UNSER LIEBLING; DIE FIRSTQUOTE A.G. - 500 Beiträge pro Seite

[Dr.Trend]

:FirstQuote A.G.THE POWER-COMPANY OF SWITZERLAND

[agent1]

Und was soll der scheiss?ß???
Was willst Du bezwecken???
Brauchst Du Hilfe????
www.psychiater.de

[Dr.Trend]

[agent1]

Okay, der war gut

[TicTacTo]

Ich habe den untenstehenden Artikel heute bei Onvista gefunden.
Das könnte mit ein Grund für den Kursverlauf von Firstquote sein.
Wenn man sich den Chart anschaut, paßt das ziemlich zusammen.
Also sollte der Kurs nicht unter 6+ fallen.
Ich wünsche euch ein schönes verlängertes Wochenende
TicTacTo


Telebörse


Firstquote Kaufsignal Datum : 21.09.2000
Zeit :12:21


Der siebenmonatige Abwärtstrend bei Firstquote (WKN 917558) konnte nach
oben durchbrochen werden, berichtet Hans-Dieter Schulz von Hoppenstedt im
Anlegermagazin „Die Telebörse“.
Weil die Bewertung der Gewinnaussichten sehr stark schwanke, sei der Kurs
nach einem kurzen Höhenflug zu Jahresbeginn wieder auf Vorjahresniveau
zurückgefallen. Mit der Durchbrechung des Abwärtstrends habe sich nun ein
Kaufsignal ergeben und das nächste Kursziel werde bei rund acht Euro
gesehen.

[agent1]

Könnte, wenn und wollte, dann hätte der Hund vielleicht den Hasen erwischt.....

[nolens]

As filed with the Securities and Exchange Commission on September 6, 2000
Registration No. 333-36694

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE EFFECTIVE AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRSTQUOTE INC.
(Name of small business issuer in its charter)
Delaware 7373 98-0162893
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or
organization) Classification Code Number) Identification No.)
12 Avenue des Morgines
1213 Petit Lancy 1
Geneva, Switzerland
4122-879-0879
(Address and telephone number of principal executive offices
and principal place of business)
Neil Gibbons
12 Avenue des Morgines
1213 Petit Lancy 1
Geneva, Switzerland
4122-879-0879
(Name, address and telephone number of agent for service)
Copies to:
Daniel K. Donahue, Esq.
Daniel C. Burnham, Esq.
Oppenheimer Wolff & Donnelly LLP
500 Newport Center Drive, Suite 700
Newport Beach, CA 92660
[phone]
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]

CALCULATION OF REGISTRATION FEE
==================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to be Offering Price Aggregate Registration
Securities to be Registered Registered(1) per Share(2) Offering Price Fee(3)
--------------------------------------------------------------------------------------------------
Common Stock, $.001 par value........ 1,399,763 Shares $11.00 $15,397,393 $4,064.79
==================================================================================================
(1) Includes 197,815 shares subject to a previously filed registration statement on Form S-3 (SEC File No. 333-36700) which are being re- registered on this registration statement on Form SB-2.
(2) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, based upon the last sale of the Registrant`s common stock on May 8, 2000, as reported in the over-the-counter market.
(3) Previously paid, including $574.45 previously paid in connection with the initial registration of 197,815 shares referred to in footnote (1) above.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.


PROSPECTUS
1,399,763 Shares
FIRSTQUOTE INC.
Common Stock
This prospectus relates to the offer and sale of our common stock by the selling shareholders identified in this prospectus. The selling shareholders will determine when they will sell their shares, and in all cases, will sell their shares at the current market price or at negotiated prices at the time of the sale. Although we have agreed to pay the expenses related to the registration of the shares being offered, we will not receive any proceeds from the sale of the shares by the selling shareholders.
Our common stock is currently traded on the OTC Bulletin Board under the symbol "FSQT." We have applied to list our common stock on the NASDAQ National Market System. On August 18, 2000, the last reported sale price of the common stock on the OTC Bulletin Board was $5.19 per share.

Please see "Risk Factors" beginning on page 3 to read about certain factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2000


TABLE OF CONTENTS
Page
----
Summary .................................................................. 1

Risk Factors ............................................................. 3

Selling Stockholders ..................................................... 7

Market for Common Equity and Related Stockholder Matters ................. 8

Management`s Discussion and Analysis or Plan of Operation ................ 9

Business ................................................................. 12

Management............................... ................................ 19

Principal Stockholders ................................................... 22

Description of Securities ................................................ 24

Legal Matters ............................................................ 26

Experts .................................................................. 26

Available Information .................................................... 27

Index to Financial Statements ............................................ 28

No person has been authorized to give any information or to make any representations not contained or incorporated by reference in this prospectus in connection with the offer described in this prospectus and, if given or made, such information and representations must not be relied upon as having been authorized by us. Neither the delivery of this prospectus nor any sale made under this prospectus shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or since the date of any documents incorporated herein by reference. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities other than the securities to which it relates, or an offer or solicitation in any state to any person to whom it is unlawful to make such offer in each state.

SUMMARY
You should read this summary in conjunction with the more detailed information and financial statements appearing elsewhere in this prospectus.
Our Company
We are engaged in the business of developing and marketing a range of internet-based financial information and transactional services to the European investment community. We provide real-time and delayed market data, news and other financial information over the internet. We also provide to financial institutions a turnkey solution for their provision of electronic brokerage services to their customers. Our financial information services are offered by us directly on a subscription basis. We also provide to financial institutions, such as banks and brokerage firms, financial media and publishing organizations and internet service providers, the ability to offer our financial information services to their clients on a co-branded basis. We also derive revenue from the provision of underlying internet access and network connectivity services to our corporate and institutional clients.
Our services are available via our own wide-area internet network backbone by dial-up or dedicated access, as well as from any other internet point of access world-wide.
Our executive offices are located at 12, Av. des Morgines, 1213 Petit-Lancy 1, Geneva, Switzerland. Our telephone number is [phone].

