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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 8/04/04  Matchnet/Inc                      S-1                   17:368                                    950148

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)               HTML  1,441K 
 2: EX-10.1     Lease Dated September 1, 2000 - 8383 Wilshire         43    233K 
                          Blvd.Ers Ltd                                           
 3: EX-10.1(A)  First Amendment to Lease Dated September 5, 2000       2     15K 
 4: EX-10.1(B)  Second Amendment to Lease Dated January 16, 2003       8     32K 
 5: EX-10.1(C)  Third Amendment to Lease Dated October 30, 2003        4     22K 
 6: EX-10.1(D)  Fourth Amendment to Lease Dated May 14, 2004           4     21K 
 7: EX-10.4     Asset Purchase Agreement Dated November 27, 2003      31    118K 
 8: EX-10.5     Asset Purchase Agreement Dated November 27, 2003      64    170K 
 9: EX-10.5(A)  First Amendment to Asset Purchase Agreement            5     21K 
10: EX-10.9     Material Contract                                      3     20K 
11: EX-10.10    Material Contract                                      3     15K 
12: EX-10.11    Material Contract                                      3     20K 
13: EX-10.12    Material Contract                                      3     21K 
14: EX-10.13    Executive Employment Agreement - Steven Cramer         6     32K 
15: EX-16.1     Letter Re: Change in Certifying Accountant             2±    14K 
16: EX-23.1     Consent of Ernst & Young                               1      7K 
17: EX-23.2     Consent of Ziv Haft                                    1      7K 

Table of Contents

Form S-1

MatchNet, Inc.

8383 Wilshire Boulevard, Suite 800

Todd Tappin

Copies to:

      Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

      If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check following box:     o

      If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:     o

      If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:     o

      If this form is a post effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, please check the following box and list the Securities Act registration statement number of the earliest effective registration statement for the same offering:     o

      If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act of 1933, check the following box:     o

Calculation of Registration Fee

(1)	Includes shares which the underwriters have the option to purchase to cover over-allotments, if any.
(2)	Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended.

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

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement relating to these securities that has been filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated August 4, 2004

Preliminary Prospectus

                                    shares

Common stock

This is the initial public offering of shares of common stock by MatchNet, Inc. MatchNet is selling                      shares of common stock, and the selling stockholders identified in this prospectus are selling an additional                      shares. We will not receive any of the proceeds from the sale of the shares by the selling stockholders. The estimated initial public offering price is between $                 and $           per share.

We intend to apply for quotation of our common stock on the Nasdaq National Market under the symbol “               .”

MatchNet has granted the underwriters an option for a period of 30 days to purchase up to                      additional shares of common stock.

Investing in our common stock involves a high degree of risk. See “Risk factors” beginning on page 6.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

JPMorgan

	Piper Jaffray

	CIBC World Markets

	Pacific Crest Securities

                      , 2004

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You should rely only on information contained in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

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RISK FACTORS

      You should carefully consider the risks described below together with all of the other information included in this prospectus and the related registration statement before making an investment decision. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that adversely affect us. If any of the following risks actually occurs, our business, financial condition or results of operations could be materially adversely affected. In that case, the trading price of our common stock would decline and you may lose all or part of your investment.

Risks Related to Our Business

Our limited operating history and relatively new business model in an emerging and rapidly evolving market makes it difficult to evaluate our future prospects.

      MatchNet plc commenced operations in September 1998 and we have only a short operating history with our subscription-based business model. As a result, we have very little operating history for you to evaluate in assessing our future prospects. Also, we derive nearly all of our net revenues from online subscription fees, which is an early-stage business model that has undergone rapid and dramatic changes. You must consider our business and prospects in light of the risks and difficulties we will encounter as an early-stage company in a new and rapidly evolving market. We may not be able to successfully assess or address these risks and difficulties, which could materially harm our business and operating results.

We have significant operating losses.

      We have historically generated significant operating losses. As of June 30, 2004, we had an accumulated deficit of approximately $39.1 million. We had a net loss of approximately $7.1 million for the six months ended June 30, 2004 and approximately $10.9 million for the year ended December 31, 2003. We anticipate an operating loss for the year ending December 31, 2004, for at least the first two quarters of 2005 and possibly for the year ending December 31, 2005. We expect that our operating expenses will continue to materially increase during the next several years as a result of the rebranding of our company, the promotion of our services, the hiring of additional key personnel, the expansion of our operations, including the launch of new Web sites, and entering into strategic alliances and joint ventures. If our revenues do not grow at a substantially faster rate than these expected increases in our expenses or if our operating expenses are higher than we anticipate, we may not be profitable and we may incur additional losses, which could be significant.

Our ability to generate positive cash flow and operating profits as a relatively new company in a new and evolving business will depend upon a number of factors that are difficult to predict, including factors such as:

	•	continued acceptance of online personals services;
	•	our ability to create and increase brand awareness and attract and retain a large number of members and subscribers, including our ability to convert members into paying subscribers;
	•	level of usage of the Internet and traffic to our Web sites;
	•	our ability to maintain current, and develop new, relationships with portals, search engines, ISPs and other Web properties and entities capable of attracting individuals who might subscribe to our fee-generating services;
	•	our ability to implement our expansion plans or integrate newly acquired companies, including controlling the costs associated with such expansion or acquisitions;
	•	our ability to control costs related to general infrastructure including the amount and timing of operating and capital expenditures;
	•	our ability to introduce new Web sites, features and functionality on a timely basis;

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	•	our ability to scale technological and other infrastructure across our various Web sites;
	•	our ability to protect our data from loss or electronic or magnetic corruption;
	•	providing for failover and disaster recovery programs;
	•	our ability to upgrade our technologies and protect our sites from technology failures, which could cause revenue loss and allow affiliates to terminate their contracts with us;
	•	our ability to attract, retain and motivate qualified personnel;
	•	our ability to expand and compete internationally;
	•	introduction of new products or services by our competitors; and
	•	our ability to anticipate and adapt to the changing Internet business and any changes in government regulation.

Our business depends on strong brands and if we are not able to maintain and enhance our brands, or if we are not successful in our rebranding efforts, our business and operating results would be harmed.

