U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-Q

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


         For the quarterly period ended March 31, 1999

___      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES   
         EXCHANGE ACT OF 1934
         For the transition period from              to             
                                        ------------    ------------

         Commission file number 1-10932


                         INDIVIDUAL INVESTOR GROUP, INC.              
                        (Exact name of registrant as specified in its charter)

                   Delaware                                          13-3487784 
         (State or other jurisdiction of                          (IRS Employer
         incorporation or organization)                      Identification No.)

                      125 Broad Street, 14th Floor, New York, New York 10004 
                           (Address of principal executive offices)

                                        (212) 742-2277                         
                                   (Registrant's telephone number)


     Check whether the registrant (1) filed all reports  required to be filed by
     Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the past
     12 months (or for such shorter  period that the  registrant was required to
     file such  reports),  and (2) has been subject to such filing  requirements
     for the past 90 days. Yes X No

     State the number of shares outstanding of each of the registrant's  classes
     of common  equity,  as of the latest  practicable  date: As of May 5, 1999,
     registrant had outstanding 8,942,297 shares of Common Stock, $.01 par value
     per share.

PART I. Financial Information ITEM 1. Financial Statements INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) March 31, December 31, ASSETS 1999 1998 ------------ ------------ Current assets: Cash and cash equivalents $4,985,688 $4,752,587 Investments 419,061 877,231 Accounts receivable (net of allowances of $404,183 in 1999 and $391,328 in 1998) 2,562,651 2,356,126 Investment in discontinued operations (Note 2) 142,534 282,383 Prepaid expenses and other current assets 541,411 512,641 ------------ ------------ Total current assets 8,651,345 8,780,968 Deferred subscription expense 398,172 576,237 Property and equipment - net 1,750,121 586,007 Security deposits 469,627 469,627 Other assets 311,958 374,404 ------------ ------------ Total assets $11,581,223 $10,787,243 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,509,649 $2,191,765 Accrued expenses 623,516 519,887 Deferred revenue 138,097 138,097 ------------ ------------ Total current liabilities 3,271,262 2,849,749 Deferred subscription revenue 2,348,351 2,246,422 ------------ ------------ Total liabilities 5,619,613 5,096,171 ============ ============ Stockholders' Equity: Preferred stock, $.01 par value, authorized 2,000,000 shares, 10,000 issued and outstanding in 1999 and 1998 100 100 Common stock, $.01 par value; authorized 18,000,000 shares; 8,890,964 issued and outstanding in 1999 and 8,490,851 shares in 1998 88,910 84,909 Additional paid-in capital 29,150,476 27,595,151 Accumulated deficit (23,240,727) (21,922,595) Accumulated other comprehensive loss (Note 5) (37,149) (66,493) ------------ ------------ Total stockholders' equity 5,961,610 5,691,072 ------------ ------------ Total liabilities and stockholders' equity $11,581,223 $10,787,243 ============ ============= See Notes to Consolidated Condensed Financial Statements

INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended March 31, --------------------------------------------------- 1999 1998 ------------ ------------ Revenues: Print Publications $3,748,847 $3,724,552 Online Services 252,969 229,421 ------------ ------------ Total revenues 4,001,816 3,953,973 ------------ ------------ Operating expenses: Editorial, production and distribution 2,755,718 2,900,474 Promotion and selling 1,851,476 1,642,669 General and administrative 1,172,491 1,149,660 Depreciation and amortization 96,830 73,311 ------------ ------------ Total operating expenses 5,876,515 5,766,114 ------------ ------------ Operating loss from continuing operations (1,874,699) (1,812,141) Interest and other income 556,567 29,955 ------------ ------------ Net loss from continuing operations (1,318,132) (1,782,186) Discontinued operations (Note 2) Loss from discontinued operations - (377,460) ------------ ------------ Net loss ($1,318,132) ($2,159,646) ============ ============ Basic and dilutive loss per common share: Continuing operations ($0.15) ($0.25) Discontinued operations 0.00 (0.05) ------------ ------------ Net loss per share ($0.15) ($0.30) ============ ============ Average number of common shares used in computing 8,786,599 7,203,199 basic and dilutive loss per common share See Notes to Consolidated Condensed Financial Statements

INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Three Months Ended March 31, -------------------------------------------- 1999 1998 ------------ ------------ Cash flows from operating activities: Net loss ($1,318,132) ($2,159,646) Less: Loss from discontinued operations - (377,460) ------------ ------------ Loss from continuing operations (1,318,132) (1,782,186) Reconciliation of net loss to net cash used in operating activities: Depreciation and amortization 96,830 73,311 Stock option and warrant transactions 81,818 - Loss on sale of equipment - 1,258 Gain on sale of investments (503,215) - Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable (206,525) 391,957 Prepaid expenses and other current assets (53,883) (55,508) Deferred subscription expense 178,065 41,208 Increase in: Accounts payable and accrued expenses 421,513 121,299 Deferred revenue - 4,890 Deferred subscription revenue 101,929 69,735 ------------ ------------ Net cash used in operating activities (1,201,600) (1,134,036) ------------ ------------ Cash flows from investing activities: Purchase of property and equipment (1,255,203) (38,559) Proceeds from sale of equipment - 1,051 Proceeds from sale of investments 990,729 - Net cash provided by discontinued operations 139,849 62,853 ------------- ------------- Net cash (used in) provided by investing activities (124,625) 25,345 ------------- ------------- Cash flows from financing activities: Proceeds from exercise of stock options 1,559,326 398,152 ------------- ------------- Net cash provided by financing activities 1,559,326 398,152 ------------- ------------- Net increase (decrease) in cash and cash equivalents 233,101 (710,539) Cash and cash equivalents, beginning of period 4,752,587 3,533,622 ------------- ------------- Cash and cash equivalents, end of period $4,985,688 $2,823,083 ============= ============= See Notes to Consolidated Condensed Financial Statements INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED) 1. BASIS OF PRESENTATION The consolidated condensed financial statements include the accounts of Individual Investor Group, Inc. and its subsidiaries (collectively, the "Company"). Such financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes as required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1999 are not necessarily indicative of the results that may be expected for the year ending December 31, 1999. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report for the year ended December 31, 1998 on Form 10-K. 2. DISCONTINUED OPERATIONS On April 30, 1998 the Company's Board of Directors decided to discontinue the Company's investment management services business. As a result, the operating results relating to investment management services have been segregated from continuing operations and reported as a separate line item on the consolidated condensed statements of operations. The Company has restated its consolidated condensed financial statements for the prior year to conform to the current year presentation. The investment management services business was principally conducted by a wholly-owned subsidiary of the Company, WisdomTree Capital Management, Inc. ("WTCM"). WTCM served as general partner of (and is an investor in) a domestic private investment fund. The Company is also a limited partner in the fund. As a result of the Board's decision to discontinue the investment management services business, WTCM is dissolving the domestic investment fund, liquidating its investments and distributing the net assets to all investors as promptly as possible. In 1998, the Company recorded a provision of $591,741 to accrue for its share of any net operating losses of the domestic fund and related costs that are expected to occur until the fund liquidates its investments. The Company believes that adequate provision has been made for any remaining net operating losses and related costs associated with these discontinued operations. The Company, through WTCM and another wholly-owned subsidiary, also provided investment management services to an offshore private investment fund. On May 21, 1998 the sole voting shareholder of the offshore fund, in consultation with WTCM, resolved to wind up the fund and appointed a liquidator to distribute the assets of the fund to its investors in accordance with Cayman Islands law. Substantially all of the fund assets were distributed in cash to its investors by December 31, 1998. The Company has no investment in the offshore fund. In January 1999, the domestic investment fund distributed cash to its partners totaling $1,189,510, of which $139,849 was received by the Company and was used to reduce its net investment in discontinued operations. At March 31, 1999, the domestic investment fund had remaining net assets of approximately $1,460,000. The Company's net investment in discontinued operations of $142,534 at March 31, 1999, represents its share of the net assets of the domestic investment fund, less any costs associated with discontinuing the investment management services business. 3. STOCK OPTIONS During the three months ended March 31, 1999, the Company granted 57,500 options to purchase the Company's Common Stock; 400,113 options were exercised (providing proceeds of $1,559,326); and 15,333 options were canceled. Of the total options granted, 37,500 were granted under the Company's stock option plans, 20,000 shares were granted outside of the plans, and all expire at various dates through March 2009. 4. LOSS PER COMMON SHARE Net loss per basic and dilutive common share for the three month periods ended March 31, 1999 and 1998 were computed using the weighted average number of common shares outstanding during each period. The exercise of stock options and warrants were not assumed in the computation of loss per common share, as the effect would have been antidilutive. 5. COMPREHENSIVE INCOME Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," requires the disclosure of comprehensive income (loss), defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive income (loss) is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income (loss). Comprehensive loss for the three months ended March 31, 1999 and 1998, respectively, is presented in the following table: Three Months Ended March 31 1999 1998 --------------- --------------- Net loss $ (1,318,132) $ (2,159,646) Accumulated other comprehensive gain: Net unrealized gain on investments 29,344 - --------------- --------------- Total comprehensive loss $ (1,288,788) $ (2,159,646) =============== =============== 6. SEGMENT INFORMATION In 1998, the Company adopted SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," which changes the way the Company reports information about its operating segments. Accordingly, the prior year's information has been restated to be consistent with the current year presentation. The Company's business segments are focused on providing research and analysis of investment information to individuals and investment professionals through two operating segments: Print Publications and Online Services. The Company's Print Publications operations publishes and markets Individual Investor magazine, a personal finance and investment magazine, Ticker, a magazine for investment professionals, and Individual Investor's Special Situations Report, a financial investment newsletter. The Company's Online Services operations include Individual Investor Online (www.iionline.com) and InsiderTrader.com (www.insidertrader.com). Substantially all of the Company's operations are within the United States. The table below presents summarized operating data for the Company's two business segments, consistent with the way such data is utilized by Company management in evaluating operating results. The accounting policies utilized in the table below are the same as those described in Note 1 of the Notes to Condensed Consolidated Financial Statements, as well as the consolidated financial statements and footnotes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. Operating contribution represents the difference between operating revenues less operating expenses (before general and administrative ("G&A") and depreciation and amortization expenses). Three Months Ended March 31, 1999 1998 Revenues: -------------- -------------- Print Publications $3,748,847 $3,724,552 Online Services 252,969 229,421 -------------- -------------- $4,001,816 $3,953,973 ============== ============== Operating contribution (before G&A and depreciation and amortization expenses): Print Publications ($123,271) ($121,646) Online Services (482,107) (467,524) -------------- -------------- (605,378) (589,170) G&A and depreciation and amortization expenses (1,269,321) (1,222,971) Interest and other income 556,567 29,955 -------------- -------------- Net loss from continuing operations ($1,318,132) ($1,782,186) ============== ============== Net property and equipment as of March 31, 1999 increased approximately $1.2 million as compared to December 31, 1998. The increase is primarily due to capital expenditures (primarily leasehold improvements and furniture) in connection with the relocation of the Company's corporate office in March 1999. The capital expenditures allocable to Print Publications, Online Services and Corporate are approximately $0.8 million, $0.2 million and $0.2 million respectively. There were no other material changes from year-end 1998 in total assets, the basis of segmentation, or in the basis of measurement of segment profit or loss. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Important Notice Concerning "Forward-looking Statements" in this Report 1. "Forward-looking Statements." Certain parts of this Report describe historical information (such as operating results for the quarters ended March 31, 1999 and March 31, 1998, respectively), and the Company believes the descriptions to be accurate. In contrast to describing the past, various sentences of this Report indicate that the Company believes that certain results are likely to occur after the first quarter of 1999. These sentences typically use words or phrases like "believes," "expects," "anticipates," "estimates," "will continue" and similar expressions. Statements using those words or similar expressions are intended to identify "forward-looking statements" as that term is used in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, projections of operating results for periods after the first quarter of 1999, either concerning a specific segment of the Company's business, or concerning the Company as a whole. For example, projections concerning the following are forward-looking statements: net revenues, operating expenses, net income or loss, contribution to overhead, number of subscribers, subscription revenues, revenues per advertising page, number of advertising pages, production expense per copy, page views, revenues per page view, marketing expenses, sales expenses, and general and administrative expenses. Any statement in this Report that does not describe a historical fact is deemed to be a forward-looking statement. 2. Actual Results May Be Different than Projections. Actual results, however, may be materially different from the results projected in the forward-looking statements, due to a variety of risks and uncertainties. These risks and uncertainties include those set forth in Item 2 (entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations") of Part I hereof, in Exhibit 99 hereof and elsewhere in this Report, and in Item 1 (entitled "Business") of Part I and in Item 7 (entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations") of Part II of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed with the Securities and Exchange Commission. 3. The Company Has No Duty to Update Projections. The forward-looking statements in this Report are current only on the date this Report is filed. After the filing of this Report, the Company's expectations of likely results may change, and the Company might come to believe that certain forward-looking statements in this Report are no longer accurate. The Company shall not have any obligation, however, to release publicly any corrections or revisions to any forward-looking statements contained in this Report, even if the Company believes the forward-looking statements are no longer accurate. Three Months Ended March 31, 1999 as Compared to the Three Months Ended March 31, 1998 Loss from Continuing Operations The Company's loss from continuing operations for the three months ended March 31, 1999 decreased by $464,054, or 26%, to $1,318,132, as compared to $1,782,186 in 1998. The decrease is due primarily to realized gains on the sale of investments in the first quarter of 1999. Print Publications operations provided a negative operating contribution (before deducting general and administrative ("G&A") and depreciation and amortization expenses) of $123,271 for the three months ended March 31, 1999, as compared to a negative operating contribution of $121,646 in 1998. Individual Investor magazine provided a negative operating contribution (before deducting G&A and depreciation and amortization expenses) of $189,957 for the three months ended March 31, 1999, as compared to a negative operating contribution of $49,495 in 1998. This change is primarily due to a 17% decrease in advertising revenues, offset in part by a 20% decrease in production and distribution costs. Ticker (sm) magazine provided a positive operating contribution (before deducting G&A and depreciation and amortization expenses) of $42,201 for the three months ended March 31, 1999, as compared to a negative operating contribution of $96,889 in 1998. This change is primarily attributable to a 79% increase in Ticker advertising revenues, offset in part by a 39% increase in operating expenses primarily attributable to increased promotion and selling costs associated with the increase in revenues. Special Situations Report provided a positive operating contribution (before deducting G&A and depreciation and amortization expenses) of $24,485 for the three months ended March 31, 1999, as compared to a positive operating contribution of $24,738 in 1998. The Company currently anticipates that the Print Publishing operations as a whole will provide a positive contribution to overhead before year-end. Online Services operations provided a negative operating contribution (before deducting G&A and depreciation and amortization expenses) of $482,107 for the three months ended March 31, 1999, as compared to a negative operating contribution of $467,524 in 1998. This increase is primarily due to lower advertising revenues for the Company's website, Individual Investor Online (www.iionline.com), offset in part by lower production and development expenses. Operating Revenues Total revenues from continuing operations for the three months ended March 31, 1999 increased by 1%, to $4,001,816, as compared to $3,953,973 in 1998. Revenues for the Print Publications operations for the three months ended March 31, 1999 increased by 1%, to $3,748,847, as compared to $3,724,552 in 1998. Revenues for the Online Services operations for the three months ended March 31, 1999 increased by 10%, to $252,969, as compared to $229,421 in 1998. Print Publications advertising revenues for the three months ended March 31, 1999 increased by $3,065, to $2,566,908, as compared to $2,563,843 in 1998. Ticker advertising revenues for the three months ended March 31, 1999 increased by 79%, to $802,517, as compared to $448,932 in 1998. This increase relates primarily to an increase in advertising pages of approximately 60%. Individual Investor advertising revenues for the three months ended March 31, 1999 decreased 17%, to $1,764,391, as compared to $2,114,911 in 1998. The decline is primarily attributable to a 22% decrease in advertising pages, offset in part by an increase in the advertising net rate per page of approximately 13%. Print Publications circulation revenues for the three months ended March 31, 1999 increased 1%, to $857,554, as compared to $850,957 in 1998. This increase is attributable to Individual Investor newsstand sales, which, for the three months ended March 31, 1999 increased 16%, to $200,631, as compared to $173,519 for the prior year period, mostly due to increased newsstand sell-through of the January 1999 Individual Investor "Magic 25 (TM)" issue. This increase was partially offset by a 2% reduction in Individual Investor subscription revenues, which resulted from the Company's use of subscription-generation sources that provide for continuing numbers of new subscribers with low marketing expenses but little or no subscription revenue. The Company believes that the reduction in subscription revenues has stabilized and expects the full year subscription revenues to increase. Print Publications list rental and other revenues for the three months ended March 31, 1999, increased 5%, to $324,385, as compared to $309,752 in 1998. List rental revenue for the three months ended March 31, 1999 increased 47%, to $236,873, as compared to $160,767 in 1998. The increase in list rental revenue is primarily attributable to increased demand, partially offset by the decrease in the number of subscribers to Special Situations Report. Other revenues for the three months ended March 31, 1999 decreased 41%, to $87,512, as compared to $148,985 in 1998. The decrease is primarily attributable to reduced demand for reprints of Individual Investor magazine. Online Services subscription and advertising revenues for the three months ended March 31, 1999 were $48,977 and $203,992, respectively, as compared to $0 and $229,421 in 1998. The increase in subscription revenues is attributable to InsiderTrader.com (www.insidertrader.com), which the Company purchased in November 1998. The decrease in advertising revenues is attributable to a decline in advertising sponsorship sales by the Company's independent sales agent, along with lower rates earned on advertising impressions for Individual Investor Online (www.iionline.com), offset in part by advertising revenue earned by InsiderTrader.com. As a result of the decrease in advertising sponsorships for Individual Investor Online, in April 1999 the Company reorganized and strengthened its sales efforts and is now selling sponsorship advertisements directly as opposed to through a sales agent. During the first quarter of 1999, traffic to the Company's web sites averaged approximately 4 million page views per month. In April 1999, traffic to the Company's web sites reached a record for the fifth consecutive month with approximately 6 million page views. The Company expects that Online Services advertising revenues should trend higher in the future (with sequential fluctuations), and expects that gross margins associated with such revenues will increase in light of reduced dependence upon outside sales agents. Operating Expenses Total operating expenses from continuing operations for the three months ended March 31, 1999 increased 2%, to $5,876,515, as compared to $5,766,114 in 1998. The increase is due to several factors, including increased advertising salaries and commissions and marketing expenses, partially offset by reduced editorial, production, and distribution costs related to the Company's print publications, and moving costs related to the relocation of the Company's corporate office in March 1999. Editorial, production and distribution expenses for the three months ended March 31, 1999, decreased 5%, to $2,755,718, as compared to $2,900,474 in 1998. Print Publications editorial, production and distribution expenses decreased 7%, to $2,214,127, as compared to $2,381,382 in 1998. The decrease relates primarily to Individual Investor magazine, which had fewer pages and less copies printed, along with lower paper costs and reduced manufacturing expenses resulting from a renegotiated agreement with the Company's printer. Online Services production and editorial expenses for the three months ended March 31, 1999 increased 4%, to $541,591, as compared to $519,092 in 1998. The increase is primarily related to production and research costs for InsiderTrader.com, which the Company purchased in November 1998. Promotion and selling expenses for the three months ended March 31, 1999, increased 13%, to $1,851,476, as compared to $1,642,669 in 1998. Print Publications promotion and selling expenses for the three months ended March 31, 1999 increased by 13%, to $1,657,991, as compared to $1,464,816 in 1998. The increase was primarily due to increased