The Offering
This offering relates to the offer and sale of our common stock by the selling shareholders identified in this prospectus. We will not receive any proceeds from the sale of the shares by the selling shareholders.
1


Summary Financial Information
The summary financial information set forth below has been derived from our financial statements. You should read this information in conjunction with the financial statements and notes thereto, included elsewhere in this memorandum.
Year Ended Year Ended Six Months Ended June
December 31, December 31, 30,
------------ ------------ ------------------------
1999 1998 2000 1999
---- ---- ---- ----
(Unaudited) (Unaudited)
Operations Data:
Net revenue................. $ 1,778,459 $ 534,715 $ 2,695,129 $ 644,362
Net loss.................... (6,840,368) (3,421,229) (4,448,758) (3,366,656)

June 30,
2000
------------
(Unaudited)
Balance Sheet Data:
Working capital............. $ 2,445,355
Total assets................ 11,844,216
Total liabilities........... 4,607,677
Stockholders` equity........ 7,236,539
2


RISK FACTORS
You should carefully consider the following risk factors and the other information in this prospectus before investing in our common stock. Our business and results of operations could be seriously harmed by any of the following risks. The trading price of our common stock could decline due to any of these risks, and you may lose part or all of your investment.
We have a history of losses and will experience future losses
We have incurred net losses of approximately $6.8 million for fiscal year 1999 and approximately $3.4 million for fiscal year 1998. As of June 30, 2000, we had an accumulated deficit of approximately $18.1 million. We have not achieved profitability and we expect to continue to experience net losses in the future. We anticipate continuing to incur significant sales and marketing, product development and general and administrative expenses and, as a result, we will need to generate significantly higher revenues to achieve and sustain profitability on an annual basis. Although our revenues have grown in recent quarters, we cannot be certain that we will continue to achieve revenue growth or realize sufficient revenues to achieve profitability.
We will require additional financing in order to meet our future capital needs
We require substantial working capital to fund our business. As of June 30, 2000, we had approximately $2.5 million of working capital. We believe that our existing capital resources will be sufficient to meet our capital requirements for through the end of the current fiscal year ending December 31, 2000. However, we will require, at least $3,000,000 of additional capital over the next 12 months in order to fund our planned operating and capital expenditures through June 2001. If our capital requirements vary materially from those currently planned, we may require additional financing sooner than anticipated. Additional financing may not be available when needed on terms favorable to us or at all. If adequate funds are not available or are not available on acceptable terms, we may be unable to develop or enhance our services, take advantage of future opportunities or respond to competitive pressures, which could materially adversely affect our business, financial condition or results of operations.
We are in an intensely competitive business
We face intense competition on a number of fronts. In the area of internet- based market data and financial information services, we face direct competition from a number of well-established companies that provide electronic and online financial data and information, including Reuters, Bloomberg, Bridge, GlobalNet Financial and Atos, among others. As a provider of hardware and software solutions which enable banks and brokerage houses to operate online brokerage services, we compete to an extent with established online brokerage firms such as E*Trade, Charles Schwab and DLJ Direct and, in the European context, Consors and e-Cortal, who develop proprietary market data and internet brokerage systems. Many of our competitors have greater name recognition, financial, technical or marketing resources, and more extensive customer bases than we do. Our competitors can leverage these advantages to gain market share to our detriment and we may not be able to compete effectively with them.
A downturn in U.S. or international securities markets could adversely affect our business
Substantially all of our revenues to date have been from subscriptions to our financial information and electronic brokerage services. We expect these services to continue to account for substantially all of our revenues for the foreseeable future. As a result, we are directly affected by U.S., European and international economic and political conditions, broad trends in business and finance and substantial fluctuations in volume and price levels of securities and futures transactions. In recent months, the U.S. securities markets have established record levels of trading. However, a downturn in these markets could adversely affect our operating results and future plan of operations. Certain of our competitors with more diverse product and service offerings may be better positioned to withstand such a downturn in the securities industry.
3