      We believe that establishing and maintaining our brands is critical to our efforts to attract and expand our membership and subscriber base. We believe that the importance of brand recognition will continue to increase, given the growing number of Internet sites and the low barriers to entry for companies offering online personals services. We intend to change our name and consolidate our online dating properties, with the exception of JDate, under the new company umbrella brand name. To attract and retain members and subscribers, and to promote and maintain our brands in response to competitive pressures, we intend to substantially increase our financial commitment to creating and maintaining distinct brand loyalty among these groups. We intend to use a portion of the proceeds of this offering to institute a marketing program designed to heighten our brand recognition, including our rebranding efforts, and attract additional members and subscribers. The impact of the change of our name and rebranding efforts cannot be fully predicted. The lack of an established brand image for the new company name and the possibility that our strategy to create a recognizable and well known brand may not succeed may materially and adversely affect our business. If we do not generate a corresponding increase in revenues as a result of our rebranding and continuing branding efforts or otherwise fail to successfully promote our new and existing brands, or if we incur excessive expenses in our rebranding efforts and in our attempt to promote and maintain our new and existing brands, we will continue to incur losses, which may increase, and the value of our common stock could decline. If visitors, members and subscribers to our Web sites, and affiliate and distribution partners do not perceive our existing services to be of high quality, or if we introduce new services or enter into new business ventures that are not favorably received by such parties, the value of our brands could be diluted, thereby decreasing the attractiveness of our Web sites to such parties.

      As part of our rebranding efforts, we intend to spend substantial advertising dollars in offline media such as television, radio and print. Our company has no significant experience in offline advertising and we cannot assure you that these efforts will be successful. In addition, should these offline methods become more costly than currently anticipated, our profitability will be adversely affected.

If our efforts to attract a large number of members, convert members into paying subscribers and retain our paying subscribers are not successful, our revenues and operating results would suffer.

      Our future growth depends on our ability to attract a large number of members, convert members into paying subscribers and retain our paying subscribers. This in turn depends on our ability to deliver a high-quality online personals experience to these members and subscribers. Our competitors are developing highly targeted content as well as innovations in technology, online advertising and providing information. As a result, we must continue to invest significant resources in order to enhance our existing products and services and introduce new high-quality products and services that people will use. If we are unable to predict user preferences or industry changes, or if we are unable to modify our products and services on a timely basis, we may lose existing subscribers and may fail to attract new subscribers. Our operating results would also suffer if our innovations are not responsive to the needs of our subscribers or are not brought to market in an effective or timely manner.

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Our subscriber acquisition costs vary depending upon prevailing market conditions and may increase significantly in the future.

      Our subscriber acquisition costs are dependent in part upon our ability to purchase advertising at a reasonable cost. Our advertising costs vary over time, depending upon a number of factors, some of which are beyond our control. Historically, we have used online advertising as the primary means of marketing our services. In general, the costs of online advertising have recently increased substantially and these costs are expected to continue to increase as long as the demand for online advertising remains robust. Commencing in late 2004 or early 2005, we expect to expand to offline advertising such as television, radio and print, which may be more expensive and which will initially increase our subscriber acquisition costs. As we initiate these additional marketing efforts to build offline brand recognition, we expect there will be a significant lag between the time we incur the offline advertising expense and the receipt of revenues resulting from this advertising spend. As a result, we expect that our subscriber acquisition costs will be higher in the initial stages of our offline advertising efforts. If we are not able to reduce our other operating costs, increase our subscriber base or increase revenue per subscriber to offset these anticipated increases, our profitability will be adversely affected.

We must keep pace with rapid technological change to remain competitive; our services are not well-suited to many alternate Web access devices.

      We operate in a market characterized by rapidly changing technology, evolving industry standards, frequent new product and service announcements, enhancements, and changing customer demands. Accordingly, our success will depend on our ability to adapt to rapidly changing technologies and industry standards, and our ability to continually improve the speed, performance, features, ease of use and reliability of services in response to both evolving demands of the marketplace and competitive service and product offerings. There have been occasions when we have not been as responsive as many of our competitors in adapting our services to changing industry standards and the needs of our members and subscribers. Introducing new technology into our systems involves numerous technical challenges, substantial amounts of capital and personnel resources and often takes many months to complete. We intend to continue to devote substantial efforts and funds towards the development of additional technologies and services. For example, in 2003 and 2004 we have introduced a number of new Web sites and features, and we anticipate the introduction of additional Web sites and features in 2004 and 2005. We may not be successful in integrating new technology into our Web sites on a timely basis, which may degrade the responsiveness and speed of our Web sites. Such technology, once integrated, may not function as expected.

      In addition, the number of people who access the Internet through devices other than desktop and laptop computers, including mobile telephones and other handheld computing devices, has increased dramatically in the past few years, and we expect this growth to continue. The lower resolution, functionality and memory currently associated with such mobile devices makes the use of our services through such mobile devices more difficult and generally impairs the member experience relative to access via desktop and laptop computers. If we are unable to attract and retain a substantial number of such mobile device users to our online personals services or if we are unable to develop services that are more compatible with such mobile communications devices, our growth could be adversely affected.

The online personals business is highly competitive. Competition presents an ongoing threat to the success of our business.

      We expect competition in the online personals business to continue to increase because there are no substantial barriers to entry. We believe that our ability to compete depends upon many factors both within and beyond our control, including the following:

	•	the size and diversity of our member and subscriber bases;
	•	the timing and market acceptance of products and services, including the developments and enhancements to those products and services, offered by us or our competitors;
	•	customer service and support efforts;
	•	selling and marketing efforts;

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	•	ease of use, performance, price and reliability of solutions developed either by us or our competitors; and
	•	our brand strength relative to our competitors.

      We compete with traditional dating and personals services, as well as newspapers, magazines and other traditional media companies that provide dating and personals services. We also compete with large Internet information hubs, or portals, such as Yahoo!, as well as online personals companies such as Match.com, a wholly-owned subsidiary of InterActiveCorp. Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources and larger customer bases than we do. These factors may allow our competitors to respond more quickly than we can to new or emerging technologies and changes in customer requirements. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies which may allow them to build larger member and subscriber bases than we have. Our competitors may develop products or services that are equal or superior to our products and services or that achieve greater market acceptance than our products and services. This could attract subscribers away from our Web sites and reduce our market share.

      In addition, current and potential competitors are making, and are expected to continue to make, strategic acquisitions or establish cooperative, and, in some cases, exclusive relationships with significant companies or competitors to expand their businesses or to offer more comprehensive products and services. To the extent these competitors or potential competitors establish exclusive relationships with major portals, search engines and ISPs, our ability to reach potential members through online advertising may be restricted. Any of these competitors could cause us difficulty in attracting and retaining members and converting members into subscribers and could jeopardize our existing affiliate program and relationships with portals, search engines, ISPs and other Web properties.

Expansion into international markets is important to our long-term success, and our limited experience in the operation of our business outside the United States increases the risk that our international expansion efforts and operations will not be successful.

