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Each Hoover’s, Inc., which provides corporate data to businesses, kept details of its own investment in 10K Wizard Technology, llc under wraps on Thursday. Hoover’s, of Austin, Texas, which operates the Hoover’s Online business portal, took a stake of less than 20 percent in 10K Wizard, a Dallas-based startup that offers free, full-text, real-time searches over the Internet of the Securities and Exchange Commission’s entire Edgar database of corporate financial information. Exact terms were not disclosed, but 10K Wizard said it was priced based on a valuation between $10 million and $40 million. The financing is the startup’s first since it raised $600,000 from friends and family in May at a valuation near $7.5 million. 10K Wizard employs five people and currently competes against Norwalk, Conn.-based Edgar Online, Inc. Carl Shepherd, an executive vice president and chief operating officer at Hoover’s, said the deal was not material to the $100 million company’s financial results. He added that 10K Wizard is privately-held and need not disclose terms. As part of the deal, 10K Wizard granted Hoover’s a nine-month call option that provides Hoover’s the right, but not the obligation, to purchase the startup within nine months. Hoover’s would exercise its option if 10K Wizard continues to focus its business plan on developing its SEC filings search site and starts to deploy its technology toward databases with other documents such as foreign filings, research reports and annual reports. If the company, however, begins to focus on developing search technology deployable for large non-financial databases, Hoover’s may conclude that the startup would operate best as a stand-alone company, said Martin Zacarias, 10K Wizard’s CEO. Shepherd agreed, saying, “We could remain an investor and watch it grow on its own.” The use of an option to purchase an entire company is rare. The call option gives Hoover’s the latitude to choose whether 10K Wizard develops into a complementary company. “We want to let this company develop and we thought they could develop better on their own,” Shepherd said. Waiting a few months to purchase the company might also allow shares of Hoover’s, near an all-time low, to recover. This delay would allow the company to issue fewer shares were it to acquire 10K Wizard in stock. In Thursday midday trading on the Nasdaq, shares of Hoover’s rose 2.5 percent to $7.625. 10K Wizard granted the call option because it believes Hoover’s will be instrumental in its development. “The marketing and strategic alliance will create value and allow us to become profitable in a short period,” Zacarias said. The minority investment solidifies a partnership with Hoover’s that dates to March, when the business portal replaced Edgar Online’s SEC filings search with 10K Wizard’s. With the new agreement, Hoover’s will make the 10K Wizard tools available through syndication to its customers. Additionally, Hoover’s Online will become the exclusive advertising sales and business development representative for 10K Wizard. Bill Stone, a partner at Scheef & Stone, llp, in Dallas, provided 10K Wizard with legal counsel. Hoover’s tapped San Francisco-based Morrison & Foerster llp for legal counsel. Neither side used an investment bank. Copyright �2000 TDD, LLC. All rights reserved.

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