**UNITED
STATES SECURITIES AND EXCHANGE**


**COMMISSION**





WASHINGTON,
D.C. 20549





**FORM
10-K**





**ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**


**SECURITIES
EXCHANGE ACT OF 1934**





**FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2004**





*COMMISSION
FILE NO. 0-26071*





**EDGAR
ONLINE, INC.**





(Exact
name of registrant as specified in its charter)








DELAWARE
    
    06-1447017(State
      or other jurisdiction of
    
    (I.R.S.
      Employerincorporation
      or organization)
    
    Identification
      No.)50
      WASHINGTON STREET,
    
    06854NORWALK
      CT
    
    (Zip
      code)(Address of principal
      executive offices)




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





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


Warrants
to purchase Common Stock





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


Common
Stock, $0.01 par value





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 1933 during the
preceding 12 months (or for such shorter period that the registrant as required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes[X] No[ ]





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





Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12(b)-2 of the Act). Yes[ ] No[X]





The
aggregate market value of the voting and non-voting equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of June 30,
2004 was approximately $21,509,197.





As of
March 15, 2005, there were 22,947,900 shares of the registrant's common stock
issued and 21,777,950 shares outstanding.





**DOCUMENTS
INCORPORATED BY REFERENCE: NONE**













**EDGAR
ONLINE, INC.**





**TABLE
OF CONTENTS**








PagePART I


Item
      1.
    Business
    2Item
      2.
    Properties
    12Item
      3.
    Legal
      Proceedings
    12Item
      4.
    Submission
      of Matters to a Vote of Security Holders
    12PART
      IIItem
      5.
    Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
    13Item
      6.
    Selected
      Financial Data
    14Item
      7.
    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
    16Item
      7A.
    Quantitative
      and Qualitative Disclosures About Market Risk
    22Item
      8.
    Financial
      Statements and Supplementary Data
    22Item
      9.
    Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
    22Item
      9A.
    Controls
      and Procedures
    23Item
      9B.
    Other
      Information
    23PART
      IIIItem
      10.
    Directors
      and Executive Officers of the Registrant
    23Item
      11.
    Executive
      Compensation
    26Item
      12.
    Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
    30Item
      13.
    Certain
      Relationships and Related Transactions
    32Item
      14.
    Principal
      Accountant Fees and Services
    32PART
      IVItem
      15.
    Exhibits and
      Financial Statement Schedules
    33Signatures
    
    38





**PART
I**





**FORWARD
LOOKING STATEMENTS**





The
discussions set forth in this Annual Report on Form 10-K contain statements
concerning potential future events. Such forward-looking statements are based
upon assumptions by the Company’s management, as of the date of this Annual
Report, including assumptions about risks and uncertainties faced by the
Company. In addition, management may make forward-looking statements orally or
in other writings, including, but not limited to, in press releases, in the
annual report to shareholders and in the Company’s other filings with the
Securities and Exchange Commission. Readers can identify these forward-looking
statements by the use of such verbs as expects, anticipates, believes or similar
verbs or conjugations of such verbs. If any of management’s assumptions prove
incorrect or should unanticipated circumstances arise, the Company’s actual
results could materially differ from those anticipated by such forward-looking
statements. The differences could be caused by a number of factors or
combination of factors including, but not limited to, those factors identified
in Part I, Item 1, "Risk Factors" of this report, as well as our other periodic
reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission (the "SEC") from time to time. Readers are strongly encouraged to
consider those factors when evaluating any forward-looking statements concerning
the Company. The Company will not update any forward-looking statements in this
Annual Report to reflect future events or developments.  Investors
should also be aware that while we from time to time do communicate with
securities analysts, it is against our policy to disclose to them any material
non-public information or other confidential commercial information. Investors
should not assume that we agree with any report issued by any analyst or with
any statements, projections, forecasts or opinions contained in any such
report.











**ITEM
1. BUSINESS**





**OVERVIEW**





We are a leading
provider of value-added business and financial information on global companies
to financial, corporate and advisory professionals . We make
information and a variety of analysis tools available via online subscriptions
and licensing agreements to a large user base. Using our products and services,
customers can quickly view and analyze specific aspects of a public company's
business, financial and ownership history. Our customers include financial
institutions, investment funds, asset managers, market data professionals,
accounting firms, law firms, corporations and individual investors.





**INDUSTRY
BACKGROUND**





The
industry in which we compete, providing business and financial information, is
part of a broader industry that provides information, or content, on various
industries and markets. Some of these markets and industries include financial,
legal, healthcare, technology and energy. This market is highly competitive and
includes both large and small businesses. According to Outsell, Inc., a research
and advisory firm, the top information content providers, which include large
companies such as Reuters, Reed Elsevier, Thomson, AOL, Pearson, Gannett,
McGraw-Hill, Wolters Kluwer and Gartner, have aggregate revenues of
approximately $196 billion. Furthermore, according to Outsell, businesses and
other users spend approximately $50 billion a year to acquire information
online. Financial and business information, includes the profile, history,
ownership, financial reporting, sales, marketing and business development of a
company, as well its regulatory filings, analyst coverage, research reports,
news alerts and stock quotes. Much of this information is required to be filed
with the SEC.





**Reports
and Disclosures to the Securities and Exchange Commission**





Public
companies are registered with the SEC under the rules, regulations and
disclosure requirements of the Securities Exchange Act of 1934, as amended.
Public companies have continuing obligations to file reports with the SEC via
the EDGAR system. These reports include quarterly reports on Form 10-Q, annual
reports on Form 10-K, current reports on Form 8-K, proxy statements or
information statements and annual reports to stockholders on Schedules 14A and
14C, and statements of beneficial ownership of securities on Forms 3, 4 and 5
and Schedules 13D and 13G.





Historically,
companies in the financial information industry have manually built distinct
databases based on mandatory company filings with the SEC that have commercial
value for various customer segments. These databases include information on
public offerings, normalized financial data and stock ownership. We use
technology to gather and manage this information and create a product that can
be easily accessed by the end user.





**The
EDGAR System**





EDGAR,
the acronym for Electronic Data Gathering Analysis and Retrieval, is the SEC's
electronic filing system. Public companies and their insiders, mutual funds and
financial institutions use this system to submit, or file, statements, reports
and forms with the SEC. The SEC established the EDGAR system to perform
automated collection and acceptance of submissions by companies and others who
are required to file disclosure documents with the SEC and to make them
available to the public. In 1996, the SEC required all reporting U.S. public
companies to file compliance documents such as prospectuses, proxies and annual
and quarterly reports via the electronic format created through the EDGAR
system. Before the introduction of the EDGAR system, SEC filings were only
available on a delayed basis in costly paper or CD-ROM format from a limited
number of document providers or from SEC public reference rooms.





According
to our internal analysis, which is based on our database of all documents filed
via EDGAR, the number of documents filed through EDGAR has grown from
approximately 56,600 in 1994 to over one million in 2004. These documents are
submitted by approximately 12,000 public companies, 2,500 American Depository
Receipts (ADRs), 2,500 private companies with public debt, 2,200 institutions,
8,000 mutual funds, and 60,000 corporate executives and other company insiders.
On a typical day, up to 10,000 documents may be filed through EDGAR,
representing over one million pages of data.





**Sarbanes-Oxley
Act of 2002**





Government
regulation in the wake of Enron and other corporate scandals has mandated more
timely disclosure of material information from companies and other filers, as
well as the disclosure of additional and more detailed information on companies
and individuals. On July 30, 2002, President Bush signed into law the
Sarbanes-Oxley Act of 2002. This act is designed to enhance corporate
responsibility through new corporate governance and disclosure obligations,
increase auditor independence and impose tougher penalties for securities fraud.
In addition, the SEC, Nasdaq, the New York Stock Exchange, the American Stock
Exchange, and other national exchanges have adopted rules in furtherance of this
act. These new rules have modified the regulatory system governing capital
markets and provide a permanent framework to improve the quality of financial
reporting, as well as increase the responsibility of management for corporate
disclosures and financial statements. As a result, the availability of accurate,
reliable and real-time information is even more significant.




2





**eXtensible
Business Reporting Language (XBRL)**





Traditionally,
corporate financial reporting has been a labor-intensive process involving the
compilation of data from a variety of sources and formats. eXtensible
Business Reporting Language (XBRL) is one of a family of "XML" languages for the
electronic communication of business and financial data that simplifies the
mechanics of working with financial statements. XBRL provides substantial
benefits in the preparation, analysis and communication of financial
information. XBRL uses tags based on standardized accounting industry
definitions to describe and identify different categories of financial
information, which provides uniformity otherwise lacking in today's
financial reporting. With its superior search capabilities, XBRL makes financial
information more consistent and accessible without requiring companies to change
the way they report financial results.





The
potential widespread adoption of the XBRL standard is driven by the increasing
demand for analytics, continuous auditing
and real-time reporting by private and public companies and the institutions
that finance and invest in these companies. The SEC recently established a
voluntary program relating to XBRL whereby registrants may voluntarily furnish
XBRL data in an exhibit to specified EDGAR filings effective April 4, 2005. The
SEC stated that the primary purpose of the program is to assess XBRL technology,
including both the ability of registrants to tag their financial information
using XBRL and the benefits of using tagged data for analysis.




XBRL is a
royalty-free and open global standard. It has been developed by XBRL
International Inc., a not-for-profit consortium of over 250 leading companies
involved in providing or using business information. We are a founding member of
the XBRL consortium and one of the organizations developing and refining the
standards for XBRL. Members of the XBRL consortium include financial services
and information providers, software and other technology providers and
accounting and trade organizations. Our leadership position in this effort has
enabled us to develop new strategic alliances with such companies as Microsoft,
Hitachi and others.


**OUR
BUSINESS**





We
subscribe to a Level 1 feed of real-time SEC regulatory filings. The live feed
of EDGAR filings comes from the SEC's dissemination agent, Northrop Grumman
Space & Mission Systems Corp., which sends this feed to our primary facility
in Rockville, Maryland, and our back-up facility in New York, via private high
speed T-1 connections. This feed immediately creates a historical archive of
original, unaltered SEC filings dating back to 1993. We maintain a relational
database that supports complex search and retrieval mechanisms to access the
filings archive. The raw EDGAR filings are processed independently by our
proprietary software, stored in databases, posted to our websites and
distributed to third parties with whom we have distribution contracts via our
production servers. Our proprietary document processing systems also create
other representations of the original document, including XBRL, HTML, Rich Text
Format, PDF and Excel. These value-added versions of the original document are a
vital part of serving our customers' needs to efficiently view, print and
analyze the content reported in the SEC filings.





We also
produce a specialized line of data feeds, products and services based on
designated content sets. These content sets include a complete database of XBRL
formatted annual and quarterly financial statements, insider trades,
institutional holdings, initial and secondary public offerings, mutual fund
e-prospectuses and form 8-K disclosures. Each of these independent content sets
represents a set of discrete facts that can be searched and analyzed by our
various product offerings. Customers can also subscribe to daily custom data
feeds of this content or access the information in real time using our
proprietary XML based application programming interface (API). A network of
custom data parsers, integrity checks, and auditing tools are used with each
content set to insure a premium level of data quality and completeness.





**PRODUCTS
AND SERVICES**





We apply
our proprietary technological know-how to extract, process and categorize raw
information filed over EDGAR, and present it in a real-time or near real-time,
user-friendly format. We provide this information through a variety of products
and services via online subscriptions and licensing agreements to investors and
professionals in the corporate, financial and advisory communities.





**Subscription
Services**





We offer
the following subscription services:





EDGAR
Online Pro. Our flagship product is EDGAR Online Pro (pro.edgar-online.com).
This product offers financial data, stock ownership, public offering datasets
and advanced search tools. The list price for a single seat of EDGAR Online Pro
is $1,200 per year, plus additional fees for add-on services such as global
annual reports and conference call transcripts, and is available via multi-seat
and enterprise-wide contract.





EDGAR
Online Access. Our retail service is EDGAR Online Access
(access.edgar-online.com). This product is less expensive and has fewer features
than EDGAR Online Pro. EDGAR Online Access is available for $220 per year,
purchased annually or quarterly, and is available via single-seat, credit card
purchase only.





**Digital
Data Feeds**





EDGAR
Online Explorer. We make our various databases available through EDGAR Online
Explorer. This product is a digital data feed transmitted through an application
program interface - a customized request response mechanism that allows a
licensed customer to seamlessly replicate a feature or functionality of our
service inside an intranet, extranet and other proprietary products or
applications. For instance, customers such as Standard & Poor's, Lexis-Nexis
and One Source use this mechanism to enhance the functionality of their own
products and services.




3





**Other
Services**





We
provide technical services to Nasdaq. Several of our technical and non-technical
employees operate, maintain and support the Nasdaq Online website service which
is available only to Nasdaq listed companies. We also provide ancillary
advertising and e-commerce services on websites such as Yahoo!. We generate
revenues through the sale of advertising banners and sponsorships on these
websites and through e-commerce activities such as marketing third party
services to the users of our websites.





**PROPOSED
PRODUCTS AND SERVICES**





We
continue to enhance our existing products and services by adding new tools and
databases. Among our proposed products and services are analytical tools based
on the quantitative and qualitative data sets that we collect. In 2005, we will
introduce I-Metrix, a suite of products designed to process fundamental data,
such as income statement, balance sheet and statements of cash flow, as well as
standard financial ratios, insider transactions, changes in institutional
ownership, Form 8-K information, keyword filings and corporate governance data.
As a result of our continued work with XBRL, I-Metrix fundamental data will be
delivered using the XBRL standard.





**GROWTH
STRATEGY**





Our
growth strategy is designed to capitalize on our brand recognition and our
position as a provider of public company information to the financial and
business community and consists of the following:





**Increase
Sales to New and Existing Customers**





Our sales
force will enable us to increase our goal of expanding sales of our products and
services. Particularly, we have strengthened our management team by adding an
Executive Vice President of Sales and Marketing to coordinate our accelerated
effort to bring more of our products and services to market and to increase
sales of our existing services, with particular emphasis on EDGAR Online Pro and
the new I-Metrix suite of products. The sales group will continue to be expanded
to meet the anticipated new demand for our services. Fundamental to our sales
effort is managing our database of registered users of our former FreeEDGAR site
and EDGAR Online, which includes more than 1 million names. We add approximately
10,000 to 15,000 new registered users per month. Our ongoing marketing
activities involve targeting those users who are more suited to be users of our
premium services and to proactively market to them to upgrade their
subscriptions.





**Develop
New Products and Services**





We
continue to enhance our existing products and services by increasing
functionality and adding more datasets from EDGAR content. We also regularly
develop and license new analytical tools as well as adding new databases to
enhance our offerings. We have recently added a database of Japanese company
financial statements. As foreign jurisdictions begin to require their
constituents to file their disclosures in XBRL we will be building a database of
foreign financial statement data.





**Expand
Functionality and Content Offerings**





We
continuously seek to introduce new value-added services to increase revenues
from our existing customer base and to attract new customers. We have
sophisticated search technology under development to further mine the data in
EDGAR filings and plan to continue to introduce and market tailored products to
our customers. We continually seek to add more specialized and versatile tools
and features to our products and services, to further enrich the type of
information utilized by our customers. We are also incorporating additional
sources of business and financial information into the services we offer to our
clients. For example, in early 2004, we announced the addition of conference
call transcripts, company web casts and an events calendar to our EDGAR Online
Pro service.





We are
currently focused on the following general areas:





-  
Fundamental Data. Fundamental data includes income statement, balance sheet and
statements of cash flow. We are expanding our fundamental data products to
include information from sources other than SEC filings, as well as broadening
the ways in which we present this data.





-  
Data Mining. We are building and integrating search tools that are based on
real-time analysis of key events, topics and financial ratios.





-  
Microsoft Office. We are creating interfaces to our content into Microsoft
Office 2003, as well as to earlier releases of Microsoft Office.





We expect
that this increased functionality will broaden our core customers to include
accounting and consulting firms and public companies.





**Expand
Internationally**





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




4





**Expand
Existing Alliances and Develop New Strategic Partnerships**





We will
seek to leverage our position as a leading source of business and financial
information by broadening our existing strategic relationships and creating new
strategic relationships. We believe that creating additional distribution
relationships will allow us to reach a broader customer base, strengthen our
brand awareness and ensure that we remain dominant in our current and future
markets. We have developed strategic relationships with a number of industry
leaders including Microsoft and Hitachi.





Microsoft
Relationship. In October 2003, we signed a memorandum of understanding with
Microsoft, whereby we have worked with Microsoft to build analytical
capabilities within Microsoft Office 2003 Excel XBRL Tool For Microsoft Office,
a first commercial application of the XBRL standard. In July 2004, we signed an
additional agreement which allowed us to build this tool into the I-Metrix suite
of products. With I-Metrix, users simply input a company's name or ticker
symbol into an Excel spreadsheet, and that company's financial data will be
automatically inserted in the appropriate cells, saving time and ensuring
accuracy. Additionally, we have been designated a Solutions Showcase Microsoft
partner and the I-Metrix suite of products are expected to be
highlighted through Microsoft.com, Microsoft Office sales and marketing
collateral and Microsoft’s intranet for sales and marketing. At this time, we
are unable to estimate the amount of any future revenues or costs associated
with this arrangement as the I-Metrix
suite of products are not currently available to the market.





Hitachi
Relationship. In September 2004, we signed a reseller agreement with Hitachi
America, Ltd. whereby we have the right to sell to our United States customers
financial data of companies listed on securities exchanges in Japan which are
presented using XBRL standards. Hitachi has the right to sell EDGAR Online's
U.S. public company financial data presented in XBRL to its Japanese
customers.





**Pursue
Strategic Acquisitions**





At the
present time, we have no plans to make any acquisitions. However, we will
consider specific acquisition opportunities if we feel they have strategic
value. The types of acquisitions that we would consider as having strategic
value include those that will enable us to offer additional services, enhance
our selling and marketing efforts, improve technology and gain access to
complementary services or information that may be of interest to our customer
base.





**MARKETING
AND SALES**





As of
March 15, 2005, we have a staff of 24 professionals dedicated to supporting our
sales and marketing efforts. We believe that enterprise customers will continue
to represent an important source of revenue growth in the next few years, as we
continue to introduce new value-added search and extraction products and
customized fee-based services to enterprise purchasers of financial information.





We
promote our services through direct sales efforts, websites, marketing
alliances, direct marketing and telemarketing and trade shows. Through these
efforts, we sell and use trial offers on EDGAR Online Pro and EDGAR Online
Access to encourage visitors to subscribe to our services and to encourage
existing subscribers to purchase additional value-added services.





Our
direct sales efforts are focused on decision makers in the financial services
business, most typically a business group head, market data professional or
corporate librarian. Our direct and telemarketing programs are based on lists we
acquire from third parties or that we acquire through marketing alliances with
websites such as Quote.com and Yahoo! Finance. In exchange for allowing users
access to a basic level of financial information on a company through these
websites and other marketing alliances, and through our sales efforts we
register approximately 10,000 to 15,000 new users each month. We use this data,
in addition to the lists we acquire, to run direct marketing, telemarketing and
direct sales programs to these potential customers.





**CUSTOMERS**





Our
customers include financial services companies such as Bank of America, Citibank
and Morgan Stanley, stock exchanges such as Nasdaq and the New York Stock
Exchange, and leading information companies such as Lexis-Nexis, Moody's and
Reuters.





We have
over 185 clients that license EDGAR Online Explorer for use in existing
intranet, extranet and other product applications. We also have over 24,000
users of EDGAR Online Pro and EDGAR Online Access. These subscribers represent a
wide array of users in the financial services, accounting, legal, public company
and other markets.





**COMPETITION**





We are a
provider of financial and business information contained in SEC filings. As
such, we compete with those businesses that provide similar information and have
greater resources and market penetration than we do. As a result, they have been
able to establish a stronger competitive position than we have, in part through
greater marketing resources.





We
believe that competition for business information comes from such companies as
Reuters, Standard & Poor's and Thomson Financial. Competition for
information focused on financial data or credit risk comes from companies such
as S&P’s Capital IQ, Dun & Bradstreet and Factset. Competition for legal
information comes from companies such as Global Securities Information. Other
competitors include companies such as 10-K Wizard Technology, LLC, which focus
on simple SEC data offerings, and MSN Money and Yahoo! Finance, which are more
focused on serving individual investors.





5





Many of
these competitors have longer operating histories, larger, more established
customer bases, greater brand recognition and significantly greater resources,
particularly financial resources. As a result, they may develop products and
services comparable or superior in terms of price and performance features to
those developed by us or adapt more quickly than we can to new or emerging
technologies and changes in customer requirements. We may be required to make
substantial additional investments in connection with our research, development,
engineering, marketing and customer service efforts in order to meet any
competitive threat, so that we will be able to compete successfully in the
future. We believe, however, that based on our pricing and the content and
features of the products and service that we provide, we remain highly
competitive in the financial and business information market.





We
believe that the principal competitive factors in our market include the
following:





- Speed
of delivery;




-
Accuracy;




- Cost
efficiencies;




- Scope
of service;




- Quality
of service;




-
Convenience;




-
Customer service;




-
Reliability of service; and




-
Availability of enhanced services.





We
believe our competitive strengths include the following:





Timeliness.
Our information databases and products are created in real-time or near
real-time. For instance, subscribers to our EDGAR Online Pro service can receive
real time alerts based on various criteria. Similarly, our EDGAR Online Explorer
digital data feed processes and makes available documents moments after they
have been filed with the SEC. This attribute is imperative for those in the
financial services market requiring real-time data for competitive
decision-making.





Ease of
use. Our EDGAR Online Pro subscription service is delivered via a standard web
browser in a friendly, easy to use graphical user interface. A typical
subscriber can begin using the service immediately, without any special
training.





Versatility
and flexibility. We can provide our customers with a web-delivered subscription
service that allows for immediate purchase, immediate use and easy access within
the client company. Our EDGAR Online Explorer digital data feed allows a high
degree of customization for clients that want all or part of the offered
databases and functionality built into their existing applications. We also will
create customized databases, extracts and delivery mechanisms for clients with
special needs.