We must keep pace with the rapidly changing product requirements of our customers
The information and financial services industries are characterized by rapid technological change, changes in customer requirements, frequent new service and product introductions and enhancements, and emerging industry standards. We believe our future success will depend, in part, on our ability to anticipate and adapt to such changes and to offer, on a timely basis, services that meet customer demands. Our inability to develop on a timely basis new products or enhancements to existing products, or the failure of such products or enhancements to achieve market acceptance, could materially and adversely affect our business, financial condition and results of operations.
Our success depends on the continued development of the internet and online commerce, particularly in Europe
The market for electronic brokerage services, particularly over the internet, is at an early stage of development and is rapidly evolving. As is typical for new and rapidly evolving industries, demand and market acceptance for recently introduced services and products are subject to a high level of uncertainty. Although the past two years have shown a rapid increase in the volume of commercial transactions over the internet, there can be no assurance that the internet will continue to be accepted by consumers as a widely used medium for commerce and communication. In addition, European companies and consumers may not adopt the internet with the same enthusiasm as in the United States. Accordingly, because global commerce and online exchange of information on the internet and other similar open wide area networks are new and evolving, there can be no assurance that the internet will prove to be a viable commercial marketplace. If critical issues concerning the commercial use of the internet are not favorably resolved, if the necessary infrastructure is not developed, or if the internet does not become a viable commercial marketplace, our business, financial condition and operating results will be materially adversely affected.
Our success depends in part on our ability to securely keep and transmit data
A significant barrier to online commerce and communication is the secure transmission of confidential information over public networks. We rely on encryption and authentication technology to provide the security and authentication necessary to effect secure transmission of confidential information. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the encryption or other algorithms we use to protect customer transaction data. If any such compromise of our security were to occur, it could have a material adverse effect on our business, financial condition and operating results.
We depend on third parties for the information we provide
We use suppliers of information, software and services in virtually every phase of its operations. Our financial data service is offered pursuant to separate non-exclusive licenses from the following two companies:
. Standard & Poor`s ComStock, which supplies us with a raw feed of market data from securities and commodities exchanges world-wide; and
. Townsend Analytics, Ltd., which supplies us with its proprietary software program which organizes the raw data feed from S&P ComStock for presentation in tabular and chart formats.
Our license with Townsend Analytics is presently due to expire in January 2001, subject to automatic successive one year extensions unless either party notifies the other of its intent to allow the agreement to terminate. While we are presently in negotiations with Townsend for a long term extension, there can be no assurance we will be able to negotiate a long-term extension on terms acceptable to us. Although we believe that we have no long term dependence on any one supplier, there is always a certain amount of time required to develop internally or locate and engage externally a replacement and integrate that replacement into our operations. In the event a key supplier terminates its relationship with us without notice, or should we be compelled to do the same, our operations may be adversely affected.
4

We may not be able to protect our proprietary rights and we may incur significant costs in attempting to do so
Our success and ability to compete are dependent to a significant degree on our proprietary technology. We rely on a combination of copyright, trade secret and trademark laws, as well as confidentiality agreements and licensing agreements to protect our proprietary rights. However, it may be possible for a third party to copy or otherwise obtain and use our software or other proprietary information without authorization or to develop similar software independently. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. Such litigation, whether successful or unsuccessful, could result in substantial costs and diversions of resources, either of which could have a material adverse effect on our business, financial condition and operating results.
We may pursue future acquisitions which could dilute our stockholders or cause us to incur debt and assume contingent liabilities
As part of our business strategy, we expect to review acquisition prospects that would complement our current product offerings, augment our market coverage or enhance our technical capabilities, or that may otherwise offer growth opportunities. While we have no current agreements or negotiations underway with respect to any such acquisitions, we may acquire businesses, products or technologies in the future. Such actions by us could materially adversely affect our results of operations and/or the price of our common stock. Further, if we issue stock in connection with such acqusitions, our stockholders will be diluted.
We have limited experience in assimilating acquired organizations into our operations and we may not be able to successfully integrate any businesses, products, technologies or personnel that we might acquire in the future. Our failure to do so could have a material adverse effect on our business, financial condition and results of operations.
A large percentage of our stock is held by our officers and directors
Our present directors and executive officers and their respective affiliates beneficially own approximately 53% of our outstanding common stock. As a result, these stockholders, if they act together, will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, and will have veto power with respect to any stockholder action or approval requiring a majority vote.
Certain provisions in our charter and bylaws may discourage take-over attempts and thus depress the market price of our stock
Certain provisions in our certificate of incorporation, bylaws, and Delaware law may be deemed to have an anti-takeover effect. Such provisions may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in that stockholder`s best interests. For example, our certificate of incorporation allows our board of directors to issue additional shares of common stock or establish one or more classes or series of preferred stock, having rights, preferences and limitations as determined by the board of directors without stockholder approval.
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law which prohibits a publicly-held Delaware corporation from engaging in certain business combinations with interested stockholders for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Compliance with both the Delaware code and the anti-takeover provisions in our charter and bylaws could have the effect of delaying, deterring or preventing a tender offer or takeover attempt that a stockholder might consider to be in that stockholder`s best interests, including attempts that might result in a premium over the market price for the shares held by stockholders.
5

We may issue preferred stock which adversely affects the rights of common stock holders
Our board of directors has the authority to issue up to 10,000,000 shares of preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote or action by our stockholders. To date, we have 200,815 shares of preferred stock outstanding in two different series. Any additional preferred stock issued by our board of directors may contain rights and preferences adverse to the voting power and other rights of the holders of common stock.
The market for our stock is limited
Our common stock is traded on the OTC Bulletin Board under the symbol "FSQT." On August 18, 2000, the last reported sale price of the common stock on the OTC Bulletin Board was $5.19 per share. However, we consider our common stock to be "thinly traded" and any last reported sale prices may not be a true market-based valuation of the common stock. There can be no assurance that an active market for our common stock will develop. In addition, the stock market in general, and internet and technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies.
Special note regarding forward-looking statements
This prospectus contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "except," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. In evaluating these statements, you should specifically consider various factors, including the risks outlined under "Risk Factors." These factors may cause our actual results to differ materially from any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this prospectus or to conform such statements to actual results or to changes in our expectations.
6

SELLING STOCKHOLDERS
This prospectus relates to the offer and sale of our common stock by the selling shareholders identified below. The shares were issued in connection with our acquisition of Stockdata Amsterdam BV in December 1999 and in a private placement concluded in March 2000. We agreed to register the shares for resale. The selling shareholders will determine when they will sell their shares, and in all cases, will sell their shares at the current market price or at negotiated prices at the time of the sale. Although we have agreed to pay the expenses related to the registration of the shares being offered, we will not receive any proceeds from the sale of the shares by the selling shareholders.
The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this prospectus by each selling shareholders. In reviewing the table, please keep in mind that the amounts in the column relating to shares beneficially owned after the offering assume that all offered shares are sold.