      One of our strategies is to expand our presence in international markets. Although we currently have offices in Germany, Israel and the U.K. and Web sites that serve the Australian, Canadian, German, Israeli and U.K. markets, we have only limited experience with operations outside the United States. Our primary current international operations are in Israel, which has political risks to our business associated with the continuing hostilities there. Expansion into international markets requires management and resources. In addition, we face the following additional risks associated with our expansion outside the United States:

	•	challenges caused by distance, language and cultural differences;
	•	local competitors with substantially greater brand recognition, more users and more traffic than we have;
	•	our need to create and increase our brand recognition and improve our marketing efforts internationally and build strong relationships with local affiliates;
	•	longer payment cycles in some countries;
	•	credit risk and higher levels of payment fraud;
	•	legal and regulatory restrictions;
	•	political, social and economic instability;
	•	foreign currency risk;
	•	potentially adverse tax consequences; and
	•	higher costs associated with doing business internationally.

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      These risks could harm our international expansion efforts, which would in turn harm our business and operating results.

If we are unable to attract, retain or motivate key personnel or hire qualified personnel, our business will be harmed.

      Our performance and success is largely dependent on the talents and efforts of highly skilled individuals. Many of our executive officers and other key management talent were recently recruited to fill newly created positions in response to our expanding operations. For example, Todd Tappin, our President and Chief Executive Officer, joined us in February 2004. In addition, certain of our recently hired executives have limited or no experience in the online personals industry. We do not maintain any key-person life insurance policies and certain of our key employees, including Mr. Tappin, do not have employment contracts. We also do not have non-competition agreements with most employees, although these agreements are of limited enforceability in California. The loss of any of our management or key personnel could seriously harm our business.

      In addition, we will need to identify, hire, and retain a number of key management personnel, including a Chief Financial Officer, Controller and General Counsel, as well as other highly skilled personnel for other areas of our organization. Competition in our industry for such personnel is intense, and we are aware that certain of our competitors have directly targeted our employees. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existing employees.

      As we become a more mature company, we may find our recruiting efforts more challenging. The incentives to attract, retain and motivate employees provided by our option grants or by future arrangements, such as through cash bonuses, may not be as effective as in the past. If we do not succeed in attracting excellent personnel or retaining or motivating existing personnel, we may be unable to grow effectively.

Our executive management has worked as a team for only a limited period of time, which may harm their ability to manage effectively.

      Todd Tappin, our President and Chief Executive Officer, joined our company in February 2004. Although Joe Y. Shapira and Alon Carmel resigned as our Chief Executive Officer and President, respectively, upon the hiring of Mr. Tappin, both of them have remained in an executive and day-to-day operating capacity and involved in corporate decision-making as Executive Co-Chairmen of the Board. Each of Messrs. Tappin, Shapira and Carmel have different and distinct management skills, backgrounds and styles and from time to time may work independently on new business or product development, which may be without the complete knowledge or understanding of the others’ activities. Because Messrs. Tappin, Shapira and Carmel have only worked together as a team for a limited period of time, there are inherent risks in the management of our company with respect to decision-making, business direction, product development and strategic relationships. In addition, certain other key management roles, such as Chief Financial Officer, Controller and General Counsel, have not yet been filled, and others have only been filled recently. In the event our Chief Executive Officer, and Executive Co-Chairmen of the Board and other members of our management team are unable to work well together or agree on certain operating principles, business direction or business transactions or in providing cohesive leadership, our business would be harmed and may also result in one or more of these individuals discontinuing their service to our company.

We cannot assure you that we will effectively manage our growth.

      We have experienced rapid growth and demand for our services since inception. The growth and expansion of our business and service offerings places a continuous significant strain on our management, operational and financial resources. We are required to manage multiple relations with various strategic partners, technology licensors, members and other third parties. In the event of further growth of our operations or in the number of our third-party relationships, our computer systems, procedures or internal controls may not be adequate to support our operations and our management may not be able to manage any such growth effectively. To effectively manage our growth, we must continue to implement and improve our operational, financial and management information systems and to expand, train and manage our employee base.

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We expect our growth rates to decline and our negative operating margins could deteriorate.

      We believe our revenue growth rate will decline as our net revenues increase to higher levels. It is possible that our negative operating margin will deteriorate if revenue growth does not exceed planned increases in expenditures for all aspects of our business in an increasingly competitive environment, including sales and marketing, general and administrative and technical operations expenses.

Our business depends on our server and network hardware and software and our ability to obtain network capacity; our current failover may be inadequate to prevent an interruption of use of our services.

      The performance of our server and networking hardware and software infrastructure is critical to our business and reputation and our ability to attract Web users, advertisers, members and e-commerce partners to our Web sites and to convert members to subscribers. An unexpected and/or substantial increase in the use of our Web sites could strain the capacity of our systems, which could lead to a slower response time or system failures. Although we have not had any significant delays, any slowdowns or system failures could adversely affect the speed and responsiveness of our Web sites and would diminish the experience for our members and visitors. We face risks related to our ability to scale up to our expected customer levels while maintaining superior performance. If the usage of our Web sites substantially increases, we may need to purchase additional servers and networking equipment to maintain adequate data transmission speeds, the availability of which may be limited or the cost of which may be significant. Any system failure that causes an interruption in service or a decrease in the responsiveness of our Web sites could reduce traffic on our Web sites and, if sustained or repeated, could impair our reputation and the attractiveness of our brands as well as reduce revenue and negatively impact our operating results.

      Furthermore, we rely on many different software applications, some of which have been developed internally. If these hardware and software systems fail, it would adversely affect our ability to provide our services. If we receive a significant unexpected increase in usage and are not able to rapidly expand our transaction-processing systems and network infrastructure without any systems interruptions, it could seriously harm our business and reputation. We have experienced occasional systems interruptions in the past as a result of unexpected increases in usage, and we cannot assure you we will not incur similar or more serious interruptions in the future.

      In addition, we do not currently have adequate disaster recovery systems in place, which means in the event of any catastrophic failure involving our Web sites, we may be unable to serve our Web traffic for up to several days. Our servers operate from only a single site in Southern California and the absence of a backup site could exacerbate this disruption. Any system failure, including network, software or hardware failure, that causes such an interruption in the delivery of our Web sites and services or a decrease in responsiveness of our services would result in reduced visitor traffic, reduced revenue and would adversely affect our reputation and brands.

The failure to establish and maintain affiliate agreements and relationships could limit the growth of our business.