**INTELLECTUAL
PROPERTY**





The SEC
has granted us a non-exclusive, royalty-free license to use the name EDGAR in
our logo and corporate name through 2009. We have over 412 unique registered
domain names, including those representing our flagship products EDGAR Online
Pro and EDGAR Online Access. We have received registration for our EDGAR Online
trademark from the U.S. Patent and Trademark Office. We also have registered
trademarks and/or servicemarks on other service offerings including EDGAR Pro,
EDGAR Explorer, FreeEDGAR and EDGAR News and have active trademark/servicemark
applications pending on certain other service offerings including EDGAR Analyst.





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




6





**TECHNOLOGY**





We
develop and maintain our technology in-house and have the ability to create new
distinct databases from EDGAR data such as initial public offering data,
normalized financial data, ownership data and secondary public offering data. In
addition, we can incorporate existing technologies and solutions driven by our
domestic and international pricing systems, charting applications, validation
systems, quoting applications, and various maintenance tools that ensure our
commitment to data quality.





Our
proprietary technology has been focused on a framework approach, which allows us
to integrate solutions that were developed exclusively for us in combination
with third-party vendors, as well as easily incorporate system modifications.
Some of our proprietary solutions include our repository of financial
information, mutual fund e-prospectuses, web-based customer interfaces, section
extraction, form-type specific data extraction systems, XML delivery systems,
permissioning systems, alerting systems and our customer support and tracking
system. Software solutions obtained commercially include the Great Plains
Accounting System, the Verity Search Engine and the NetOwl Extractor.





Over the
last five years, we have developed various proprietary software solutions that
enable us to perform many complex data mining functions necessary to deliver our
services on a real-time and cost-effective basis to both our subscribers and
corporate customers. Our status as a Microsoft Certified Partner has allowed us
to leverage newer technologies in support of creating proprietary applications,
integrating them into our enterprise systems, and providing us a significant
advantage over any competitors seeking to match our speed and accuracy in
extracting data from the EDGAR database and delivering that data to a large
number of customers in a variety of formats.





In order
to further strengthen our capabilities in this area, we hired Stefan Chopin as
our Chief Technology Officer in early 2004. Mr. Chopin was one of the original
architects of our EDGAROnline.com technology and infrastructure and designed our
website. Mr. Chopin previously served on our Board of Directors and has
substantial expertise in both managing technology and understanding the demands
of our marketplace.





**INFRASTRUCTURE
AND OPERATIONS**





Although
third party development support is sometimes used in order to meet some
aggressive development timelines, our employees now perform all of our
development programming, as well as manage our content delivery infrastructure.
We own all the application level systems that serve our content delivery. The
largest portion of our development team is located in our Rockville, Maryland
office. In addition, the delivery solutions developed and maintained for some of
our largest corporate customers are hosted primarily in our data center in
Rockville and are facilitated by our use of the Microsoft technologies
framework. The Rockville data center is also the primary facility that provides
services used to deliver and support our flagship seat-based service EDGAR
Online Pro, our EDGAR Online Explorer data feeds and other content delivery
mechanisms.





Redundancy,
scalability and security have been and always will be a core focus of our
support staff and executives. All of our critical systems, including our
accounting system, user information databases, repository of EDGAR filings, and
all of our real-time updated datasets are backed up on a daily, or less, basis
and then stored offsite. Additionally, we make use of various applications and
techniques to ensure the availability of our applications and its data
throughout the day using procedures like application or data replication,
clustering, load balancing, and extensive application monitoring.





Our
systems are maintained on a 24 hour-a-day, 7 days-a-week basis by our own
technicians. Our services are available to users 24 hours a day, 7 days a week.
Customer service is available weekdays 9:00 AM to 5:00 PM (ET). Customer and
support inquiries have the availability of our websites, e-mail and telephone
options for assistance.





**EMPLOYEES**





As of
March 15, 2005, we have 92 employees, two of whom are part-time employees. None
of our employees are members of a union. We believe that we have good relations
with our employees.




7





**RISK
FACTORS**





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





**WE
HAVE A HISTORY OF LOSSES AND WE EXPECT TO INCUR LOSES FOR THE FORESEEABLE
FUTURE. IF WE ARE UNABLE TO ACHIEVE PROFITABILITY, OUR BUSINESS WILL SUFFER AND
OUR STOCK PRICE IS LIKELY TO DECLINE.**





We have
never operated at a profit and we anticipate incurring a loss in 2005, and may
incur additional losses in 2006. At December 31, 2004, we had an accumulated
deficit of $46.3 million. As a result, we will need to increase our revenues
significantly to achieve and sustain profitability. If revenues grow more slowly
than we anticipate, or if operating expenses exceed our expectations or cannot
be adjusted accordingly, we may incur further losses in the future. We cannot
assure you that we will be able to achieve or sustain profitability.





**OUR
REVENUES HAVE BEEN DECREASING. IF WE FAIL TO INCREASE REVENUES, WE WILL NOT
ACHIEVE OR MAINTAIN PROFITABILITY.**





Our
revenues decreased from approximately $16.2 million in 2002, to approximately
$14.3 million in 2003 to approximately $12.9 million in 2004. To achieve
profitability, we will need to increase revenues substantially through
implementation of our growth strategy and/or reduce expenses significantly. We
cannot assure you that our revenues will grow or that we will achieve or
maintain profitability in the future.





**WE
HAVE RECORDED IMPAIRMENT CHARGES IN CONNECTION WITH PRIOR ACQUISITIONS AND MAY
RECORD FURTHER IMPAIRMENT CHARGES IN THE FUTURE, WHICH COULD FURTHER DELAY OUR
PROFITABILITY.**





Our
losses in 2002 and 2000 were due, in part, to impairment charges relating to
acquisitions we made in 1999 and 2000. In 2002 and 2000 we wrote down an
aggregate of $15.5 million of goodwill and intangible assets relating to these
acquisitions. We are required to test goodwill annually and between annual tests
if events occur or circumstances change that would more likely than not reduce
the fair value of a reporting unit below its carrying amount. Annual reviews may
result in future periodic impairments that could have a material adverse effect
on the results of operations in the period recognized.





**NASDAQ
ACCOUNTS FOR A SIGNIFICANT PERCENTAGE OF OUR TOTAL REVENUE. HOWEVER, OUR NASDAQ
RELATED REVENUE HAS BEEN DECREASING OVER THE LAST FEW YEARS AND WE EXPECT THAT
THIS TREND WILL CONTINUE.**





A
significant portion of our total revenues over the last two fiscal years has
been attributable to the numerous work orders that we have performed under our
agreements with Nasdaq. Sales to Nasdaq accounted for 14% and 28% of our total
revenue during the years ended December 31, 2004 and 2003, respectively, and 14%
and 21% of our revenue for the fourth quarters ended December 31, 2004 and 2003,
respectively. We expect that Nasdaq will continue to be a significant customer,
but that revenues from Nasdaq will continue to decline. The loss of a
significant customer such as Nasdaq would have a material adverse effect on our
attempt to achieve profitability.





**IF
WE CANNOT GENERATE NEW SUBSCRIBERS, WE MAY NOT ACHIEVE PROFITABILITY.**





To
increase our revenues and achieve profitability, we must increase our subscriber
base significantly. We generate most of our leads for new subscribers from our
websites and through our content distribution relationships from such websites
as Yahoo! and Terra Lycos. These leads must be converted into subscriptions for
one or more of our products and services at a rate higher than what we have been
able to achieve so far. If we fail to do so, we may not achieve profitability.





**THE
TIMELINESS OF ACCEPTANCE OF XBRL IS UNCERTAIN AND ITS FAILURE TO GROW COULD
ADVERSELY AFFECT THE GROWTH OF OUR BUSINESS.**





We
believe our future growth depends, in part, on the adoption of the new XBRL data
standard. In particular, we believe that our initiative with the EDGAR Online
XBRL Tool (I-Metrix) may provide us with a new source of subscribers. We are
currently building a commercial version of the I-Metrix suite of products. These
tools are designed solely for analyzing documents that have been formatted in
XBRL and for use exclusively with the Microsoft Office System. Since I-Metrix is
based on a new reporting language data standard, it is difficult to predict the
demand, timing and rate of market adoption of this standard. As a result, our
business and prospects could be affected if XBRL is not quickly and widely
adopted.




8





**OUR
FUTURE SUCCESS DEPENDS, IN PART, ON FURTHER DEVELOPING OUR INITIATIVES THROUGH
THE MICROSOFT OFFICE SYSTEM. FAILURE TO DO SO MAY IMPAIR OUR ABILITY TO GROW AND
BECOME PROFITABLE.**





In
October 2003, we signed a non-binding Memorandum of Understanding with
Microsoft and have since worked with Microsoft to build analytical
capabilities within the Microsoft Solution Accelerator for XBRL within Office
2003, a first commercial application of the XBRL standard. In July 2004, we
entered into a license agreement with Microsoft, and we received certain license
rights to develop and distribute an EDGAR Online branded version of Microsoft’s
financial information analysis software. The software that we have licensed is a
part of our I-Metrix product, which has not yet been introduced to the market.
Thus we cannot assure you that this initiative will be successful. If this
initiative is not successful, we may not be able to increase our revenues and
achieve profitability in the short-term.





**THE
INDUSTRY IN WHICH WE OPERATE IS HIGHLY COMPETITIVE AND HAS LOW BARRIERS TO
ENTRY. INCREASED COMPETITION WOULD MAKE PROFITABILITY EVEN MORE DIFFICULT TO
ACHIEVE.**





We
compete with many providers of business and financial information including
Bloomberg, S&P’s Capital IQ, Dun & Bradstreet, Global Securities
Information, Reuters, Standard & Poor's, Thomson Financial, 10-K Wizard, MSN
and Yahoo! Our industry is characterized by low barriers to entry, rapidly
changing technology, evolving industry standards, frequent new product and
service introductions and changing customer demands. Many of our existing
competitors have longer operating histories, name recognition, larger customer
bases and significantly greater financial, technical and marketing resources
than we do. Current competitors or new market entrants could introduce products
with features that may render our products and services obsolete or
uncompetitive. To be competitive and to serve our customers effectively, we must
respond on a timely and cost-efficient basis to changes in technology, industry
standards and customer preferences. The cost to modify our products, services or
infrastructure in order to adapt to these changes could be substantial and we
cannot assure you that we will have the financial resources to fund these
expenses. Increased competition could result in reduced operating margins, as
well as a loss of market share and brand recognition. If these events occur,
they could have a material adverse effect on our revenue.





**FUTURE
ENHANCEMENTS TO THE SEC'S EDGAR SYSTEM MAY ERODE DEMAND FOR OUR SERVICES AND OUR
REVENUES MAY SUFFER AS A RESULT.**





Our
future success will depend on our ability to continue to provide value-added
services that distinguish our products from the type of EDGAR-information
available from the SEC on its website. The SEC currently provides free access on
its website to raw EDGAR filings on a real-time basis. If the SEC were to make
other changes to its website such as providing value-added services comparable
to those provided by us, our results of operations and financial condition would
be materially and adversely affected. Additionally, if the SEC were to enhance
or upgrade services available on its website or the EDGAR filing system, we
would need to tailor our products and services to be compatible with these new
architectures or technologies, which would increase costs. If we are unable to
do this, there may be a reduction in demand for our products and services and
our revenues may suffer as a result.





**OUR
BUSINESS COULD BE ADVERSELY AFFECTED BY ANY ADVERSE ECONOMIC DEVELOPMENTS IN THE
FINANCIAL SERVICES INDUSTRY AND/OR THE ECONOMY IN GENERAL.**





We depend
on the continued demand for the distribution of business and financial
information. Therefore, our business is susceptible to downturns in the
financial services industry and the economy in general. Our 2003 and 2004
results of operations reflect, in part, the effects of the slowdown in our
markets, which have only recently begun to improve. For example, we believe that
decreases in the expenditures that corporations and individuals are willing to
make to purchase the types of information we provide has resulted in a slower
growth in the number of customers purchasing our information services. Any
significant downturn in the market or in general economic conditions would
likely hurt our business.





**IF
WE FAIL TO DEVELOP AND INTRODUCE NEW PRODUCTS AND SERVICES, OUR SALES AND
COMPETITIVE POSITION WILL SUFFER.**





Our
market is characterized by rapidly changing technologies, evolving industry
standards, frequent new product and service introductions and changing customer
demands. To be successful, we must continue to enhance our existing services and
develop and add new services by introducing products and services embodying new
technologies, such as XBRL, to address our customers' changing demands in a
timely and cost effective manner. Our business could be adversely affected if we
were to incur significant costs without generating related revenues or if we
cannot adapt rapidly to these changes. Our business could also be adversely
affected if we experience difficulties in introducing new or enhanced services
or if these services are not favorably received by users. We may experience
technical or other difficulties that could delay or prevent us from introducing
new or enhanced services. If we are not successful in developing and marketing
enhancements to our existing products and services or our products and services
do not incorporate new technology on a timely basis, we may become less
competitive and our revenues may suffer as a result.




9





**FUTURE
ACQUISITIONS AND BUSINESS COMBINATIONS THAT WE CONSUMMATE MAY BE DIFFICULT TO
INTEGRATE, DISRUPT OUR BUSINESS, DILUTE STOCKHOLDER VALUE OR DIVERT MANAGEMENT
ATTENTION.**





We may
continue to expand our operations and market presence by making acquisitions and
entering into business combinations, investments, joint ventures or other
strategic alliances, with other companies. We may have to issue debt or equity
securities to pay for future acquisitions, which could be dilutive to our then
current stockholders. No specific transactions are pending at the current time
and we cannot assure you that we will consummate any transactions in the future.
However, these transactions create risks, such as:





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




-
disrupting our ongoing business;




-
problems retaining key technical and managerial personnel;




-
additional operating losses and expenses of acquired businesses; and




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





Any of
the events described in the foregoing paragraph could have an adverse effect on
our business, financial condition and results of operations and could cause the
price of our common stock to decline.





**WE
DEPEND ON KEY PERSONNEL, THE LOSS OF WHOM COULD THREATEN OUR ABILITY TO OPERATE
OUR BUSINESS SUCCESSFULLY.**





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





**WE
MAY ENCOUNTER RISKS RELATING TO SECURITY OR OTHER SYSTEM DISRUPTIONS AND
FAILURES THAT COULD REDUCE THE ATTRACTIVENESS OF OUR SITES AND THAT COULD HARM
OUR BUSINESS.**





Although
we have implemented in our products various security mechanisms, our business is
vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions, which could lead to interruptions, delays or loss of data. For
instance, because a portion of our revenue is based on individuals using credit
cards to purchase subscriptions over the Internet and a portion from advertisers
who seek to encourage people to use the Internet to purchase goods or services,
our business could be adversely affected by these break-ins or disruptions.
Additionally, our operations depend on our ability to protect systems against
damage from fire, earthquakes, power loss, telecommunications failure, and other
events beyond our control. Moreover, our websites and business solutions have,
in the past, and may in the future, experience slower response times or other
problems for a variety of reasons, including hardware and communication line
capacity restraints, software failures or during significant increases in
traffic when there have been important business or financial news stories and
during the seasonal periods of peak SEC filing activity. These strains on our
system could cause customer dissatisfaction and could discourage visitors from
becoming paying subscribers. Although we have redundant feeds to our facilities,
we also depend on the Level I EDGAR feed we purchase in order to provide SEC
filings on a real-time basis. Our websites could experience disruptions or
interruptions in service due to the failure or delay in the transmission or
receipt of this information. These types of occurrences could cause users to
perceive our websites and technology solutions as not functioning properly and
cause them to use other methods or services of our competitors. Any disruption
resulting from these actions may harm our business and may be very expensive to
remedy, may not be fully covered by our insurance and could damage our
reputation and discourage new and existing users from using our products and
services. Any disruptions could increase costs and make profitability even more
difficult to achieve.








10





**IF
WE FAIL TO SECURE OR PROTECT OUR PROPRIETARY RIGHTS, COMPETITORS MAY BE ABLE TO
USE OUR TECHNOLOGIES, WHICH COULD WEAKEN OUR COMPETITIVE POSITION, REDUCE OUR
REVENUE OR INCREASE OUR COSTS.**





Our
trademarks and other proprietary rights, principally our proprietary database
technology, are essential to our success and our competitive position. We seek
to protect our trademarks and other proprietary rights by entering into
confidentiality agreements with our employees, consultants and content
distribution partners, and attempting to control access to and distribution of
our proprietary information. We also believe that factors such as the
technological and creative skills of our personnel, new product developments,
frequent product enhancements, name recognition, and reliable product
maintenance are essential to establishing and maintaining a technology
leadership position. We have obtained a non-exclusive, royalty-free license from
the SEC to use the term EDGAR in our trademarks, service marks and corporate
name. We have not, however, relied on a combination of copyright, trade secret
and trademark laws in order to protect our proprietary rights.





Despite
our efforts to protect our proprietary rights from unauthorized use or
disclosure, third parties may attempt to disclose, obtain or use our proprietary
information. The precautions we take may not prevent this type of
misappropriation. In addition, our proprietary rights may not be viable or of
value in the future since the validity, enforceability and scope of protection
of proprietary rights in Internet-related industries is uncertain and still
evolving. Additionally, third parties could claim that our database technology
infringes their proprietary rights. Claims of this sort and any resultant
litigation, should it occur, could result in us being liable for damages and
could result in our proprietary rights being invalidated. Even if we prevail,
litigation could be time-consuming and expensive, and could divert the time and
attention of management, any of which could materially adversely affect our
business, results of operations and financial condition. Any claims or
litigation could also result in limitations on our ability to use our trademarks
and other intellectual property unless we enter into license or royalty
agreements, which agreements may not be available on commercially reasonable
terms, if at all.





**LEGAL
UNCERTAINTIES AND GOVERNMENT REGULATION OF THE INTERNET COULD ADVERSELY AFFECT
OUR BUSINESS.**





Many
legal questions relating to the Internet remain unclear and these areas of
uncertainty may be resolved in ways that damage our business. It may take years
to determine whether and how existing laws governing matters such as
intellectual property, privacy, libel and taxation apply to the Internet. In
addition, new laws and regulations that apply directly to Internet
communications, commerce and advertising are becoming more prevalent. As the use
of the Internet grows, there may be calls for further regulation, such as more
stringent consumer protection laws.





These
possibilities could affect our business adversely in a number of ways. New
regulations could make the Internet less attractive to users, resulting in
slower growth in its use and acceptance than is expected. We may be affected
indirectly by legislation that fundamentally alters the practicality or
cost-effectiveness of utilizing the Internet, including the cost of transmitting
over various forms of network architecture, such as telephone networks or cable
systems, or the imposition of various forms of taxation on Internet-related
activities. Complying with new regulations could result in additional cost to
us, which could reduce our profit margins or leave us at risk of potentially
costly legal action.





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





Users
provide us with personal information, including credit card information, which
we do not share without the user's consent. Despite this policy of obtaining
consent, however, if third persons were able to penetrate our network security
or otherwise misappropriate our users' personal or credit card information, we
could be subject to liability, including claims for unauthorized purchases with
credit card information, impersonation or other similar fraud claims, and
misuses of personal information, such as for unauthorized marketing purposes.
New privacy legislation may further increase this type of liability. California,
for example, recently passed a privacy law that would apply to a security breach
that affects unencrypted, computerized personal information of a California
resident. Furthermore, we could incur additional expenses if additional
regulations regarding the use of personal information were introduced or if
federal or state agencies were to investigate our privacy practices.





**OUR
COMMON STOCK COULD BE DELISTED FROM THE NASDAQ NATIONAL MARKET, WHICH WOULD MAKE
TRADING IN OUR STOCK MORE DIFFICULT.**





At
various times during the period from February 2003 through October 2004, the
closing bid price of our common stock was below $1.00. If the closing bid price
of our stock were to drop below $1.00 per share and remain below $1.00 per share
for thirty consecutive business days, we would be in violation of the continued
listing requirements of the Nasdaq National Market and would risk the delisting
of our shares from Nasdaq. On August 27, 2004, we received a letter from Nasdaq
indicating that we were not in compliance with the minimum bid price
requirement. By October 19, 2004, however, we demonstrated full compliance with
this requirement. However, even if the minimum per share bid price of our common
stock is maintained, we must also satisfy other listing requirements of the
Nasdaq National Market, such as maintaining equity of at least $10 million. If
we fail to satisfy any of the maintenance requirements, our common stock could
be delisted from the Nasdaq National Market. In that event we could apply to
list our shares with the Nasdaq SmallCap Market or, if we fail to satisfy the
maintenance requirements of the Nasdaq SmallCap Market, we would list our shares
on the Over the Counter Bulletin Board. Either option could adversely affect the
liquidity and price of our common stock and make it more difficult for us to
raise additional capital on favorable terms, if at all.








11





**THE
PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE.**





The
market price of our common stock has been, and is likely to continue to be,
volatile and subject to wide fluctuations. Over the 52-week period ending March
15, 2005, the highest closing sales price of our common stock was $3.16 and
the lowest closing sales price of our common stock was $0.71. In recent
years, the stock market has experienced significant price and volume
fluctuations, which has impacted the market prices of equity securities and
viability of many small-cap companies. Some of these fluctuations appear to be
unrelated or disproportionate to the operating performance of such companies.
Future market movements may materially and adversely affect the market price of
our common stock.





**ITEM
2. PROPERTIES**





Our
principal executive offices are located in Norwalk, Connecticut, where we lease
7,500 square feet of office space. This lease expires June 2006. We also lease
approximately 4,900 square feet of office space at 122 East 42nd Street, New
York, New York. This facility houses sales and administrative personnel. This
lease expires April 2007. Additionally, we lease approximately 14,200 square
feet of office space at 11200 Rockville Pike, Suite 310, Rockville, Maryland. In
March 2005, we signed an amendment to the lease agreement which extended the
lease term through August 2015. These facilities house our development and
operations personnel as well as over computer and communications equipment.