Shares Beneficially Owned
Prior to Offering Shares
--------------------------- Beneficially
Number of Number of Owned After
Name Shares owned Shares offered Offering
---- ------------ -------------- ------------
Media Investerings-en
Managementmaatschappij B.V.......... 210,484 135,574 74,190
Horizon Investments B.V.............. 98,583 45,190 53,393
CV Stockdata......................... 37,199 17,052 20,147
Oakes Fitzwilliams & Co.............. 53,053 53,053 0
Ermgassen & Co., Ltd................. 37,838 87,838 0
Idrone Pauline Mary Brittain......... 900 900 0
Roger Brittain....................... 2,000 2,000 0
Durnford Securities Ltd.............. 7,350 7,350 0
Jan Pier Ebbinge..................... 11,000 11,000 0
Fleetway Investments Ltd............. 4,500 4,500 0
Intercontinental Services Limited A/C
J331C............................... 11,000 11,000 0
Kestrel Services Ltd. ............... 14,700 14,700 0
Marcuard Cook & Cie.................. 14,700 14,700 0
Overseas & Foreign Investors......... 11,000 11,000 0
Paris Investments.................... 7,350 7,350 0
Rysaffe Trustee Company (CI) Ltd. Re:
The Hector Settlement............... 3,600 3,600 0
SBS Nominees Ltd. A/C SBCLT.......... 73,500 73,500 0
John William Taylor.................. 4,400 4,400 0
Andrew Threipland.................... 4,500 4,500 0
Marcus Widmer........................ 5,800 5,800 0
Dunpil Management Ltd. .............. 7,350 7,350 0
Benjamin Slade....................... 7,350 7,350 0
Smith & Williamson Nominees Limited.. 44,100 44,100 0
Christopher Weston................... 14,700 14,700 0
Yili Holdings Ltd. .................. 14,700 14,700 0
FPK Nominees......................... 7,350 7,350 0
European Financial Services
Venture Fund (General Partner)
Limited........................... 449,500 449,500 0
NeSBIC Converging Technologies Europe
(CTE)............................... 1,502,822 151,471 1,351,351
GIMV................................. 1,238,552 151,471 1,087,081
Leon Seynave......................... 36,765 36,765 0
7

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock trades on the OTC Bulletin Board under the symbol "FSQT." We have applied to list our common stock on the NASDAQ National Market System. The following table shows the high and low closing prices of our common stock for the periods indicated as reported by the OTC Bulletin Board. These prices do not include retail markup, markdown or commission.
High Low
----- ----
1998
First quarter..................................................... 2.13 1.56
Second quarter.................................................... 2.00 1.00
Third quarter..................................................... 1.13 0.91
Fourth quarter.................................................... 2.00 0.69

1999
First quarter..................................................... 5.00 1.38
Second quarter.................................................... 11.00 3.31
Third quarter..................................................... 10.00 5.25
Fourth quarter.................................................... 7.50 4.00

2000
First quarter..................................................... 19.00 5.88
Second quarter.................................................... 12.00 6.00
Third quarter (through August 18, 2000)........................... 7.50 5.13
We consider our common stock to be thinly traded and, accordingly, reported sale prices may not be a true market-based valuation of our common stock. As of August 24, 2000, there were approximately 344 record holders of our common stock.
We have not paid any cash dividends since our inception and do not contemplate paying dividends in the foreseeable future. It is anticipated that earnings, if any, will be retained for the operation of our business.
8


MANAGEMENT`S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Background
General. We are a European technology provider of financial information and electronic brokerage solutions. We offer a comprehensive range of real-time market data and electronic brokerage systems for both the institutional and individual investor. Our financial information systems are offered via the internet or through virtual private networks using internet technology. We also provide related network services to users of our financial information and electronic brokerage products.
Effective December 24, 1999, we acquired all of the outstanding capital shares of Stockdata Amsterdam BV, a company located in Amsterdam, for cash and securities with a value of up to $3,750,000. Stockdata is engaged in the distribution of real-time market data products to the Benelux region, primarily through the use of datacast technologies via cable networks. This acquisition will give us a sales and operations presence in the Benelux countries of Belgium, The Netherlands and Luxembourg. Stockdata Amsterdam`s operations are currently profitable, so we believe that the effects of the acquisition on our cash flow and liquidity will be neutral to positive.
Our plan of operations for the 2000 fiscal year is to continue to target strategic alliances in key European financial centers from which to leverage our growth. We plan to market our financial market information, analytical tools and electronic brokerage systems both under our own product names and as co-branded implementations with institutional clients.
Currency Exchange Rates. Although we report our results in US dollars, virtually all of our revenues and expenses are denominated in other currencies, primarily Swiss francs, Euros and Pounds sterling. Consequently, our net results are directly affected by changes in the exchange rate between the US dollar, on the one hand, and the Swiss franc, Euros or Pounds sterling, on the other. Our transactions and those of our subsidiaries are recorded based on the functional currency of each particular company. Our main operating subsidiary maintains a Swiss franc functional currency and has a US dollar denominated current account with its parent company. This results in foreign exchange differences being recorded based on variations in the USD/CHF rate of exchange, which are carried forward on consolidation.
Our assets and liabilities and those of our subsidiaries are translated at the exchange rate in effect at each year-end. Income statement accounts are translated at the average rate of exchange prevailing during the year. Translation adjustments arising from differences in exchange rates from period to period are included in the cumulative translation adjustment account in stockholders` equity.
Results of Operations
Year Ended December 31, 1999 and 1998
Revenue for the year ended December 31, 1999 was $1,778,459, an increase of 233% over that of $534,715 for the corresponding prior year. Revenue is derived primarily from the provision of financial market data and related network connectivity and web-operation services, but also includes revenue from development and integration projects as well as transaction related revenue linked to electronic brokerage activity.
Revenue for the fourth quarter of 1999 was only marginally increased from that of the previous quarter, due principally to an increased foreign exchange rate between European currencies in which revenue is recorded and the US Dollar, in which revenue is reported, as well as "year 2000` factors which caused certain business to be shifted into the first quarter of 2000.
Cost of revenue for the year ended December 31, 1999 was $2,157,659, an increase of 78% above the amount of $1,209,387 for the corresponding prior year. Cost of revenue as a percentage of revenue has decreased from 226% in the prior year to 121%, reflecting the economies of operation at a larger scale. Cost of revenue includes network expenses, data feeds and commissions.
9