advertising salaries and commissions as a result of hiring additional in-house sales personnel, as well as increased marketing expenses. Online Services promotion and selling expenses for the three months ended March 31, 1999 increased 9%, to $193,485, as compared to $177,853 in 1998. This increase is primarily attributable to advertising commissions for InsiderTrader.com. General and administrative expenses for the three months ended March 31, 1999, increased 2%, to $1,172,491, as compared to $1,149,660 in 1998. The increase resulted primarily from moving costs related to relocation of the Company's corporate office in March 1999. Depreciation and amortization expense for the three months ended March 31, 1999 increased 32%, to $96,830, as compared to $73,311 in 1998. The increase is primarily attributable to additional depreciation for computer equipment purchased for the Company's Online Services operations. Interest and Other Income Interest and other income for the three months ended March 31, 1999, increased to $556,567, as compared to $29,955 in 1998. The increase is primarily attributable to realized gains from the sale of investments. Discontinued Operations On April 30, 1998, the Company's Board of Directors decided to discontinue the Company's investment management services business. As a result of the Board's decision, WisdomTree Capital Management, Inc. ("WTCM") is dissolving the domestic and offshore investment funds, liquidating fund investments and distributing the net assets to all investors as promptly as possible. Accordingly, the operating results related to investment management services have been segregated from continuing operations and reported as a separate line item on the statement of operations. Net loss from discontinued operations for the three months ended March 31, 1999 was $0, as compared to a net loss of $377,460 for 1998. No additional loss amounts were recorded by the Company for the three months ended March 31, 1999 for discontinued operations because the Company believes that any remaining net operating losses and related costs associated with these discontinued operations have been adequately provided for by provisions established in 1998. The Company's net investment in discontinued operations of $142,534 at March 31, 1999, represents its share of the net assets of the domestic investment fund, less any costs associated with discontinuing the investment management services business. Net Loss The Company's net loss for the three months ended March 31, 1999 decreased 39%, to $1,318,132, as compared to a net loss of $2,159,646 in 1998. No income taxes were provided in 1999 or 1998 due to the net loss. The basic and dilutive net loss per weighted average common share for the three months ended March 31, 1999 was $0.15, as compared to $0.30 in 1998. Liquidity and Capital Resources During the three months ended March 31, 1999, the Company received $1,559,326 from exercises of stock options, $990,729 from sales of investments, and $139,849 from the liquidation of the domestic fund. These inflows more than funded the Company's net cash used in operating activities of $1,201,600 during the quarter. The Company also had approximately $1.2 million of capital expenditures (primarily leasehold improvements and furniture) during the first quarter of 1999 in connection with the relocation of its corporate office. As of March 31, 1999, the Company had working capital of $5,380,083, which included cash and cash equivalents totaling $4,985,688 and investments of $419,061. In addition, in the second quarter of 1999 through May 11, the Company received approximately $0.5 million from the exercise of stock options. The Company's current levels of revenues are not sufficient to cover its expenses. Under its current business plan for the year 1999, the Company intends to control its operating expenses while continuing to invest in its existing products. The Company anticipates losses to continue through 1999, although the Company anticipates that losses from continuing operations in 1999 will be significantly less than in 1998. Profitability may be achieved in future periods only if the Company can substantially increase its revenues while controlling increases in expenses. There can be no assurance that revenues will be substantially increased, or that the increases in expenses can be controlled adequately to enable the Company to attain profitability. Management continues to expect that revenues will grow significantly in 1999 as the Company implements changes made by a new management team. Advertising sales are expected to increase for Individual Investor and Ticker magazines due to the addition of new key sales personnel, anticipated publication of 13th issues and the effect of the increased awareness in the marketplace for both magazines due in part to selected public relations and advertising efforts. There can be no assurance, however, that advertising sales will increase because higher advertising rates may not be accepted by advertisers, advertising pages may continue to decline for Individual Investor, circulation may drop at either or both Individual Investor and Ticker, and the advertising mix may change. Although the Company has recently added key advertising sales personnel, no assurance can be given that these changes will result in advertising revenue increases. The Company also believes that a stock market correction or "bear" market would adversely affect its ability to sell advertising, particularly to the financial advertiser categories. The Company plans to continue investing in its Online Services because it believes that this line of business offers the greatest opportunity for generating substantial revenues and shareholder value over the longer term. The Company expects to realize higher revenues from operations of its flagship online service, Individual Investor Online, primarily due to the anticipated continuation of traffic growth to the site. There can be no assurance, however, that such traffic growth will be realized, or that, even if realized, such traffic growth will result in higher revenues or shareholder value. The Company also expects to launch additional subscription-based online products during 1999. There can be no assurance, however, that such products in fact will be launched, or that if launched, such products will be successful. Based on the Company's business plan, the Company believes that its working capital and its investments will be sufficient to fund its operations and capital requirements through 1999. Thereafter, the Company may need to raise additional capital in order to sustain operations unless the Company achieves profitability through the generation of revenues beyond those currently anticipated. The Company is currently exploring its ability to obtain additional financing. No assurance can be given as to the availability of additional financing or, if available, the terms upon which it may be obtained. Any such additional financing may result in dilution of an investor's equity investment in the Company. Failure to obtain additional financing on favorable terms, or at all, could have a substantial adverse effect on the Company's future ability to conduct operations. The Company currently owns 250,000 shares of Series A Preferred Stock of Wit Capital Group, an online investment banking and brokerage firm. These shares will convert into 250,000 shares of Wit Capital Common Stock in the event of an initial public offering ("IPO") of Wit Capital. The Company's stake in Wit Capital was acquired in 1997, and is recorded on the Company's March 31, 1999 balance sheet at $375,000. On March 18, 1999, Wit Capital filed an S-1 registration statement for an IPO and announced that it expected to complete its IPO, for which Bear, Stearns & Co. Inc. is acting as lead underwriter, prior to June 30, 1999. On March 29, 1999, Wit Capital and the Goldman Sachs Group announced that Goldman Sachs had agreed to acquire an approximately 22% stake in Wit Capital. In the event that Wit Capital completes its IPO, the Company will be subject to a 180-day lock-up preventing any sale of the Wit Capital stock. The Company could record a significant gain with respect to this investment, although there can be no assurance that the Company ultimately will realize any value with respect to its shares of Wit Capital. Year 2000 The Company has evaluated the potential impact of the situation commonly referred to as the "Year 2000 Issue". The Year 2000 Issue concerns the inability of information systems, whether due to computer hardware or software, to properly recognize and process date sensitive information relating to the year 2000 and beyond. Many of the world's computer systems currently record years in a two-digit format. Such computer systems may be unable to properly interpret dates beyond the year 1999, which could lead to business disruptions in the U.S and internationally. The potential costs and uncertainties associated with the Year 2000 Issue will depend on a number of factors, including software, hardware and the nature of the industry in which a company operates. The Year 2000 Issue could have a material adverse effect on the Company's results of operations and ability to conduct business. To attempt to ensure that the Company's computer systems (including computer hardware and computer software) are "Year 2000 Ready" (that is, are not disrupted by the Year 2000 Issue), the Company developed a plan to assess, and remediate where necessary, any Year 2000 Issue with respect to the Company's computer systems, and appointed certain employees to administer such plan. The plan contains four phases: first, identifying all computer hardware and software being used by the Company; second, determining whether such hardware and software is Year 2000 Ready; third, remediating any Year 2000 Issue with respect to any particular piece of hardware or software; and fourth, performing a final audit and test. The Company has completed the first two phases, and has completed the third phase with respect to hardware issues. The Company has made significant progress toward completing the third phase with respect to software issues, and currently expects to complete the third phase before June 1999. The Company intends to commence the fourth phase upon the completion of the first three phases, and currently expects to complete the fourth phase before October 1999. As of March 31, 1999, the Company has incurred direct costs of approximately $15,000 relating to the development and implementation of its Year 2000 Plan. The Company currently believes that total direct costs associated with making the Company's systems Year 2000 Ready should not exceed $30,000 and that such costs, together with any lost revenue associated with making the Company's systems Year 2000 Ready, should not have a material adverse effect on the Company's operating results or financial condition. The Company does not believe that the diversion of employee resources required to address the Year 2000 Issue will have a material effect on the Company's operating results or financial condition. The Company does not have in place a contingency plan of action in the event that it is not able to make its computer systems Year 2000 Ready, but will consider on an ongoing basis whether a contingency plan should be developed. The dates on which the Company believes it will complete its Year 2000 readiness phases, and the costs associated with such efforts, are based on the Company's current best estimates. However, there can be no guarantee that these estimates will be achieved, or that there will not be a delay in, or increased costs associated with, making the Company's systems Year 2000 Ready. Specific factors that might cause differences between the estimates and actual results include, but are not limited to, the availability and cost of personnel trained in these areas, the ability to locate and correct all relevant computer code and hardware devices (such as microcontrollers), timely responses to and corrections by third parties and suppliers, the ability to implement interfaces between the new systems and the systems not being replaced, and similar uncertainties. Due to the general uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the Year 2000 readiness of third parties and the interconnection of global businesses, the Company cannot ensure its ability to timely and cost-effectively resolve problems associated with the Year 2000 Issue, and a failure to do so could materially adversely affect the Company's operations and business, and expose it to third party liability. The Company also faces risks and uncertainties to the extent that the third party suppliers of products, services and systems on which the Company relies or customers do not have business systems or products that are Year 2000 Ready. The Company has initiated communications with all of its significant suppliers to determine the extent to which the Company's systems and products are vulnerable to those third parties' failure to remediate their own systems' Year 2000 Issues. The Company has received assurances from certain of its suppliers stating that such suppliers' systems are or will timely be Year 2000 Ready, but there is no guarantee that the systems or products of other companies on which the Company relies will be timely, if at all, made Year 2000 Ready, and such a failure by such other companies could have a material adverse effect on the Company's systems and products. No one customer has accounted for more than 10% of the Company's revenues in the past year, and the Company has not initiated contact with its customers concerning the status of their Year 2000 readiness. There is no guarantee that the systems of the Company's customers will be made Year 2000 Ready, and a failure by a number of the Company's customers to become Year 2000 Ready could have a material adverse effect on the Company's revenues and cash flows. The Company is in the process of identifying what actions may be needed to mitigate vulnerability to problems related to enterprises with which the Company interacts, but does not currently have in place a contingency plan of action in the event that the failure by one or more third parties to make their computer systems Year 2000 Ready causes adverse effects to be suffered by the Company. The Company will consider on an ongoing basis the extent to which a contingency plan should be developed. INDIVIDUAL INVESTOR GROUP, INC. AND SUBSIDIARIES PART II- OTHER INFORMATION ITEM 2. Changes in Securities Sales of Unregistered Securities - ----------------- ----------------------- ---------- -------------------------------- ---------------- ----------------------------- Consideration received and Exemption from If option, warrant or Date of sale Title of security Number description of underwriting registration convertible security, terms Sold or other discounts to market claimed of exercise or conversion price afforded to purchasers - ----------------- ----------------------- ---------- -------------------------------- ---------------- ----------------------------- 1/99 - 3/99 Options to purchase 57,500 Exercise price would be Section 4(2) Vesting over a period of common stock granted received upon exercise four years from date of to employees grant, subject to certain conditions of continued service; exercisable for a period lasting ten years from date of grant at exercise prices ranging from $3.3125 to $8.1875 per share - ------------------------------------------------------------------------------------------------------------------------------------ ITEM 5. Other Information In July 1997 certain former limited partners of WisdomTree Associates, L.P. ("WTA"), a domestic private investment fund of which WisdomTree Capital Management, Inc., a wholly-owned subsidiary of the Company, is the general partner, initiated an action in the Supreme Court of the State of New York, County of New York, captioned Richard Tarlow and Sandra Tarlow v. WisdomTree Associates, L.P., Bob Schmidt and Jonathan Steinberg, Index No. 113819/97. Defendants moved to dismiss the action based on plaintiffs' failure to file a complaint, and the action was dismissed without prejudice in October 1997. In October 1998, plaintiffs moved to vacate the default judgment. Defendants opposed the motion. On April 20, 1999, the court denied plaintiffs' motion with respect to Messrs. Schmidt and Steinberg, but granted the motion with respect to WTA, and plaintiffs will be permitted to file and serve a complaint and proceed with the action solely with respect to this defendant. In their motion plaintiffs alleged that defendants did not timely process plaintiffs' request for redemption of their interest in WTA, which delay allegedly caused plaintiffs to suffer approximately $470,000 in damages. WTA is currently awaiting service of the complaint and intends to continue conducting a vigorous defense. Due to the inherent uncertainty of litigation, the Company is not able to reasonably estimate the potential losses, if any, that may be incurred in relation to this litigation. In April 1999 a stockholder of the Company initiated an action in the Court of Chancery of the State of Delaware, New Castle County, captioned Michele S. Criden v. Jonathan L. Steinberg, Bruce L. Sokoloff, Peter M. Ziemba and S. Christopher Meigher III (C.A. No. 17082). The Company is named as a nominal defendant in the action. Plaintiff alleges that the four individual defendants, who comprise the entire Board of Directors of the Company, took improper action (i) on November 19, 1998, in determining to amend the terms of options previously granted to Jonathan Steinberg to reduce their exercise prices (which ranged from $4.9375 to $7.50) to $1.25 (11% higher than the last sale price on the trading date immediately preceding the date of such amendment), and (ii) on December 23, 1998, in determining to grant replacement options to each of Messrs. Sokoloff, Ziemba and Meigher, conditioned upon cancellation of their existing options, which replacement options had an exercise price of $2.00 per share (the last sale price of the Common Stock on the trading date immediately preceding the date of the new grant), which was less than the exercise price of options previously granted to them (which exercise prices ranged from $4.375 to $10.50). Plaintiff claims that such actions constituted corporate waste and a diversion of corporate assets for improper and unnecessary purposes and that the directors breached their fiduciary duties, including their duty of loyalty, to the Company and its stockholders. Plaintiff demands judgment (i) enjoining the four directors from exercising any options at the reduced exercise price, (ii) declaring a constructive trust of any proceeds resulting from the directors' exercise of such options, (iii) damages, on behalf of the Company, for losses and damages suffered and to be suffered in connection with the option repricings, including interest thereon, and (iv) awarding plaintiffs the costs of this action, including reasonable attorney's fees. The Board of Directors believed at the time, and continues to believe, that the actions taken on November 19, 1998 and December 23, 1998, were proper. ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Description Method of Filing No. 3.1 Amended and Restated Certificate Incorporated by reference of Incorporation of Registrant, to Exhibit 3.4 to the Form as amended, through June 18, 1997 10-Q for the quarter ended September 30, 1998 3.2 Bylaws of Registrant Incorporated by reference to Exhibit 3.2 to the Registrant's Registration Statement on Form S-18 (File No. 33-43551-NY) (the "Form S-18") 4.1 Specimen Certificate for Common Incorporated by reference Stock of Registrant to Exhibit 4.1 to the Form S-18 10.1 Indemnification Agreement, dated Filed herewith June 17, 1998, between Registrant and S. Christopher Meigher III 27 Financial Data Schedule March 31, Filed only with the 1999 electronic submission of Form 10-Q in accordance with the EDGAR requirement 99 Certain Risk Factors Filed herewith (b) The Company did not file any reports on Form 8-K during the Quarter Ended March 31, 1999. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DATE: May 17, 1999 INDIVIDUAL INVESTOR GROUP, INC. (Registrant) By: /s/ Jonathan L. Steinberg Jonathan L. Steinberg, Chief Executive Officer and Director By: /s/ Henry G. Clark Henry G. Clark, Vice President Finance (Principal Financial and Accounting Officer)