      We have entered into, and expect to continue to enter into, arrangements with affiliates to increase our member base, bring traffic to our Web sites and enhance our brands. If any of the current agreements are terminated, we may not be able to replace the terminated agreement with an equally beneficial arrangement. We cannot assure you that we will be able to renew any of our current agreements when they expire or, if we are able to do so, that such renewals will be available on acceptable terms. We also do not know whether we will be successful in entering into additional agreements or that any relationships, if entered into, will be on terms favorable to us.

We rely on a number of third-party providers, and their failure to perform or termination of our relationships with them could harm us.

      We rely on third parties to provide important services and technologies to us, including third parties that manage and monitor our offsite data center located in Southern California, ISPs and credit card processors. In addition, we license technologies from third parties to facilitate our ability to provide our services. Any failure on

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If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common stock.

      Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement. For example, during our 2003 audit, our external auditors brought to our attention a need to restate 2001 and 2002 annual results as well as 2003 interim results.

      Our external auditors also noted in a letter to management certain reportable conditions involving internal controls and operations. According to the letter, we currently do not have a sufficient amount or type of staff in the financial, accounting and external reporting areas, including a Controller and a Chief Financial Officer, nor do we have an adequate automated accounting system. We are currently seeking to hire appropriate staff as soon as practicable, and we intend to replace our accounting system within approximately 12 months, but each of these matters may take longer. Other reportable conditions involve the inadequacy of our procedures regarding: reconciliation of our accounts; proof of internal review and approval of accounting items; documentation of key accounting assumptions, estimates and/or conclusions; and documentation of accounting policies and procedures. We are currently taking steps to address these conditions, but we may be hampered in this regard by our current level of staffing and our current accounting system. We also have not yet developed or implemented a disaster recovery plan or business continuity plan for our accounting and related information technology systems. Any disaster could therefore materially impair our ability to maintain timely accounting and reporting. In addition, we need to hire a General Counsel.

      We cannot be certain that our efforts to improve our internal controls will be successful or that we will be able to maintain adequate controls over our financial processes and reporting in the future. Any failure to develop or maintain effective controls, or difficulties encountered in their implementation or delay in the implementation of our new accounting system or other effective improvement of our internal controls could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

We face risks related to our recent accounting restatements.

      Prior to this offering, the global depository shares of MatchNet plc traded on the Frankfurt Stock Exchange in Germany. Pursuant to the laws governing this exchange, we publicly reported our quarterly and annual operating results. On April 28, 2004, we publicly announced that we had discovered accounting inaccuracies in previously reported financial statements. As a result, following consultation with our new auditors, we have restated our financial statements for the first two quarters of 2003 and for each of the years ended December 31, 2002 and 2001 to correct inappropriate accounting entries.

      The restatements primarily related to the timing of recognition of deferred revenue and the capitalization of bounty costs, which are the amounts paid to online marketers to acquire members. The restatements are in accordance with United States generally accepted accounting principles and pertained primarily to timing matters

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      Holders of securities in MatchNet plc will become shareholders of our company as a result of the English Scheme of Arrangement concurrent with the completion of this offering. As a result, the restatement of these financial statements may lead to litigation claims and/or regulatory proceedings against us. The defense of any such claims or proceedings may cause the diversion of management’s attention and resources, and we may be required to pay damages if any such claims or proceedings are not resolved in our favor. Any litigation or regulatory proceeding, even if resolved in our favor, could cause us to incur significant legal and other expenses. Moreover, we may be the subject of negative publicity focusing on the financial statement inaccuracies and resulting restatement. The occurrence of any of the foregoing could harm our business and reputation and cause the price of our common stock to decline.

We may not be successful in protecting our Internet domain names or proprietary rights upon which our business relies or avoiding claims that we infringe upon the proprietary rights of others.

      We regard substantial elements of our Web sites and the underlying technology as proprietary, and attempt to protect them by relying on trademark, service mark, copyright, patent and trade secret laws, and restrictions on disclosure and transferring title and other methods. We also generally enter into confidentiality agreements with our employees and consultants, and generally seek to control access to and distribution of our technology, documentation and other proprietary information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary information without authorization or to develop similar or superior technology independently. Effective trademark, service mark, copyright, patent and trade secret protection may not be available in every country in which our services are distributed or made available through the Internet, and policing unauthorized use of our proprietary information is difficult. Any such misappropriation or development of similar or superior technology by third parties could adversely impact our future financial results.

      We believe that our Web sites, services, trademarks, patent, and other proprietary technology do not infringe on the rights of third parties. However, there can be no assurance that our business activities will not infringe upon the proprietary rights of others, or that other parties will not assert infringement claims against us. From time to time, we have been, and expect to continue to be, subject to claims in the ordinary course of business including claims of alleged infringement of the trademarks, service marks and other intellectual property rights of third parties by us. Although such claims have not resulted in any significant litigation or had a material adverse effect on our business to date, any such claims and resultant litigation might subject us to temporary injunctive restrictions on the use of our products or services and could result in significant liability for damages for intellectual property infringement, require us to enter into royalty agreements, or restrict us from using infringing software or technologies in the future. Even if not meritorious, such litigation could be time-consuming and expensive and could result in the diversion of management’s time and attention.

      We currently hold various Web domain names relating to our brands and in the future may acquire new Web domain names. The regulation of domain names in the United States and in foreign countries is subject to change. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we may be unable to acquire or maintain relevant domain names in all countries in which we conduct business. Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our existing trademarks and other proprietary rights or those we may seek to acquire. Any such inability could harm our business.

We may face potential liability, loss of users and damage to our reputation for violation of our privacy policy.

      Our privacy policy prohibits the sale or disclosure to any third party of any member’s personal identifying information, except to the extent expressly set forth in the policy. Growing public concern about privacy and the

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We may be liable as a result of information retrieved from or transmitted over the Internet.

      We may be sued for defamation, civil rights infringement, negligence, copyright or trademark infringement, invasion of privacy, personal injury, product liability or other legal claims relating to information that is published or made available on our Web sites and the other sites linked to it. These types of claims have been brought, sometimes successfully, against online services in the past. We also offer email services, which may subject us to potential risks, such as liabilities or claims resulting from unsolicited email or spamming, lost or misdirected messages, security breaches, illegal or fraudulent use of email or interruptions or delays in email service. Our insurance does not specifically provide for coverage of these types of claims and therefore may not adequately protect us against these types of claims. In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately are not liable. If any of these events occur, our revenues could be materially adversely affected and the value of our common stock may decline.

Our quarterly results may fluctuate because of many factors. Investors should not rely on quarterly operating results as indicative of future results because they are subject to fluctuations.