Selling and market development expenses for the year ended December 31, 1999 were $405,256 or 83% above the amount of $221,210 for the corresponding prior year. Corporate and product marketing expenses have increased in conjunction with the corporate name change from Virtual Telecom to FirstQuote and the continued rollout of our services in Europe.
General and administrative expenses for the year ended December 31, 1999 were $4,796,643, an increase of 68% from the amount of $2,861,662 for the corresponding prior year. Staff costs represent the major component of this expense and have increased 101% from $1,232,645 to $2,483,326. Operating expenses have increased 50% from $1,108,596 to $1,666,618, and depreciation charges have increased by 24% from $520,421 to $646,699.
Operating loss for the year ended December 31, 1999 was $5,581,099, an increase of 49% from the amount of $3,757,544 for the prior year. Expressed as a percentage of revenue the operating loss has improved from 703% to 314% of revenue.
Foreign exchange gains and losses arise essentially from the revaluation of amounts due by our Swiss operating company, FirstQuote SA, to the parent holding corporation, which are denominated in US dollars. The functional currency of FirstQuote SA is the Swiss franc, and the resultant loss on revaluation in Swiss francs is carried forward in consolidation. The US dollar/Swiss franc rate of exchange was 1.3760 at December 31, 1998 and 1.5915 at December 31, 1999.
Net loss for the year ended December 31, 1999 was $6,840,368, compared with $3,421,229 for the corresponding prior year.
Six Months Ended June 30, 2000 and 1999
We acquired FirstQuote Stockdata on December 24, 1999. FirstQuote Stockdata has been included in our consolidated operating results for all periods subsequent to December 24, 1999.
Revenue for the six months ended June 30, 2000 was $2,695,129, an increase of 318% over that of $644,362 for the corresponding prior year period. Revenue is comprised primarily of the provision of financial market data services and related network services, the development and operation of market data enabled web-sites, as well as transaction related revenue linked to the provision of outsourced electronic brokerage services. Without giving effect to the consolidation of FirstQuote Stockdata, we had a 161% increase in revenue during the six month period ended June 30, 2000 over the prior year period.
Revenue for the second quarter of 2000 increased 11% above that of the first quarter of 2000 and 269% over that for the three months ended June 30, 1999. Without giving effect to the consolidation of FirstQuote Stockdata, we had a 144% increase in revenue during the three month period ended June 30, 2000 over the prior year period.
Cost of revenue for the six months ended June 30, 2000 was $2,026,777, an increase of 141% above the amount of $839,532 for the corresponding prior year period. Cost of revenue as a percentage of revenue has decreased from 130% in the prior year to 75%, reflecting the economies of operation at a larger scale. Cost of revenue includes content acquisition costs, network expenses, and commissions.
Selling and market development expenses for the six months ended June 30, 2000 were $421,277, an increase of 207% above the amount of $137,391 for the corresponding prior year period. Corporate and product marketing expenses have increased in conjunction with our corporate name change to FirstQuote and the continued rollout of our services in Europe.
General and administrative expenses for the six months ended June 30, 2000 were $4,508,990, an increase of 112% from the amount of $2,124,560 for the corresponding prior year period. Staff costs represent the major component of this expense and have increased 104% from $1,059,245 to $2,160,712. Office expenses have
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increased 79% from $284,269 to $508,124, and depreciation charges (excluding amortisation of goodwill) have increased by 58% from $289,311 to $457,720. Amortisation of goodwill related to our acquisition of FirstQuote Stockdata amounted to $554,741 for the six months ended June 30, 2000.
Operating loss for the six months ended June 30, 2000 was $4,261,915, an increase of 73% from the amount of $2,457,121 for the prior year period. Expressed as a percentage of revenue the operating loss has improved from 381% to 158% of revenue.
Foreign exchange gains and losses arise essentially from the revaluation of amounts due to us from our Swiss operating subsidiary, FirstQuote SA, which are denominated in US dollars. The functional currency of FirstQuote SA is the Swiss franc, and the resultant loss on revaluation in Swiss francs is carried forward in consolidation. The US dollar and Swiss franc rate of exchange was one US dollar for 1.3760 Swiss franc as of December 31, 1998, 1.5915 Swiss franc as of December 31, 1999 and 1.6343 Swiss franc as of June 30, 2000.
The continued increase in the value of the US dollar against most European currencies has resulted in revenues and costs reported in US dollars being lower than had the value of the US dollar remained more constant.
Net loss for the six months ended June 30, 2000 was $4,448,758, compared with $3,366,656 for the corresponding prior year period.
Liquidity and Financial Condition
As of June 30, 2000, we had working capital of $2,445,357 and stockholders` equity of $7,236,541.
In January 2000, we obtained bridge financing of $510,000 from three of our existing financial investors in order to finance our acquisition of FirstQuote Stockdata, and pending the closing of our private placement of 1,061,057 of our common shares for a total amount of $7,155,180, which was concluded during March 2000. Two thirds of the bridge financing was converted to common shares as part of the private placement and the remaining $170,000 was repaid during April 2000 at our option.
During the six months ended June 30, 2000, we also received $477,750 from the exercise of 136,500 warrants at $3.50. During the same period, we also received $155,000 from the exercise of 70,000 employee stock options at strike prices varying between $2.00 and $3.50 per share.