                                        
                           
                  This Agreement, made and entered into effective as of the 17th
day of June, 1998 ("Agreement"), by and between Individual Investor Group, Inc.,
a  Delaware  corporation   ("Corporation"),   and  S.  Christopher  Meigher  III
("Indemnitee"):

                  WHEREAS,  highly  competent  persons recently have become more
reluctant to serve  publicly-held  corporations  as directors,  officers,  or in
other capacities,  unless they are provided with better protection from the risk
of  claims  and  actions  against  them  arising  out of  their  service  to and
activities on behalf of such corporation; and

                  WHEREAS,  the current  impracticability  of obtaining adequate
insurance and the uncertainties  related to  indemnification  have increased the
difficulty of attracting and retaining such persons; and

                  WHEREAS,  the Board of Directors of the Corporation  ("Board")
has  determined  that the  inability  to  attract  and  retain  such  persons is
detrimental to the best  interests of the  Corporation's  stockholders  and that
such  persons  should be assured  that they will have better  protection  in the
future; and

                  WHEREAS,  it is  reasonable,  prudent  and  necessary  for the
Corporation to obligate  itself  contractually  to indemnify such persons to the
fullest  extent  permitted by applicable  law so that such persons will serve or
continue to serve the Corporation  free from undue concern that they will not be
adequately indemnified; and

                  WHEREAS,  this Agreement is a supplement to and in furtherance
of Article  VIII of the  By-laws of the  Corporation,  and  Article  VIII of the
Amended and Restated  Certificate of  Incorporation  of the  Corporation and any
resolutions  adopted  pursuant  thereto  and  shall  neither  be  deemed to be a
substitute  therefor  nor to  diminish  or  abrogate  any  rights of  Indemnitee
thereunder; and

                  WHEREAS,  Indemnitee  is  willing  to  serve  and to  take  on
additional  service for or on behalf of the Corporation on the condition that he
be indemnified according to the terms of this Agreement;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
covenants  contained  herein,  the Corporation and Indemnitee do hereby covenant
and agree as follows:

1.                Definitions.  For purposes of this Agreement:

                                                                                
1.1  "Change in Control" means a change in control of the Corporation  occurring
after the date  hereof of a nature  that would be  required  to be  reported  in
response to Item 6(e) of Schedule 14A of  Regulation  14A (or in response to any
similar item on any similar schedule or form)  promulgated  under the Securities
Exchange Act of 1934, as amended ("Act"), whether or not the Corporation is then
subject  to  such  reporting  requirement  provided,   however,   that,  without
limitation,  such a Change in Control  shall be deemed to have occurred if after
the date hereof (i) any  "person"  (as such term is used in  Sections  13(d) and
14(d) of the Act) is or becomes  "beneficial  owner"  (as  defined in Rule 13d-3
under the  Act),  directly  or  indirectly,  of  securities  of the  Corporation
representing  20% or more of the combined  voting power of the then  outstanding
securities of the Corporation  without the prior approval of at least two-thirds
of the members of the Board in office immediately prior to such person attaining
such  percentage  interest;  (ii)  the  Corporation  is a  party  to  a  merger,
consolidation,  sale of assets or other reorganization, or a proxy contest, as a
consequence  of which members of the Board in office  immediately  prior to such
transaction or event constitute less than a majority of the Board thereafter; or
(iii)  during  any  period  of two  consecutive  years,  individuals  who at the
beginning of such period  constituted the Board  (including for this purpose any
new director  whose  election or  nomination  for election by the  Corporation's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were  directors at the  beginning of such period)  cease for
any reason to constitute at least a majority of the Board.

1.2  "Corporate  Status"  means the status of a person who is or was a director,
officer,  employee,  agent  or  fiduciary  of the  Corporation  or of any  other
corporation,  partnership,  joint venture, trust, employee benefit plan or other
enterprise  which  such  person  is  or  was  serving  at  the  request  of  the
Corporation.

1.3 "Disinterested  Director" means a director of the Corporation who is not and
was not a party to the Proceeding in respect of which  indemnification is sought
by Indemnitee.

1.4 "Expenses"  means all reasonable  attorneys' fees,  retainers,  court costs,
transcript  costs, fees of experts,  witness fees, travel expenses,  duplicating
costs, printing and binding costs, telephone charges,  postage, delivery service
fees, and all other disbursements or expenses of the types customarily  incurred
in connection  with  prosecuting,  defending,  preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

1.5  "Independent  Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation  law and neither  presently is, nor in the
past  five  years  has been,  retained  to  represent:  (i) the  Corporation  or
Indemnitee in any other matter  material to either such party, or (ii) any other
party to the Proceeding  giving rise to a claim for  indemnification  hereunder.
Notwithstanding the foregoing,  the term "Independent Counsel" shall not include
any person who,  under the  applicable  standards of  professional  conduct then
prevailing,  would  have a  conflict  of  interest  in  representing  either the
Corporation  or Indemnitee in an action to determine  Indemnitee's  rights under
this Agreement.

1.6  "Proceeding"  means  any  action,  suit,  arbitration,   alternate  dispute
resolution  mechanism,  investigation,   administrative  hearing  or  any  other
proceeding, whether civil, criminal, administrative or investigative, except one
initiated by an Indemnitee  pursuant to Section 11 of this  Agreement to enforce
his rights under this Agreement.

2.                Services by Indemnitee.

         Indemnitee agrees to serve as a director of the Corporation. Indemnitee
may at any time and for any reason  resign  from such  position  (subject to any
other contractual obligation or any obligation imposed by operation of law).

3.                Indemnification - General.

         The Corporation shall indemnify, and advance Expenses to, Indemnitee as
provided in this Agreement to the fullest extent  permitted by applicable law in
effect on the date  hereof  and to such  greater  extent as  applicable  law may
thereafter from time to time permit. The rights of Indemnitee provided under the
preceding  sentence shall  include,  but shall not be limited to, the rights set
forth in the other Sections of this Agreement.

4. Proceedings Other Than Proceedings by or in the Right of the Corporation.

         Indemnitee shall be entitled to the rights of indemnification  provided
in this Section if, by reason of his Corporate  Status,  he is, or is threatened
to be made, a party to any threatened,  pending or completed  Proceeding,  other
than a  Proceeding  by or in the  right  of the  Corporation.  Pursuant  to this
Section, Indemnitee shall be indemnified against Expenses, judgments, penalties,
fines and amounts paid in settlement  actually and reasonably incurred by him or
on his behalf in  connection  with any such  Proceeding  or any claim,  issue or
matter therein, if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best  interests  of the  Corporation,  and,  with
respect to any  criminal  Proceeding,  had no  reasonable  cause to believe  his
conduct was unlawful.

5.                Proceedings by or in the Right of the Corporation.

         Indemnitee shall be entitled to the rights of indemnification  provided
in this Section if, by reason of his Corporate  Status,  he is, or is threatened
to be made, a party to any threatened,  pending or completed  Proceeding brought
by or in the right of the  Corporation  to  procure  a  judgment  in its  favor.
Pursuant to this  Section,  Indemnitee  shall be  indemnified  against  Expenses
actually and reasonably  incurred by him or on his behalf in connection with any
such Proceeding if he acted in good faith and in a manner he reasonably believed
to  be  in  or  not  opposed  to  the  best   interests   of  the   Corporation.
Notwithstanding the foregoing, no indemnification against such Expenses shall be
made in respect of any claim, issue or matter in any such proceeding as to which
Indemnitee  shall  have  been  adjudged  to be  liable  to  the  Corporation  if
applicable  law prohibits such  indemnification  unless the Court of Chancery of
the State of  Delaware,  or the court in which such  Proceeding  shall have been
brought or is pending, shall determine that indemnification against Expenses may
nevertheless be made by the Corporation.

6. Indemnification for Expenses of Party Who is Wholly or Partly Successful.

         Notwithstanding  any other provision of this  Agreement,  to the extent
that  Indemnitee  is,  by  reason  of his  Corporate  Status,  a party to and is
successful,  on  the  merits  or  otherwise,  in any  Proceeding,  he  shall  be
indemnified  against all Expenses actually and reasonably  incurred by him or on
his behalf in connection  therewith.  If Indemnitee is not wholly  successful in
such Proceeding but is successful, on the merits or otherwise, as to one or more
but less than all claims, issues or matters in such Proceeding,  the Corporation
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf in connection  with each  successfully  resolved  claim,
issue or matter.  For the  purposes of this  Section and  without  limiting  the
foregoing,  the termination of any claim, issue or matter in any such Proceeding
by  dismissal,  with or without  prejudice,  shall be deemed to be a  successful
result as to such claim, issue or matter.

7.                Indemnification for Expenses as a Witness.

         Notwithstanding  any other provision of this  Agreement,  to the extent
that  Indemnitee  is, by  reason  of his  Corporate  Status,  a  witness  in any
Proceeding, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

8.                Advancement of Expenses.

         The Corporation  shall advance all Expenses incurred by or on behalf of
Indemnitee  in  connection  with any  Proceeding  within  twenty  days after the
receipt  by  the  Corporation  of a  statement  or  statements  from  Indemnitee
requesting such advance or advances from time to time, whether prior to or after
final  disposition  of such  Proceeding.  Such  statement  or  statements  shall
reasonably  evidence the Expenses incurred by Indemnitee and shall include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses  advanced if it shall  ultimately be determined  that Indemnitee is
not entitled to be indemnified against such Expenses.

9.                Procedure for Determination of Entitlement to Indemnification.

9.1 To obtain  indemnification  under  this  Agreement  in  connection  with any
Proceeding,  and  for the  duration  thereof,  Indemnitee  shall  submit  to the
Corporation a written request, including therein or therewith such documentation
and  information  as is  reasonably  available to  Indemnitee  and is reasonably
necessary  to  determine  whether and to what extent  Indemnitee  is entitled to
indemnification.  The Secretary of the Corporation shall,  promptly upon receipt
of any such  request  for  indemnification,  advise  the Board in  writing  that
Indemnitee has requested indemnification.

9.2 Upon written request by Indemnitee for  indemnification  pursuant to Section
9.1 hereof,  a  determination,  if required by  applicable  law, with respect to
Indemnitee's  entitlement thereto shall be made in such case: (i) if a Change in
Control shall have occurred,  by Independent  Counsel (unless  Indemnitee  shall
request that such  determination  be made by the Board or the  stockholders,  in
which case in the manner  provided  for in clauses (ii) or (iii) of this Section
9.2) in a written  opinion to the Board,  a copy of which shall be  delivered to
Indemnitee);  (ii) if a Change of Control  shall not have  occurred,  (A) by the
Board by a majority vote of a quorum consisting of Disinterested  Directors,  or
(B) if a quorum  of the  Board  consisting  of  Disinterested  Directors  is not
obtainable,   or  even  if  such  quorum  is  obtainable,   if  such  quorum  of
Disinterested  Directors  so  directs,  either (x) by  Independent  Counsel in a
written  opinion to the Board, a copy of which shall be delivered to Indemnitee,
or (y) by the stockholders of the  Corporation,  as determined by such quorum of
Disinterested  Directors, or a quorum of the Board, as the case may be; or (iii)
as provided  in Section  10.2 of this  Agreement.  If it is so  determined  that
Indemnitee is entitled to  indemnification,  payment to Indemnitee shall be made
within ten (10) days after such  determination.  Indemnitee shall cooperate with
the  person,  persons  or entity  making  such  determination  with  respect  to
Indemnitee's entitlement to indemnification, including providing to such person,
persons  or  entity  upon  reasonable   advance  request  any  documentation  or
information  which is not privileged or otherwise  protected from disclosure and
which is reasonably  available to Indemnitee  and  reasonably  necessary to such
determination.   Any  costs  or   expenses   (including   attorneys'   fees  and
disbursements) incurred by Indemnitee in so cooperating with the person, persons
or  entity  making  such  determination   shall  be  borne  by  the  Corporation
(irrespective   of  the   determination   as  to  Indemnitee's   entitlement  to
indemnification)  and the  Corporation  hereby  indemnifies  and  agrees to hold
Indemnitee harmless therefrom.