      Fluctuations in operating results or the failure of operating results to meet the expectations of public market analysts and investors may negatively impact the value of our common stock. Quarterly operating results may fluctuate in the future due to a variety of factors that could affect revenues or expenses in any particular quarter. Fluctuations in quarterly operating results could cause the value of our common stock to decline. Investors should not rely on quarter-to-quarter comparisons of results of operations as an indication of future performance. Factors that may affect our quarterly results include:

	•	the demand for, and acceptance of, our online personals services and enhancements to these services;
	•	the timing and amount of our subscription revenues;
	•	the introduction, development, timing, competitive pricing and market acceptance of our Web sites and services and those of our competitors;
	•	the magnitude and timing of marketing initiatives and capital expenditures relating to our rebranding efforts and expansion of our operations;
	•	the cost and timing of online and offline advertising and other marketing efforts;
	•	the maintenance and development of relationships with portals, search engines, ISPs and other Web properties and other entities capable of attracting potential subscribers to our Web sites;
	•	technical difficulties, system failures, system security breaches, or downtime of the Internet in general or of our products and services specifically;
	•	costs related to any acquisitions or dispositions of technologies or businesses; and
	•	general economic conditions, as well as those specific to the Internet and related industries.

      As a result of the factors listed above and because the online personals business is still immature, making it difficult to predict consumer demand, it is possible that in future periods results of operations may be below the expectations of public market analysts and investors. This could cause the market price of our common stock to decline.

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Acquisitions could result in operating difficulties, dilution and other harmful consequences.

      We plan during the next few years to further extend and develop our presence both within the United States and internationally, partially through acquisitions of entities offering online personals services and related businesses. We have a limited amount of experience acquiring companies and the companies we have acquired have been small. We have evaluated, and expect to continue to evaluate, a wide array of potential strategic transactions. From time to time, we may engage in discussions regarding potential acquisitions. Any of these transactions could be material to our financial condition and results of operations. In addition, the process of integrating an acquired company, business or technology may create unforeseen operating difficulties and expenditures and is risky. For example, we are currently engaged in litigation with respect to our acquisition of SocialNet, Inc. in 2001. In addition, our acquisition of a 20% interest in a Swedish online personals company is currently pending. The areas where we may face risks include:

	•	the need to implement or remediate controls, procedures and policies appropriate for a larger company at companies that prior to the acquisition lacked these controls, procedures and policies;
	•	diversion of management time and focus from operating our business to acquisition integration challenges;
	•	cultural challenges associated with integrating employees from the acquired company into our organization;
	•	dependence on co-investors or controlling shareholders for performance of any joint venture or similar arrangement that we make that is not subject to our control;
	•	retaining employees from the businesses we acquire; and
	•	the need to integrate each company’s accounting, management information, human resource and other administrative systems to permit effective management.

      The anticipated benefit of many of our acquisitions may not materialize. Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.

We may need additional capital to finance our growth or to compete.

      We currently anticipate that the proceeds of this offering, existing cash, cash equivalents, and marketable securities and cash flow from operations will be sufficient to meet our anticipated needs for working capital, operating expenses and capital expenditures for at least the next 12 months. We may need to raise additional capital in the future to fund more aggressive brand promotions and rapid expansion, develop newer or enhanced services, respond to competitive pressures or acquire complementary businesses, technologies or services. Such additional financing may not be available on terms acceptable to us or at all. If additional financing is not available or not available on acceptable terms, we may not be able to fund our expansion, promote our brands, take advantage of acquisition opportunities, develop or enhance services or respond to competitive pressures. Additionally, any issuance of additional capital stock could dilute your investment and announcements of additional stock issuances often cause market prices to decline.

Our business could be significantly impacted by the occurrence of natural disasters and other catastrophic events.

      Our operations depend upon our ability to maintain and protect our data center, which is located in Southern California and is managed by a third party. Our business is therefore susceptible to earthquakes and other catastrophic events, including acts of terrorism. We currently lack adequate redundant hardware and software systems supporting our services at an alternate site. We may not be able to prevent outages and downtime caused by natural disasters and other events out of our control, which could adversely affect our reputation, brands and business.

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The initial option grants to many of our senior management and key employees are fully vested. Therefore, these employees may not have sufficient financial incentive to stay with us.

      With the exceptions of Todd Tappin, our President and Chief Executive Officer, and other executive officers and key employees who have recently joined our company, many of our senior management personnel and other key employees have become, or will soon become, substantially vested in their initial stock option grants. While we often grant additional stock options to management personnel and other key employees after their hire dates to provide additional incentives to remain employed by us, their initial grants are usually much larger than follow-on grants. Employees may be more likely to leave us after their initial option grant fully vests, especially if the shares underlying the options have significantly appreciated in value relative to the option exercise price.

If we account for employee stock options using the fair value method, it could significantly reduce our net income or increase our losses.

      There has been ongoing public debate about whether share options granted to employees should be treated as a compensation expense and, if so, how to properly value such charges. On March 31, 2004, the Financial Accounting Standard Board (FASB) issued an Exposure Draft, Stock-Based Payment: an amendment of FASB statements No. 123 and 95, which would require a company to recognize, as an expense, the fair value of stock options and other stock-based compensation to employees beginning in 2005 and subsequent reporting periods. If we elect or are required to record an expense for our stock-based compensation plans using the fair value method as described in the Exposure Draft, we could have significant and ongoing accounting charges.

We may face risks associated with currency fluctuations.

      Our foreign operations may subject us to currency fluctuations and such fluctuations may adversely affect our financial position and results. However, sales and expenses to date have occurred primarily in the United States. For this reason, we have not engaged in foreign exchange hedging. In connection with our planned international expansion, currency risk positions could change correspondingly and the use of foreign exchange hedging instruments could become necessary. Effects of exchange rate fluctuations on our financial condition, operations, and profitability may depend on how successfully we manage our foreign currency risks. There can be no assurance that steps taken by management to address foreign currency fluctuations will eliminate all adverse effects and accordingly, we may suffer losses due to adverse foreign currency fluctuation.

It has been and may continue to be expensive to obtain and maintain insurance.

      We contract for insurance to cover potential risks and liabilities. In the current environment, insurance companies are increasingly specific about what they will and will not insure. It is possible that we may not be able to get enough insurance to meet our needs, we may have to pay very high prices for the coverage we do get, or we may not be able to acquire any insurance for certain types of business risk or may have gaps in coverage for certain risks. This could leave us exposed to potential claims. If we were found liable for a significant claim in the future, our operating results could be negatively impacted.

Risks Related to Our Industry

The percentage of cancelling subscribers in comparison to other subscription businesses requires that we must continually seek new subscribers to maintain or increase our current level of revenue.