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





**ITEM
3. LEGAL PROCEEDINGS**





On
December 30, 2004, the Company entered into a settlement agreement which
concluded a lawsuit commenced by the Company entitled EDGAR Online, Inc. and
Financial Insight Systems, Inc. v. Albert E. Girod and Kristine Delta, C.A. No.
1560-K, Court of Chancery of the State of Delaware, Kent County. The Company
initiated the lawsuit against Albert Girod, its former chief technology officer,
executive vice president and director, and Kristine Delta, its former vice
president, based on certain claims that arose out of the purchase by the Company
of Financial Insight Systems, Inc. ("FIS") in October 2000. The Company sought
compensatory damages and/or restitution for defendants' alleged fraud, unjust
enrichment, breach of fiduciary duty, breach of contract and other actions that
occurred in connection with the acquisition of FIS. The Company settled the
lawsuit in exchange for all of the shares of common stock then held by Mr. Girod
and one-third of the shares of common stock currently held by Ms. Delta.
Specifically, Mr. Girod transferred 962,375 shares to the Company and Ms. Delta
transferred 12,500 shares to the Company. These shares are reflected in the
Company's treasury. The Company and Mr. Girod have also agreed not to disparage
each other pursuant to the Settlement Agreement.





On April
27, 2004, our former employee, A. Jason Sears, filed suit against us in the
United States District Court for the District of Connecticut. The suit purports
to allege causes of action for breach of contract, breach of the covenant of
good faith and fair dealing, slander per se, negligent infliction of emotional
distress and various causes of action pursuant to Connecticut's statutory
employment law, arising out of the expiration of plaintiff's employment
agreement on April 30, 2004. Plaintiff seeks compensatory damages as well as
other relief. We will defend the action vigorously. We do not expect this
litigation to have a material impact on our financial condition or results of
operation.








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





No
matters were submitted to security holders through the solicitation of proxies
or otherwise during the fourth quarter of our fiscal year ended December 31,
2004.








12







**PART
II**


****ITEM
5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES****


**MARKET
PRICE FOR COMMON STOCK**





On March
15, 2005, the closing sales price of our common stock on the Nasdaq National
Market was $3.00.





Our
common stock is traded on the Nasdaq National Market under the symbol EDGR. The
following table sets forth the high and low closing sales prices of our common
stock as quoted by the Nasdaq National Market:








HIGH
    
    LOWFISCAL
      YEAR ENDED DECEMBER 31, 2003First
      Quarter
    
    $
    1.80
    
    $
    0.85Second
      Quarter
    
    $
    1.55
    
    $
    0.71Third
      Quarter
    
    $
    2.10
    
    $
    1.08Fourth
      Quarter
    
    $
    2.41
    
    $
    1.53FISCAL
      YEAR ENDED DECEMBER 31, 2004First
      Quarter
    
    $
    1.87
    
    $
    1.25Second
      Quarter
    
    $
    1.44
    
    $
    0.89Third
      Quarter
    
    $
    1.07
    
    $
    0.71Fourth
      Quarter
    
    $
    1.00
    
    $
    1.59FISCAL
      YEAR ENDED DECEMBER 31, 2005First
      Quarter (through March 15, 2005)
    
    $
    3.16
    
    $
    1.30





We also
have warrants to purchase common stock that have been trading on the Nasdaq
National Market under the symbol EDGRW since May 26, 2004. The following table
sets forth the high and low closing prices of our warrants as quoted by the
Nasdaq National Market since the commencement of such trading:





HIGH
    
    LOWFISCAL
      YEAR ENDED DECEMBER 31, 2004May
      26, 2004 - June 30, 2004
    
    $
    0.23
    
    $
    0.11Third
      Quarter
    
    $
    0.31
    
    $
    0.16Fourth
      Quarter
    
    $
    0.60
    
    $
    0.26FISCAL
      YEAR ENDED DECEMBER 31, 2005First
      Quarter (through March 15, 2005)
    
    $
    1.65
    
    $
    0.47





**HOLDERS**





As of
March 15, 2005, there were approximately 94 holders of record of our common
stock.





**DIVIDEND
POLICY**





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








13





**EQUITY
COMPENSATION PLANS**





Item 12
of Part III contains information concerning securities authorized for issuance
under our equity compensation plans.





**RECENT
SALES OF UNREGISTERED SECURITIES**





None.





**ISSUER
PURCHASES OF EQUITY SECURITIES**





None.





**ITEM
6. SELECTED FINANCIAL DATA**




The
selected consolidated financial data set forth below should be read in
conjunction with our consolidated financial statements, and the related notes
thereto, and "Management's Discussion and Analysis of Financial Condition and
Results of Operations," included in this annual report. The statement of
operations and balance sheet data presented below for, and as of the end of,
each of the years in the five-year period ended December 31, 2004 are derived
from our audited consolidated financial statements. The financial statements for
December 31, 2004 and 2003 and each of the years in the three-year period
ended December 31, 2004 are included elsewhere in this annual report. The
financial statements of each of the years in the three-year period ended
December 31, 2002 were audited by KPMG LLP, independent registered public
accounting firm. The KPMG LLP Report of Independent Registered Public Accounting
Firm makes reference to our change in accounting for goodwill and other
intangible assets as of January 1, 2002. The financial statements at December
31, 2004 and 2003, and as of the end of the two years ended December 31, 2004
were audited by BDO Seidman, LLP, independent registered public accounting firm.
Historical results are not necessarily indicative of the results to be expected
in the future.





YEAR ENDED DECEMBER 31,2000
    
    2001
    
    2002
    
    2003
    
    2004(in
      thousands, except per share information)STATEMENT
      OF OPERATIONS DATA:Seat-based
      subscriptions
    
    $
    2,220
    
    $
    3,388
    
    $
    5,148
    
    $
    5,953
    
    $
    6,919Data
      sales
    
    
    3,385
    
    
    5,416
    
    
    5,380
    
    
    4,833
    
    
    4,575Technical
      services
    
    
    1,124
    
    
    6,782
    
    
    4,287
    
    
    2,805
    
    
    823Advertising
      and e-commerce
    
    
    3,013
    
    
    1,467
    
    
    1,356
    
    
    728
    
    
    568Revenues
    
    
    9,742
    
    
    17,053
    
    
    16,171
    
    
    14,319
    
    
    12,885Cost
      of revenues
    
    
    3,022
    
    
    4,449
    
    
    2,632
    
    
    1,979
    
    
    1,898Gross
      profit
    
    
    6,720
    
    
    12,604
    
    
    13,539
    
    
    12,340
    
    
    10,987Operating
      expenses:Selling,
      general and administrative and development
    
    
    13,296
    
    
    12,965
    
    
    12,315
    
    
    11,086
    
    
    12,167Restructuring
      and severance charges(1)
    
    
    --
    
    
    995
    
    
    (182
    )
    
    784
    
    
    --Amortization
      and depreciation
    
    
    3,484
    
    
    4,767
    
    
    2,880
    
    
    2,503
    
    
    2,226Impairment
      of intangible assets(2)
    
    
    6,151
    
    
    --
    
    
    --
    
    
    --
    
    
    --Loss
      from operations
    
    
    (16,211
    )
    
    (6,123
    )
    
    (1,474
    )
    
    (2,033
    )
    
    (3,406
    )Interest
      income (expense) and other, net
    
    
    974
    
    
    (665
    )
    
    (251
    )
    
    (134
    )
    
    1,240Loss
      before cumulativeeffect of change in accounting principle
    
    
    (15,237
    )
    
    (6,788
    )
    
    (1,725
    )
    
    (2,167
    )
    
    (2,166
    )Cumulative effect of changein
      accounting principle (3)
    
    
    --
    
    
    --
    
    
    (9,317
    )
    
    --
    
    
    --Net
      loss
    
    $
    (15,237
    )
    $
    (6,788
    )
    $
    (11,042
    )
    $
    (2,167
    )
    $
    (2,166
    )






14






Loss
      before cumulative effect of change in accounting principle per share -
      basic and diluted
    
    $
    (1.18
    )
    $
    (0.46
    )
    $
    (0.10
    )
    $
    (0.13
    )
    $
    (0.11
    )Cumulative
      effect of change in accounting principle per share - basic and diluted
    
    
    (0.00
    )
    
    (0.00
    )
    
    (0.55
    )
    
    (0.00
    )
    
    (0.00
    )Net
      loss per share - basic and diluted
    
    $
    (1.18
    )
    $
    (0.46
    )
    $
    (0.65
    )
    $
    (0.13
    )
    $
    (0.11
    )Weighted
      average shares outstanding - basic and diluted (4)
    
    
    12,863
    
    
    14,912
    
    
    16,933
    
    
    16,976
    
    
    20,254





DECEMBER
      31,2000
    
    2001
    
    2002
    
    2003
    
    2004BALANCE
      SHEET DATA:Cash
      and cash equivalents
    
    $
    2,284
    
    $
    3,461
    
    $
    5,550
    
    $
    3,860
    
    $
    2,678Investments
    
    $
    1,498
    
    $
    --
    
    $
    --
    
    $
    --
    
    $
    2,000Working
      capital
    
    $
    3,704
    
    $
    46
    
    $
    2,458
    
    $
    702
    
    $
    2,709Total
      assets
    
    $
    39,466
    
    $
    33,486
    
    $
    23,219
    
    $
    19,145
    
    $
    18,606Long-term
      debt
    
    $
    6,000
    
    $
    3,800
    
    $
    1,878
    
    $
    --
    
    $
    --Stockholders'
      equity
    
    $
    29,483
    
    $
    23,960
    
    $
    16,370
    
    $
    14,015
    
    $
    14,413




(1) In
2001, we recognized restructuring costs which were primarily comprised of
expenses associated with closing our Kirkland, Washington office. These costs
include severance payments, non-recoverable lease liabilities, loss on fixed
assets, and the cost of non-cancelable service contracts for operating expenses
such as phone lines and equipment leases. Restructuring costs also include
severance expenses for Financial Insight Systems, Inc. employees. In 2002,
portions of these costs were reversed as contract terminations were negotiated.
In 2003, we effected a 17% workforce reduction in response to an expected
decline in Nasdaq revenues in the second half of 2003. In addition, we
negotiated payments under a Separation and Release Agreement with our former
President and Chief Operating Officer. We accrued $783,600 of related severance
costs.





(2) In
2000, we performed a reassessment of the recovery of the goodwill and other
long-lived assets related to our acquisition of Partes Corporation, owner of the
FreeEDGAR.com website, and our acquisition of certain of the assets of
Individual Investor Group including the website InsiderTrader.com and related
user data. Based on these reassessments, we recorded impairment charges of $6.0
million. The balance was attributable to an additional impairment charge of
$117,000, as we discontinued the use of the edgar.com URL.





(3) We
adopted Statement of Financial Accounting Standard No. 142 (SFAS 142) effective
January 1, 2002. This standard required that we performed a transitional
assessment to determine whether there was an impairment of goodwill. The
assessment indicated that goodwill associated with the Financial Insight Systems
acquisition was impaired and accordingly, we recognized a non-cash charge as the
cumulative effect of a change in accounting principle for the write-down of
goodwill to its fair value.
 
 (4)
Diluted loss per share has not been presented separately, as the outstanding
stock options, warrants and convertible debenture are anti-dilutive for each of
the periods presented. Anti-dilutive securities outstanding were 1,900,105,
2,805,010, 3,124,643, 3,347,660 and 6,994,742 for the years ended December 31,
2000, 2001, 2002, 2003 and 2004 respectively.





15




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





You
should read the following discussions of our financial condition and results of
operations in conjunction with the financial statements and the notes to those
statements included elsewhere in this annual report. This discussion may contain
forward-looking statements that involve risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking
statements as a result of certain factors, such as those set forth under "Risk
Factors" and elsewhere in this annual report.





**OVERVIEW**





We are a leading
provider of value-added business and financial information on global companies
to financial, corporate and advisory professionals . We
launched our EDGAR Online website in January 1996 and began selling our
subscription services and establishing contractual relationships with business
and financial information websites to supply EDGAR content. Our primary focus
was generating sales leads and building brand recognition.





We went
public in May 1999. In September 1999, we acquired all of the outstanding equity
of Partes Corporation, owner of the Freeedgar.com website ("FreeEDGAR"),
for $9.9 million. The purchase price consisted of the issuance of common stock,
stock options and warrants, the assumption of liabilities and acquisition
related expenses. In October 2000, we acquired all the outstanding equity of
Financial Insight Systems, Inc. ("FIS") for approximately $28.1 million. The
purchase price included the issuance of common stock, a cash payment, issuance
of notes and acquisition related expenses.





We are
continuing to focus on growing our subscription revenues and corporate data
sales and expect to generate positive cash flow from operations by offering the
following products and services:





Subscription
Services. Our subscription services include EDGAR Online Pro and EDGAR Online
Access. In October 2004, we discontinued the FreeEDGAR service. EDGAR Online Pro
is sold by our sales force and is available via multi-seat and enterprise-wide
contracts. Sales leads are primarily provided from the traffic to our
subscription websites from Yahoo! Finance and from the migration of users from
EDGAR Online Access. The price of a new subscription is $100 per month or $1,200
per year. Additional fees are applied when the customer requests additional,
specific content such as conference call transcripts and global annual and
interim reports. EDGAR Online Access is available for $220 per year and is
purchased annually or quarterly in advance with a credit card. Revenue from
subscription services is recognized ratably over the subscription period, which
is typically twelve months.





Digital
Data Feeds. Through EDGAR Online Explorer, we license services that integrate
our products into our customers' existing applications. The price for a digital
data feed ranges from approximately $1,200 to $200,000 per year. Prices vary
depending on such factors as the quantity, type and format of information
provided. Revenue from digital data feeds is recognized over the term of the
contract, which are typically non-cancelable, one-year contracts with automatic
renewal clauses, or, in the case of certain up-front fees, over the estimated
customer relationship period.





Other
Services. We provide technical services to Nasdaq. Several of our technical and
non-technical contract employees operate, maintain and support the Nasdaq Online
website. We also generate ancillary advertising and e-commerce revenues through
the sale of advertising banners, sponsorships and through e-commerce activities
such as marketing third party services to the users of our websites. Revenue
from technical services, consisting primarily of time and materials based
contracts, is recognized in the period services are rendered. Advertising and
e-commerce revenue is recognized as the services are provided.





16







RESULTS OF OPERATIONS




The
following table sets forth the percentage relationships of certain items from
our Consolidated Statements of Operations as a percentage of total revenue.





YEAR ENDED DECEMBER 31,2002
    
    2003
    
    2004Total
      revenues
    
    
    100
    %
    
    100
    %
    
    100
    %Cost
      of revenues
    
    
    16
    
    
    14
    
    
    15Gross
      profit
    
    
    84
    
    
    86
    
    
    85Operating
      expenses:Sales
      and marketing
    
    
    14
    
    
    15
    
    
    20Product
      development
    
    
    14
    
    
    12
    
    
    13General
      and administrative
    
    
    48
    
    
    50
    
    
    62Restructuring
      and severance costs
    
    
    (1
    )
    
    6
    
    
    -Amortization
      and depreciation
    
    
    18
    
    
    17
    
    
    17Loss
      from operations
    
    
    (9
    )
    
    (14
    )
    
    (27
    )Interest
      and other, net
    
    
    (2
    )
    
    (1
    )
    
    10Loss
      before cumulative effect ofchange
      in accounting principle
    
    
    (11
    )
    
    (15
    )
    
    (17
    )Cumulative
      effect of changein
      accounting principle
    
    
    (58
    )
    
    -
    
    
    -Net
      loss
    
    
    (68
    )%
    
    (15
    )%
    
    (17
    )%








**COMPARISON
OF THE YEARS 2004, 2003, AND 2002**





**REVENUES**





Total
revenues for the year ended December 31, 2004 decreased 10% to $12.9 million,
from $14.3 million for the year ended December 31, 2003. The net decrease in
revenues is primarily attributable to a $2.0 million, or 71%, decrease in
technical services revenues, a $258,000, or 5%, decrease in data sales, and a
$160,000, or 22%, decrease in advertising and e-commerce revenues which were
partially offset by a $966,000, or 16%, increase in seat-based subscriptions.





Total
revenues for the year ended December 31, 2003 decreased 11% to $14.3 million
from $16.2 million for the year ended December 31, 2002. The net decrease in
revenues is primarily attributable to a $1.5 million, or 35%, decrease in
technical services revenues, a $628,000 or 46%, decrease in advertising and
e-commerce revenues, and a $547,000, or 10%, decrease in data sales which were
partially offset by a $805,000, or 16%, increase in seat-based subscriptions.





**Seat-based
Subscriptions**





YEAR
      ENDED DECEMBER 31,2002
    
    
    2003
    
    
    2004REVENUES
      (IN $000s)
    
    $
    5,148
    
    $
    5,953
    
    $
    6,919Percentage
      of total revenue
    
    
    32
    %
    
    42
    %
    
    54
    %Number
      of subscribers
    
    
    23,000
    
    
    23,000
    
    
    23,800Average
      price per subscriber
    
    $
    224
    
    $
    259
    
    $
    291








17


The
increase in seat-based subscription revenue in 2004 and 2003 is primarily due to
a 12% increase in the average price per subscriber in 2004 from 2003 and a 16%
increase in the average price per subscriber 2003 from 2002 as well as an
increase in the number of seat-based contracts and individual accounts. The
increases in subscriptions to our premium product, EDGAR Online Pro were offset
by cancellations and user migrations from our retail service, EDGAR Online
Access. In late 2003 and early 2004, we expanded our telesales and account
management personnel in order to sell EDGAR Online Pro to new customers, reduce
cancellations and capitalize on our strategic relationships. With an expanded
sales team and the launch of I-Metrix, we expect to continue to increase
seat-based subscription revenues and our average price per subscriber.





**Data
Sales**





YEAR
      ENDED DECEMBER 31,2002
    
    
    2003
    
    
    2004REVENUES
      (IN $000s)
    
    $
    5,380
    
    $
    4,833
    
    $
    4,575Percentage
      of total revenue
    
    
    33
    %
    
    34
    %
    
    36
    %Number
      of contracts
    
    
    191
    
    
    220
    
    
    194Average
      price per contract
    
    $
    28,168
    
    $
    21,968
    
    $
    23,582








The
decrease in data sales in 2004 from 2003 was primarily due to several smaller
contracts not being renewed. The decrease in data sales in 2003 from 2002 was
primarily attributable to the fact that two of our largest customers reduced
their purchases by an aggregate of $1.0 million. We were able to offset these
significant contract reductions by adding a number of new customers and by
expanding the scope of services with our existing customers.





**Technical
services**





YEAR
      ENDED DECEMBER 31,2002
    
    
    2003
    
    
    2004REVENUES
      (IN $000s)
    
    $
    4,287
    
    $
    2,805
    
    $
    823Percentage
      of total revenue
    
    
    27
    %
    
    19
    %
    
    6
    %














The
decrease in technical services revenue is due to decreases in the services
provided to Nasdaq, the sole client to which we provide technical services. In
May 2003, the Nasdaq-Online.com website that we previously hosted in our
Rockville, Maryland facility was removed from our data center and into Nasdaq's
facility, significantly reducing our technical services revenue during the
second half of 2003. In 2004, Nasdaq further reduced their technical services
contract. We expect technical services revenue from Nasdaq will be approximately
$200,000 in the first quarter of 2005 and anticipate that this will decline
further during the remainder of 2005.





**Advertising
and E-Commerce**





YEAR
      ENDED DECEMBER 31,2002
    
    
    2003
    
    
    2004REVENUES
      (IN $000s)
    
    $
    1,356
    
    $
    728
    
    $
    568Percentage
      of total revenue
    
    
    8
    %
    
    5
    %
    
    4
    %




The
decrease in advertising and e-commerce revenues is primarily due to the decrease
in advertising rates and impressions due to the migration of many of our users
to our premium service that does not support ads.






18




**COST
OF REVENUES**





Cost of
revenues consists primarily of fees paid to acquire the Level I EDGAR database
feed from the SEC, content feeds, salaries and benefits of operations employees
and the costs associated with our computer equipment and communications lines
used in conjunction with our websites. In addition, for each period, online
barter advertising expense is recorded equal to the online barter advertising
revenue for that period.





Total
cost of revenues for the year ended December 31, 2004 decreased $81,000, or 4%,
to $1.9 million, from $2.0 million for the year ended December 31, 2003. The
decrease in cost of revenues is primarily attributable to a continued decrease
in the cost and number of content feeds and communications lines, as well as the
workforce reduction effected March 31, 2003.





Total
cost of revenues for the year ended December 31, 2003 decreased $653,000, or
25%, to $2.0 million from $2.6 million for the year ended December 31, 2002. The
decrease in cost of revenues is primarily attributable to a decrease in the cost
and number of content feeds and communications lines, as well as the workforce
reduction effected March 31, 2003.





**OPERATING
EXPENSES**





Selling
and Marketing. Sales and marketing expenses consist primarily of salaries and
benefits, sales commissions, advertising expenses, public relations, and costs
of marketing materials. Sales and marketing expenses for the year ended December
31, 2004 increased $437,000, or 20%, to $2.6 million, from $2.2 million for the
year ended December 31, 2003, due to a $288,000 increase in payroll expenditures
required to increase our sales force as well as a $110,000 increase in outside
consulting fees. Sales and marketing expenses for the year ended December 31,
2003 decreased $149,000, or 6%, to $2.2 million, from $2.3 million for the year
ended December 31, 2002, primarily due to a $176,000 decrease in payroll
expenses resulting from the workforce reduction effected March 31,
2003.





Development.
Development expenses for the year ended December 31, 2004 decreased $99,000, or
6%, to $1.6 million, from $1.7 million for the year ended December 31, 2003
primarily due to a $73,000 decrease in payroll costs. Development expenses for
the year ended December 31, 2003 decreased $545,000, or 24%, to $1.7 million,
from $2.2 million for the year ended December 31, 2002, primarily due to a
$478,000 decrease in payroll expenses, $285,000 of which was related to the
workforce reduction effected March 31, 2003.