9.3 If  required,  Independent  Counsel  shall be selected as follows:  (i) if a
Change of Control shall not have occurred, Independent Counsel shall be selected
by the Board,  and the  Corporation  shall  give  written  notice to  Indemnitee
advising  him of the  identity of  Independent  Counsel so selected or (ii) if a
Change of Control shall have occurred,  Independent Counsel shall be selected by
Indemnitee  (unless  Indemnitee shall request that such selection be made by the
Board, in which event (i) shall apply), and Indemnitee shall give written notice
to the  Corporation  advising  it of the  identity  of  Independent  Counsel  so
selected.  In either event,  Indemnitee or the Corporation,  as the case may be,
may,  within seven days after such written  notice of selection  shall have been
given,  deliver  to the  Corporation  or to  Indemnitee,  as the  case may be, a
written objection to such selection.  Such objection may be asserted only on the
ground that  Independent  Counsel so selected does not meet the  requirements of
"Independent  Counsel"  as  defined  in  Section  1 of this  Agreement,  and the
objection  shall  set  forth  with  particularity  the  factual  basis  of  such
assertion.  If such written objection is made,  Independent  Counsel so selected
may not serve as  Independent  Counsel  unless and until a court has  determined
that such  objection is without  merit.  If, within 20 days after  submission by
Indemnitee  of a written  request  for  indemnification  pursuant to Section 9.1
hereof,  no  Independent  Counsel  shall have been selected and not objected to,
either the  Corporation  or Indemnitee may petition the Court of Chancery of the
State of Delaware, or other court of competent  jurisdiction,  for resolution of
any objection which shall have been made by the Corporation or Indemnitee to the
other's  selection  of  Independent   Counsel  and/or  for  the  appointment  as
Independent  Counsel of a person  selected by such court or by such other person
as such court shall designate,  and the person with respect to whom an objection
is so resolved or the person so appointed shall act as Independent Counsel under
Section 9.2 hereof.  The  Corporation  shall pay any and all reasonable fees and
expenses  of  Independent  Counsel  incurred  by  such  Independent  Counsel  in
connection  with its actions  pursuant to this  Agreement,  and the  Corporation
shall pay all  reasonable  fees and expenses  incident to the procedures of this
Section  9.3,  regardless  of the manner in which such  Independent  Counsel was
selected or appointed. Upon the due commencement date of any judicial proceeding
or  arbitration  pursuant to Section  11.1(iii) of this  Agreement,  Independent
Counsel shall be discharged and relieved of any further  responsibility  in such
capacity  (subject to the  applicable  standards  of  professional  conduct then
prevailing).

10.               Presumptions and Effects of Certain Proceedings.

10.1 If a Change of Control shall have occurred,  in making a determination with
respect to entitlement to  indemnification  hereunder,  the person or persons or
entity making such  determination  shall presume that  Indemnitee is entitled to
indemnification  under this  Agreement if Indemnitee has submitted a request for
indemnification  in  accordance  with  Section  9.1 of this  Agreement,  and the
Corporation  shall  have the burden of proof to  overcome  that  presumption  in
connection with the making by any person, persons or entity of any determination
contrary to that presumption.

10.2 If the person,  persons or entity  empowered or selected under Section 9 of
this Agreement to determine  whether  Indemnitee is entitled to  indemnification
shall  not  have  made a  determination  within  60 days  after  receipt  by the
Corporation of the request therefor, the requisite  determination of entitlement
to  indemnification  shall be deemed to have been made and  Indemnitee  shall be
entitled to such  indemnification,  absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make  Indemnitee's
statement  not  materially  misleading,  in  connection  with  the  request  for
indemnification,  or (ii) prohibition of such  indemnification  under applicable
law provided,  however, that such 60-day period may be extended for a reasonable
time,  not to exceed an  additional  30 days,  if the person,  persons or entity
making the determination  with respect to entitlement to indemnification in good
faith  require(s)  such  additional  time for the  obtaining  or  evaluating  of
documentation  and/or information relating thereto and provided,  further,  that
the  foregoing  provisions  of this  Section  10.2  shall  not  apply (i) if the
determination  of  entitlement  to   indemnification   is  to  be  made  by  the
stockholders pursuant to Section 9.2 of this Agreement and if (A) within 15 days
after receipt by the Corporation of the request for such determination the Board
has  resolved  to  submit  such  determination  to the  stockholders  for  their
consideration  at an annual meeting thereof to be held within 75 days after such
receipt and such  determination  is made  thereat,  or (B) a special  meeting of
stockholders  is called  within 15 days after such  receipt  for the  purpose of
making such determination,  such meeting is held for such purpose within 60 days
after having been so called and such  determination is made thereat,  or (ii) if
the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 9.2 of this Agreement.

10.3 The termination of any Proceeding or of any claim, issue or matter therein,
by judgment,  order, settlement or conviction, or upon a plea of nolo contendere
or its  equivalent,  shall not (except as otherwise  expressly  provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or  create a  presumption  that  Indemnitee  did not act in good  faith and in a
manner  which  he  reasonably  believed  to be in or not  opposed  to  the  best
interests of the Corporation or, with respect to any criminal  Proceeding,  that
Indemnitee had reasonable cause to believe that his conduct was unlawful.

11.               Remedies of Indemnitee.

11.1 In the event that (i) a determination is made pursuant to Section 9 of this
Agreement  that  Indemnitee  is  not  entitled  to  indemnification  under  this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8
of this Agreement,  (iii) the determination of  indemnification is to be made by
Independent  Counsel  pursuant  to  Section  9.2  of  this  Agreement  and  such
determination shall not have been made and delivered in a written opinion within
90 days after  receipt by the  Corporation  of the request for  indemnification,
(iv)  payment  of  indemnification  is not made  pursuant  to  Section 7 of this
Agreement  within ten days after receipt by the Corporation of a written request
therefor,  or (v) payment of indemnification is not made within ten days after a
determination  has been made that Indemnitee is entitled to  indemnification  or
such  determination  is deemed to have been made  pursuant to Section 9 or 10 of
this  Agreement,   Indemnitee  shall  be  entitled  to  an  adjudication  in  an
appropriate  court of the State of Delaware,  or in any other court of competent
jurisdiction,  of his  entitlement  to such  indemnification  or  advancement of
Expenses.  Alternatively,  the Indemnitee,  at his option,  may seek an award in
arbitration to be conducted by a single arbitrator  pursuant to the rules of the
American  Arbitration  Association.  Indemnitee  shall commence such  proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which  Indemnitee  first  has the  right  to  commence  such  proceeding
pursuant to this Section 11.1.  The  Corporation  shall not oppose  Indemnitee's
right to seek any such adjudication or award in arbitration.

11.2 In the event that a determination  shall have been made pursuant to Section
9 of this  Agreement  that  Indemnitee is not entitled to  indemnification,  any
judicial  proceeding or arbitration  commenced pursuant to this Section shall be
conducted  in all respects as a de novo trial or  arbitration  on the merits and
Indemnitee shall not be prejudiced by reason of that adverse determination.

11.3 If a  determination  shall  have  been  made or  deemed  to have  been made
pursuant to Section 9 or 10 of this  Agreement  that  Indemnitee  is entitled to
indemnification,  the Corporation  shall be bound by such  determination  in any
judicial  proceeding or arbitration  commenced pursuant to this Section,  absent
(i) a  misstatement  by  Indemnitee  of a material  fact,  or an  omission  of a
material  fact   necessary  to  make   Indemnitee's   statement  not  materially
misleading,  in  connection  with  the  request  for  indemnification,  or  (ii)
prohibition of such indemnification under applicable law.

11.4  The  Corporation  shall  be  precluded  from  asserting  in  any  judicial
proceeding or arbitration commenced pursuant to this Section that the procedures
and  presumptions  of this Agreement are not valid,  binding and enforceable and
shall  stipulate  in any such  court or  before  any  such  arbitrator  that the
Corporation is bound by all the provisions of this Agreement.

11.5 In the event that  Indemnitee,  pursuant to this Section,  seeks a judicial
adjudication of, or an award in arbitration to enforce,  his rights under, or to
recover damages for breach of, this Agreement,  Indemnitee  shall be entitled to
recover  from the  Corporation,  and  shall be  indemnified  by the  Corporation
against,  any and all expenses  (of the kinds  described  in the  definition  of
Expenses) actually and reasonably incurred by him in such judicial  adjudication
or arbitration,  but only if he prevails  therein.  If it shall be determined in
such judicial adjudication or arbitration that Indemnitee is entitled to receive
all of the  indemnification  or  advancement  of expenses  sought,  the expenses
incurred  by  Indemnitee  in  connection  with  such  judicial  adjudication  or
arbitration shall be appropriately prorated.

12.               Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

12.1 The rights of  indemnification  and to receive  advancement  of Expenses as
provided by this Agreement shall not be deemed  exclusive of any other rights to
which  Indemnitee  may at  any  time  be  entitled  under  applicable  law,  the
certificate of  incorporation or by-laws of the  Corporation,  any agreement,  a
vote of stockholders or a resolution of directors,  or otherwise.  No amendment,
alteration  or  repeal  of this  Agreement  or any  provision  hereof  shall  be
effective  as to any  Indemnitee  with respect to any action taken or omitted by
such Indemnitee in his Corporate  Status prior to such amendment,  alteration or
repeal.

12.2 To the  extent  that the  Corporation  maintains  an  insurance  policy  or
policies  providing  liability  insurance for  directors,  officers,  employees,
agents  or  fiduciaries  of  the  Corporation  or  of  any  other   corporation,
partnership,  joint venture,  trust,  employee  benefit plan or other enterprise
which such person serves at the request of the Corporation,  Indemnitee shall be
covered by such policy or policies in accordance  with its or their terms to the
maximum  extent  of the  coverage  available  for any  such  director,  officer,
employee, agent or fiduciary under such policy or policies.

12.3 In the event of any payment under this Agreement,  the Corporation shall be
subrogated  to the extent of such  payment to all of the rights of  recovery  of
Indemnitee,  who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Corporation to bring suit to enforce such rights.

12.4 The  Corporation  shall  not be liable  under  this  Agreement  to make any
payment of amounts otherwise  indemnifiable  hereunder if and to the extent that
Indemnitee  has  otherwise  actually  received  such payment under any insurance
policy, contract, agreement or otherwise.

13.               Duration of Agreement.

         This  Agreement  shall  continue until and terminate upon the later of:
(a) ten years  after the date that  Indemnitee  shall have  ceased to serve as a
director  of the  Corporation,  or (b)  the  final  termination  of all  pending
Proceedings in respect of which Indemnitee is granted rights of  indemnification
or  advancement  of  Expenses  hereunder  and or  any  proceeding  commenced  by
Indemnitee  pursuant to Section 11 of this  Agreement.  This Agreement  shall be
binding upon the  Corporation  and its successors and assigns and shall inure to
the benefit of Indemnitee and his heirs, executors and administrators.


14.               Severability.


         If any provision or provisions  of this  Agreement  shall be held to be
invalid,  illegal or unenforceable for any reason whatsoever:  (a) the validity,
legality  and  enforceability  of the  remaining  provisions  of this  Agreement
(including,  without  limitation,  each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
is not  itself  invalid,  illegal  or  unenforceable)  shall  not in any  way be
affected  or  impaired  thereby;  and (b) to the fullest  extent  possible,  the
provisions of this Agreement (including, without limitation, each portion of any
Section of this  Agreement  containing  any such  provision  held to be invalid,
illegal or unenforceable,  that is not itself invalid, illegal or unenforceable)
shall  be  construed  so as to  give  effect  to the  intent  manifested  by the
provision held invalid, illegal or unenforceable.

15.            Exception to Right of Indemnification or Advancement of Expenses.

         Except as provided in Section 11.5, Indemnitee shall not be entitled to
indemnification  or advancement of Expenses under this Agreement with respect to
any  Proceeding,  or any  claim  therein,  brought  or made by him  against  the
Corporation.