      Internet users in general, and users of online personals services specifically, freely navigate and switch among a large number of Web sites. Subscriber churn represents a ratio, expressed as a percentage, of (i) subscriber cancellations in a period divided by the average of the subscribers at the beginning and end of the period and (ii) the number of months in the period. For the six months ended June 30, 2004 and 2003, subscriber churn was 32% and 29%, respectively. We cannot assure you that we will be able to maintain our subscriber churn, and it may increase in the future. This makes it difficult for us to have a stable member base and requires that we constantly attract new subscribers at a faster rate than subscription terminations to maintain or increase our current level of revenue. If we are unable to attract new subscribers on a cost-effective basis, our business will not grow and our profitability will be adversely affected.

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We face certain risks related to the physical and emotional safety of our members.

      Given the nature of online personals services, we cannot control the actions of our members in their communication or physical actions and there is a possibility that one or more of our members could be physically or emotionally harmed following interaction with another member on one of our Web sites. We warn our members that we do not and cannot screen other members, and given our lack of physical presence, we do not take any action to ensure personal safety on a meeting arranged following contact initiated via our Web sites. If an unfortunate incident of this nature occurred in a meeting of two people following contact initiated on one of our Web sites or a Web site of one of our competitors, any resulting negative publicity could materially and adversely affect the online personals industry in general. Any such incident involving one of our Web sites could damage our reputation and our brands. This, in turn, could adversely affect our revenues and could cause the value of our common stock to decline. In addition, the affected members could initiate legal action against us, which could cause us to incur significant expense, whether or not successful, and further damage our reputation.

We are exposed to risks associated with credit card fraud and credit payment.

      We depend on continuing availability of credit card usage to process subscriptions, and this availability in turn depends on acceptable levels of chargebacks and fraud performance. We have suffered losses and may continue to suffer losses as a result of subscription orders placed with fraudulent credit card data, even though the associated financial institution approved payment. Under current credit card practices, a merchant is liable for fraudulent credit card transactions when, as is the case with the transactions we process, that merchant does not obtain a cardholder’s signature. A failure to adequately control fraudulent credit card transactions would result in significantly higher credit card-related costs.

Our network is vulnerable to security breaches and inappropriate use by Internet users, which could disrupt or deter future use of our services.

      Concerns over the security of transactions conducted on the Internet and the privacy of users may inhibit the growth of the Internet and other online services generally, and online commerce in particular. Our failure to successfully prevent security breaches could significantly harm our business, reputation and results of operations and could expose us to lawsuits by state and federal consumer protection agencies, by governmental authorities in the foreign jurisdictions in which we operate, and by consumers. Anyone who is able to circumvent our security measures could misappropriate proprietary information, including customer credit card and personal data, cause interruptions in our operations or damage our brand and reputation. Such breach of our security measures could involve the disclosure of personally identifiable information and could expose us to a material risk of litigation, liability or a governmental enforcement proceeding. We cannot assure you that our financial systems and other technology resources are completely secure from security breaches or sabotage, and we have occasionally experienced security breaches and attempts at “hacking.” We may be required to incur significant additional costs to protect against security breaches or to alleviate problems caused by breaches. Any well-publicized compromise of our security or the security of any other Internet provider could deter people from using our services or the Internet to conduct transactions that involve transmitting confidential information or downloading sensitive materials, which would adversely affect our business.

      Computer viruses may cause our systems to incur delays or other service interruptions and could damage our reputation and affect our ability to provide our services and adversely affect our revenues. The inadvertent transmission of computer viruses could also expose us to a material risk of loss or litigation and possible liability. Moreover, if a computer virus affecting our system is highly publicized, our reputation could be significantly damaged resulting in the loss of current and future members and subscribers.

Our business depends in part on the growth and maintenance of the Internet infrastructure.

      Our success will depend in part on the continued growth and maintenance of the Internet infrastructure. This includes maintenance of a reliable network backbone with the necessary speed, data capacity and security for providing reliable Internet services. Internet infrastructure may be unable to support the demands placed on it if the number of Internet users continues to increase, or if existing or future Internet users access the Internet more

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We face risks associated with our dependence on computer and telecommunications infrastructure.

      Our services are dependent upon the use of the Internet and telephone and broadband communications to provide high-capacity data transmission without system downtime. For example, there have been instances where regional and national telecommunications outages have caused us to experience systems interruptions. Any additional interruptions, delays or capacity problems experienced with the telephone connection could adversely affect our ability to provide services to our customers. The temporary or permanent loss of all or a portion of the telecommunications system, or significant delays, could cause disruption of our business activities and result in a loss of revenue. Additionally, the telecommunications industry is subject to regulatory control. Amendments to current regulations could disrupt or adversely affect the profitability of our business.

      In addition, if any of our current agreements with telecommunications providers are terminated, we may not be able to replace the terminated agreement with an equally beneficial arrangement. There can be no assurance that we will be able to renew any of our current agreements when they expire or, if we are able to do so, that such renewals will be available on acceptable terms. We also do not know whether we will be successful in entering into additional agreements or that any relationships, if entered into, will be on terms favorable to us.

We may become subject to burdensome government regulations and legal uncertainties affecting the Internet that could adversely affect our business.

      Legal uncertainties surrounding domestic and foreign government regulations could increase our costs of doing business, require us to revise our services, prevent us from delivering our services over the Internet or slow the growth of the Internet, any of which could increase our expenses, reduce our revenues or cause our revenues to grow at a slower rate than expected and materially adversely affect our business, financial condition and results of operations. Laws and regulations related to Internet communications, security, privacy, intellectual property rights, commerce, taxation, entertainment, recruiting and advertising are becoming more prevalent, and new laws and regulations are under consideration by the United States Congress, state legislatures and foreign governments. Any legislation enacted or restrictions arising from current or future government investigations or policy could dampen the growth in use of the Internet generally and decrease the acceptance of the Internet as a communications, commercial, entertainment, recruiting and advertising medium. In addition to new laws and regulations being adopted, existing laws may be applied to the Internet. Many areas of law affecting the Internet remain unsettled, even in areas where there has been some legislative action. It may take years to determine whether and how existing laws such as those governing consumer protection, intellectual property, libel and taxation apply to the Internet.

      In the normal course of our business, we handle personally identifiable information pertaining to our members and Web site visitors residing in the United States as well as foreign countries. In recent years, many of these countries have adopted privacy, security, and data protection laws and regulations intended to prevent improper uses and disclosures of personally identifiable information. In addition, some jurisdictions impose database registration requirements for which significant monetary and other penalties may be imposed for

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Risks Related to This Offering

We expect the price of our common stock to be volatile, and if an active trading market for our common stock does not develop, the price of our common stock may suffer and may decline below the initial public offering price.