General
and Administrative. General and administrative expenses consist primarily of
salaries and benefits, insurance, fees for professional services, general
corporate expenses and facility expenses. General and administrative expenses
for the year ended December 31, 2004 increased $743,000, or 10%, to $8.0
million, from $7.2 million for the year ended December 31, 2003. The increase
was primarily due to a $437,000 increase in bad debt provisions as well as a
$191,000 increase in professional fees. The increase in bad debt provisions
reflect an increase in the age of certain receivable balances during the fourth
quarter of 2004. We have implemented new procedures beginning in 2005 that
we believe will improve the collectibility of these types of accounts.
General and administrative expenses for the year ended December 31, 2003
decreased $535,000, or 7%, to $7.2 million, from $7.8 million for the year ended
December 31, 2002 primarily due to a $221,000 decrease in payroll expense
related to the workforce reduction effected March 31, 2003 and a $437,000
decrease in professional fees as 2002 included costs incurred in association
with a terminated proposed transaction.





Restructuring
Costs. In the first quarter of 2003, we effected a 17% workforce reduction in
response to an expected decline in Nasdaq revenues in the second half of 2003.
In addition, we negotiated payments under a Separation and Release Agreement
with our former President and Chief Operating Officer. We accrued $784,000 of
related severance costs in the first quarter of 2003. In 2002, we reversed
approximately $182,000 of charges related to the closing our Kirkland,
Washington office as contract terminations were re-negotiated.





Depreciation
and Amortization. Depreciation and amortization expenses include the
depreciation of property and equipment and the amortization of definitive lived
intangible assets. Depreciation and amortization for the year ended December 31,
2004 decreased $277,000, or 11%, to $2.2 million, from $2.5 million for the year
ended December 31, 2003. The decreases are due to several fixed assets becoming
fully depreciated as well as the identifiable intangible assets related to our
acquisition of FreeEDGAR in 1999 becoming fully amortized in 2004. Depreciation
and amortization for the year ended December 31, 2003 decreased $377,000, or
13%, to $2.5 million, from $2.9 million for the year ended December 31, 2002 due
to several fixed assets becoming fully depreciated in 2003.





Cumulative
Effect of Change in Accounting Principle. As required by SFAS 142, which we
adopted effective January 1, 2002, we performed a transitional assessment to
determine whether there was an impairment of goodwill at the effective date.
Based on this assessment, we recognized a $9.3 million non-cash charge, measured
as of January 1, 2002, as the cumulative effect of a change in accounting
principle for the write-down of goodwill to its fair value. The impaired
goodwill was not deductible for tax purposes, and as a result, no tax benefit
has been recorded in relation to the charge.





Other
Income. On December 30, 2004, we entered into a settlement agreement which
concluded a lawsuit commenced by us against Albert E. Girod, our former Chief
Technology Officer, Executive Vice President and Director, and Kristine Delta,
our former Vice President, based on certain claims that arose out of the
purchase of FIS in October 2000. We settled the lawsuit in exchange for all of
the shares of common stock then held by Mr. Girod and one-third of the shares of
common stock then held by Ms. Delta. Specifically, Mr. Girod transferred 962,375
shares Ms. Delta transferred 12,500 shares to us which are included in treasury
stock at December 31, 2004. We recorded other income of $1.2 million which is
comprised of $1.5 million in gross income representing the fair value of the
stock received offset by $347,000 legal fees.








19





**SELECTED
QUARTERLY REVENUE RESULTS**





The
following table sets forth unaudited revenue results for each of our last eight
fiscal quarters. In the opinion of management, this unaudited quarterly
information has been prepared on a basis consistent with our audited
consolidated financial statements and includes all adjustments (consisting of
normal and recurring adjustments) that management considers necessary for a fair
presentation of the data. These quarterly revenue results are not necessarily
indicative of future quarterly patterns or revenue results. This information
should be read in conjunction with our financial statements and the related
notes included elsewhere in this annual report.







THREE
      MONTHS ENDEDMAR.
      31,
    
    
    JUNE
      30,
    
    
    SEPT.
      30,
    
    
    DEC.
      31,
    
    
    MAR.
      31,
    
    
    JUNE
      30,
    
    
    SEPT.
      30,
    
    
    DEC.
      31,2003
    
    
    2003
    
    
    2003
    
    
    2003
    
    
    2004
    
    
    2004
    
    
    2004
    
    
    2004(in
      thousands) (UNAUDITED)REVENUE
      SOURCES:Seat-based
      subscriptions
    
    $
    1,423
    
    $
    1,485
    
    $
    1,502
    
    $
    1,543
    
    $
    1,605
    
    $
    1,715
    
    $
    1,775
    
    $
    1,824Data
      sales
    
    
    1,192
    
    
    1,301
    
    
    1,169
    
    
    1,171
    
    
    1,162
    
    
    1,095
    
    
    1,145
    
    
    1,173Technical
      services
    
    
    1,020
    
    
    1,015
    
    
    423
    
    
    347
    
    
    206
    
    
    207
    
    
    204
    
    
    206Advertising
      and e-commerce
    
    
    201
    
    
    193
    
    
    207
    
    
    127
    
    
    173
    
    
    220
    
    
    113
    
    
    62Total
    
    $
    3,836
    
    $
    3,994
    
    $
    3,301
    
    $
    3,188
    
    $
    3,146
    
    $
    3,237
    
    $
    3,237
    
    $
    3,265





**LIQUIDITY
AND CAPITAL RESOURCES**





We have
historically financed our operations through private debt placements and the
sale of equity securities to investors. We continue to focus on growing our
subscription and corporate customer base while maintaining stringent cost
controls.





Net cash
used in operating activities was $1.0 million for the year ended December 31,
2004, a decrease from net cash provided from operating activities of $674,000
for the year ended December 31, 2003. This is primarily due to an increase in
accounts receivable resulting from, among other things, price increases for our
services implemented in December 2003 and a greater portion of our revenue being
billed on an annual basis, as well as an increase in our loss from operations
related to the decrease in technical services revenue and additional
expenditures to increase our sales efforts.





Capital
expenditures, primarily for computers and equipment, totaled $358,000 for the
year ended December 31, 2004, and $600,000 for the year ended December 31, 2003.
The purchases were made to support our expansion and increased infrastructure.





In
connection with our acquisition of FIS in October 2000, we issued $6,000,000 in
promissory notes to the former owners of FIS. The notes were originally
scheduled to mature on October 27, 2002. In March 2002, we extended the maturity
date of the notes such that the holders of $5,700,000 in principal amount of the
notes agreed to amend and restate their notes to provide for, among other
things, the following schedule of principal payments: $1,900,000 on April 1,
2002, $1,900,000 on April 1, 2003 and $1,900,000 on January 2, 2004. All
payments have been made and no further obligations remain under these notes.





On March
28, 2003, we entered into a Separation and Release Agreement with Tom Vos, our
former President and Chief Operating Officer. Under the agreement, we were
required to make payments to Mr. Vos of $340,000 in 2003 and $170,000 in 2004,
and are required to make payments totaling $42,000 in either 2005 or 2006. We
have also paid or are obligated to make three payments of $60,972 to a deferred
compensation plan for the benefit of Mr. Vos, one payment per year in 2003, 2004
and 2005. On March 31, 2003, we effected a plan to align our cost structure with
current business conditions. These conditions include an anticipated reduction
in technical services revenues related to the Nasdaq contract, which began in
the second half of 2003, by approximately $2.4 million annually. The plan
entailed a reduction in workforce of 17%, which was effected in March 2003. We
anticipate that this action will reduce operating expenses on an annualized
basis by approximately $1.2 to $1.3 million. We incurred severance charges of
$783,600 in the quarter ended March 31, 2003 associated with the work force
reduction and the Separation and Release Agreement with Mr. Vos.





In May
2004, we sold 2,500,000 units for $2.00 per unit in a public offering. Each unit
consisted of two shares of our common stock and one warrant to purchase one
share of our common stock. An additional 375,000 units were sold to cover
over-allotments. Of the 750,000 shares of common stock included in the
over-allotment units, 300,000 were offered by a selling stockholder and we did
not receive any proceeds from that portion of the over-allotment.  We also
issued to the underwriter of the public offering a warrant to purchase 250,000
units for a price of $2.40 per unit. The warrants issued in the public offering
are separately traded, have an exercise price of $1.50 and are exercisable until
May 29, 2009. Since November 26, 2004, we have had the right to redeem some or
all of the warrants at a price of $0.25 per warrant after the closing price for
our common stock equals or exceeds $2.00 per share for any five consecutive
trading days by giving certain notice to the then warrant holders. We received
net proceeds of approximately $4.1 million from the public offering. As of March
15, 2005, our common stock has satisfied the foregoing trading requirement.







20





At
December 31, 2004, we had cash and short-term investments on hand of $4.7
million, which includes a certificate of deposit (CD) for $2,000,000 at 2.10%
that matures in June 2005. In addition, in the event we elect to redeem the
warrants issued in the May 2004 offering, we may receive proceeds of up to $4.7
million from holders who then elect to exercise the warrants. In the event
that holders do not elect to exercise their warrants upon the occurrence of
a redemption event, if any, we would be required to expend up to $781,000 for
such redemption. We believe that our existing capital resources and projected
cash generated from operations will be sufficient to meet our anticipated cash
needs for working capital and capital expenditures for at least the next 12
months. Thereafter, if cash generated from operations is insufficient to satisfy
our liquidity requirements, we may need to raise additional funds through public
or private financings, strategic relationships or other arrangements. There can
be no assurance that such additional funding, if needed, will be available on
terms attractive to us, or at all. The failure to raise capital when needed
could materially adversely affect our business, results of operations and
financial condition. If additional funds are raised through the issuance of
equity securities, the percentage ownership of our then-current stockholders
would be reduced.





Our
future contractual obligations at December 31, 2004, in thousands, were as
follows:





Payments
      Due by PeriodLess
      than
    
    
    1 -
      3Total
    
    
    1
      year
    
    
    YearsOperating
      leases
    
    $
    1,099
    
    $
    730
    
    $
    369Severance
      payments
    
    
    103
    
    
    103
    
    
    --Total
    
    $
    1,202
    
    $
    833
    
    $
    369







**CRITICAL
ACCOUNTING POLICIES AND ESTIMATES**





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





We derive
revenues from four primary sources: seat-based subscriptions to our Web
services, contracts with corporate customers for customized data, sale of our
technical services to construct and/or operate the technical systems our
customers use to integrate our data and data from other sources into their
products and services, and advertising and other e-commerce based revenues.
Revenue from seat-based subscriptions is recognized ratably over the
subscription period, which is typically twelve months. Revenue from data sales
is recognized over the term of the contract or, in the case of certain up-front
fees, over the estimated customer relationship period. Revenue from technical
services, consisting primarily of time and materials based contracts, is
recognized in the period services are rendered. Advertising and e-commerce
revenue is recognized as the services are provided. Revenue is recognized
provided acceptance, and delivery if applicable, has occurred, collection of the
resulting receivable is probable and no significant obligations remain. If
amounts are received in advance of the services being performed, the amounts are
recorded and presented as deferred revenues.





Several
of our accounting policies involve significant judgments and uncertainties. The
policies with the greatest potential effect on our results of operations and
financial position include the estimated collectibility of accounts receivable,
the estimated useful lives and fair values of intangible assets and the
estimated fair value of goodwill. We maintain an allowance for doubtful accounts
for estimated losses resulting from the inability of customers to make payments
and for sales allowances. If the financial conditions of our customers
deteriorate or there are specific factors resulting from the specific type of
product, or customer class inability to make payments, additional allowances
will be required. We establish the estimated useful lives of our intangible
assets based on a number of factors, which is in part based on our assessments
of the technology and customer relationships acquired. If these estimates
change, the estimated useful lives of our intangibles may require adjustment. We
test goodwill annually and between annual tests if events occur or circumstances
change that would more likely than not reduce the fair value of a reporting unit
below its carrying amount. These evaluations are done with the assistance of an
independent valuation firm and include assumptions regarding future cash flows,
growth rates, and discount rates. Subsequent reviews may result in future
periodic impairments that could have a material adverse effect on the results of
operations in the period recognized.







21





**RECENT
ACCOUNTING PRONOUNCEMENTS**




In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary
Assets” (SFAS 153) which amends Accounting Principles Board Opinion
No. 29, “Accounting for Nonmonetary Transactions (APB 29).
SFAS 153 amends APB 29 to eliminate the fair-value exception for
nonmonetary exchanges of similar productive assets and replace it with a general
exception for nonmonetary exchanges that do not have commercial substance. It is
effective for nonmonetary asset exchanges occurring in fiscal periods beginning
after June 15, 2005. This statement is not anticipated to have a material
impact on our financial position or results of operations.





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”
(SFAS 123(R)) which establishes accounting standards for all transactions
in which an entity exchanges its equity instruments for goods and services.
SFAS 123(R) revises SFAS No. 123, “Accounting for Stock-Based
Compensation”, supersedes Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees” and amends Financial Accounting
Standard No. 95, “Statement of Cash Flows”. SFAS No. 123(R) generally
requires us to measure the cost of employee services received in exchange for an
award of equity instruments based on the fair value of the award on the date of
the grant. The standard requires the fair value on the grant date to be
estimated using either an option-pricing model which is consistent with the
terms of the award or a market observed price, if such a price exists. The
resulting cost must be recognized over the period during which an employee is
required to provide service in exchange for the award, which is usually the
vesting period. SFAS 123(R) must be adopted no later than periods beginning
after June 15, 2005 and the Company expects to adopt SFAS 123(R) on
the effective date. We expect the adoption of SFAS 123(R) will have a
material impact on our net income and earnings per share.








**ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**





**INTEREST
RATE FLUCTUATIONS**





We
generally invest in short-term, low risk instruments. We believe that any change
in interest rates would not have a material effect on our financial statements.





**CURRENCY
RATE FLUCTUATIONS**





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





**ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.**





The
financial statements required by this Item 8 are set forth in Item 15 of this
Form 10-K. All information which has been omitted is either inapplicable or not
required.





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





On
September 15, 2003, we dismissed KPMG LLP (KPMG) as our principal accountant
engaged to audit our financial statements. KPMG performed the audits of our
financial statements for the fiscal years ended December 31, 1999, 2000, 2001
and 2002. During these periods and the subsequent interim period prior to their
dismissal, there were no disagreements with KPMG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures, which disagreements, if not resolved to KPMG's satisfaction, would
have caused KPMG to make reference to the subject matter of the disagreements in
connection with KPMG's report, nor were there any "reportable events," as such
term is defined in Item 304(a)(1)(v) of Regulation S-K, promulgated under the
Securities Exchange Act of 1934, as amended (Regulation S-K). The audit report
of KPMG for our fiscal year ended December 31, 2002 did not contain an adverse
opinion, or a disclaimer of opinion, or qualification or modification as to
uncertainty, audit scope, or accounting principles. On September 15, 2003, we
engaged BDO Seidman, LLP (BDO Seidman) as our new independent accountants to
audit our financial statements. Before engaging BDO Seidman, we had not
consulted with them regarding: (i) the application of accounting principles to a
specified transaction, either completed or proposed; (ii) the type of audit
opinion that might be rendered on our financial statements; or (iii) any matter
that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv)
of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of
Regulation S-K). Our Audit
Committee approved the change in accountants.







22




ITEM 9A. CONTROLS AND PROCEDURES.





**EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES**





We
carried out an evaluation under the supervision and with the participation of
our management, including our Chief Executive Officer and Chief Financial
Officer, of the design and effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as of the end of the
period covered by this report. Based on the evaluation of our disclosure
controls and procedures, our Chief Executive Officer and Chief Financial Officer
have concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective. It should be noted that the
design of any system of controls is based in part upon certain assumptions about
the likelihood of future events, and can therefore only provide reasonable, not
absolute, assurance that the design will succeed in achieving its stated goals.





**CHANGES
IN INTERNAL CONTROLS**





There
were no significant changes in our internal controls over financial reporting
during the most recently completed fiscal quarter that materially affected, or
are reasonably likely to materially affect, our internal controls over financial
reporting.





**ITEM
9B. OTHER INFORMATION.**





None.








**PART
III**





**ITEM
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.**





Our
current executive officers and directors and their respective ages as of March
22, 2005 are as follows:





NAME
    AGE
    POSITIONSusan
      Strausberg (1)
    65
    Chief
      Executive Officer, President, Secretary and DirectorMarc
      Strausberg (1)
    70
    Chairman
      of the Board of DirectorsGreg
      D. Adams (1)
    43
    Chief
      Operating Officer, Chief Financial Officer and DirectorStefan
      Chopin
    46
    Chief
      Technology OfficerMorton
      Mackof
    57
    Executive
      Vice President of SalesElisabeth
      DeMarse (2)(3)
    50
    DirectorRichard
      L. Feinstein (3)(4)
    61
    DirectorMark
      Maged (2)(3)(4)
    73
    DirectorMiklos
      A. Vasarhelyi (2)(4)
    60
    Director








(1)
Member of the Outside Directors Compensation Committee.





(2)
Member of the Compensation Committee.





(3)
Member of the Nominating Committee.





(4)
Member of the Audit Committee.











23





SUSAN
STRAUSBERG, one of our co-founders, has served as a member of our Board of
Directors, Chief Executive Officer and Secretary since our formation in November
1995 and as President since January 2003. Ms. Strausberg served on the Board of
Directors of RKO Pictures from December 1998 to May 2001. Ms. Strausberg is the
wife of Marc Strausberg, our other co-founder and Chairman. Ms. Strausberg
received a B.A. degree from Sarah Lawrence College.





MARC
STRAUSBERG, our other co-founder, has served as Chairman of our Board of
Directors since our inception in November 1995. Mr. Strausberg is the husband of
Susan Strausberg, our Chief Executive Officer and President. Mr. Strausberg
received a B.A. degree from Muhlenberg College.





GREG D.
ADAMS joined us as our Chief Financial Officer in March 1999 and became Chief
Operating Officer in January 2003. Mr. Adams became a member of the Board of
Directors in February 2004. Mr. Adams is a Certified Public Accountant. From May
1996 to March 1999, Mr. Adams served as Senior Vice President Finance and
Administration of PRT Group Inc., a technology solutions and services company.
Mr. Adams is a member of the New York State Society of Certified Public
Accountants and the American Institute of Certified Public Accountants. Mr.
Adams received a B.B.A. degree in Accounting from the College of William &
Mary.





STEFAN
CHOPIN was a member of our Board of Directors from 1996 until February 2004,
when he was appointed Chief Technology Officer. Mr. Chopin was previously the
President of Pequot Group Inc., a technology development company for the
financial services industry. From October 1998 to November 2001, Mr. Chopin was
the Senior Vice President of Technology for iXL Enterprises, Inc., an e-business
solutions provider.





MORTON
MACKOF joined our Board of Directors in February 2004 and became our Executive
Vice President of Sales in November 2004. Mr. Mackof resigned from the Board of
Directors in March 2005. Prior to joining EDGAR Online, Mr. Mackof served in
numerous executive capacities with International Business Machines, FONAR
Corporation, Third Millennium Technology and Data General Corporation. Mr.
Mackof also served as the President and Executive Vice President of Sales and
Marketing for Track Data Corporation. Mr. Mackof received a B.S. in Electrical
Engineering from Rensselaer Polytechnic Institute, where he also pursued
graduate studies in Computer Science.





ELISABETH
DEMARSE **** has been
a member of our Board of Directors since November 2004. Ms. DeMarse is currently
a member of the Board of Directors for Heska Corporation, where she serves on
the Audit Committee. She brings over 25 years of executive management experience
and a successful track record across a diverse set of businesses to
EDGAR-Online. Most recently, Ms. DeMarse served as President and Chief Executive
Officer of Bankrate Inc., an internet based consumer banking marketplace. Prior
to that time, Ms. DeMarse served as Executive Vice President of International
Operations at Hoover’s, Inc., which operates Hoover’s Online. Prior to her focus
in the Internet sector, she spent ten years at Bloomberg L.P. in various
leadership positions, and over four years at Western Union marketing
telecommunications services. Ms. DeMarse holds an A.B. cum laude from Wellesley
College where she majored in history, and an M.B.A. from Harvard with an
emphasis on marketing. She is a member of The Committee of 200.





RICHARD
L. FEINSTEIN has been a member of our Board of Directors since April 2003. Mr.
Feinstein is currently a private consultant providing management and financial
advice to clients in a variety of industries. From December 1997 to October
2002, Mr. Feinstein was a Senior Vice President and Chief Financial Officer for
The Major Automotive Companies, Inc. (OTC BB: MAJR.OB), formerly a diversified
holding company, but now engaged solely in retail automotive dealership
operations. Mr. Feinstein, a certified public accountant, received a B.B.A.
degree from Pace University.





MARK
MAGED has been a member of our Board of Directors since March 1999. Since 1992,
Mr. Maged, either individually or as Chairman of MJM Associates, LLC, has
engaged in various private investment banking activities in the United States
and internationally. From September 1995 through May 2000, he was chairman of
Internet Tradeline, Inc. Mr. Maged received a B.S.S. from the College of the
City of New York and an M.A. and L.L.B. from Harvard University.





MIKLOS A.
VASARHELYI joined our Board of Directors in February 2004. Since 1989, Dr.
Vasarhelyi has been the KPMG Professor of Accounting Information Systems of the
Graduate School of Management at Rutgers University, where he is also the
director of the Rutgers Accounting Research Center. Dr. Vasarhelyi has also been
a Technology Consultant for the E-Commerce Solutions Group of AT&T
Laboratories since 1985. Dr. Vasarhelyi received B.S. degrees from the State
University of Guanabara (Economics) and Catholic University of Rio de Janeiro
(Electrical Engineering), an M.B.A. from the Massachusetts Institute of
Technology in Management and a Ph.D. from the University of California, Los
Angeles (Management Information Systems).






24




**BOARD
OF DIRECTORS AND COMMITTEES**
 
 Our Board
of Directors has an Audit Committee, a Compensation Committee, an Outside
Directors Compensation Committee and a Nominating Committee.




The Audit
Committee reviews, acts on and reports to the Board of Directors with respect to
various auditing and accounting matters, including selecting our independent
auditors, the scope of the annual audits, fees to be paid to the auditors, the
performance of our independent auditors and our accounting practices. The
members of the Audit Committee currently are Messrs. Feinstein, Maged and
Vasarhelyi, each of whom are non-employee directors. Mr. Feinstein serves as the
Chairman of the Audit Committee.





