securities and Exchange Commission from the reporting
requirements under the Exchange Act. Until such relief is granted we will
continue to make obligatory Exchange Act filings. We anticipate that even if
such relief is granted in the future, we will continue to file current reports
on Form 8-K to disclose material events relating to our liquidation and
dissolution along with any other reports that the Securities and Exchange
Commission may require.
ITEM 4. CONTROLS AND PROCEDURES
QUARTERLY EVALUATION OF THE COMPANY'S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.
Within the 90-day period prior to the filing of this report, an evaluation
was carried out under the supervision and with the participation of the
Company's management including the Chief Executive Officer ("CEO") and Chief
Financial Officer ("CFO") of the effectiveness of our disclosure controls and
procedures. Based on that evaluation, the CEO and CFO have concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Securities and Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in Securities and
Exchange Commission rules and forms. Subsequent to the date of their evaluation,
there were no significant changes in the Company's internal controls or in other
factors that could significantly affect the disclosure controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On July 30, 2002, we were sued in the Superior Court of California, County
of Santa Clara by NetRatings, Inc. alleging we violated provisions of a
non-competition clause entered into in connection with the sale by us to
NetRatings of our European business and otherwise breached contractual
obligations owed by us to NetRatings with respect to the licensing of certain
intellectual property. comScore Networks has agreed to indemnify us with respect
to the intellectual property claim. We believe the lawsuit is without merit and
intend to vigorously defend the actions.
On October 8, 2002, we were served notice of a suit filed in the United
States District Court for the Western District of Washington in Seattle by two
former employees alleging we violated Washington State and Federal securities
laws in connection with our purchase of AdRelevance, Inc. and otherwise breached
contractual and other obligations allegedly owed to such employees with respect
to their receipt of shares and options to
18
purchase shares of our common stock. We believe the lawsuit is meritless and
intend to vigorously defend the actions.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of our stockholders was held on July 31, 2002. The
purpose of the meeting was to consider and vote on the following proposals:
1. to approve the sale by us to INT Media Group, Inc. of substantially
all of the assets of our Jupiter research and events businesses, including our
customer contracts and intellectual property, as well as the assignment of
certain related liabilities pursuant to an Asset Purchase Agreement dated June
20, 2002, among us, our wholly owned subsidiary, Jupiter Communications, Inc.,
and INT Media Group, Inc.
2. to approve and adopt our Plan of Liquidation and Dissolution.
3. to approve and adopt an amendment to our Amended and Restated
Certificate of Incorporation to change our name to JMXI, Inc. and to decrease
the minimum number of directors required to serve on the board of directors from
six persons to one person.
The results of the voting on each of the proposals set forth above is as
follows:
1. Proposal No. 1 was approved with 18,594,182 shares cast in favor of
the proposal, 68,418 shares cast against the proposal and 7,402 abstentions;
2. Proposal No. 2 was approved with 18,586,779 shares cast in favor of
the proposal, 80,721 shares cast against the proposal and 2,502 abstentions;
3. Proposal No. 3 was approved with 18,588,898 shares cast in favor of
the proposal, 76,647 shares cast against the proposal and 4,457 abstentions.
ITEM 5. OTHER INFORMATION
Sarbanes-Oxley Act
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, our Chief
Executive Officer and Principal Financial Officer has provided certain
certifications to the Securities and Exchange Commission. These certifications
accompany this report when filed with the Commission but are not set forth
herein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
19
Number Description
------ -----------
99.1 Certification of Robert Becker, Chief Executive
Officer and Principal Financial Officer of JMXI,
Inc., pursuant to 18 U.S.C. Section 1350, dated
November 19, 2002.
(b) Reports on Form 8-K
We filed a Current Report on Form 8-K with the Securities and Exchange
Commission on July 2, 2002 with respect to the sale of substantially all of the
assets of our Jupiter research and events divisions and the adoption by our
Board of Directors of our plan of dissolution and liquidation.
We filed a Current Report on Form 8-K with the Securities and Exchange
Commission on July 3, 2002 with respect to our request for a hearing before the
Nasdaq Listing Qualifications Panel in connection with the delisting of our
common stock from the Nasdaq National Market.
We filed a Current Report on Form 8-K with the Securities and Exchange
Commission on August 9, 2002 with respect to the approval by our shareholders of
the sale of substantially all of the assets of our Jupiter research and events
divisions and our plan of dissolution and liquidation and the withdrawal of our
challenge to the delisting of our common stock from the Nasdaq National Market.
20
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.
JUPITER MEDIA METRIX, INC.
By: /s/Robert Becker
----------------------------------
Name: Robert Becker
Title: Chief Executive Officer and
Principal Financial Officer
Date: November 19, 2002
21
JMXI, INC.
CERTIFICATIONS FOR FORM 10-Q
FOR PERIOD ENDED SEPTEMBER 30, 2002
I, Robert Becker, certify that:
1. I have reviewed this quarterly report on Form 10-Q of JMXI, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 19, 2002
/s/ Robert Becker
-----------------------------------
Robert Becker
Chief Executive Officer and
Principal Financial Officer
22
EXHIBIT INDEX
Number Description
------ -----------
99.1 Certification of Robert Becker, Chief Executive Officer and
Principal Financial Officer of JMXI, Inc., pursuant to 18
U.S.C. Section 1350, dated November 19, 2002.
23