We continue to generate negative cash flows from operations. Cash flow is calculated by adjusting net income or loss by non-cash items of expense such as depreciation, foreign exchange differences and stock compensation. The significance of cash flow is its ability to measure the amount of cash used in operating a business. The negative cash flow from operations was approximately $519,000 per month during the second quarter of 2000, compared with $485,000 per month during the first quarter of 2000 and $461,000 per month during the fourth quarter of 1999. We anticipate continuing to incur increasing sales and marketing, product development and general and administrative expenses. As a result, we will need to generate significantly higher revenues to achieve and sustain positive cash flow and profitability on an annual basis. Although our revenues have grown in recent quarters, we cannot be certain that we will continue to achieve revenue growth or realize sufficient revenues to achieve positive cash flow or profitability.
We believe that we will require a minimum of $3,000,000 of additional capital over the next 12 months in order to fund the planned operating and capital expenditure. We intend to pursue the required capital through the sale of additional securities. However, there are no commitments or understandings on the part of any party to provide any additional debt or equity capital to us and there can be no assurance that we will be able to obtain additional capital. Our inability to increase revenue or obtain additional debt or equity capital on a timely basis will, in all likelihood, materially adversely affect its future planned growth of operations and revenues.
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BUSINESS
General
We are engaged in the business of developing and marketing a range of internet-based financial information and transactional services to the European investment community. We provide business-to-business and business-to-consumer services to the financial marketplace. Our services are provided to our corporate clients for internal use as well as for redistribution to their customer bases. We provide real-time or delayed market data, news and other financial information as well as electronic brokerage capabilities over the internet to a range of customized interfaces, including desktop client-server applications, web-browser based interfaces, as well as via wireless services such as the short messaging service and the wireless application protocol. .
Our financial information services are offered on a direct subscription basis or as a co-branded business-to-business service to financial institutions, such as banks and brokerage firms, financial media and publishing organizations and internet service providers, who desire to offer financial content and related services directly to their own customers. We also offer to institutional clients turnkey solutions for internet-based electronic brokerage capabilities. We also derive revenue from the provision of underlying internet access and network connectivity services to its corporate and institutional clients.
Our services are available via our own wide-area internet network backbone by dial-up or dedicated access, as well as from any other Internet point of access world-wide.
Products and Services
We provide real-time or delayed market data, news and fundamental financial information using internet technologies. Our services are marketed to European financial institutions, including brokerage firms, banks, insurance companies, fund managers, professional traders, and private investors. The market data comprises securities, including stocks, futures and options on stocks, major stock and option indices, commodities and foreign exchange rates, from over 150 exchanges worldwide, including major European, American and Asian exchanges. We consolidate and manage information on our own data hub for over 800,000 securities instruments. This content is received over data feeds from stock exchanges and third party providers and is processed on a number of servers within a common financial data hub, embodying database, analytical and transactional functionality. Access to such content and functionality is governed by a permissioning database which controls users` access to different content or applications to which the user interfaces. In this manner, customers can access the data via a range of user interfaces including Windows compliant desktop resident "client` applications, dynamic or static web browsers, as well as short messaging service or wireless application protocol devices which are fed content on a real-time or delayed basis, according to each user profile.
The above content is distributed across our network backbone directly to permanently connected users or via the public internet. As a result, our services can be organized over the public internet, virtual private networks, intranets, extranets and local or wide area networks using internet protocol technology.
Our specific services include:
FirstQuote Professional: This is a real-time market data, news and fundamental financial information service that employs a sophisticated desktop resident decision support interface targeted at institutional investors, brokerage firms and their more active clients. It provides real-time data coverage across a variety of financial instruments, sophisticated analytical tools, alarm settings, historical data, news and all investment indicators regularly used by professional traders. FirstQuote Professional displays financial information in multiple windows on multiple pages, each of which can be configured to suit individual requirements, and stored for retrieval. FirstQuote Professional customers are granted a floating license, allowing the software to
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be installed and used on multiple machines, for example an office PC, home PC and portable PC, and thus providing a highly mobile solution. However only one simultaneous access is permitted per subscription.
The principal features of the FirstQuote Professional include:
Market Minder A quote screen with rows of symbols and columns of prices
and other data related to the symbols (name, last price,
bid, ask, etc.)