The
Compensation Committee reviews and approves the compensation and benefits of our
key executive officers, administers our employee benefit plans and makes
recommendations to the Board regarding such matters. The members of the
Compensation Committee are Messrs. Maged and Vaserhelyi and Ms. DeMarse. Mr.
Maged serves as the Chairman of the Compensation Committee.





The
Outside Directors Compensation Committee has the discretion of granting
compensation and stock options to the outside directors under the terms of the
1999 Outside Directors Stock Option Plan. The members of the Outside Directors
Compensation Committee are Marc Strausberg, Susan Strausberg and Greg Adams.





The
Nominating Committee reviews and assesses the composition of the Board, assists
in identifying potential new candidates for Director and nominates candidates
for election to the Board of Directors. The Nominating Committee currently
consists of Messrs. Feinstein and Maged and Ms. DeMarse. Mr. Maged serves as the
Chairman of the Nominating Committee.





**AUDIT
COMMITTEE FINANCIAL EXPERT**





Under new
rules of the SEC, companies are required to disclose whether their audit
committees have an "audit committee financial expert" as defined in Item 401(h)
of Regulation S-K under the Exchange Act and whether that expert is
"independent" as that term is used in Item 7(d)(3)(iv) of Schedule 14A under the
Exchange Act. The Board of Directors has determined that Mr. Feinstein is a
"financial expert" and is also "independent."





**SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**





Section
16(a) of the Exchange Act generally requires our executive officers and
directors, and persons who own more than ten percent of our common stock, to
file reports of beneficial ownership and changes in beneficial ownership with
the SEC. Regulations promulgated by the SEC require us to disclose any reporting
violations with respect to the 2004 fiscal year which came to our attention
based on a review of the applicable filings required by the SEC to report the
status of an officer or director, or the changes in beneficial ownership as
submitted to us. Based solely on review of such forms received by us, we believe
that all required reports for the 2004 fiscal year have been timely filed other
than the following Form 4 filings made by Miklos Vasarhelyi: Form 4 filed June
24, 2004, Form 4A filed June 24, 2004 and Form 4 filed July 26,
2004.





**CODE
OF ETHICS**





We have
adopted a written Code of Ethics (the "Code of Ethics") that applies to our
Chief Executive Officer and Chief Financial Officer. A copy of the Code of
Ethics is available on our website at www.edgar-online.com and print copies are
available to any shareholder that requests a copy. Any amendment to the Code of
Ethics or any waiver of the Code of Ethics will be disclosed on our website
promptly following the date of such amendment or waiver.





**CODE
OF CONDUCT**





We have
adopted a Code of Conduct that applies to all employees, including all executive
officers and senior financial officers and directors. A copy of the Code of
Conduct is available on our website at www.edgar-online.com and print copies are
available to any shareholder that requests a copy. Any amendment to the Code of
Conduct or any waiver of the Code of Conduct will be disclosed on our website
promptly following the date of such amendment or waiver.





****





25







ITEM 11. EXECUTIVE COMPENSATION




**SUMMARY
COMPENSATION TABLE**





The
following table sets forth the total compensation paid or accrued for the fiscal
years ended December 31, 2004, 2003 and 2002 by our Chief Executive Officer and
our four most highly compensated executive officers (other than our Chief
Executive Officer).





ANNUAL
      COMPENSATION
    
    
    
    
    
    LONG-TERM
      COMPENSATION
      SECURITIES
      UNDERLYINGNAME
      AND PRINCIPAL POSITION
    
    
    YEAR
    
    
    SALARY
    
    
    BONUS
    
    
    OTHER(2)
    
    
    OPTIONS
      (#)Susan
      Strausberg (1)
    
    
    2004
    
    $
    220,000
    
    $
    24,750
    
    $
    21,000(2
    )
    
    7,500Chief
      Executive Officer and President
    
    
    2003
    
    $
    211,231
    
    
    —
    
    $
    12,115(2
    )
    
    27,5002002
    
    $
    152,923
    
    
    —
    
    
    —
    
    
    14,000Marc
      Strausberg
    
    
    2004
    
    $
    100,000
    
    
    —
    
    $
    21,000(2
    )
    
    7,500Chairman
    
    
    2003
    
    $
    113,846
    
    
    —
    
    $
    12,115(2
    )
    
    15,0002002
    
    $
    146,885
    
    
    —
    
    
    —
    
    
    14,000Tom
      Vos
    
    
    2004
    
    $
    —
    
    
    —
    
    $
    170,000(3
    )
    
    —Former
      President and Chief
    
    
    2003
    
    $
    41,731
    
    
    —
    
    $
    340,000(3
    )
    
    —Operating
      Officer
    
    
    2002
    
    $
    149,904
    
    
    —
    
    
    —
    
    
    14,000Greg
      Adams (1)
    
    
    2004
    
    $
    195,000
    
    $
    21,938
    
    $
    18,000(2
    )
    
    180,000Chief
      Operating Officer and Chief
    
    
    2003
    
    $
    193,346
    
    
    —
    
    $
    18,000(2
    )
    
    130,000Financial
      Officer
    
    
    2002
    
    $
    149,904
    
    
    —
    
    $
    43,049(2
    )
    
    14,000Stefan
      Chopin
    
    
    2004
    
    $
    170,625
    
    
    —
    
    $
    15,750(2
    )
    
    57,500Chief
      Technology Officer
    
    
    2003
    
    
    —
    
    
    —
    
    $
    12,500(4
    )
    
    10,000
    (4)2002
    
    
    —
    
    
    —
    
    $
    7,500(4
    )
    
    15,000
    (4)





(1)
Effective January 27, 2003, Ms. Strausberg assumed the responsibilities of
President and Mr. Adams assumed the responsibilities of Chief Operating Officer.





(2)
Includes amounts paid as commutation allowances and a commission paid in 2002 to
Mr. Adams for certain sales.





(3)
Includes amounts paid under a Separation and Release Agreement between us and
Mr. Vos. Mr. Vos' employment terminated in March 2003.





(4)
Includes amounts paid and options granted pursuant to Mr. Chopin’s position as a
Director of the Company. 15,000 options granted under the 1999 Directors Plan
were cancelled when Mr. Chopin resigned from the Board in 2004.







26




OPTION GRANTS IN LAST FISCAL
YEAR




The
following table sets forth information regarding stock options granted to each
of the executives named in the Summary Compensation Table above during the 2004
fiscal year. We have never granted any stock appreciation rights.





INDIVIDUAL GRANTS(1)
    
    
    
    
    
    
    
    
    POTENTIAL REALIZABLE
      VALUE
      AT ASSUMED
      ANNUAL RATES OF STOCK PRICE APPRECIATION
      FOR
      OPTION
      TERM(3)NAME
    
    
    NUMBER
      OFSECURITIESUNDERLYINGOPTIONSGRANTED
    
    
    PERCENT
      OFTOTAL OPTIONSGRANTED TOEMPLOYEES
      IN2004(2)
    
    
    EXERCISEPRICE
      PER  SHARE($)
    
    
    EXPIRATION
      DATE
    
    
    5%
    
    
    10%Susan
      Strausberg
    
    
    7,500
    
    
    1.03
    %
    $
    1.05
    
    
    June
      17, 2014
    
    $
    10,854
    
    $
    21,926Marc
      Strausberg
    
    
    7,500
    
    
    1.03
    %
    $
    1.05
    
    
    June
      17, 2014
    
    $
    10,854
    
    $
    21,926Tom
      Vos
    
    
    --
    
    
    --
    
    
    --
    
    
    --
    
    
    --
    
    
    --Greg
      Adams
    
    
    30,000
    
    
    4.12
    %
    $
    0.95
    
    
    June
      17, 2014
    
    $
    46,266
    
    $
    90,553150,000
    
    
    20.61
    %
    $
    1.27
    
    
    December
      27, 2014
    
    $
    183,331
    
    $
    404,767Stefan
      Chopin
    
    
    100,000
    
    
    13.74
    %
    $
    1.72
    
    
    February
      18, 2014
    
    $
    77,221
    
    $
    224,8437,500
    
    
    1.03
    %
    $
    0.95
    
    
    June
      17, 2014
    
    $
    11,567
    
    $
    22,638








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





(2) In
the 2004 fiscal year, we granted options to employees to purchase an aggregate
of 727,850 shares of common stock.





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





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





The
following table sets forth information concerning the exercise of stock options
during the 2004 fiscal year by each of the executives named in the Summary
Compensation Table above and the fiscal year-end value of unexercised options.
No options were exercised by any of the executives named in the Summary
Compensation Table above during this period.





NUMBER
      OFSECURITIES
      UNDERLYING
      UNEXERCISED
      OPTIONS AT
      DECEMBER
      31, 2004
    
    VALUE
      OF UNEXERCISED
      IN-THE-MONEY
      OPTIONS
      ATDECEMBER
      31, 2004 (1)NAME
    
    
    EXERCISABLE
    
    
    UNEXERCISABLE
    
    
    EXERCISABLE
    
    
    UNEXERCISABLESusan
      Strausberg
    
    
    101,000
    
    
    80,500
    
    $
    11,142
    
    $
    15,521Marc
      Strausberg
    
    
    96,833
    
    
    22,167
    
    $
    9,350
    
    $
    7,938Tom
      Vos
    
    
    386,833
    
    
    4,667
    
    $
    265,675
    
    $
    --Greg
      Adams
    
    
    295,167
    
    
    271,333
    
    $
    25,642
    
    $
    88,333Stefan
      Chopin
    
    
    20,834
    
    
    164,166
    
    $
    1,067
    
    $
    16,983





(1) The
closing price of the common stock as of December 31, 2004 was $1.53.








27





**EMPLOYMENT
AGREEMENTS**





On April
26, 2004, we entered into a two-year employment agreement with Susan Strausberg
to serve as our President, Chief Executive Officer and Secretary. The term of
the agreement extends automatically for an additional year at the end of the
initial term and each anniversary thereafter unless 30-day prior notice of
termination is provided by either Ms. Strausberg or us. The agreement provides
for a minimum annual salary of $220,000, an annual bonus at the discretion of
the Board of Directors and a commutation allowance equal to $1,750 per month.
Additionally, in the event there is a change of control (as defined in the
agreement) and Ms. Strausberg's employment is terminated (either by her or us)
within the employment term, Ms. Strausberg will receive a severance benefit
equal to the sum of (i) her then applicable annual base salary and (ii) the
average of her last two annual cash bonuses, which will continue for the greater
of (i) the balance of the remaining term of the agreement or (ii) one year from
the date of termination. Moreover, if we terminate the agreement during the
employment term for any reason other than for cause, death or change of control,
if we decide not to renew the agreement or Ms. Strausberg terminates the
agreement for good reason (as defined in the agreement), we will pay Ms.
Strausberg a one-year severance payment. The agreement also contains non-compete
and non-solicitation provisions effective during the term of her employment and
for one year thereafter. On January 31, 2005, Amendment No. 1 to Employment
Agreement was signed which provided for immediate vesting of any stock options
outstanding under certain circumstances.





On April
26, 2004, we entered into a two-year employment agreement with Marc Strausberg
to serve as our Chairman of the Board of Directors. The term of the agreement
extends automatically for an additional year at the end of the initial term and
each anniversary thereafter unless 30-day prior notice of termination is
provided by either Mr. Strausberg or us. The agreement provides for a minimum
annual salary of $100,000, an annual bonus at the discretion of the Board of
Directors and a commutation allowance equal to $1,750 per month. In the event
there is a change of control (as defined in the agreement) and Mr. Strausberg's
employment is terminated (either by him or us) within the employment term, Mr.
Strausberg will receive a severance benefit equal to the sum of (i) his then
applicable annual base salary and (ii) the average of his last two annual cash
bonuses, which will continue for the greater of (i) the balance of the remaining
term of the agreement or (ii) one year from the date of termination. Moreover,
if we terminate the agreement during the employment term for any reason other
than for cause, death or change of control, if we decide not to renew the
agreement or Mr. Strausberg terminates the agreement for good reason (as defined
in the agreement), we will pay Mr. Strausberg a one-year severance payment. The
agreement also contains non-compete and non-solicitation provisions effective
during the term of his employment and for one year thereafter. On January 31,
2005, Amendment No. 1 to Employment Agreement was signed which provided for
immediate vesting of any stock options outstanding under certain
circumstances.




We
entered into a five-year amended and restated employment agreement dated June
29, 2001 with Tom Vos to serve as President and Chief Operating Officer. In
March 2003, we and Mr. Vos entered into a Separation and Release Agreement (the
"Separation Agreement") under which Mr. Vos' employment terminated with us as of
February 24, 2003. We paid or agreed to pay Mr. Vos the following payments (i)
$250,000 on or before April 16, 2003, (ii) $50,000 on or before January 15,
2004, (iii) $210,000 in 21 consecutive monthly installments of $10,000
commencing on or before April 16, 2003 and (iv) $42,000 in six (or fifteen at
Mr. Vos' election) equal installments consistent with the our payroll dates
commencing January 2005. All of the foregoing payments are immediately due and
payable upon a change of control (as defined in the employment agreement with
Mr. Vos) or upon Mr. Vos' death. Mr. Vos also has the right on or after June 30,
2004 to demand payment in full of payments then remaining due to him under the
Separation Agreement, in which event all other benefits due Mr. Vos will
terminate. We have paid and are also obligated to make scheduled payments in
2003, 2004 and 2005 to the Deferred Compensation Plan established for the
benefit of Mr. Vos under the terms of the June 29, 2001 employment agreement.
All stock options issued to Mr. Vos are fully vested as of April 25, 2003 and
are exercisable through March 30, 2008. Mr. Vos agreed (i) to make himself
available as a consultant on an as-needed basis at our request from April 25,
2003 through June 30, 2005 for no additional consideration and (ii) to
non-compete and non-solicitation provisions which are effective through March
31, 2004.


On
December 27, 2004, we entered into a two-year employment agreement with Greg
Adams to serve as Chief Financial Officer and Chief Operating Officer. The
agreement extends automatically for an additional year at the end of the initial
term and each anniversary thereafter unless 30-day prior notice of termination
is provided by either Mr. Adams or us. The agreement provides Mr. Adams with a
minimum annual salary of $210,000, an annual bonus at the discretion of the
Board of Directors, a commutation allowance equal to $1,500 per month and
options to purchase 150,000 shares of our common stock under our 1999 Stock
Option Plan. In the event there is a change of control (as defined in the
agreement) and Mr. Adams's employment is terminated (either by him or us) within
one year thereafter, Mr. Adams will receive a severance benefit equal to the the
sum of (i) 1.5 times his then applicable annual base salary and (ii) the average
of his last two annual cash bonuses paid as well as the cost of outplacement
counseling up to $25,000. Moreover, if we terminate the agreement during the
employment term for any reason other than for cause, death or change of control,
if we decide not to renew the agreement or Mr. Adams terminates the agreement
for good reason (as defined in the agreement), we will pay Mr. Adams a severance
payment equal to one year his then applicable salary and the average of the last
two annual cash bonuses in 12 monthly installments. Additionally, the agreement
contains non-compete and non-solicitation provisions effective during the term
of his employment and for one year thereafter. On January 31, 2005, Amendment
No. 1 to Employment Agreement was signed which provided for immediate vesting of
any stock options outstanding under certain circumstances.





28





On
February 18, 2004, we entered into a one-year employment agreement with
Stefan Chopin to serve as Chief Technology Officer. The agreement extends
automatically for an additional year at the end of the initial term and each
anniversary thereafter unless 30-day prior notice of termination is provided by
either Mr. Chopin or us. The agreement provides Mr. Chopin with a minimum salary
of $195,000, a commutation allowance equal to $1,500 per month, options to
purchase 100,000 shares of our common stock under our 1999 Stock Option Plan and
an annual bonus at the discretion of the Board of Directors. In the event there
is a change of control (as defined in the agreement) and Mr. Chopin's employment
is terminated (either by him or us) within one year thereafter, Mr. Chopin will
receive a severance benefit equal to the sum of (i) his then applicable annual
base salary and (ii) the average of his last two annual cash bonuses.
Additionally, the agreement contains non-compete and non-solicitation provisions
effective during the term of his employment and for one year thereafter. On
January 31, 2005, Amendment No. 1 to Employment Agreement was signed which
provided for immediate vesting of any stock options outstanding under certain
circumstances.





On
November 29, 2004, we entered into a two-year employment agreement with Morton
Mackof to serve as Executive Vice President of Sales. The agreement extends
automatically for an additional year at the end of the initial term and each
anniversary thereafter unless 30-day prior notice of termination is provided by
either Mr. Mackof or us. The agreement provides Mr. Mackof with a minimum annual
salary of $195,000, an annual bonus at the discretion of the Board of Directors,
and options to purchase 75,000 shares of our common stock under our 1999 Stock
Option Plan. If we terminate the agreement during the employment term for any
reason other than for cause, death or change of control, if we decide not to
renew the agreement or Mr. Mackof terminates the agreement for good reason (as
defined in the agreement), we will pay Mr. Mackof a severance payment equal to
one year his then applicable salary and the average of the last two annual cash
bonuses. Additionally, the agreement contains non-compete and non-solicitation
provisions effective during the term of his employment and for one year
thereafter. On January 31, 2005, Amendment No. 1 to Employment Agreement was
signed which provided for immediate vesting of any stock options outstanding
under certain circumstances.





**COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION**





No
interlocking relationships exist between any members of our Board or the
Compensation Committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.





**DIRECTOR
COMPENSATION**





Directors
are currently eligible to receive stock options every three years under any one
of our three stock option plans: the 1996 Stock Option Plan, the 1999 Stock
Option Plan and the 1999 Outside Directors' Stock Option Plan. In August 2000,
each of our non-employee directors was granted options to purchase 7,500 shares
of common stock at an exercise price of $3.50 per share under the 1999 Stock
Option Plan. In August 2002, each of our non-employee directors were granted
options to purchase 15,000 shares of our common stock at a price of $1.75 per
share under our 1999 Outside Directors Stock Option Plan. In June 2003, Messrs.
Chopin and Maged were granted options to purchase 10,000 shares of our common
stock at a price of $1.21 per share under our 1999 Stock Option Plan. Mr.
Chopin’s options were cancelled when he resigned from the Board of Directors in
February 2004 and he received new options as part of his employment
agreement.





In
November 2002, a Merger and Acquisition Committee was formed consisting of our
former outside directors, Bruce Bezpa and Stefan Chopin, and our current outside
director, Mark Maged, to explore a proposed transaction. Each member of the
committee was paid $7,500 in 2002 and $7,500 in 2003. The proposed merger was
not consummated, and no further payments are due to the members of this
committee, which has since been terminated. In June 2004, each of our then
current directors was paid $7,500 as compensation for services rendered in
connection with our May 2004 secondary offering.





In
January 2003, Douglas McIntyre, a former outside director, was granted options
to purchase 15,000 shares of common stock at an exercise price of $1.42 per
share under our 1999 Outside Directors Stock Option Plan. These options were
unvested and forfeited when Mr. McIntyre resigned from the Board of Directors in
April 2003.





In April
2003, Messrs. Burditt and Feinstein were each granted options to purchase 15,000
shares at an exercise price of $0.86 per share under our 1999 Outside Directors
Stock Option Plan. Mr. Burditt’s options were unvested and forfeited when he
resigned from the Board of Directors in April 2004.





In April
2003, Jonathan Bulkeley was granted options to purchase 75,000 shares of our
common stock at a price of $0.86 under our 1999 Stock Option Plan. Mr. Bulkeley
also entered into a consulting agreement which paid him an annual salary of
$60,000 to serve as non-executive Vice Chairman of the Board of Directors. On
February 2, 2004, the consulting agreement was terminated. Mr. Bulkeley’s
options were unvested and forfeited when he resigned from the Board of Directors
in March 2004.





In
February 2004, Messrs. Mackof and Vasarhelyi were each granted options to
purchase 15,000 shares at an exercise price of $1.75 per share under our 1999
Outside Directors Stock Option Plan. Mr. Mackof’s director options were
cancelled when he resigned from the Board of Directors in March 2005 and he
received new options as part of his employment agreement.





In
October 2004, Elisabeth DeMarse was granted options to purchase 15,000 shares at
an exercise price of $1.25 per share under our 1999 Outside Directors Stock
Option Plan.








29





In
addition to the grant of stock options available to directors, non-employee
directors are now eligible to receive $5,000 every six months as consideration
for their service on the Board. In addition, beginning in November 2004,
directors are also eligible to receive $5,000 per year for serving on the audit
or compensation committee and an additional $5,000 for chairing the committee.
On December 31, 2003, each of Messrs. Burditt, Chopin, Feinstein and Maged
received $5,000. On June 30, 2004, each of Messrs. Feinstein, Mackof, Maged and
Vaserhelyi received $5,000. On January 3, 2005, Messrs. Feinstein, Mackof,
Maged, and Vaserhelyi, and Ms. DeMarse received $7,500, $6,667, $9,167, $8,333
and $5,833, respectively. The next scheduled payment to be made to the
non-employee directors is due June 30, 3005.





**ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS**





The
following table sets forth information regarding the beneficial ownership of our
common stock as of March 15, 2005 by:





- each
person, or group of affiliated persons, known by us to be the beneficial owner
of more than 5% of our outstanding common stock;





- each of
our directors;





- each of
the executives named in the Summary Compensation Table above; and





- all of
our directors and executive officers as a group.





Except as
otherwise indicated, the persons listed below have sole voting and investment
power with respect to all of the common stock owned by them.






NAME
      OF BENEFICIAL OWNER
    
    NUMBER
      OF
      SHARES
      (1)
    
    PERCENT
      OF
      SHARESOWNEDExecutive
      Officers and Directors:Susan
      Strausberg (2)
    
    
    2,290,173
    
    
    10.41
    %Marc
      Strausberg (3)
    
    
    2,290,173
    
    
    10.41
    %Greg
      D. Adams (4)
    
    
    309,834
    
    
    1.40
    %Stefan
      Chopin (5)
    
    
    353,552
    
    
    1.62
    %Elizabeth
      DeMarse
    
    
    -
    
    
    *Richard
      L. Feinstein (6)
    
    
    10,000
    
    
    *Morton
      Mackof
    
    
    8,000
    
    
    *Mark
      Maged (7)
    
    
    104,445
    
    
    *Miklos
      A. Vasarhelyi (8)
    
    
    175,850
    
    
    *All
      executive officers and directors as a group (9 persons)
    
    
    3,251,854
    
    
    14.50
    %Other
      5% Stockholders:Austin
      W. Marxe/David
    
    
    4,339,912
    
    
    19.35
    %Greenhouse
      (9)153
      East 53rd StreetNew
      York, NY 10021Theodore
      Cross (10)
    
    
    1,626,500
    
    
    7.47
    %One
      Cambleton CirclePrinceton,
      NJ 08540Gannett
      Welsh & Kotler (11)
    
    
    1,621,500
    
    
    7.45
    %222
      Berkeley StreetSuite
      1500Boston,
      Ma 02116





* Less than 1%.