16.               Identical Counterparts.

         This  Agreement  may be executed in one or more  counterparts,  each of
which  shall  for all  purposes  be deemed  to be an  original  but all of which
together shall constitute one and the same Agreement.

17.               Headings.

         The  headings of the  paragraphs  of this  Agreement  are  inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction thereof.

18.               Modification and Waiver.

         No supplement,  modification  or amendment of this  Agreement  shall be
binding unless executed in writing by both of the parties  hereto.  No waiver of
any of the  provisions of this Agreement  shall be deemed or shall  constitute a
waiver of any other  provisions  hereof  (whether or not similar) nor shall such
waiver constitute a continuing waiver.

19.               Notice by Indemnitee.

         Indemnitee  agrees  promptly to notify the  Corporation in writing upon
being  served  with any  summons,  citation,  subpoena,  complaint,  indictment,
information  or other  document  relating any  Proceeding or matter which may be
subject to indemnification or advancement of Expenses covered hereunder.

20.               Notices.

         All notices, requests, demands and other communications hereunder shall
be in writing  and shall be deemed to have been duly given if (i)  delivered  by
hand and receipted  for by the party to whom such notice or other  communication
shall have been  directed,  or (ii) mailed by certified or registered  mail with
postage  prepaid,  on the  third  business  day after the date on which it is so
mailed:

         If to Indemnitee, to:

                  S. Christopher Meigher III
                  c/o Meigher Communications
                  100 Avenue of the Americas
                  7th Floor
                  New York, NY 10013

         If to the Corporation, to:

                  Individual Investor Group, Inc.
                  1633 Broadway, 38th Floor
                  New York, New York 10019

or to such other address or such other person as  Indemnitee or the  Corporation
shall designate in writing in accordance with this Section,  except that notices
regarding changes in notices shall be effective only upon receipt.

21.               Governing Law.

         The  parties  agree  that this  Agreement  shall be  governed  by,  and
construed and enforced in accordance with, the laws of the State of Delaware.

22.               Miscellaneous.

         Use of the  masculine  pronoun  shall be deemed to include usage of the
feminine pronoun where appropriate.


         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement on
the day and year first above written.


                                              INDIVIDUAL INVESTOR GROUP, INC.



                                               By:____________________
                                                  Jonathan L. Steinberg
                                                  Chief Executive Officer


                                              INDEMNITEE



                                                  -----------------------
                                                S. Christopher Meigher III







                                         
                       
                               Dated: May 13, 1999

         You should  carefully  consider the following  risks,  as well as those
described in our most recent Form 10-K,  Form 10-Q and Form 8-K filings,  before
making an investment decision.  The risks described below are not the only risks
we face. Additional risks may also impair our business operations. If any of the
following  risks  occur,  our  business,  results  of  operations  or  financial
condition could be materially  adversely affected.  If that happens, the trading
price of our common  stock could  decline,  and you may lose all or part of your
investment.  In the  risk  factors  below,  when we use the word  "web,"  we are
referring to the portion of the Internet commonly referred to as the "world wide
web."

We have a history of losses and we  anticipate  that our losses will continue in
the  future.  As of March  31,  1999,  we had an  accumulated  deficit  of $23.2
million.  In the past ten years,  the only calendar year we were  profitable was
1995. We expect to continue to incur net losses in 1999 and in subsequent fiscal
periods. We expect to continue to incur significant operating expenses and, as a
result,  will need to generate  significant  revenues to achieve  profitability,
which may not occur.  Even if we do achieve  profitability,  we may be unable to
sustain or increase profitability on a quarterly or annual basis in the future.

We will need to raise  additional  capital in the  future.  Based on our current
business  plan,  we believe  that our working  capital and  investments  will be
sufficient to fund our operations and capital  requirements through 1999. Due to
unforeseen  events and  circumstances  that may arise as  discussed in the other
risks identified in this Exhibit 99 and in the accompanying  report, our working
capital and  investments  in fact might not be sufficient to fund our operations
and capital  requirements through 1999. In any event, we believe we will need to
raise additional capital in order to sustain our operations after 1999 unless we
generate  revenues beyond the amounts we currently  anticipate.  Such additional
financing may not be available to us, or, if available,  the terms upon which it
may be  obtained  may be  unfavorable  to us and may  result in  dilution  of an
investor's equity  investment in us. Our failure to obtain additional  financing
on favorable  terms,  or at all, would have a substantial  adverse effect on our
future ability to conduct operations.

Our online services business has a limited operating  history.  We commenced our
online  services  operations  in May 1997.  Accordingly,  we have only a limited
operating  history upon which you can  evaluate  this  business  segment and its
prospects. An investor in our common stock must consider the risks, expenses and
difficulties frequently encountered by early stage businesses in new and rapidly
evolving markets, including web-based financial news and information companies.

The market value of our common stock may not  appreciate as much as the stock of
Internet  companies because we have two business  segments.  Our company has two
distinct  segments.  One is print  publications and the other is online services
operations. We believe these business activities are complementary and each will
benefit  the  other.  However,  the stock  prices of many  companies  whose only
business  Internet-related recently have gone up much more than the stock prices
of  companies   that  have   multiple   lines  of  business  that  are  not  all
Internet-related.  Because our company is not a pure  Internet  company - and in
fact the large majority of our total revenues are from our print  publications -
our common stock may not be valued by investors in the stock market as highly as
the common stock of pure Internet companies.

Our quarterly  financial  results are subject to significant  fluctuations.  Our
quarterly  operating  results  may  fluctuate  significantly  in the future as a
result of a variety of  factors,  many of which are  outside  our  control.  For
example,  in our print  publications  business,  our  revenues  tend to  reflect
seasonal  patterns,  with certain calendar  quarters tending to be stronger than
others. Similar seasonal patterns may develop in the online services business as
well.

         We believe that quarter-to-quarter comparisons of our operating results
may not be a good indication of our future performance,  nor would our operating
results for any particular quarter be indicative of future operating results. In
some future  quarters our  operating  results may be below the  expectations  of
public market analysts and investors.  If that happens,  the price of our common
stock may fall, perhaps dramatically.

We face intense  competition in both of our businesses.  An increasing number of
financial news and information  sources compete for consumers' and  advertisers'
attention and spending.  We expect this competition to continue and to increase.
We compete for advertisers,  readers,  staff and outside  contributors with many
types of companies. These competitors include:

- --   online  services or web sites focused on business,  finance and  investing,
     such as CBS  MarketWatch.com;  The Wall Street Journal Interactive Edition;
     TheStreet.com; The Motley Fool; Yahoo! Finance; Silicon Investor; Microsoft
     Investor; SmartMoney.com; Money.com and Multex.com;

- --   publishers and  distributors of traditional  print media,  such as The Wall
     Street Journal; Barron's; Investors Business Daily; Business Week; Fortune;
     Forbes; Money; Kiplinger's;  Smart Money; Worth; Registered Representative;
     Institutional Investor; Research and On Wall Street;

- --   publishers and  distributors  of radio and television  programs  focused on
     business, finance and investing, such as Bloomberg Business Radio and CNBC;

- --   web "portal" companies,  such as Yahoo!;  Excite; Lycos; Snap!; Go Network;
     and America Online; and

- --   online brokerage firms, many of which provide financial and investment news
     and information, such as Charles Schwab and E*TRADE.

         Our  ability  to  compete  depends  on  many  factors,   including  the
originality,  timeliness,  comprehensiveness  and trustworthiness of our content
and that of our competitors,  the ease of use of services developed either by us
or our competitors and the effectiveness of our sales and marketing efforts.

         Many of our existing competitors,  as well as a number of potential new
competitors,  have longer operating histories, greater name recognition,  larger
customer  bases and  significantly  greater  financial,  technical and marketing
resources  than we do. This may allow them to devote  greater  resources than we
can to the  development  and  promotion of their  services and  products.  These
competitors  may  also  engage  in  more  extensive  research  and  development,
undertake more far-reaching  marketing campaigns,  adopt more aggressive pricing
policies to attract  advertisers and make more attractive offers to existing and
potential employees,  outside contributors,  strategic partners and advertisers.
Our  competitors  may develop  content that is equal or superior to ours or that
achieves  greater  market  acceptance  than ours.  It is also  possible that new
competitors may emerge and rapidly acquire  significant market share. We may not
be able to  compete  successfully  for  advertisers,  readers,  staff or outside
contributors.  Increased  competition could result in price reductions,  reduced
margins or loss of our market  share.  Any of these could  materially  adversely
affect our business, results of operations and financial condition.

Because our editorial is focused on the  financial  markets,  a prolonged  "bear
market" may cause our  businesses to suffer.  Our editorial is highly focused on
the  financial  markets.  If the markets  suffer a  prolonged  downturn or "bear
market," it is possible  that our  businesses  might suffer  materially  for two
reasons.  First,  during a bear  market,  people may become less  interested  in
buying and selling  securities,  and thus less  interested  in our  research and
analysis of  securities.  Less people might be interested in  subscribing to our
print  publications,  and less people  might be  interested  in using our online
services.  Second, advertisers - particularly the financial services advertisers
that are our most  important  source of  advertising  revenue - might  decide to
reduce their advertising  budgets.  Either of these developments could cause our
operations to suffer materially.

Because our  editorial is focused on research  and analysis of specific  stocks,
our businesses  could suffer if our  recommendations  are poor. Our editorial is
focused on research and analysis of specific stocks.  We frequently state that a
particular  company's  stock is undervalued or overvalued at the current prices.
We believe that our research and analysis is of a high quality, and we are proud
to take a stand and be held accountable for our opinions. We believe our readers
appreciate  this  editorial  courage,  and find it to be of  greater  value than
stories on such topics as "the best  cities in which to live" and the like.  But
because we give these specific  opinions,  the wisdom of our  conclusions can be
measured:  did the stocks we say were  undervalued  go up, and did the stocks we
say were  undervalued  go down.  If our opinions  turn out to be incorrect - and
some of our opinions  certainly  will be - people may become less  interested in
learning these opinions. They may be less interested in subscribing to our print
publications  and less interested in using our online  services.  If interest in
our opinions declines, our operations could suffer materially.

Our company may not be able to attract and retain  qualified  employees  for our
print publications  business.  Many of our competitors in the print publications
business are larger than we are, and have a number of print titles (we only have
two  magazines  and  one  newsletter).  There  is a  general  perception  in the
employment  market that larger  publishers  are more  prestigious  or offer more
varied career opportunities (for instance, the ability to move from one title to
another).  Although we believe our company offers an attractive work environment
and  employment  opportunity  in  our  print  publications  business,  we may be
perceived by many people as a less attractive  employer than a larger publisher.
If we are  unable  to  attract  and  retain  qualified  employees  for our print
publications business, that business could suffer materially.

Our company may not be able to attract and retain  qualified  employees  for our
online service business.  There is a general perception in the employment market
that pure Internet  companies  offer a more  attractive  work  environment for a
youthful  workforce.  This is based on the belief that the Internet is a new and
growing  industry  that offers a great  future.  In  addition,  employees in the
Internet  industry  seek  and  often  receive  significant   portions  of  their
compensation  through  stock  options.  The stock  prices of many pure  Internet
companies recently have increased dramatically.  Although we believe our company
offers an attractive work  environment and employment  opportunity in our online
services  business,  we may be  perceived  by many  people as a less  attractive
employer  than a pure Internet  company.  If we are unable to attract and retain
qualified employees for our online services business, that business could suffer
materially.

We depend on our editorial staff and outside  contributors.  Our success depends
substantially  upon the efforts of our editorial staff and outside  contributors
to produce original, timely,  comprehensive and trustworthy content. Our writers
are not bound by employment agreements. Competition for financial journalists is
intense,  and we may  not be able  to  retain  existing  or  attract  additional
qualified writers in the future. If we lose the services of a significant number
of our  editorial  staff and  outside  contributors  or are  unable  to  attract
additional  writers with appropriate  qualifications,  our business,  results of
operations and financial condition could be materially adversely affected.