MultiQuote Detailed fundamental information on a symbol in a
customizable layout

Ticker Scrolling ticker window showing trade price and volume
information.

Time & Sales Tabular display of each transaction showing transaction type
price and volume.

News A scrolling list of searchable headlines and full news
stories.

Charts Graphical analysis of market data with a variety of
technical studies available.

Forex Foreign exchange cross rates

Table Exportable tabular display of market data for a given symbol

Turbo Options Advanced options quote screen

Market Makers Comparative table of market maker bids and asks indicating
market depth.

Alarm Automated event-monitoring tool.

Internet Drag and drop functionality enables seamless look up of
Browser financial information from public Internet databases (such
as Yahoo and Edgar On-line) or private intranet databases.

DDE Link Links real-time data into a spreadsheet for further analysis
and modeling.
FirstQuote Lite: This is a real-time market data, news and fundamental financial information service designed for corporate treasurers, portfolio managers, smaller brokers and sophisticated private investors. The service provides real-time data and news, and includes a reduced range of analytical tools and functions when compared to FirstQuote Professional. The service consists of a fixed page market data screens featuring Market Minder, MultiQuote, Ticker, Time and Sales, News, Charts and Internet Browser. The fixed page nature of this product provides for customizable configurations to be implemented for larger groups, which are then non-modifiable by users.
FirstQuote Trader: This is an electronic brokerage service designed to be integrated with either the FirstQuote Professional or FirstQuote Lite services. The service is offered as an outsourced solution to banks and brokerage firms providing them the ability to offer internet-based electronic brokerage services to their clients. The service involves the design of appropriate network architectures as well as the integration of our licensed trading server platform software with the institution`s existing settlement and account risk management systems. We provide the electronic order entry and routing technologies as well as the security systems, while the institution`s existing computer systems provide order approval and execution functions. As a result the institution`s clientele is offered a complete order entry, execution, and real time profit/loss portfolio information via the Internet. Since the FirstQuote Trader elements of the interface are embedded within the FirstQuote Professional or FirstQuote Lite services, we can provide a complete and real- time package of decision support, order entry, order routing and portfolio monitoring capability.
We are not a licensed bank or securities brokerage firm nor do we intend to obtain any such licenses at this time. Therefore, we intend for the foreseeable future to offer electronic brokerage services on a co-branded outsourced basis to licensed banks and brokerage firms. Our electronic brokerage technology is based on a software license from Townsend Analytics which is described under the heading Trademarks and Licenses below.
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FirstQuote.net Services: The FirstQuote.net range of services complement the FirstQuote Professional range by offering similar content and applicable functionality over Web and wireless technologies targeted at clients of banks, brokerages, financial media companies and internet service providers seeking to add financial content to their portal audiences. In this way we are able to reach broader bands of the investment community, with the objective of seamlessly upgrading certain of the more sophisticated users to higher value services, such as those provided under the FirstQuote Professional range of products.
FirstQuote.net is a component-based service offering, providing businesses in the finance sector with an array of browser-based investor content combined with ease-of-use functionality. The browser-based application components allow real-time customer interaction for finance, content management and trade lifecycle support. The offering provides banks and brokerage institutions with the capability to provide their clients with multiple points from which to access market data, news, analyses, brokerage reports, fundamental data, portfolio services, market risk, trade and order management services to any one of a number of desktop or wireless devices, based on a common client profile. As the applications are component-based, fully customised solutions can be rapidly created, addressing the "speed to market` issue.
FirstQuote.net components are centered around the following product ranges:
SnapQuote
Static, refresh updated, web-based modules for market data,
charts and news

StreamQuote Dynamically updating content, including screen tickers,
charts, as well as real-time browser-based electronic
brokerage functionality

MarketRisk Decision support analyses presented via a range of graphical
interfaces