30










(1)
Shares of common stock underlying options currently exercisable or exercisable
within 60 days are deemed outstanding for the purpose of computing the
percentage ownership of the person holding such options but are not deemed
outstanding for computing the percentage ownership of any other person.





(2)
Includes 156,000 shares owned by Ms. Strausberg's husband, Marc Strausberg,
EDGAR Online's Chairman of the Board and 1,912,840 shares owned by TheBean LLC
as well as 114,833 shares issuable upon exercise of options exercisable within
60 days and 106,500 shares issuable upon exercise of options exercisable within
60 days owned by Ms. Strausberg's husband, Marc Strausberg. Ms. Strausberg is a
managing member of TheBean LLC and as such she may be deemed to be the
beneficial owner of all the shares held by TheBean LLC. Ms. Strausberg disclaims
beneficial ownership of the shares owned by her husband.





(3)
Includes 1,912,840 shares owned by TheBean LLC as well as 106,500 shares
issuable upon exercise of options exercisable within 60 days and 114,833 shares
issuable upon exercise of options exercisable within 60 days owned by Mr.
Strausberg's wife, Susan Strausberg. Mr. Strausberg is a managing member of
TheBean LLC and as such he may be deemed to be the beneficial owner of all the
shares held by TheBean LLC. Mr. Strausberg disclaims beneficial ownership of the
shares owned by his wife.





(4)
Includes 309,834 shares issuable upon exercise of options exercisable within 60
days.





(5)
Includes shares owned jointly with Barbara Chopin, his wife and 64,168 shares
issuable upon exercise of options exercisable within 60 days.





(6)
Includes 10,000 shares issuable upon exercise of options exercisable within 60
days.





(7)
Includes 30,834 shares issuable upon exercise of options exercisable within 60
days.





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





(9)
Reflects amount derived from this persons’ Schedule 13G/A as filed with the SEC
on February 11, 2005.





(10)
Reflects amount derived from such person’s Schedule 13G as filed with the SEC on
February 14, 2005.





(11)
Reflects amount derived from such entity’s Schedule 13F as filed with the SEC on
February 14, 2005.








**STOCK
OPTION PLANS**





We
currently have three stock option plans: 1996 Stock Option Plan, 1999 Stock
Option Plan, as amended, and 1999 Outside Directors Stock Option Plan. The 1996
Stock Option Plan (the "1996 Plan") provides for the granting of options to
purchase up to an aggregate of 800,000 shares of our authorized but unissued
common stock to our officers, directors, employees and consultants. The 1999
Stock Option Plan (the "1999 Plan") provides for the granting of options to
purchase up to an aggregate of 3,200,000 shares of our authorized but unissued
common stock to our officers, directors, employees and consultants. Both the
1996 Stock Option and the 1999 Stock Option Plan are intended as an incentive to
encourage stock ownership by officers and certain of our other employees in
order to increase their proprietary interest in our continued growth and success
and to encourage such employees to remain in the employ of EDGAR Online.





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





Under the
1999 Outside Directors Stock Option Plan, there are up to 100,000 shares
authorized for issuance. Each new non-employee director will be granted, at the
time of his or her appointment and on each third anniversary thereafter, a
nonstatutory option to purchase 15,000 shares of common stock. The exercise
price of each of these options will be equal to the fair market value of our
common stock on the date of grant. These options will vest equally over a
three-year period.





As of
March 15, 2005, 800,000 options were authorized under the 1996 Plan and options
to purchase 607,455 shares were outstanding and 42,045 options were available
for future grants. As of March 15, 2005, 3,200,000 options were authorized under
the 1999 Plan, options to purchase 2,395,456 shares were outstanding and 591,809
options were available for future grants. As of March 15, 2005, 100,000 options
were authorized under the 1999 Outside Directors Stock Option Plan, 60,000
options to purchase shares had been granted and 40,000 options were available
for future grants. As of March 15, 2005, 100,000 options were authorized under
the FreeEDGAR Stock Option Plan and 2,025 shares were outstanding. No future
grants will be made under the FreeEDGAR Stock Option Plan.





31


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





**EQUITY
COMPENSATION PLANS**





The
following table sets forth information as of March 15, 2005 with respect to
compensation plans under which our equity securities are authorized for
issuance.





NUMBER
      OF
      SECURITIES
      TO BE
      ISSUED
      UPON
      EXERCISE
      OF
      OUTSTANDING
      OPTIONS
      AND
      WARRANTS
    
    WEIGHTED
      AVERAGE
      EXERCISE
      PRICE
      OF
      OUTSTANDING
      OPTIONS
      AND
      WARRANTS
    
    NUMBER
      OF SECURITIES REMAINING
      AVAILABLE
      FOR
      FUTURE
      ISSUANCE
      UNDER
      EQUITY
      COMPENSATION
      PLANSEquity
      compensation plans approved by stockholders:
    
    
    6,905,892
    (1)
    $
    1.93
    
    
    769,746
    (2)Equity
      compensation plans not approved by stockholders
    
    
    --
    
    
    --
    
    
    --Total
    
    
    6,905,892
    (1)
    $
    1.93
    
    
    769,746
    (2)








(1)
Includes 607,455 options issued and outstanding in the 1996 Stock Option Plan
with a weighted average exercise price of $2.39 per share, 2,395,456 options
issued and outstanding under the 1999 Stock Option Plan with a weighted average
exercise price of $2.20 per share, 2,025 options issued and outstanding under
the FreeEDGAR Stock Option Plan with a weighted average exercise price of
$3.03, 60,000 options issued and outstanding in the 1999 Outside Director
Plan with a weighted average exercise price of $1.41 per share and 3,840,956
warrants with a weighted average exercise price of $1.69 per share.





(2)
Includes 42,045 shares available for issuance under the 1996 Stock Option Plan,
591,809 shares available for issuance under the 1999 Stock Option Plan, 95,892
shares available for issuance under the FreeEDGAR Stock Option Plan and 40,000
shares available for issuance under the 1999 Outside Directors Stock Option
Plan.





**ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





None





**ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.**








During
2004 and 2003, the Company retained its principal auditors, BDO Seidman, LLP, in
several capacities (in thousands):





2004
    
    
    2003Audit
      Fees
    
    $
    174
    
    $
    112Audit-Related
      Fees
    
    
    15
    
    
    --Tax
      Fees
    
    
    --
    
    
    --All
      Other Fees
    
    
    --
    
    
    --Total
    
    $
    189
    
    $
    112








Audit
Fees. Audit fees represent amounts incurred in connection with the audit of the
Company's annual financial statements included in the Company's Form 10-K and
review of quarterly financial statements included in the Company's Forms 10-Q
and amounts incurred in connection with the Company's secondary public offering
in May 2004. In 2003, audit fees for services provided by BDO Seidman, LLP began
in the quarter ended September 30, 2003.





32





Audit
Related Fees. Audit related fees represent amounts incurred in connection with
the audit of the Company’s 401(k) Savings Plan.





All fees
paid by the Company to the Company's independent auditors were approved by the
Audit Committee in advance of the services being performed by such auditors.





Pre-Approval
Policies. Pursuant to the rules and regulations of the SEC, before the Company's
independent accountant is engaged to render audit or non-audit services, the
engagement must be approved by the Audit Committee or entered into pursuant to
the Audit Committee's pre-approval policies and procedures. The policy granting
pre-approval to certain specific audit and audit-related services and specifying
the procedures for pre-approving other services is set forth in the Amended and
Restated Charter of the Audit Committee, attached as Exhibit B to this Proxy
Statement.







**ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**




(a)
Exhibits










EXHIBIT
      NUMBER
    
    
    DESCRIPTION2.1
    
    
    Agreement
      and Plan of Merger dated as of September 10, 1999 among EDGAR Online,
      Inc., FreeEDGAR Acquisition Corp. and FreeEDGAR.com, Inc.
    (7)2.2
    
    
    Agreement
      and Plan of Merger dated as of October 18, 2000 among Registrant, FIS
      Acquisition Corp., Financial Insight Systems, Inc. and the Principal
      Stockholders named therein. (6)3.01
    
    
    Certificate
      of Incorporation (1)3.02
    
    
    Amended
      and Restated Certificate of Incorporation (2)3.03
    
    
    Bylaws
      (2)3.04
    
    
    Amendment
      to Amended and Restated Certificate of Incorporation*4.01
    
    
    Form
      of Specimen Stock Certificate for Registrant's Common Stock
      (2)4.02
    
    
    10%
      Convertible Subordinated Debenture due 2001(1)4.03
    
    
    Warrant
      to Purchase Common Stock(1)10.01
    
    
    Form
      of Indemnity Agreement to be entered into between the Registrant with each
      of its directors and executive officers(2)10.02
    
    
    1996
      Stock Option Plan(1)10.03
    
    
    1999
      Stock Option Plan(2)10.04
    
    
    1999
      Outside Directors Stock Option Plan(2)10.05
    
    
    Amended
      and Restated Employment Agreement dated as of May 6, 1999 between the
      Registrant and Marc Strausberg(2)10.06
    
    
    Amended
      and Restated Employment Agreement dated as of May 6, 1999 between the
      Registrant and Susan Strausberg(2)10.07
    
    
    Employment
      Agreement, dated as of April 23, 1999, between the Registrant and Tom
      Vos(2)10.08
    
    
    Employment
      Agreement, dated as of May 3, 1999, between the Registrant and Greg
      Adams(2)10.09
    
    
    Employment
      Agreement, dated as of March 11, 1997, between the Registrant and Brian
      Fitzpatrick(2)
   33
  EXHIBIT
      NUMBER
    
    
    DESCRIPTION10.10
    
    
    Employment
      Agreement, dated as of May 19, 1997, between the Registrant and Jay
      Sears(2)10.11
    
    
    Employment
      Agreement, dated as of May 3, 1999, between Registrant and David
      Trenck(2)10.12
    
    
    Securities
      Purchase Agreement, dated as of July 23, 1998 by and between the
      Registrant and Globix Corporation(1)10.13
    
    
    Form
      of Registration Rights Agreement for December 1998
      Investors(2)10.14
    
    
    Form
      of Subscription Agreement, including registration rights, for March 1999
      Investors(2)10.15
    
    
    Lease
      Agreement, dated April 4, 1997 by and between 50 Washington Street Realty
      Corp., Pequot Systems, Inc. and the Registrant(1)10.16
    
    
    Dissemination
      Services Agreement dated September 11, 1998 by and between TRW, Inc. and
      the Registrant(1)10.17
    
    
    Trademark
      License Agreement dated March 26, 1999 between the U.S. Securities and
      Exchange Commission and the Registrant(2)10.18
    
    
    Agreement
      dated March 1, 1998 by and between the Registrant and Pequot Systems,
      Inc.(2)10.19
    
    
    Form
      of Content License Agreement(2)10.20
    
    
    Restated
      Equity Purchase Agreement by and among the Registrant, Bowne & Co.,
      Inc., Globix Corporation, Marc Strausberg, Susan Strausberg and Michael
      Horowitz(2)10.21
    
    
    Procurement
      and Trafficking Agreement dated August 29, 1997 by and between the
      Registrant and DoubleClick Inc.(3)10.22
    
    
    Agreement
      dated July 23, 1998 by and between the Registrant and Globix Corporation
      with annexed Co-location Service Agreement(3)10.23
    
    
    Agreement
      of Lease, dated June 7, 1999, by and between Sono Equities LLC and 1122
      Associates LLC, as Owner, and the Registrant, as
  Tenant.(4)10.24
    
    
    Office
      Lease Agreement, dated January 28, 2000, by and between Yett Family
      Partnership, L.P. and the Registrant, regarding 10628 NE 37thCircle,
      Kirkland, Washington.(4)10.25
    
    
    Office
      Lease Agreement, dated January 28, 2000, by and between Yett Family
      Partnership, L.P. and the Registrant, regarding 10635 NE 38thPlace,
      Kirkland, Washington.(4)10.26
    
    
    Office
      Building Lease Agreement, dated February 7, 2000, between 122 East 42nd
      Street LLC and Registrant.(5)10.27
    
    
    Employment
      Agreement, dated as of October 1, 2000, between the Registrant and Albert
      E. Girod.(6)10.28
    
    
    Office
      Building Lease Agreement, dated July 1, 1998, as amended September 24,
      1998 by and between OTR and Financial Insight Systems, Inc. regarding
      11200 Rockville Pike, Suite 310, Rockville
Maryland.(8)
   34
  EXHIBIT
      NUMBER
    
    
    DESCRIPTION10.29
    
    
    Amended
      and Restated Stock Purchase Agreement dated as of January 8, 2002 among
      EDGAR Online, Inc. and the Investors set forth in Schedule I
      thereto(9)10.30
    
    
    Amended
      and Restated Registration Rights Agreement dated as of January 8, 2002
      among EDGAR Online, Inc. and the Investors set forth in Schedule I
      thereto(9)10.31
    
    
    Form
      of Warrant(9)10.32
    
    
    Amendment
      to Employment Agreement of Albert E. Girod dated March 21,
      2002(10)10.33
    
    
    Form
      of Amended and Restated Promissory Note(10)10.34
    
    
    Security
      Agreement dated March 21, 2002 by and among the Company, Financial Insight
      Systems, Inc. and Albert E. Girod, as agent for certain note
      holders(10)10.35
    
    
    Employment
      Agreement dated as of June 30, 2001 between the Registrant and Tom
      Vos.(11)10.36
    
    
    Amended
      and Restated Employment Agreement dated as of August 1, 2001 between the
      Registrant and Paul Sappington.(11)10.37
    
    
    Employment
      Agreement dated as of February 1, 2001 between the Registrant and Greg
      Adams.(11)10.38
    
    
    Amended
      and Restated Employment Agreement dated as of April 13, 2001 between the
      Registrant and Jay Sears.(11)10.39
    
    
    Amendment
      to Employment Agreement dated as of March 17, 2003 between the Registrant
      and Susan Strausberg. (12)10.40
    
    
    Amendment
      of Employment Agreement dated as of March 17, 2003 between the Registrant
      and Marc Strausberg. (12)10.41
    
    
    Amendment
      to Employment Agreement dated as of February 17, 2003 between the
      Registrant and Greg Adams. (12)10.42
    
    
    Separation
      and Release Agreement, dated March 28, 2003 between the Registrant and Tom
      Vos. (12)10.43
    
    
    Amendment
      to Employment Agreement dated as of April 26, 2004 between the Registrant
      and Marc Strausberg. (14)10.44
    
    
    Amendment
      of Employment Agreement dated as of April 26, 2004 between the Registrant
      and Susan Strausberg. (14)10.45
    
    
    Employment
      Agreement dated as of February 17, 2004 between the
      Registrantand Stefan Chopin. *10.46
    
    
    Employment
      Agreement dated as of December 27, 2004 between the Registrant and Greg
      Adams. (15)10.47
    
    
    Amendment
      to Employment Agreement dated as of January 31, 2005 between the
      Registrant and Marc Strausberg. *10.48
    
    
    Amendment
      to Employment Agreement dated as of January 31, 2005 between the
      Registrant and Susan Strausberg. *
   35
  EXHIBIT
      NUMBER
    
    
    DESCRIPTION10.49
    
    
    Amendment
      to Employment Agreement dated as of January 31, 2005 between the
      Registrant and Greg Adams. *10.50
    
    
    Amendment
      to Employment Agreement dated as of January 31, 2005 between the
      Registrant and Stefan Chopin. *10.51
    
    
    Employment
      Agreement dated November 29, 2004 between the Registrantand Morton Mackof.
      (16)10.52
    
    
    Amendment
      to Employment Agreement dated as of January 31, 2005 between the
      Registrant and Morton Mackof. *10.53
    
    
    Third
      Amendment to Office Building Lease by and between PRIM Rockville
      Pike, LLC and the Registrant. *14.1
    
    
    Code
      of Ethics (13)14.2
    
    
    Code
      of Conduct (13)17.1
    
    
    Resignation
      Letter of Marc Bell(6)21.1
    
    
    Subsidiaries
      of EDGAR Online, Inc.*23.1
    
    
    Consent
      of BDO Seidman, LLP.*23.2
    
    
    Consent
      of KPMG LLP.*31.1
    
    
    Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*31.2
    
    
    Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*32.1
    
    
    Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.*32.2
    
    
    Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.*








* filed
herewith





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





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





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





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





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





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





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





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





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





36





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





(11)
Incorporated by reference to exhibit with corresponding number filed with the
Registrant's Annual Report on Form 10-K for the year ended December 31, 2001.





(12)
Incorporated by reference to exhibit with corresponding number filed with the
Registrant's Annual Report on Form 10-K for the year ended December 31, 2002.





(13)
Incorporated by reference to exhibit with corresponding number filed with the
Registrant's Annual Report on Form 10-K for the year ended December 31, 2003.





(14)
Incorporated by reference to exhibit with corresponding number filed with the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
2004.




(15) Incorporated by reference to exhibit 10.44 filed with the
Registrant's Current Report on Form 8-K dated December 29, 2004.




(16) Incorporated by reference to
exhibit 10.43 filed with the Registrant's Current Report on Form 8-K
dated December 1, 2004.





(b)
Financial Statements and Financial Statement Schedules





The
consolidated financial statements of the Company filed as part of this Form 10-K
are filed on pages F-1 to F-18 to this Form 10-K. The financial statement
schedule required by Regulation S-X follows.


****


****


**SCHEDULE
II -- VALUATION AND QUALIFYING ACCOUNTS**





**EDGAR
ONLINE, INC.**


**FINANCIAL
STATEMENT SCHEDULE**





**VALUATION
AND QUALIFYING ACCOUNTS**





(in
      thousands)DESCRIPTION
    
    
    BALANCE
      ATBEGINNING OF PERIOD
    
    
    CHARGED
      TOCOSTS ANDEXPENSES
    
    
    CHARGED
      TOOTHERACCOUNTS
    
    
    DEDUCTIONS(1)
    
    
    BALANCE
      ATEND OFPERIODAllowance
      for Doubtful Accounts ReceivableYear
      ended December 31, 2002
    
    $
    298
    
    
    185
    
    
    —
    
    
    (259
    )
    $
    224Year
      ended December 31, 2003
    
    $
    224
    
    
    158
    
    
    —
    
    
    (186
    )
    $
    196Year
      ended December 31, 2004
    
    $
    196
    
    
    595
    
    
    —
    
    
    (317
    )
    $
    474





(1)
Write-offs of receivables.





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





****





37







SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


****





**EDGAR ONLINE, INC.**By:
    /s/ *SUSAN STRAUSBERG**Susan
      Strausberg*
      *President
      and*
      *Chief
      Executive Officer*


Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





SIGNATURE
    
    TITLE
    DATE/s/
      Susan Strausberg
    
    President,
      Chief Executive Officer and Director
    March
      25, 2005Susan
      Strausberg/s/
      Greg D. Adams
    
    Chief
      Financial Officer, Chief Operating Officer and Director
    March
      25, 2005Greg
      D. Adams/s/
      Stefan Chopin
    
    Chief
      Technology Officer
    March
      25, 2005Stefan
      Chopin/s/
      Morton Mackof
    
    Executive
      Vice President of Sales
    March
      25, 2005Morton
      Mackof/s/
      Marc Strausberg
    
    Chairman
      of the Board of Directors
    March
      25, 2005Marc
      Strausberg/s/
      Elisabeth DeMarse
    
    Director
    March
      25, 2005Elisabeth
      DeMarse/s/
      Richard L. Feinstein
    
    Director
    March
      25, 2005Richard
      L. Feinstein/s/
      Mark Maged
    
    Director
    March
      25, 2005Mark
      Maged/s/
      Miklos A. Vasarhelyi
    
    Director
    March
      25, 2005Miklos
      A. Vasarhelyi











38





**EDGAR
ONLINE, INC.**





**INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS**








PAGEReport
      of Independent Registered Public Accounting Firm - BDO Seidman,
      LLP
    
    
    F-2Report
      of Independent Registered Public Accounting Firm - KPMG
      LLP
    
    
    F-3Consolidated
      Balance Sheets as of December 31, 2004 and 2003
    
    
    F-4Consolidated
      Statements of Operations for the Years ended December 31, 2004, 2003, and
      2002
    
    
    F-5Consolidated
      Statements of Changes in Stockholders' Equity for the Years ended December
      31, 2004, 2003, and 2002
    
    
    F-6Consolidated
      Statements of Cash Flows for the Years ended December 31, 2004, 2003, and
      2002
    
    
    F-7Notes
      to Consolidated Financial Statements
    
    
    F-8




















F-1








**REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





The Board
of Directors and Stockholders


EDGAR
Online, Inc.


Norwalk,
Connecticut





We have
audited the accompanying consolidated balance sheets of EDGAR Online, Inc. and
subsidiaries (the "Company") as of December 31, 2004 and 2003 and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the years then ended. We have also audited the financial statement
schedule listed under Item 15(b). These consolidated financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial statement schedule are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and schedule,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement and schedule
presentation. We believe that our audits provide a reasonable basis for our
opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of EDGAR Online, Inc. and
subsidiaries at December 31, 2004 and 2003, and the results of their operations
and their cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States. Also in our opinion, the
financial statement schedule presents fairly, in all material respects, the
information set forth therein, for the years ended December 31, 2004 and 2003.





As
discussed in Note 3 to the consolidated financial statements, in 2002 the
Company changed its method of accounting for goodwill and intangible assets.