We depend on key  management  personnel.  Our future  success  depends  upon the
continued  service of key management  personnel.  The loss of one or more of our
key management personnel could materially adversely affect our business, results
of operations  and financial  condition.  Moreover,  the costs that may arise in
connection with executive  departures and  replacements  can be significant,  as
they were during 1998.

We depend on certain  advertisers  and on  independent  advertising  agents,  to
generate revenue. In 1998, and continuing through the first quarter of 1999, the
majority  of our print  publications  advertising  revenue  came from  financial
services  companies,  followed by consumer  advertisers and others.  We were not
dependent upon any particular advertiser for our print publications revenues. In
1998, and continuing through the first quarter of 1999, approximately two-thirds
of the  online  services  advertising  revenue  came  from six  brokerage  firms
offering  online  trading.  We expect that the majority of advertising  revenues
derived  from our online  services  operations  will come from online  brokerage
firms.  In the event that online  brokerage  firms choose to scale back on their
advertising (on the Internet in general or on our web sites in particular),  our
online services business, results of operations and financial condition could be
materially adversely affected.

         If we do not continue to increase our revenue from  financial  services
advertisers or attract advertisers from non-financial industries,  our business,
results of operations  and  financial  condition  could be materially  adversely
affected.  With respect to our online services in particular,  advertising rates
are frequently  measured on a "cost per thousand"  clicks,  or "CPM," basis. CPM
rates  have  fluctuated  in the past and we  expect  CPM  rates to  continue  to
fluctuate. CPM rates may experience industry-wide declines in the future, as the
supply of desirable online advertising space may be increasing at a rate greater
than the  demand  for that  space by  advertisers.  We  believe  that we  charge
advertising rates that are among the highest of financial web sites. However, we
cannot guarantee that we will be able to command premium rates in the future.

     In selling print  advertising,  we depend both on our internal  advertising
sales department and on outside sales  representatives  to maintain and increase
our advertising sales. In selling online  advertising,  we depend primarily upon
our outside sales agent. The success of our advertising sales efforts is subject
to a number of risks,  including the competition we face from other companies in
hiring   and   retaining   sales   personnel   and   effective   outside   sales
representatives,  and the length of time it takes new sales  personnel to become
productive. Our business, results of operations and financial condition could be
materially  adversely  affected if we do not maintain an  effective  advertising
sales department.

Additional  risks  associated  with online  advertising.  No standards have been
widely accepted to measure the effectiveness of web advertising. If standards do
not develop,  existing  advertisers may not continue or increase their levels of
web advertising. If standards develop and we are unable to meet those standards,
advertisers may not continue advertising on our site.  Furthermore,  advertisers
that have traditionally  relied upon other advertising media may be reluctant to
advertise on the web. If advertisers perceive the Internet or our web site to be
a limited or an ineffective  advertising medium, they may be reluctant to devote
a portion of their advertising budget to Internet  advertising or to advertising
on our web site.  Our business,  results of operations  and financial  condition
could  be  materially  adversely  affected  if the  market  for web  advertising
declines or develops more slowly than expected.

         Different pricing models are used to sell advertising on the web. It is
difficult to predict which, if any, will emerge as the industry  standard.  This
uncertainty  makes it  difficult  to project  our future  advertising  rates and
revenues.  We cannot  assure you that we will be  successful  under  alternative
pricing models that may emerge. Moreover,  "filter" software programs that limit
or  prevent  advertising  from being  delivered  to a web  user's  computer  are
available.  Widespread  adoption of this  software  could  materially  adversely
affect the  commercial  viability  of web  advertising,  which could  materially
adversely affect our advertising revenues.

Risks associated with our list rental revenue.  The ability to earn revenue from
list rental  depends in large degree upon three  factors:  first,  the number of
subscribers  on  this  list;  second,  the  demographic  characteristics  of the
subscribers on the list (such as age, income and wealth);  and third, the degree
to which previous  rentals of the list have produced  favorable  results for the
renter. This last factor is affected by the manner in which the subscribers have
been added. For example, new subscribers from direct-to-publisher  sources (such
as direct mail and insert cards in the  magazine)  typically  are more  valuable
than  subscribers  obtained  from  subscription  agencies  by means  of  reduced
introductory  rates or use airline frequent flyer miles. Our list rental revenue
has declined in the recent past,  and we cannot assure  you that our list rental
revenue will not decline in the future.

         We use an independent  party,  Rickard List  Marketing,  to promote the
rental of our subscriber  lists. The revenue we earn from list rentals thus also
depends in part upon the efforts our agent makes.

We depend on independent  parties to publish our print  publications.  We depend
upon an independent  party,  Quebecor,  to print our print  publications  and to
deliver the printed  copies to the United  States Post Office for mailing to our
subscribers. If our printer's business is disrupted for any reason, such as fire
or  other  natural  disaster,  labor  strife,  supply  shortages,  or  machinery
problems,  we  might  not be able to  distribute  our  publications  in a timely
manner.  Since magazines typically are printed only shortly before the time they
are to be mailed to subscribers, any disruption at our printer could prevent our
magazines from being  distributed in a timely manner. If we don't distribute our
magazines on time,  our  subscribers  may become  dissatisfied  and cancel their
subscriptions.  If a disruption at our printer  delays our ability to distribute
Individual Investor magazine to newsstands,  we may lose newsstand sales. In the
event of a disruption,  our  insurance  may not cover all of our losses.  Any of
these developments may cause our operating results to suffer materially.

We depend on independent  parties to distribute  Individual Investor magazine to
newsstands.  We depend  upon an  independent  parties  (the  largest of which is
International Circulation Distributors,  a subsidiary of The Hearst Corporation)
to distribute Individual Investor magazine to newsstands. If the business of our
distributors  is  disrupted  for any  reason,  such as labor  strife or  natural
disaster,  we might not be able to distribute  Individual  Investor  magazine to
newsstands  in a  timely  manner.  Since  our  distributors  typically  pick  up
Individual Investor magazine for newsstand  distribution only shortly before the
time the magazine is to be delivered,  any disruption at our distributors  could
prevent the magazine from being distributed to newsstands in a timely manner. If
a  disruption  at our  distributors  delays our  ability  to deliver  Individual
Investor  magazine to  newsstands,  we may lose  newsstand  sales.  Any of these
developments may cause our operating results to suffer materially.

We depend on  independent  parties to obtain the majority of the  subscribers to
Individual  Investor magazine.  We depend upon independent parties to obtain the
majority of the  subscribers  to Individual  Investor  magazine.  These agencies
include  American  Family  Publishers,  Publishers  Clearing  House  and  NewSub
services. These agencies obtain subscribers primarily through use of direct mail
campaigns.  If the positive  response to the  promotion of  Individual  Investor
magazine by these agencies is not great enough,  or if the agencies believe that
we may fail to fulfill a  subscription,  they may stop  promoting  our magazine.
This  could  cause  our  subscriber  base  to  shrink,  which  would  lower  our
subscription  revenue and reduce our advertising  rate base, which would lead to
lower  advertising  revenue.  Also,  many  publications  compete for services of
subscription agencies, and one or more of these subscription agencies may choose
not to continue to market Individual  Investor in order to better serve a one of
our competitors.  Any of those developments could cause our operating results to
suffer materially.

We may incorrectly forecast our success in obtaining and renewing subscriptions.
We  attempt  to  accurately  forecast  the  number of  subscribers  to our print
publications.  We run the risk that our forecasts will be incorrect,  either too
high or too low. Our forecast could be too high if the number of new subscribers
that we obtain is less than the amount we projected.  Our forecast also could be
too  high if we get  less  renewal  orders  from  existing  subscribers.  If our
subscriber  base is less than our  projections,  we will earn less  subscription
revenue and our advertising  rate base will be lower,  which would lead to lower
advertising   revenue.   This  could  cause  our  operating  results  to  suffer
materially.

         Our forecast  could be too low if we obtain more new  subscribers  than
projected,  or if we receive more renewal  orders than  projected  from existing
subscribers.  If our subscriber base is higher than we projected,  we would earn
more  subscription  revenue  than  projected,  but  have  higher  than  expected
production  and  distribution  costs.  We  might  not be  able to  increase  our
advertising  rate base  immediately.  This could lead to our  operating  results
being worse than projected.

We depend on independent  parties to manage our subscriber files. We depend upon
an  independent  party to manage  our  subscriber  files.  This  party  receives
subscription orders and payments for our print  publications,  sends renewal and
invoice notices to subscribers and generates subscribers' labels and circulation
reports for us. If the business of this party is disrupted, we may become unable
to process subscription  requests,  or send out renewal notices or invoices,  or
deliver our print publications.  If this were to happen, our insurance might not
cover all of our losses.  Any of those  developments  could cause our  operating
results to suffer materially.

We need to manage our growth.  Although our print publications  business has not
experienced  rapid  growth  in the  recent  past,  our  online  services,  which
commenced in May 1997, have experienced  rapid growth.  This growth has placed a
strain on our managerial,  operational and financial  resources.  We expect this
strain to increase with anticipated future growth in both print publications and
online services. To manage our growth, we must continue to implement and improve
our  managerial  controls  and  procedures  and our  operational  and  financial
systems.  In addition,  our future success will depend on our ability to expand,
train and manage our workforce,  in particular our editorial,  advertising sales
and business  development staff. We cannot assure you that we have made adequate
allowances  for the costs and risks  associated  with this  expansion,  that our
systems,  procedures or controls will be adequate to support our operations,  or
that our management will be able to successfully  offer and expand our services.
If we are unable to manage  our growth  effectively,  our  business,  results of
operations and financial condition could be materially adversely affected.

     We need to  establish  and maintain  relationships  with other web sites to
promote  the growth of our online  services  business.  For us to  maintain  and
increase the traffic to our web sites,  it is also important for us to establish
and maintain  content  distribution  relationships  with  high-traffic web sites
operated by other companies. There is intense competition for relationships with
these  sites.  Although we have not paid any  material  sum with  respect to our
relationships to date, it is possible that, in the future,  we might be required
to pay fees in order to  establish or maintain  relationships  with these sites.
(It is also possible,  however, that we may be able to charge fees in connection
with these  relationships  in the  future.)  Additionally,  many of these  sites
compete with our web sites as providers of financial information,and these sites
may become less willing to establish or maintain strategic relationships with us
in the future. We may be unable to enter into  relationships with these sites on
commercially   reasonable   terms  or  at  all.  Even  if  we  enter  into  such
relationships,  they may not attract  significant  numbers of viewers to our web
sites.

Increased  traffic to our web sites may strain our systems and impair our online
services  business.  On  occasion,  we have  experienced  significant  spikes in
traffic on our web site. In addition, the number of our readers has continued to
increase  over time and we are  seeking to  increase  our reader  base  further.
Accordingly,  our web site must  accommodate a high volume of traffic,  often at
unexpected  times.  Our  web  site  has  in the  past,  and  may in the  future,
experience  slower  response times than usual or other problems for a variety of
reasons.  These  occurrences could cause our readers to perceive our web site as
not  functioning  properly  and,  therefore,  cause them to use other methods to
obtain their  financial  news and  information.  In such a case,  our  business,
results of operations  and  financial  condition  could be materially  adversely
affected.