SMS Alert features based on pre-defined user-configured parameters

WAP
Wireless access to market data, charts, news and electronic
brokerage functionality, based on wireless application
protocol enabled devices such as mobile telephones and
personal digital assistants.
FirstQuote Network Services: In order to offer a complete end-to-end package of services, we also provide network development and enterprise connectivity services including internet access and network security services to our corporate and institutional clients.
We maintain our own wide-area internet protocol network backbone, enabling clients to access the market data, financial information and online dealing services directly by way of dial-up or dedicated lines, where speed and performance is an issue and thus connectivity is not entrusted to the public internet. Our internet backbone is currently operative throughout Switzerland, as well as in Paris and Frankfurt and is being extended to London and Amsterdam. We also lease bandwidth from various European telecommunications carriers further enabling access to our services from any internet access point worldwide.
Market Environment and Corporate Strategy
Based on our own marketing analysis and research reports published by Forrester Research and Datamonitor, we believe that the market for online investor services in Europe, including both informational and transactional services, will provide significant opportunities for the provision of the underlying technology and content. While this market has developed rapidly in the USA over the past three years, we believe the European marketplace is characterized by particular parameters which will require a distinctly different approach in order to capitalize on the opportunities presented. As a result, we believe that significant market opportunities exist for a provider of financial information and electronic brokerage services that is able to address the interests and requirements of the European investor.
We believe that the key drivers influencing the market opportunity which we face are as follows:
Internet penetration: While the European private and business internet connectivity currently lags behind that of the USA, recent studies indicate that this will be redressed over the next three years. According to a Datamonitor report, internet connectivity for European business users is estimated to reach 70% penetration by
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the year 2004 or about 5.75 million companies. Particularly noteworthy is the extension of the internet to a range of wireless devices which we believe will further increase penetration, as well as the demand for investment information and transactional services. Emerging demand for such wireless services is believed to be growing strongly in Europe due to the large installed base of GSM mobile phones.
Growth in online banking: The number of Europeans using internet banking is expected to grow by 30% to 21 million by the year 2004. The move into online banking is a rational move for traditional banks as the costs of online transactions cost up to 12 times less to process than transactions made in person. Also, online customers tend to be more sophisticated and able to look after their own finances.
Direct equity ownership: The trend towards greater financial flexibility and self-determination amongst the European investment community is being driven both by an emerging class of information- and technology-enabled individuals as well as government pressure to encourage individual retirement planning outside of traditional state controlled pension funds.
Availability of investment products: The scope of investment possibility has been significantly extended during the past three years with the emergence of several "new market` exchanges in Europe which are largely geared towards new- economy equities. While European mid-size companies are privately held to a greater extent than their US counterparts, the succession of ownership to a next generation who are not always willing to remain in control is creating flotation opportunities in many cases.
Number of online accounts: According to a Forrester Research report, the number of online securities accounts in Europe is currently about 1.3 million, estimated to grow to 14 million by 2002.
Cross border investment tendencies: European investors have traditionally invested within their own local markets. However, in light of currency-related and trade harmonization initiatives currently being adopted by European countries, we believe that a demand for cross-border investment opportunities will emerge.
Pressure on European financial institutions to offer online services: Over the past three years, European financial institutions have committed significant resources to the introduction of the Euro as well Y2K issues. We believe that presently, many such financial institutions will perceive an increased need to offer or improve online investment services to their clients, with an emphasis on speed to market, in order to maintain clients, capitalize on additional revenue opportunities, reduce costs, and counter competition from especially US based service providers penetrating European markets.
Cross-selling demand from other internet franchises for financial services: Following from possibilities created by the internet-economy, we believe that many enterprises which currently command the attention of large franchises of internet-enabled communities will seek to add complementary financial services to their product offering in an attempt to capitalize on overall e-commerce opportunities, thus requiring access to the services that we provide.
Our objective is to be a leading provider of internet-based services and solutions to the European investment community. We plan to achieve these objectives through:
. the development of strategic alliances with banks and securities brokerages, financial service providers, financial news organizations, financial middle-ware companies and internet service providers throughout Europe, so as to leverage our services across existing client bases;
. our own direct sales channels targeted at sophisticated private investors as well as corporate clients; and
. the development and operation of co-branded content-enabled web-sites catering to emerging Internet-communities, for the purpose of offering basic investor services which serve as a marketing platform for our more sophisticated higher value services.
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Key elements of our strategy include:
State of the Art Technology: Our technologies and services include software licensed from Townsend Analytics Ltd. We believe that Townsend Analytics is a recognized world leader in the development and commercialization of software and technologies dedicated to internet-based market data, trading and exchange activities. The owner and President of Townsend Analytics, Mr. Stuart Townsend, has served on our Board of Directors since April 1997.
European Focus: We offer internet-based information and electronic brokerage services that are uniquely European in nature. Until now, the dominant providers of internet-based information and brokerage services in Europe have been U.S. based companies which, in our opinion, offer a service that is distinctly American in nature. We believe that financial and information services offered by U.S. tend to focus on the U.S. stock markets, and to the extent they focus on Europe, the focus is homogenized in the sense that they treat the European market as one market. The U.S. competition does not give proper regard to the fact that Europe, unlike the U.S., is a highly fragmented market with significant language, demographic and cultural distinctions. Since most of the European banks tend to serve one or perhaps a few of the many market segments, our marketing research indicates that banks and their clientele prefer a service that emphasizes their distinct interests, particularly the presentation of content in manner that focuses on local stock markets and stocks, financial and news publications and trading tools that best meet the interests and needs of the banks` clientele. While market data and financial services cover all major world markets and exchanges, we believe that our services provide greater focus on pan-European markets and exchanges than other competing services. In the case of joint-service arrangements for the provision of a co-branded service, we work with our local partner to customize the offered service to suit the cultural need and investment profile of the partner`s existing and targeted clientele.
Strategic Alliances; Business-to-Business Model: By focusing on the development of co-branded information and brokerage services pursuant to strategic alliances, we intend to acquire access to existing target client bases. We plan to enter into one or more strategic relationships with banks and securities brokerages, financial services providers, financial news organizations, middle-ware providers and internet service providers in each of the major investment and geographical communities of Western Europe. We believe that this strategy will accelerate the expansion of our services throughout Europe and, at the same time, reduce the marketing costs typically associated with the rollout of a service of this nature throughout an area made up of several large and culturally diverse communities.
Development of FirstQuote Brand Name: We have applied for trademark registration of the FirstQuote mark in the USA, Switzerland and throughout the European Union. We intend to market our services and solutions throughout Europe under the FirstQuote brand name. We will endeavor to create a high degree of consumer awareness of the FirstQuote name and the association of quality and reliable services with such name in the European investment and banking communities. We intend to leverage our FirstQuote brand-name through the future development and marketing of additional services, including a portal web-sites linking the customer to an array of internet based financial and investment services.

Competition
The market for financial information and brokerage services over the internet is rapidly evolving and becoming increasingly competitive. We expect competition to continue and intensify in the future.
In the area of market data and financial services, we face direct competition from several companies that provide for the delivery of financial data over the Internet or other electronic means. At the more sophisticated end of our product offering, we believe our primary competitors include Reuters, Bloomberg, and Bridge. In the web-browser based arena, companies such as GlobalNet Financial and Atos currently also offer content-enabled web material.
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In the area of electronic brokerage services, we seek to enter into partnering arrangements with licensed banks and brokerage firms enabling them to provide the service in turn to their own clients. Such arrangements will to an extent compete with electronic brokerage firms such as the eSchwab division of Charles Schwab & Co., Inc., E-Trade Group and DLJdirect, and in the European context, Consors and e-Cortal who develop proprietary market data and internet brokerage systems. However, we believe that these same electronic brokerage firms may solicit either content or specific applications from us to supplement their existing technologies. The above partnering arrangements may also encounter competition from brokerage firms offeri