*/S/ BDO SEIDMAN, LLP**New York, NY**February 1, 2005*





**





F-2










REPORT OF INDEPENDENT  REGISTERED
PUBLIC ACCOUNTING FIRM


The Board
of Directors and Stockholders


EDGAR
Online, Inc.:





We have
audited the accompanying consolidated statements of operations, changes in
stockholders' equity, and cash flows of EDGAR Online, Inc. and subsidiaries (the
"Company") for the year ended December 31, 2002. In connection with our audit of
the consolidated financial statements, we also have audited the related
financial statement schedule listed under Item 15(b) for the year ended December
31, 2002. These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and
financial statement schedule based on our audit.





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





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the results of EDGAR Online, Inc.'s operations and
their cash flows for the year ended December 31, 2002, in conformity with U.S.
generally accepted accounting principles. Also, in our opinion, the related
financial statement schedule for the year ended December 31, 2002, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.





As
discussed in Note 3 to the consolidated financial statements, in 2002 the
Company changed its method of accounting for goodwill and other intangible
assets as of January 1, 2002.








*/S/ KPMG LLP**New York, New York**March 26, 2003*





**




F-3







**EDGAR
ONLINE, INC.**


**CONSOLIDATED
BALANCE SHEETS**





(in
      thousands, except share and per share information)DECEMBER
      31, 2004
    
    DECEMBER
      31, 2003ASSETSCurrent
      assets:Cash
      and cash equivalents .
    
    $
    2,678
    
    $
    3,860Short-term
      investment .
    
    
    2,000
    
    
    -Accounts
      receivable, less allowance for doubtful accounts of$474 and
      $196, respectively .
    
    
    1,895
    
    
    1,430Other
      current assets
    
    
    329
    
    
    439Total
      current assets .
    
    
    6,902
    
    
    5,729Property
      and equipment, net .
    
    
    1,138
    
    
    1,477Goodwill
    
    
    2,189
    
    
    2,189Intangible
      assets, net
    
    
    7,936
    
    
    9,465Other
      assets
    
    
    441
    
    
    285Total
      assets .
    
    $
    18,606
    
    $
    19,145LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
    
    $
    995
    
    $
    361Accrued
      expenses
    
    
    617
    
    
    700Deferred
      revenues .
    
    
    2,581
    
    
    2,040Current
      portion of notes payable
    
    
    -
    
    
    1,900Accrued
      interest
    
    
    -
    
    
    26Total
      current liabilities
    
    
    4,193
    
    
    5,027Other
      long-term payables
    
    
    -
    
    
    103Total
      liabilities
    
    
    4,193
    
    
    5,130CommitmentsStockholders'
      equity:Common
      stock, $0.01 par value, 50,000,000 and 30,000,000
      sharesauthorized at December 31, 2004 and 2003, respectively22,640,366
      shares issued and 21,470,416 shares outstanding at
      December 31, 2004 and 17,187,365 shares issued and16,992,290
      shares outstanding at December 31, 2003
    
    
    226
    
    
    172Preferred
      stock, $0.01 par value, 1,000,000 sharesauthorized, no shares
      issued or outstanding .
    
    
    --
    
    
    --Additional
      paid-in capital
    
    
    62,378
    
    
    58,319Accumulated
      deficit .
    
    
    (46,310
    )
    
    (44,144
    )Treasury
      stock, at cost, 1,169,950 and 195,075 shares atDecember 31, 2004
      and 2003, respectively
    
    
    (1,881
    )
    
    (332
    )Total
      stockholders' equity
    
    
    14,413
    
    
    14,015Total
      liabilities and stockholders' equity .
    
    $
    18,606
    
    $
    19,145











See
accompanying notes to consolidated financial statements.





F-4







**EDGAR
ONLINE, INC.**


**CONSOLIDATED
STATEMENTS OF OPERATIONS**





(in
      thousands, except per share information)YEARS ENDED DECEMBER 31,2004
    
    2003
    
    2002Revenues:Seat-based
      subscriptions
    
    $
    6,919
    
    $
    5,953
    
    $
    5,148Data
      sales
    
    
    4,575
    
    
    4,833
    
    
    5,380Technical
      services
    
    
    823
    
    
    2,805
    
    
    4,287Advertising
      and e-commerce
    
    
    568
    
    
    728
    
    
    1,35612,885
    
    
    14,319
    
    
    16,171Cost
      of revenues
    
    
    1,898
    
    
    1,979
    
    
    2,632Gross
      profit
    
    
    10,987
    
    
    12,340
    
    
    13,539Operating
      expenses:Sales
      and marketing
    
    
    2,602
    
    
    2,165
    
    
    2,314Product
      development
    
    
    1,600
    
    
    1,699
    
    
    2,244General
      and administrative
    
    
    7,965
    
    
    7,222
    
    
    7,757Amortization
      and depreciation
    
    
    2,226
    
    
    2,503
    
    
    2,880Restructuring
      and severance costs
    
    
    --
    
    
    784
    
    
    (182
    )14,393
    
    
    14,373
    
    
    15,013Loss
      from operations
    
    
    (3,406
    )
    
    (2,033
    )
    
    (1,474
    )Interest
      income
    
    
    39
    
    
    54
    
    
    101Interest
      expense and other, net
    
    
    (2
    )
    
    (188
    )
    
    (352
    )Other
      income
    
    
    1,203
    
    
    --
    
    
    --Loss
      before cumulative effect of change in accounting principle
    
    
    (2,166
    )
    
    (2,167
    )
    
    (1,725
    )Cumulative
      effect of change in accounting principle
    
    
    --
    
    
    --
    
    
    (9,317
    )Net
      loss
    
    $
    (2,166
    )
    $
    (2,167
    )
    $
    (11,042
    )Loss
      before cumulative effect of change in accounting principle per share -
      basic and diluted
    
    $
    (0.11
    )
    $
    (0.13
    )
    $
    (0.10
    )Cumulative
      effect of change in accounting principle per share- basic and diluted
    
    
    (0.00
    )
    
    (0.00
    )
    
    (0.55
    )Net
      loss per share - basic and diluted
    
    $
    (0.11
    )
    $
    (0.13
    )
    $
    (0.65
    )Weighted
      average shares outstanding - basic and diluted
    
    
    20,254
    
    
    16,976
    
    
    16,933








See
accompanying notes to consolidated financial statements


****





F-5







**EDGAR
ONLINE, INC.**


**CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**





(in
thousands, except share and per share information)


COMMON
      STOCK
    
    TREASURY
      STOCK
    
    ADDITIONALPAID-IN
    
    ACCUMULATEDSHARES
    
    AMOUNT
    
    SHARES
    
    AMOUNT
    
    CAPITAL
    
    DEFICIT
    
    TOTALBalance
      at December 31, 2001
    
    
    15,421,917
    
    $
    154
    
    
    -
    
    $
    -
    
    $
    54,741
    
    $
    (30,935
    )
    $
    23,960Comprehensive
      loss:Net
      loss
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (11,042
    )
    
    (11,042
    )Total
      comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,042
    )Issuance
      of common stock, net of issuance costs
    
    
    1,500,000
    
    
    15
    
    
    -
    
    
    -
    
    
    3,367
    
    
    -
    
    
    3,382Exercise
      of stock options
    
    
    81,875
    
    
    1
    
    
    -
    
    
    -
    
    
    67
    
    
    -
    
    
    68Stock
      compensation expense
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    2
    
    
    -
    
    
    2Balance
      at December 31, 2002
    
    
    17,003,792
    
    
    170
    
    
    -
    
    
    -
    
    
    58,177
    
    
    (41,977
    )
    
    16,370Comprehensive
      loss:Net
      loss
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (2,167
    )
    
    (2,167
    )Total
      comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,167
    )Exercise
      of stock options
    
    
    179,500
    
    
    2
    
    
    -
    
    
    -
    
    
    142
    
    
    -
    
    
    144Exercise
      of stock warrants
    
    
    4,073
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Purchase
      of treasury stock
    
    
    (195,075
    )
    
    -
    
    
    195,075
    
    
    (332
    )
    
    -
    
    
    -
    
    
    (332
    )Balance
      at December 31, 2003
    
    
    16,992,290
    
    
    172
    
    
    195,075
    
    
    (332
    )
    
    58,319
    
    
    (44,144
    )
    
    14,015Comprehensive
      loss:Net
      loss
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (2,166
    )
    
    (2,166
    )Total
      comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,166
    )Issuance
      of common stock, net of issuance costs
    
    
    5,450,000
    
    
    54
    
    
    -
    
    
    -
    
    
    4,056
    
    
    -
    
    
    4,110Exercise
      of stock options
    
    
    3,001
    
    
    -
    
    
    -
    
    
    -
    
    
    3
    
    
    -
    
    
    3Stock
      returned as part of litigation settlement
    
    
    (974,875
    )
    
    -
    
    
    974,875
    
    
    (1,549
    )
    
    -
    
    
    -
    
    
    (1,549
    )Balance
      at December 31, 2004
    
    
    21,470,416
    
    $
    226
    
    
    1,169,950
    
    $
    (1,881
    )
    $
    62,378
    
    $
    (46,310
    )
    $
    14,413


See
accompanying notes to consolidated financial statements.








F-6







**EDGAR
ONLINE, INC.**


**CONSOLIDATED
STATEMENTS OF CASH FLOWS**





(in
thousands)


YEARS ENDED DECEMBER 31,2004
    
    2003
    
    2002Cash
      flow from operating activities:Net
      loss
    
    $
    (2,166
    )
    $
    (2,167
    )
    $
    (11,042
    )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Other
      non-cash income
    
    
    (1,550
    )
    
    --
    
    
    --Amortization
      of intangibles
    
    
    1,529
    
    
    1,687
    
    
    1,737Depreciation
    
    
    696
    
    
    816
    
    
    1,143Provision
      for (recovery of) losses on trade accounts receivable
    
    
    278
    
    
    (28
    )
    
    (75
    )Cumulative
      effect of change in accounting principle
    
    
    --
    
    
    --
    
    
    9,317Amortization
      of financing costs
    
    
    --
    
    
    22
    
    
    16Stock
      compensation expense
    
    
    --
    
    
    --
    
    
    2Changes
      in assets and liabilities:Accounts
      receivable
    
    
    (743
    )
    
    159
    
    
    538Accounts
      payable and accrued expenses
    
    
    551
    
    
    (209
    )
    
    (409
    )Accrued
      interest
    
    
    (26
    )
    
    (23
    )
    
    (26
    )Other
      long term payables
    
    
    (103
    )
    
    103
    
    
    --Deferred
      revenues
    
    
    541
    
    
    296
    
    
    351Other,
      net
    
    
    (45
    )
    
    18
    
    
    14Total
      adjustments
    
    
    1,128
    
    
    2,841
    
    
    12,608Net
      cash (used in) provided by operating activities
    
    
    (1,038
    )
    
    674
    
    
    1,566Cash
      flow from investing activities:Capital
      expenditures
    
    
    (357
    )
    
    (600
    )
    
    (318
    )Short-term
      investment
    
    
    (2,000
    )
    
    --
    
    
    --Net
      cash used in investing activities
    
    
    (2,357
    )
    
    (600
    )
    
    (318
    )Cash
      flow from financing activities:Proceeds
      from issuance of common stock
    
    
    4,110
    
    
    --
    
    
    3,382Proceeds
      from exercise of stock options and warrants
    
    
    3
    
    
    143
    
    
    68Financing
      costs
    
    
    --
    
    
    --
    
    
    (38
    )Principal
      payments on notes payable
    
    
    (1,900
    )
    
    (1,900
    )
    
    (2,546
    )Principal
      payments on capital lease obligations
    
    
    --
    
    
    (7
    )
    
    (25
    )Net
      cash provided by (used in) financing activities
    
    
    2,213
    
    
    (1,764
    )
    
    841Net
      increase (decrease) in cash and cash equivalents
    
    
    (1,182
    )
    
    (1,690
    )
    
    2,089Cash
      and cash equivalents at beginning of year
    
    
    3,860
    
    
    5,550
    
    
    3,461Cash
      and cash equivalents at end of year
    
    $
    2,678
    
    $
    3,860
    
    $
    5,550Supplemental
      disclosure of cash flow information:Cash
      paid for interest
    
    $
    26
    
    $
    206
    
    $
    301











See
accompanying notes to consolidated financial statements.





F-7





**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





(1)
DESCRIPTION OF BUSINESS





EDGAR
Online, Inc. ("EDGAR Online" or the "Company"), formerly Cybernet Data Systems,
Inc., was incorporated in the State of Delaware in November 1995 and launched
its EDGAR Online Web site in January 1996. The Company provides value-added business and financial information on global companies to financial,
corporate and advisory professionals . The
Company makes information and a variety of analysis tools available via online
subscriptions and licensing agreements to a large user base. Its customers
include financial institutions, investment funds, asset managers, market data
professionals, accounting firms, law firms, corporations and individual
investors.





(2)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





(a)
REVENUE RECOGNITION





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





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





(b) COST
OF REVENUES





Cost of
revenues consists primarily of fees paid to acquire the Level I EDGAR database
feed from the SEC, content feeds, salaries and benefits of operations employees
and the costs associated with our computer equipment and communications lines
used in conjunction with our websites. These costs are applicable to all of the
Company’s revenue sources. In addition, for each period, online barter
advertising expense is recorded equal to the online barter advertising revenue
for that period.





(c)
BARTER TRANSACTIONS





Barter
advertising revenue relates to advertising placed on the Company's Web site by
other Internet companies in exchange for the Company's advertising placed on
their Web sites. Barter expenses reflect the expense offset to barter revenue.
The amount of barter advertising revenue and expense is recorded at the
estimated fair value of the services received or the services provided,
whichever is more objectively determinable, in the month that banners are
exchanged. The Company, recognizes barter revenues only to the extent that the
Company has similar cash transactions within a period not to exceed six months
prior to the date of the barter transaction. Barter revenues and expenses
totaled $113, $137, and $309 in the years ended December 31, 2004, 2003, and
2002, respectively.





(d) WEB
SITE DEVELOPMENT COSTS





In
accordance with Emerging Task Force Issue No. 2000-2, Accounting for Web Site
Development Costs, and Statement of Position 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use (SOP 98-1), the Company
capitalizes certain Web site costs for computer software developed or obtained
for internal use. Capitalized software development costs totaled $134 and $57 at
December 31, 2004 and 2003, respectively, and are being amortized over their
estimated useful life of three years. Related amortization expense totaled $43,
$62, and $167, in the years ended December 31, 2004, 2003, and 2002,
respectively.





(e) CASH
AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS





The
Company considers cash and all highly liquid investments with original
maturities of ninety days or less to be cash and cash equivalents. Short-term
investments at December 31, 2004 include a $2,000 certificate of deposit (CD)
which accrues interest 2.10% and matures in June 2005.








F-8








**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





(f)
ACCOUNTS RECEIVABLE AND CREDIT POLICIES





The
carrying amount of accounts receivable is reduced by a valuation allowance that
reflects management's best estimate of the amounts that will not be collected.
In addition to reviewing delinquent accounts receivable, management considers
many factors in estimating its general allowance, including historical data,
experience, customer types, credit worthiness, and economic trends. From time to
time, management may adjust its assumptions for anticipated changes in any of
those or other factors expected to affect collectability.





(g)
PROPERTY AND EQUIPMENT





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





(h)
LONG-LIVED ASSETS





Long-lived
assets, other than goodwill, are evaluated for impairment when events or changes
in circumstances indicate that the carrying amount of the assets may not be
recoverable through the estimated undiscounted future cash flows from the use of
these assets. When any such impairment exists, the related assets are written
down to fair value.





Other
intangible assets continue to be amortized over their estimated useful lives.
The Company has reassessed the estimated useful lives of its intangible assets,
which consist of accumulated know-how and customer based intangibles, and no
changes have been deemed necessary.





(i)
GOODWILL





Goodwill
and intangible assets deemed to have indefinite lives are not amortized, but are
subject to annual impairment tests. The Company estimates fair value of its
reporting units and compares these valuations with the respective carrying
values for each of the reporting units to determine whether any goodwill
impairment exists.





The
goodwill is substantially related to the acquisition of Financial Insight
Systems, Inc. in October 2000. When measuring fair value, the Company considers
past, present and future expectations of performance. The Company completes
goodwill impairment tests at least annually as of December 31 each year. The
Company completed the annual test and determined that there was no impairment of
goodwill as of December 31, 2004.





(j)
ADVERTISING EXPENSES





The
Company expenses advertising costs as incurred. Advertising expenses were $48,
$83, and $95, for the years ended December 31, 2004, 2003 and 2002,
respectively.





(k)
INCOME TAXES





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





(l)
STOCK-BASED TRANSACTIONS





The
Company accounts for stock-based transactions in accordance with SFAS No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123). In accordance with SFAS
123, the Company has elected to measure stock-based employee compensation
arrangements in accordance with the provisions of Accounting Principles Board
(APB) No. 25, "Accounting for Stock Issued to Employees" (APB 25), and comply
with the disclosure provisions of SFAS 123. Under APB 25, compensation cost is
recognized based on the difference, if any, on the date of grant between the
fair value of the Company's common stock and the exercise price.











F-9




**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**








Had the
Company determined compensation expense based on the fair value of the option on
the grant date under SFAS 123, the Company's results of operations for the years
ended December 31, 2004, 2003 and 2002 would have been as follows:







2004
    
    2003
    
    2002Net
      loss -- as reported
    
    $
    (2,166
    )
    $
    (2,167
    )
    $
    (11,042
    )Compensation
      expense related to options - Fair value
method
    
    
    (723
    )
    
    (1,471
    )
    
    (2,365
    )Net
      loss -- pro forma
    
    $
    (2,889
    )
    $
    (3,638
    )
    $
    (13,407
    )Basic
      and diluted net loss per share - as reported
    
    $
    (0.11
    )
    $
    (0.13
    )
    $
    (0.65
    )Basic
      and diluted net loss per share - pro forma
    
    $
    (0.14
    )
    $
    (0.21
    )
    $
    (0.79
    )














The fair
value of the options granted to employees in 2004, 2003, and 2002 as calculated
under SFAS 123, ranged from $0.64 to $1.25, $0.80 to $1.38, and $1.75 to $2.96,
respectively, with a weighted average fair value of $1.01, $0.94, and $2.81,
respectively. The following assumptions were used in the calculations:







2004
    
    2003
    
    2002Risk
      free interest rate
    
    3.33%-4.57
    %
    3.80%-4.35
    %
    1.56%-3.54
    %Expected
      life
    
    
    10
      years
    
    
    10
      years
    
    
    10
      yearsExpected
      dividend yield
    
    
    0
    %
    
    0
    %
    
    0
    %Average
      volatility
    
    
    70
    %
    
    94
    %
    
    104
    %











Beginning
in the third quarter of 2005, in connection with our adoption of SFAS 123 (R),
“Share-Based Payment”(discussed in note 1 (r)) stock based compensation will be
included in our results of operations. The methods and assumptions used to
determine the fair value of stock based compensation under SFAS 123(R) will be
similar to those used under SFAS 123.





(m)
CONCENTRATION OF RISK AND FAIR VALUE OF FINANCIAL INSTRUMENTS





Financial
instruments that potentially subject the Company to significant concentration of
credit risk consist primarily of accounts receivable. No customer accounted for
more than 10% of accounts receivable at December 31, 2004 or 2003.





NASDAQ
comprised 14%, 28%, and 34% of the Company's total revenue during 2004, 2003 and
2002, respectively. The Company's other customers are geographically dispersed
throughout the United States with no one customer accounting for more than 10%
of revenues during 2004, 2003, or 2002. In addition, the Company has not
experienced any significant credit losses to date from any one customer.





The fair
value of the Company's cash and cash equivalents, short-term investments,
accounts receivable, accounts payable and accrued liabilities at December 31,
2004 and 2003, approximate their financial statement carrying value because of
the immediate or short-term maturity of these instruments.





(n) LOSS
PER SHARE





Basic loss
per share excludes dilution for common stock equivalents and is computed by
dividing net loss available to common shareholders by the weighted average
number of common shares outstanding for the period. Diluted EPS reflects, in
periods in which they have a dilutive effect, the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted and resulted in the issuance of common stock.







F-10





**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





Diluted
loss per share is the same as basic loss per share amounts, as the outstanding
stock options and warrants are anti-dilutive for each of the periods presented.
Anti-dilutive securities outstanding were 6,994,742, 3,347,660, and 3,124,643,
for the years ended December 31, 2004, 2003 and 2002 respectively.





(o)
BUSINESS SEGMENTS





The
Company has determined that it does not have any separately reportable business
segments as management does not manage its operations by the different product
and service offerings, but instead views the Company as one operating segment
when making business decisions, with one operating decision making group.





(p)
COMPREHENSIVE INCOME (LOSS)





Comprehensive
income (loss) includes all changes in equity during a period from non-owner
sources including, as applicable, foreign currency items, minimum pension
liability adjustments and unrealized gains and losses on certain investments in
debt and equity securities. The Company's comprehensive loss, which is comprised
solely of net loss, is presented within the statement of changes in
stockholders' equity.





(q) USE
OF ESTIMATES IN FINANCIAL STATEMENTS





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Significant estimates embedded in the consolidated financial statements for the
periods presented include the allowance for doubtful accounts, fair values and
useful lives of goodwill and other intangible assets, and the length of certain
customer relationships. Actual results could differ from those estimates.





(r)
RECENT ACCOUNTING PRONOUNCEMENTS




In
December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary
Assets” (SFAS 153) which amends Accounting Principles Board Opinion
No. 29, “Accounting for Nonmonetary Transactions (APB 29).
SFAS 153 amends APB 29 to eliminate the fair-value exception for
nonmonetary exchanges of similar productive assets and replace it with a general
exception for nonmonetary exchanges that do not have commercial substance. It is
effective for nonmonetary asset exchanges occurring in fiscal periods beginning
after June 15, 2005. This statement is not anticipated to have a material
impact on the Company’s financial position or results of
operations.