      Prior to this offering, there has been no public market for the common stock of MatchNet, Inc. Accordingly, we cannot assure you that an active trading market will develop or be sustained or that the market price of our common stock will not decline below the initial offering price. The price at which our common stock will trade after this offering is likely to be highly volatile and may fluctuate substantially due to many factors, some of which are outside of our control. In the event that the Frankfurt Stock Exchange does not exercise its discretionary authority to suspend trading of the global depository shares of MatchNet plc during that period of time from the effective date of this offering through the closing date of this offering, the global depository shares of MatchNet plc will continue to be quoted on the Frankfurt Stock Exchange. In such an event, the underwriters do not intend to engage in stabilizing transactions in the global depository shares on the Frankfurt Stock Exchange. In such an event, there may be price differences between the price at which our common stock will trade during such period on the Nasdaq National Market and the price of the global depository shares of MatchNet plc on the Frankfurt Stock Exchange. Any such price differential may have a negative effect on the price at which our common stock will trade after this offering.

      The initial public offering price for our common stock will be determined by us, the selling stockholders, and the representatives of the underwriters and may be affected by the trading price of the global depository shares of MatchNet plc. The initial public offering price of our common stock may not be indicative of prices that will prevail in the trading market.

      In addition, the stock market has experienced significant price and volume fluctuations that affected the market price for the stock of many technology, communications and entertainment and media companies. These market fluctuations were sometimes unrelated or disproportionate to the operating performance of these companies. Any significant stock market fluctuations in the future, whether due to our actual performance or prospects or not, could result in a significant decline in the market price of our common stock.

You will experience immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering.

      The initial public offering price of our common stock will be substantially higher than the book value per share of the outstanding common stock after this offering. Therefore, based on an assumed offering price of $           per share, investors in this offering will suffer immediate and substantial dilution of approximately $           per share. If outstanding options and warrants to purchase our common stock are exercised, investors in this offering will experience additional dilution.

A substantial amount of our common stock will be eligible for sale shortly after this offering.

      If our stockholders sell substantial amounts of common stock in the public market following this offering, the market price of our common stock could fall. These sales also might make it more difficult for us to sell equity or equity-related securities at a time and price that we deem appropriate. Based on shares outstanding as of June 30, 2004, upon completion of this offering, we will have                      shares of common stock outstanding. Of these shares, the                          shares of common stock being offered hereby, or approximately      %, will be freely tradable, except those held by our officers, directors and holders of over 10% of our outstanding common stock prior to the effective date of this offering. Shares held by our officers, directors and holders of over 10% of our

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Management will have broad discretion over the use of proceeds from this offering.

      The net proceeds from this offering will be used for general corporate purposes. Although we list our proposed marketing and sales program as an example of general corporate purposes, we are not obligated to pursue this opportunity. We have not reserved or allocated the net proceeds for any specific transaction, and we cannot specify with certainty how we will use the net proceeds. Accordingly, our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not increase our operating results or market value. Until the net proceeds are used, they may be placed in investments that do not produce income or that lose value.

The requirements of being a public company may strain our resources and distract our management.

      As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002 and the Nasdaq National Market rules promulgated in response to the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Securities Exchange Act requires, among other thing, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting. Significant resources and management oversight will be required, particularly in light of the conditions noted by our auditors in their letter to management in connection with the 2003 audit of our company. As a result, our management’s attention may be diverted from other business concerns, which could have a material adverse effect on our company. In addition, we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge, including staff dedicated to internal controls and related documentation and reporting, and we may not be able to do so in a timely fashion. The Nasdaq National Market rules require that a majority of our Board of Directors be comprised of independent directors and certain committees of our Board of Directors be comprised solely of independent directors. As a public company that will be required to satisfy these rules, resignations or other changes in the composition of our Board could make it difficult for us to continue to comply with these rules in a timely manner, which could result in the delisting of our common stock from the Nasdaq National Market.

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Provisions in our certificate of incorporation and bylaws or Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

      Our certificate of incorporation and bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change of control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions:

	•	establish a classified board of directors so that not all members of our Board are elected at one time;
	•	provide that directors may only be removed “for cause” and only with the approval of 66 2/3% of our stockholders;
	•	authorize the issuance of “blank check” preferred stock that our board could issue to increase the number of outstanding shares and to discourage a takeover attempt;
	•	limit the ability of our stockholders to call special meetings of stockholders;
	•	prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
	•	provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and
	•	establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

      We also will be subject to provisions of the Delaware General Corporation Law that, in general, prohibit any business combination with a beneficial owner of 15% or more of our common stock for three years after the point in time that such stockholder acquired shares constituting 15% or more of our shares, unless the holder’s acquisition of our stock was approved in advance by our board of directors.

Our principal stockholders can exercise significant influence over MatchNet.

      Joe Y. Shapira, Alon Carmel, and Tiger Technology Management, L.L.C. and their respective affiliates will beneficially own upon the closing of this offering, in the aggregate,       % of the outstanding shares of our common stock. As a result, these stockholders possess significant influence over MatchNet, giving them the ability, among other things, to elect a majority of our Board of Directors and approve significant corporate transactions. Such share ownership and control may also have the effect of delaying or preventing a change in control of our company, impeding a merger, consolidation, takeover or other business combination involving our company or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company which could adversely affect the market price of our common stock.

We do not expect to pay cash dividends in the foreseeable future.

      We have not paid cash dividends on our shares and do not plan to pay cash dividends on our common stock in the foreseeable future.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “may,” “will,” “continue,” “should,” “plan,” “predict,” “potential” or the negative of these terms or other similar expressions. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in these forward-looking statements, which are subject to a number of risks, uncertainties and assumptions described in “Risk Factors” and elsewhere in this prospectus, regarding, among other things:

	•	the future growth of the online personals market;
	•	our business strategies and development plans;
	•	new services and technologies;
	•	future expenses; and
	•	competition and competitive factors within the online personals market.

      These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and operating results. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

      You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy and completeness of the forward-looking statements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

      You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement on Form S-1, of which this prospectus is a part, that we have filed with the Securities and Exchange Commission, completely and with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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USE OF PROCEEDS

      We estimate that the net proceeds we will receive from this offering will be approximately $           million, at an assumed initial public offering price of $           per share, after deducting estimated offering expenses and estimated underwriting discounts and commissions payable by us. We will not receive any proceeds from the sale of shares by the selling stockholders. If the underwriters exercise their over-allotment option in full, we estimate that our net proceeds will be approximately $           million.