We face a risk of system failure for our online services  business.  Our ability
to  provide  timely  information  and  continuous  news  updates  depends on the
efficient  and  uninterrupted  operation  of  our  computer  and  communications
hardware  and software  systems.  Similarly,  our ability to track,  measure and
report the delivery of  advertisements  on our site depends on the efficient and
uninterrupted operation of a third-party system maintained by DoubleClick. These
systems and  operations  are  vulnerable  to damage or  interruption  from human
error,  natural  disasters,  telecommunication  failures,  break-ins,  sabotage,
computer  viruses,  intentional acts of vandalism and similar events.  We do not
have  a  formal  disaster  recovery  plan  for  the  event  of  such  damage  or
interruption. Any system failure that causes an interruption in our service or a
decrease  in  responsiveness  of our web site could  result in reduced  traffic,
reduced  revenue and harm to our  reputation,  brand and our relations  with our
advertisers.  Our insurance  policies may not  adequately  compensate us for any
losses that we may incur because of any failures in our system or  interruptions
in our delivery of content.  Our business,  results of operations  and financial
condition could be materially adversely affected by any event, damage or failure
that interrupts or delays our operations.

We may not successfully  develop new and enhanced  services and features for our
online  services to the  satisfaction  of our customers.  We intend to introduce
additional  and  enhanced  services in order to retain the current  users of our
online  services and to attract new users. If we introduce a service that is not
favorably  received,  our current  users may choose a  competitive  service over
ours. We may also  experience  difficulties  that could delay or prevent us from
introducing new services.  Furthermore,  the new services we may introduce could
contain errors that are discovered  after the services are  introduced.  If that
happens, we may need to significantly modify the design or implementation of the
services on our web sites to correct  these  errors.  Our  business,  results of
operations and financial condition could be materially  adversely affected if we
experience difficulties in introducing new services or if these new services are
not accepted by our users.

We depend on the continued growth in use and efficient operation of the web. The
web-based information market is new and rapidly evolving.  Our business would be
materially  adversely  affected if web usage does not  continue to grow or grows
slowly. Web usage may be inhibited for a number of reasons, such as:

      --    inadequate network infrastructure;

      --    security concerns;

      --    inconsistent quality of service; and

      --    unavailability of cost-effective, high-speed access to the Internet.

         The users of our online services depend on Internet service  providers,
online  service  providers  and other web site  operators  for access to our web
site. Many of these services have experienced significant service outages in the
past and could experience service outages,  delays and other difficulties due to
system  failures  unrelated to our systems.  These  occurrences  could cause our
readers  to  perceive  the web in general  or our web site in  particular  as an
unreliable medium and, therefore,  cause them to use other media to obtain their
financial news and information.  We also depend on certain information providers
to  deliver  information  and data feeds to us on a timely  basis.  Our web site
could  experience  disruptions or interruptions in service due to the failure or
delay in the  transmission  or receipt of this  information,  which could have a
material  adverse  effect on our business,  results of operations  and financial
condition.

Government  regulation  and legal  uncertainties  relating  to the web.  Certain
existing laws or regulations specifically regulate communications or commerce on
the web. Further, laws and regulations that address issues such as user privacy,
pricing, online content regulation, taxation and the characteristics and quality
of online products and services are under consideration by federal, state, local
and foreign governments and agencies. Several telecommunications  companies have
petitioned the Federal  Communications  Commission to regulate  Internet service
providers and online services providers in a manner similar to the regulation of
long distance  telephone  carriers and to impose access fees on such  companies.
That regulation,  if imposed,  could increase the cost of transmitting data over
the web.  Moreover,  it may take years to determine the extent to which existing
laws   relating  to  issues  such  as   intellectual   property   ownership  and
infringement,  libel,  obscenity and personal privacy are applicable to the web.
The Federal Trade Commission and government agencies in certain states have been
investigating  certain  Internet  companies  regarding  their  use  of  personal
information. We could incur additional expenses if any new regulations regarding
the use of personal  information  are  introduced or if these  agencies chose to
investigate our privacy practices.  Any new laws or regulations  relating to the
web, or certain  application or  interpretation of existing laws, could decrease
the  growth  in the use of the  web,  decrease  the  demand  for our web site or
otherwise materially adversely affect our business.

Web  security  concerns  could  hinder  internet  commerce.  Concern  about  the
transmission  of  confidential   information   over  the  Internet  has  been  a
significant  barrier to electronic commerce and communications over the web. Any
well-publicized  compromise  of security  could deter more people from using the
web or from using it to conduct  transactions  that involve the  transmission of
confidential information, such as signing up for a paid subscription,  executing
stock trades or purchasing  goods or services.  Because many of our  advertisers
seek to advertise on our web site to encourage people to use the web to purchase
goods or services,  our business,  results of operations and financial condition
could be materially  adversely affected if Internet users  significantly  reduce
their use of the web because of security concerns. We may also incur significant
costs to  protect  ourselves  against  the  threat of  security  breaches  or to
alleviate problems caused by such breaches.

Our  efforts to build  positive  brand  recognition  may not be  successful.  We
believe  that  maintaining  and growing  awareness  about our brands  (including
Individual  Investor,  Individual Investor Online,  Ticker and the INDI SmallCap
500) is an  important  aspect of our efforts to continue to attract  subscribers
and readers.  The importance of positive brand  recognition will increase in the
future because of the growing number of providers of financial  information.  We
cannot assure you that our efforts to build positive brand  recognition  will be
successful.

         In order to build positive brand recognition, it is very important that
we  maintain  our  reputation  as a  trustworthy  source  of  investment  ideas,
research,  analysis and news.  The occurrence of certain  events,  including our
misreporting a news story or the  non-disclosure of a financial  interest by one
or more of our  employees  in a  security  that we write  about,  could harm our
reputation  for  trustworthiness.  These events  could  result in a  significant
reduction in the number of our readers,  which could materially adversely affect
our business, results of operations and financial condition.

Control of the Company by Principal Stockholders.  At the present time, Jonathan
Steinberg, Wise Partners, L.P. (a partnership controlled by Jonathan Steinberg),
Saul  Steinberg  (who is  Jonathan's  father) and  Reliance  Financial  Services
Corporation  (a  substantial  portion of the common stock of Reliance  Financial
Services  Corporation's parent,  Reliance Group Holdings,  Inc., is beneficially
owned by Saul  Steinberg,  members  of his  family and  affiliated  trust),  own
approximately 44.4% of the outstanding shares of common stock of our Company. As
a result of their ownership of common stock,  they will be able to significantly
influence  all matters  requiring  approval by our  stockholders,  including the
election  of our  directors.  Because  it would be very  difficult  for  another
company to acquire our company  without the  approval of the  Steinbergs,  other
companies might not view our company as an attractive  takeover  candidate.  Our
stockholders  therefore  may have less of a chance to benefit  from any possible
takeover of our company,  than they would if the Steinbergs did not have as much
influence.

We rely on our intellectual  property. To protect our rights to our intellectual
property,  we rely on a combination of trademark and copyright law, trade secret
protection,  confidentiality  agreements and other contractual arrangements with
our  employees,   affiliates,   clients,  strategic  partners  and  others.  The
protective  steps we have taken may be inadequate to deter  misappropriation  of
our proprietary information. We may be unable to detect the unauthorized use of,
or take appropriate steps to enforce, our intellectual  property rights. We have
registered  certain of our  trademarks  in the United States and we have pending
U.S. applications for other trademarks. Effective trademark, copyright and trade
secret  protection  may not be available  in every  country in which we offer or
intend to offer our services.

         We are somewhat  dependent  upon the use of certain  trademarks  in our
operation,  including the marks Individual Investor, Individual Investor Online,
Ticker and the INDI  SmallCap  500. We have a  perpetual  license for use of the
trademark Individual Investor. To perfect our interests in the mark, however, we
filed suit in 1997 against the licensor and a third party whom we believed to be
infringing  the mark.  The  litigation  was  resolved  favorably  to us, with an
agreement  by the third party not to further  infringe  the mark.  We  commenced
negotiations  with the licensor to obtain  assignment  of the mark,  but did not
reach an agreement.  Although we will continuously  monitor and seek enforcement
against any  perceived  infringement  of the mark, we cannot assure you that our
efforts will be successful.

         Additionally, we are somewhat dependent upon the ability to protect our
proprietary content through the laws of copyright,  unfair competition and other
law.  We cannot  assure  you,  however,  that the laws  will give us  meaningful
protection.

We may be liable for information  published in our print  publications or on our
online services. We may be subject to claims for defamation, libel, copyright or
trademark infringement or based on other theories relating to the information we
publish in our print publications or through our online services.  We could also
be subject to claims based upon the content that is accessible from our web site
through links to other web sites.  Our insurance may not  adequately  protect us
against these claims.

Year 2000  risks.  We have  evaluated  the  potential  impact  of the  situation
commonly referred to as the "Year 2000 Issue".  The Year 2000 Issue concerns the
inability of information systems,  whether due to computer hardware or software,
to properly  recognize and process date  sensitive  information  relating to the
year 2000 and beyond. To attempt to ensure that our computer systems will not be
disrupted  by the Year 2000 Issue,  we  developed  a plan to assess,  and to fix
where necessary,  any Year 2000 Issue with respect to our computer  systems.  We
have made significant  progress toward determining  whether our computer systems
will be disrupted by the Year 2000 Issue and  currently  expect to complete this
determination  before June 1999.  We are also fixing any Year 2000 Issue we find
in our systems and currently  expect to complete our repair  efforts before June
1999. We intend to test our systems before October 1999.

         We currently  believe that  additional  direct  costs  associated  with
making our systems Year 2000 Ready should not exceed $30,000.  We do not believe
that the diversion of employee resources required to address the Year 2000 Issue
will have a material effect on our operating results or financial condition.  We
do not currently have in place a contingency plan of action in the event that we
are not able to make our computer  systems Year 2000 Ready, but will consider on
an ongoing basis whether such a contingency plan should be developed.

         The dates on which we believe we will complete our Year 2000 plan,  and
the costs associated with the efforts,  are based on our current best estimates.
However,  we cannot  guarantee that these  estimates  will be achieved,  or that
there will not be a delay in, or increased  costs  associated  with,  making our
systems Year 2000 Ready.  Specific factors that might cause differences  between
the estimates and actual results  include the following:  the  availability  and
cost of personnel  trained in these areas; the ability to locate and correct all
relevant computer code and hardware devices (such as  microcontrollers);  timely
responses to and  corrections by  third-parties  and  suppliers;  the ability to
implement interfaces between the new systems and the systems not being replaced;
and similar  uncertainties.  Due to the general uncertainty inherent in the Year
2000 problem,  resulting in part from the uncertainty of the Year 2000 readiness
of third  parties  and the  interconnection  of  global  businesses,  we  cannot
guarantee that will be able to resolve,  in a timely or cost-effective  fashion,
any problems  associated with the Year 2000 Issue.  If we fail to resolve,  in a
timely and cost-effective  fashion,  any problems  associated with the Year 2000
issue, our operations and business could be materially  adversely  affected.  If
that happens, we also could incur liabilities to third parties.

         We also face risks and uncertainties to the extent that the independent
suppliers  of  products,  services  and  systems  on  which  we rely do not have
business  systems  or  products  that  are  Year  2000  Ready.  We have  started
communicating  with all of our significant  suppliers and customers to determine
the extent to which our  systems  and  products  are  vulnerable  to those third
parties'  failure to fix their own  systems'  Year 2000  Issues.  The systems or
products of other  companies  on which we rely might not be made Year 2000 Ready
in time to prevent disruption.  If the systems of any of those third parties are
disrupted,  our operations and business could be materially  adversely affected.
We are in the process of  identifying  what  actions may be needed to reduce our
vulnerability to problems  related to the companies with which we interact,  but
we do not currently have in place a contingency plan of action in the event that
the failure by one or more third  parties to make their  computer  systems  Year
2000 Ready causes us to suffer material adverse effects.  We will consider on an
ongoing basis whether such a contingency plan should be developed.


  


5 3-mos Dec-31-1999 Jan-1-1999 Mar-31-1999 4,985,688 419,061 2,966,834 404,183 0 8,651,345 2,630,167 880,046 11,581,223 3,271,262 0 100 0 88,910 5,872,600 11,581,223 4,001,816 4,001,816 2,755,718 5,876,515 0 0 0 1,318,132 0 1,318,132 0 0 0 1,318,132 (0.15) (0.15)