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”
(SFAS 123(R)) which establishes accounting standards for all transactions
in which an entity exchanges its equity instruments for goods and services.
SFAS 123(R) revises SFAS No. 123, “Accounting for Stock-Based
Compensation”, supersedes Accounting Principles Board Opinion No. 25,
“Accounting for Stock Issued to Employees” and amends Financial Accounting
Standard No. 95, “Statement of Cash Flows”. SFAS No. 123(R) generally
requires the Company to measure the cost of employee services received in
exchange for an award of equity instruments based on the fair value of the award
on the date of the grant. The standard requires the fair value on the grant date
to be estimated using either an option-pricing model which is consistent with
the terms of the award or a market observed price, if such a price exists. The
resulting cost must be recognized over the period during which an employee is
required to provide service in exchange for the award, which is usually the
vesting period. SFAS 123(R) must be adopted no later than periods beginning
after June 15, 2005 and the Company expects to adopt SFAS 123(R) on
the effective date. The Company expects the adoption of SFAS 123(R) to have
a material impact on its net income and earnings per share.





(2) OTHER
INCOME





On
December 30, 2004, the Company entered into a settlement agreement which
concluded a lawsuit commenced by the Company against Albert Girod, its former
Chief Technology Officer, Executive Vice President and director, and Kristine
Delta, its former Vice President, based on certain claims that arose out of the
purchase by the Company of Financial Insight Systems, Inc. ("FIS") in October
2000. The Company sought compensatory damages and/or restitution for defendants'
alleged fraud, unjust enrichment, breach of fiduciary duty, breach of contract
and other actions that occurred in connection with the acquisition of FIS. The
Company settled the lawsuit in exchange for all of the shares of common stock
then held by Mr. Girod and one-third of the shares of common stock currently
held by Ms. Delta. Specifically, Mr. Girod transferred 962,375 shares to the
Company and Ms. Delta transferred 12,500 shares to the Company. These shares are
reflected in the Company's treasury. The Company and Mr. Girod have also agreed
not to disparage each other pursuant to the Settlement Agreement. As a result,
the Company recorded other income of $1,203 which is comprised of
$1,550 in gross income reflecting the fair value of the shares offset by
$347 in legal fees.








F-11











**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





(3)
GOODWILL AND OTHER INTANGIBLES





The
Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets" (SFAS
142) effective January 1, 2002. The adoption of this accounting standard
required that assembled workforce with a net book value of approximately $3,400
as of January 1, 2002 be subsumed into goodwill and also eliminated the
amortization of goodwill commencing January 1, 2002. SFAS 142 also required the
Company to perform a transitional assessment by June 30, 2002, to determine
whether there was an impairment of goodwill. To perform this assessment, the
Company, assisted by an independent valuation firm, compared the fair value of
the FIS reporting unit to the carrying amount of the related net assets. This
assessment indicated that goodwill associated with the FIS acquisition was
impaired as of January 1, 2002. Accordingly, the Company recognized an
approximately $9,300 non-cash charge, recorded as of January 1, 2002, as the
cumulative effect of a change in accounting principle for the write-down of
goodwill to its fair value. The impaired goodwill was not deductible for tax
purposes, and as a result, no tax benefit has been recorded in relation to the
change.





SFAS 142
also requires goodwill to be tested annually and between annual tests if events
occur or circumstances change that would more likely than not reduce the fair
value of a reporting unit below its carrying amount. The Company has elected to
perform its annual tests for indications of goodwill impairment as of December
31 of each year. The Company, assisted by an independent valuation firm,
determined that there is no further impairment at December 31, 2004 and 2003 and
there was no change in the carrying amount of goodwill. The fair value of our
identifiable intangible assets were also considered as part of this review and
no impairment was indicated. Subsequent reviews may result in future periodic
impairments that could have a material adverse effect on the results of
operations in the period recognized.








December
      31, 2004
    
    December
      31, 2003Accumulated
    
    
    
    AccumulatedCost
    
    Amortization
    
    Cost
    
    AmortizationOther
      intangible assets:Accumulated
      know-how
    
    $
    9,460
    
    $
    4,137
    
    $
    9,460
    
    $
    3,068Customer
      based intangibles
    
    
    4,496
    
    
    1,883
    
    
    4,496
    
    
    1,423$
    13,956
    
    $
    6,020
    
    $
    13,956
    
    $
    4,491





The
weighted average useful life of accumulated know-how and customer based
intangibles is 9.5 years and 10.9 years, respectively. Amortization of other
intangible assets for the years ended December 31, 2004, 2003, and 2002 was
$1,529, $1,670, and $1,670, respectively. The annual amortization expense
expected for each of the years ended December 31, 2005 through 2009 is $1,246.





(4)
RESTRUCTURING AND SEVERANCE COSTS





In the
first quarter of 2003, the Company effected a 17% workforce reduction (16
employees) in response to an expected decline in revenues beginning in the
second half of 2003. All terminated employees were notified prior to March 31,
2003. In addition, the Company negotiated payments under a Separation and
Release Agreement with the Company's former President and Chief Operating
Officer which released him from any further obligations to perform services as
an employee of the Company. The Company accrued $784 of severance costs related
to these actions in addition to $157 previously recorded amounts due to the
former President and Chief Operating Officer. The Company has paid $838 through
December 31, 2004. At December 31, 2004, $103 of the remaining obligations are
included in accrued expenses. The Company does not expect to incur additional
costs in relation to these actions.





In 2001,
the Company closed the Kirkland, WA office and recorded $912 of restructuring
costs which included employment termination charges for 14 employees, 11 of whom
were discharged. In September 2001, the Company incurred $84 of additional
severance costs related to restructuring at FIS. These restructuring costs
included employment termination charges for 12 employees, all of whom were
discharged. In 2002, the Company negotiated contract terminations, thereby
eliminating $182 of obligations. This amount was recorded as a reduction of
restructuring and severance costs in 2002. All costs were paid as of December
31, 2002 except $5 related to a non-recoverable lease. This amount was paid as
of December 31, 2003.










F-12








**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





(5)
PROPERTY AND EQUIPMENT





Property
and equipment at December 31, 2004 and 2003 is summarized as follows:





DECEMBER
      31,2004
    
    2003
    
    ESTIMATEDUSEFUL
      LIVESEquipment
    
    $
    4,526
    
    $
    4,383
    
    
    3 -
      5 yearsFurniture
      and fixtures
    
    
    426
    
    
    396
    
    
    7
      yearsPurchased
      software
    
    
    636
    
    
    580
    
    
    3
      yearsSoftware
      development costs
    
    
    708
    
    
    589
    
    
    3
      yearsLeasehold
      improvements
    
    
    394
    
    
    385
    
    
    3 -
      7 yearsSubtotal
    
    
    6,690
    
    
    6,333Less
      accumulated depreciation
    
    
    (5,552
    )
    
    (4,856
    )Total
    
    $
    1,138
    
    $
    1,477





Depreciation
expense for the years ended December 31, 2004, 2003 and 2002 was $696, $816, and
$1,143, respectively.





At
December 31, 2004, the Company had $32 of equipment under capital leases
included in furniture and fixtures. This lease was fully paid as of December 31,
2003. Related accumulated amortization totaled $16 and $12 at December 31, 2004
and 2003, respectively. Amortization of these assets recorded under capital
leases is included in depreciation expense.





(6)
ACCRUED EXPENSES





Accrued
expenses consist of the following at December 31, 2004 and 2003:





DECEMBER
      31,2004
    
    2003Compensation
      and related benefits
    
    $
    456
    
    $
    408Professional
      fees
    
    
    58
    
    
    39Restructuring
      and severance costs (note 4)
    
    
    103
    
    
    251Other
    
    
    -
    
    
    2Total
    
    $
    617
    
    $
    700








(7) NOTES
PAYABLE





In
connection with an earlier acquisition, the Company issued a series of two-year
senior subordinated secured promissory notes with a total principal amount of
$6,000. Interest accrued at 7.5% annually and is payable quarterly in arrears on
January 27, April 27, July 27 and October 27. Interest expense for the years
ended December 31, 2003 and 2002 was $182 and $343, respectively. On March 21,
2002, the Company concluded negotiations to extend the maturity date of certain
of the notes. The holders of $5,700 in principal amount of the notes agreed to
amend and restate their notes to provide for the following schedule of principal
payments: $1,900 which was made on April 1, 2002, $1,900 which was made on April
1, 2003 and $1,900 which was made on January 2, 2004. The Company deferred $38
of costs associated with the note restructuring. Amortization of these costs
totaled $22 and $16 in 2003 and 2002, respectively. The holder of $300 of the
notes that did not participate in the negotiations was repaid in 2002.





Total
interest expense and other financing charges for the years ended December 31,
2004, 2003 and 2002 were $2, $188, and $352, respectively.











F-13








**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





(8)
INCOME TAXES





Since its
inception, the Company has incurred net operating losses and has incurred no
federal or state income tax expense. At December 31, 2004, the Company has
approximately $18,000 in federal net operating losses, which will expire between
2018 and 2024, and approximately $16,000 of state net operating loss carry
forwards, which will expire between 2005 and 2022.





The
Company allocated $17,363 of the purchase price of an earlier acquisition to
identifiable intangible assets creating a book-tax difference for which a
corresponding deferred tax liability of $6,945 was established at the
acquisition date. In addition, at the date of acquisition, the Company had
deferred tax assets of approximately $6,120 for which a valuation allowance of a
like amount had been recorded. The establishment of the deferred tax liability
eliminated the need for the valuation allowance on the Company's net deferred
tax assets and resulted in a purchase accounting adjustment to reduce the
Company's valuation allowance. The federal and state deferred tax provision for
the years ended December 31, 2004, 2003 and 2002 includes a tax benefit of
approximately $498, $498, and $1,916, respectively, representing the decrease in
the deferred tax liability as a result of the amortization and impairment
write-off of the intangible assets offset by a like amount of expense to
increase the valuation allowance necessitated by the decrease in the deferred
tax liability.





The
Company allocated $6,351 of the purchase price of an earlier acquisition to
identifiable intangible assets creating a book-tax difference for which a
corresponding deferred tax liability of $2,540 was established at the
acquisition date. In addition, at the date of acquisition, the Company had
deferred tax assets of approximately $4,720 for which a valuation allowance of a
like amount had been recorded. The establishment of the deferred tax liability
eliminated the need for $2,540 of the Company's valuation allowance. The federal
and state deferred tax provision for the years ended December 31, 2004, 2003 and
2002 includes a tax benefit of approximately $111, $170, and $174, respectively,
representing the decrease in the deferred tax liability as a result of the
amortization and impairment write-off of the intangible assets offset by a like
amount of expense to increase the valuation allowance necessitated by the
decrease in the deferred tax liability.





The
Company's tax provision differed from the amount computed using the federal
statutory rate of 34% as follows:






YEAR
      ENDED DECEMBER 312004
    
    2003
    
    2002Expected
      federal income tax benefit
    
    $
    (736
    )
    $
    (737
    )
    $
    (3,754
    )State
      taxes, net of federal effect
    
    
    (128
    )
    
    (24
    )
    
    (21
    )Amort.
      and write-off of non-deductible intangibles
    
    
    -
    
    
    -
    
    
    2,046Other
      permanent differences
    
    
    12
    
    
    9
    
    
    (83
    )Federal
      valuation allowance
    
    
    852
    
    
    752
    
    
    1,812$
    0
    
    $
    0
    
    $
    0





The
Company's deferred tax assets and liabilities and related valuation allowance as
of December 31, 2004 and 2003 are as follows:





2004
    
    2003Deferred
      tax assets:Net
      operating loss carry forwards.
    
    $
    7,246
    
    $
    7,831Accruals
      and other, net.
    
    
    953
    
    
    129Stock
      compensation expense
    
    
    465
    
    
    465Total
      deferred tax assets.
    
    
    8,664
    
    
    8,425Federal
      and state valuation allowance.
    
    
    (5,444
    )
    
    (4,592
    )Net
      deferred tax assets.
    
    $
    3,220
    
    $
    3,833Deferred
      tax liabilities:Identifiable
      intangibles
    
    $
    (3,220
    )
    $
    (3,833
    )








F-14








**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





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





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





(9)
STOCKHOLDERS' EQUITY





**Common
Stock**





At the
Annual Meeting of Stockholders on May 27, 2004, the stockholders voted to
increase the number of authorized shares of the Company's common stock, $0.01
par value per share, from 30,000,000 shares to 50,000,000 shares.





In May
2004, the Company sold 2,500,000 units for $2.00 per unit in a public offering.
Each unit consisted of two shares of common stock and one warrant to purchase
one share of the Company's common stock. An additional 375,000 units were sold
to cover over-allotments. Of the 750,000 shares included in these units, 300,000
were offered by a selling stockholder and no related proceeds were received by
the Company. We also issued a warrant to purchase 250,000 units for a price of
$2.40 per unit to the underwriter of the offering. Net proceeds of $4,100 were
received by the Company in connection with this sale. The warrants, which are
separately traded, have an exercise price of $1.50 and are exercisable until May
29, 2009. Beginning November 26, 2004, the Company may redeem some or all of the
warrants at a price of $0.25 per warrant after the closing price for the
Company's stock equals or exceeds $2.00 per share for any five consecutive
trading days by giving certain notice to the then warrant
holders.




In
January 2002, the Company completed a private sale of 2,000,000 shares of common
stock at a purchase price of $2.50 and 400,000 four-year warrants at an exercise
price of $2.875 per share to certain institutional investors which resulted in
gross proceeds of $5,000. 500,000 shares and 100,000 warrants were sold prior to
December 31, 2001, and the remaining 1,500,000 shares and 300,000 warrants were
sold on January 8, 2002. In connection with the 2002 transaction, the Company
paid a transaction fee to Atlas Capital Services, LLC equal to 4.625% of the
gross proceeds and issued Atlas a four-year warrant to purchase 40,000 shares of
Common Stock at an exercise price of $2.50 per share. Total proceeds from the
2002 sale, net of issuance costs, were $3,382.





**Stock
Warrants**





Since its
inception, the Company has issued warrants to purchase common stock only in
connection with certain debt and equity financings.





Warrant
activity during the periods indicated is as follows:





WEIGHTED
      AVERAGENUMBER
      OFWARRANTS
    
    EXERCISE
      PRICEOutstanding
      at December 31, 2001
    
    
    451,299
    
    $
    7.43Issued
    
    
    340,000
    
    $
    2.83Exercised
    
    
    —
    
    
    —Cancelled
    
    
    —
    
    
    —Outstanding
      at December 31, 2002
    
    
    791,299
    
    $
    5.45Issued
    
    
    —
    
    
    —Exercised
    
    
    (28,800
    )
    $
    1.50Cancelled
    
    
    (20,000
    )
    $
    1.50Outstanding
      at December 31, 2003
    
    
    742,499
    
    $
    5.72Issued
    
    
    3,625,000
    
    $
    1.50Exercised
    
    
    —
    
    
    —Cancelled
    
    
    (294,868
    )
    $
    9.58Balance
      at December 31, 2004
    
    
    4,072,631
    
    $
    1.68








F-15


****


**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





The
weighted average contractual life of warrants outstanding at December 31, 2004
and 2003 was 4.04 and 1.39 years, respectively.





(11)
STOCK OPTION PLANS





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





On March
25, 1999, the Company adopted the 1999 Stock Option Plan (the "1999 Plan") and
the 1999 Outside Directors Stock Option Plan (the "1999 Directors Plan"). The
1999 Plan originally authorized the issuance of options to purchase up to
600,000 shares of the Company's common stock under the same provisions as the
1996 Plan. At the Annual Shareholder Meetings held on August 1, 2002, 2001and
2000, the Plan was amended to increase the number of shares available for grant
by 500,000, 500,000 and 800,000, respectively. At the Annual Meeting of
Stockholders held on May 27, 2004, the Plan was amended to increase the number
of shares available for grant by 800,000. As of December 31, 2004, 3,200,000
options are authorized under the 1999 Plan. The 1999 Directors Plan authorizes
the issuance of options to purchase up to 100,000 shares of the Company's common
stock.





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





WEIGHTEDAVERAGENUMBER
      OFOPTIONS
    
    OPTION
      PRICEOutstanding
      at December 31, 2001
    
    
    2,353,711
    
    $
    3.16Issued
    
    
    423,775
    
    $
    3.13Exercised
    
    
    (81,875
    )
    $
    0.83Cancelled
    
    
    (362,267
    )
    $
    4.05Outstanding
      at December 31, 2002
    
    
    2,333,344
    
    $
    3.09Issued
    
    
    725,550
    
    $
    1.06Exercised
    
    
    (179,500
    )
    $
    0.80Cancelled
    
    
    (274,233
    )
    $
    3.91Outstanding
      at December 31, 2003
    
    
    2,605,161
    
    $
    2.60Issued
    
    
    727,850
    
    $
    1.30Exercised
    
    
    (3,001
    )
    $
    1.09Cancelled
    
    
    (407,899
    )
    $
    2.68Balance
      at December 31, 2004
    
    
    2,922,111
    
    $
    2.27








The
Company recorded $2 of compensation expense in the year ended December 31, 2002,
calculated as the difference between the exercise price and the estimated fair
value of stock options at the grant date, allocated over the vesting periods of
the related options. These amounts have been included within sales and marketing
expenses. No such expense was recorded in 2003 or 2004.





F-16


****


**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**








Options
outstanding and exercisable at December 31, 2004 are as follows:





**OPTIONS
OUTSTANDING**





WEIGHTEDAVERAGE
    
    WEIGHTEDRANGE
      OFEXERCISE PRICE
    
    NUMBEROUTSTANDING
    
    REMAININGCONTRACTUAL
      LIFE
    
    AVERAGE
      EXERCISE PRICE$
      0.25 to $ 1.00
    
    
    684,417
    
    
    6.72
    
    $
    0.67$ 1.01
      to $ 2.00
    
    
    1,072,359
    
    
    8.24
    
    $
    1.31$ 2.01
      to $ 4.00
    
    
    762,786
    
    
    6.36
    
    $
    3.06$ 4.01
      to $ 6.00
    
    
    264,500
    
    
    4.25
    
    $
    4.50$
      6.01 to $ 10.00
    
    
    138,000
    
    
    4.96
    
    $
    8.84$ 20.01
      to $ 25.00
    
    
    49
    
    
    3.67
    
    $
    21.98$ 0.25
      to $ 25.00
    
    
    2,922,111
    
    
    6.88
    
    $
    2.26








**OPTIONS
EXERCISABLE**





WEIGHTED
      AVERAGERANGE
      OF EXERCISE PRICE
    
    NUMBEREXERCISABLE
    
    EXERCISE
      PRICE$
      0.25 to $ 1.00
    
    
    324,469
    
    $
    0.42$ 1.01
      to $ 2.00
    
    
    413,701
    
    $
    1.19$ 2.01
      to $ 4.00
    
    
    700,765
    
    $
    3.04$ 4.01
      to $ 6.00
    
    
    264,500
    
    $
    4.50$ 6.01
      to $ 10.00
    
    
    138,000
    
    $
    8.84$ 20.01
      to $ 25.00
    
    
    49
    
    $
    21.98$ 0.25
      to $ 25.00
    
    
    1,841,484
    
    $
    2.81





At
December 31, 2004, 988,430 options are available for grant under the Company's
option plans.





(12)
COMMITMENTS





The
Company leases space in Norwalk, Connecticut, New York, New York, and Rockville,
Maryland for its primary offices. Rent expense totaled $920, $917, and $1,062,
for the years ended December 31, 2004, 2003, and 2002, respectively.





Future
minimum lease payments under non-cancelable operating leases as of December 31,
2004 are as follows:





YEAR
      ENDING DECEMBER 31,
    
    OPERATING
      LEASES2005
    
    $
    7302006
    
    
    3132007
    
    
    56Total
    
    $
    1,099








F-17


****


**EDGAR
ONLINE, INC.**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**


**(in
thousands, except share and per share data)**





(13)
RELATED PARTY TRANSACTIONS





The
Company provided services in the normal course of business to three shareholders
in 2004, 2003, and 2002. Revenues from these related parties totaled $265, $509,
and $633, respectively. The Company also purchased services in the normal course
of business from two other shareholders in 2004, 2003 and 2002, only one of
which was included in the group of shareholders to whom we provided services,
which totaled $228, $195, and $232, in 2004, 2003, and 2002, respectively.








(14)
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)





The
following is a summary of the quarterly results of operations for the years
ended December 31, 2004 and 2003





FIRST
    
    SECOND
    
    THIRD
    
    FOURTHQUARTER
    
    QUARTER
    
    QUARTER
    
    QUARTERYear
      Ended December 31, 2004Net
      revenues
    
    $
    3,146
    
    $
    3,237
    
    $
    3,237
    
    $
    3,265Gross
      profit
    
    $
    2,661
    
    $
    2,753
    
    $
    2,787
    
    $
    2,786Loss
      from operations (1)
    
    $
    (863
    )
    $
    (787
    )
    $
    (736
    )
    $
    (1,020
    )Net
      loss
    
    $
    (861
    )
    $
    (782
    )
    $
    (720
    )
    $
    197Net
      loss per share - basic and diluted
    
    $
    (0.05
    )
    $
    (0.01
    )
    $
    (0.03
    )
    $
    0.01Weighted
      average shares outstanding - basic and
diluted
    
    
    16,992
    
    
    18,070
    
    
    19,528
    
    
    20,254Year
      Ended December 31, 2003Net
      revenues
    
    $
    3,836
    
    $
    3,994
    
    $
    3,301
    
    $
    3,188Gross
      profit
    
    $
    3,287
    
    $
    3,492
    
    $
    2,791
    
    $
    2,770Loss
      from operations
    
    $
    (1,063
    )
    $
    47
    
    $
    (492
    )
    $
    (525
    )Net
      loss
    
    $
    (1,116
    )
    $
    23
    
    $
    (519
    )
    $
    (555
    )Net
      loss per share - basic and diluted
    
    $
    (0.07
    )
    $
    0.00
    
    $
    (0.03
    )
    $
    (0.03
    )Weighted
      average shares outstanding -basic and
diluted
    
    
    17,004
    
    
    16,978
    
    
    16,916
    
    
    17,007




(1) In
the fourth quarter of 2004, the Company recorded an additional $200 provision to
the allowance for doubtful accounts. This reflects an increase in the age of
certain receivable balances during the fourth quarter of 2004.





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





F-18