      The principal purposes of this offering are to create a public market for our common stock, to obtain additional capital and to facilitate our future access to the public equity markets.

      We intend to use the net proceeds from this offering to expand our marketing efforts and for general corporate purposes, including working capital and capital expenditures, but we have not designated any specific uses. We intend to institute a marketing program designed to heighten our brand recognition, to attract additional members and subscribers and to support our rebranding campaign. We may also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, products or technologies or to establish joint ventures. We have pending an acquisition of a 20% interest in a Swedish online personals company for approximately $1.0 million. None of the proceeds of this offering will be used to fund that acquisition. We have no other current agreements or commitments with respect to any investment, acquisition or joint venture. Accordingly, our management will have broad discretion in applying the net proceeds of this offering. Pending these uses, we intend to invest the net proceeds in short-term interest-bearing U.S. government securities.

      The amount and timing of what we actually spend for these purposes may vary significantly and will depend on a number of factors, including our future revenues and cash generated by operations and the other factors described in “Risk Factors.” We may find it necessary or advisable to use portions of the proceeds for other purposes.

DIVIDEND POLICY

      We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable future. We also may incur indebtedness in the future that may prohibit or effectively restrict the payment of dividends on our common stock. Any future determination related to our dividend policy will be made at the discretion of the board.

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CAPITALIZATION

      The following table summarizes our cash, cash equivalents and marketable securities and capitalization as of June 30, 2004,

	•	on an actual basis to reflect the English Scheme of Arrangement;
	•	on an as adjusted basis to reflect our receipt of estimated net proceeds from the sale of our shares of common stock in this offering (at an assumed initial public offering price of $           per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses).

      You should read this table in conjunction with “Use of Proceeds,” “Selected Consolidated Financial Data,” “Pro Forma Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

      The number of shares of our common stock shown above to be outstanding after this offering is based on shares outstanding as of June 30, 2004 and gives effect to the English Scheme of Arrangement that will occur prior to the completion of this offering. This information excludes:

	•	8,942,587 shares of common stock issuable upon the exercise of outstanding stock options as of June 30, 2004, with exercise prices ranging from $.89 to $10.19 per share and a weighted average exercise price of $2.86 per share;
	•	1,138,000 shares of common stock issuable upon the exercise of warrants outstanding as of June 30, 2004, with exercise prices ranging from $1.05 to $2.50 and a weighted average exercise price of $2.35 per share; and
	•	5,000,000 shares of common stock available for issuance under our 2004 Stock Incentive Plan.

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DILUTION

      If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering. Pro forma net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the pro forma number of shares of our common stock outstanding after giving effect to the English Scheme of Arrangement.

      Investors participating in this offering will incur immediate, substantial dilution. Our pro forma net tangible book value as of June 30, 2004 was $4.6 million, or $0.20 per share of common stock, after giving effect to the English Scheme of Arrangement. Assuming the sale by us of                          shares of common stock offered in this offering at an assumed initial public offering price of $                 per share, and after deducting the underwriting discount and estimated offering expenses, our pro forma as adjusted net tangible book value as of June 30, 2004, would have been $           million, or $              per share of common stock. This represents an immediate increase in pro forma net tangible book value of $           per share of common stock to our existing stockholders and an immediate dilution of $               per share to the new investors purchasing shares in this offering.

      The following table illustrates this per share dilution:

      The following table sets forth, on an as adjusted basis as of June 30, 2004, the difference between the number of shares of common stock purchased from us, the total consideration paid, and the average price per share paid by existing stockholders and by new public investors before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, using an assumed initial public offering price of $            per share:

	(1)	The number of shares disclosed for the existing stockholders includes                      shares being sold by the selling stockholders in this offering. The number of shares disclosed for the new investors does not include those shares.

     If the underwriters’ over-allotment option is exercised in full, the number of shares of common stock held by existing stockholders will be reduced to                % of the total number of shares of common stock to be outstanding after this offering; and the number of shares of common stock held by the new investors will be increased to                        shares or            % of the total number of shares of common stock outstanding after this offering. See “Principal and Selling Stockholders.”

      The discussion and tables above give effect to the English Scheme of Arrangement and assume no exercise of the underwriters’ over-allotment option, and exclude:

	•	8,942,587 shares of common stock issuable upon the exercise of outstanding stock options as of June 30, 2004, with exercise prices ranging from $.89 to $10.19 per share and a weighted average exercise price of $2.86 per share;

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	•	1,138,000 shares of common stock issuable upon the exercise of warrants outstanding as of June 30, 2004, with exercise prices ranging from $1.05 to $2.50 and a weighted average exercise price of $2.35 per share; and
	•	5,000,000 shares of common stock available for issuance under our 2004 Stock Incentive Plan.

      To the extent that these options and warrants are exercised, there will be further dilution to new investors. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

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SELECTED CONSOLIDATED FINANCIAL DATA

      The following table sets forth our selected consolidated financial data. The data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements, related notes, and other financial information included herein. The following selected consolidated statement of operations data for each of the three years in the period ended December 31, 2003, and the selected consolidated balance sheet data as of December 31, 2002 and 2003, are derived from the audited consolidated financial statements of our company included elsewhere in this prospectus. The following selected unaudited consolidated statement of operations data for the six months ended June 30, 2004 and 2003 and selected consolidated balance sheet data as of June 30, 2004 are derived from the unaudited consolidated financial statements of our company included elsewhere in this prospectus. The consolidated statement of operations data for each of the two years in the period ended December 31, 2000 and the selected consolidated balance sheet data as of December 31, 1999 and 2000 are derived from unaudited consolidated financial statements not included in this prospectus. Prior to this offering, the global depository shares of MatchNet plc traded on the Frankfurt Stock Exchange in Germany. Pursuant to the laws governing this exchange, we publicly reported our quarterly and annual operating results. On April 28, 2004, we publicly announced that we had discovered accounting inaccuracies in previously reported financial statements. As a result, following consultation with our new auditors, we have restated our financial statements for the first two quarters of 2003 and for each of the years ended December 31, 2002 and 2001 to correct inappropriate accounting entries. Based in part on the fact that our 2001 and 2002 annual and 2003 interim financial statements were restated, it is likely that our 1999 and 2000 unaudited financial statements would have been subject to adjustments, which could have been material, had they been subjected to an audit and do not reflect accounting treatment or presentation consistent with audited financial statements for the years ended and as of December 31, 2001, 2002 and 2003. You should therefore not rely on data derived from such financial statements. The historical results are not necessarily indicative of results to be expected in any future period.