GuruNet Announces Fourth Quarter and Full Year 2004 Financial
Results GuruNet to Hold Investor Conference Call Today, March 16,
2005 at 2:00 PM EST WESLEY HILLS, New York, March 16
/PRNewswire-FirstCall/ -- GuruNet Corporation (AMEX:GRU), creator
of reference search engine Answers.com, today announced its
unaudited financial results for the fourth quarter and full year of
2004, the last quarter before the Company released Answers.com, on
January 3, 2005. The Company, through its Answers.com site, has
begun to generate fees from ads placed alongside its topic entries.
Prior to the launch of Answers.com, the Company's primary means of
generating revenues was from the subscription fees it charged for
the use of its GuruNet premium product. "In Q4, we successfully
completed our IPO and at the end of the quarter we also decided to
move from the subscription model to the much more scalable
advertising-based one, a proven approach in the search space
today," said Bob Rosenschein, GuruNet's CEO. "We are very pleased
with the initial reception to Answers.com: with the press, with
consumers, with potential business partners, and with traffic. And
we have recently seen the monetization start to kick in. With our
company's expanded resources, we are better suited to respond to
the heightened interest we are seeing. These financial resources
allow the company to fulfill its mission: to offer Internet
consumers an easier way to look up concise information in one
click." In the fourth quarter of 2004, the Company completed its
IPO of 2.35 million shares of its common stock and the underwriters
exercised their over-allotment option and purchased 352,500
additional shares. Total proceeds, including the exercise of the
over-allotment option, were approximately $10,786,000, net of fees
and offering expenses. In conjunction with the offering, the
Company repaid $3,160,000 of its Bridge debt. On December 31, 2004,
the Company had cash and cash equivalents of $7,415,000. In
February 2005 the Company entered into an agreement with certain
holders of warrants pursuant to which such holders exercised an
aggregate of 1,871,783 Bridge Warrants. As a result, the Company
raised approximately $12,225,000, net of costs and fees relating to
the exercise. Further, in 2005, to date, the Company raised
additional amounts, in excess of $1 million, from other exercises
of options and warrants. The Company currently has approximately
6.9 million shares outstanding, including 1.5 million shares
subject to lock-up agreements. Additionally, there are
approximately 2.4 million stock options and warrants outstanding.
"We are pleased to have a healthy balance sheet and the resources
to execute on our new business model. Based on our current plans,
the net proceeds of our IPO and recent fundraising events, will be
sufficient to enable us to meet our planned operating needs for the
foreseeable future and to fund possible future acquisitions,"
stated Steve Steinberg, GuruNet's CFO. Revenues for the three
months and full year ended December 31, 2004, were $76,245 and
$193,283, respectively, compared to $9,646 and $28,725,
respectively, for the same periods in 2003. The operating losses
for the three months and full year ended December 31, 2004 were
$1,101,893 and $3,544,812, respectively, compared to operating
losses of $603,700 and $2,762,325 for the same periods in 2003. The
net loss for the fourth quarter of 2004 was $855,131, or $.20 per
share, compared to a net loss of $659,760, or $1.86 per share, for
the same period in 2003. The net loss for the full year ended
December 31, 2004 was $6,590,519, or $2.90 per share, compared to a
net loss of $2,808,783, or $7.93 per share, for the same period in
2003. The primary reason for the increase in the net loss for the
three months and full year ending December 31, 2004 compared to the
same periods in 2003 is the increase in operating losses noted
earlier and increases in interest expense, net, less offsets for
gain on extinguishment of debt. Interest expense, net, for the
three months and full year ended December 31, 2004 includes
approximately $1,110,000 and $3,962,000, respectively, of non-cash
charges resulting from the amortization of note discounts and
deferred charges relating to the convertible bridge notes, which
will be described further in the footnotes to the financial
statements that we plan to file later this month. Gain on
extinguishment of debt, for the three months and full year ended
December 31, 2004 includes approximately $1,493,000 of non-cash
gain resulting from the fact that, in October 2004, 63% of the
Bridge Notes did not actually convert, but rather were repaid.
GuruNet will host a conference call today, Wednesday, March 16; at
2:00 PM EST, to discuss the results of its fourth quarter and full
year ended December 31, 2004. Bob Rosenschein, Chief Executive
Officer, and Steven Steinberg, Chief Financial Officer, will be
making the presentation, which will be followed by a question and
answer session. Investors will have the opportunity to listen to
the conference call and the replay over the Internet through
GuruNet's Investor Relations page at http://www.gurunet.com/ir. To
listen to the live call via webcast, please go to the Web site at
least 10 minutes early to connect and register. To dial in to
listen and/or submit a question, please dial 888-889-2497 and
request the GuruNet call. For those unable to listen to the live
broadcast, a replay will be available on the site shortly after the
call, and will remain available on the site for a period of three
weeks following the call. About GuruNet GuruNet Corporation
(AMEX:GRU) operates a reference search engine, Answers.com
(http://www.answers.com/). Founded in 1999 by Bob Rosenschein,
GuruNet provides patented technology and software tools to access
concise information on demand. For additional information, visit
http://www.gurunet.com/. Cautionary Statement Some of the
statements included in this press release are forward-looking
statements that involve a number of risks and uncertainties. For
those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Important factors may cause our
actual results to differ materially, including our inability to
increase the number of persons who use our products and the number
of partners who will generate increase traffic to our sites, and
other risk factors identified from time to time in our SEC reports,
including, but not limited to, the registration statement on Form
SB-2 filed in connection with our initial public offering in
October 2004. Any forward-looking statements set forth in this news
release speak only as of the date of this news release. We do not
intend to update any of these forward-looking statements to reflect
events or circumstances that occur after the date hereof. This
press release and prior releases are available at
http://www.gurunet.com/. The information in GuruNet's website is
not incorporated by reference into this press release and is
included as an inactive textual reference only. (Tables to follow)
GuruNet Contact: Jay Bailey Director of Communications
+1-866-576-0352 Selected Consolidated Financial Data (Unaudited)
Statements of Operations: Three months ended December 31, Year
ended December 31, 2004 2003 2004 2003 $ $ $ $ Revenue 76,245 9,646
193,283 28,725 Cost of revenue 213,442 185,167 647,055 723,349
Gross margin (137,197) (175,521) (453,772) (694,624) Operating
expenses: Research and 243,559 173,467 1,033,521 910,114
development Sales and 232,406 122,508 932,455 478,942 marketing
General and 488,731 132,204 1,125,064 678,645 administrative Total
operating expenses 964,696 428,179 3,091,040 2,067,701 Operating
loss (1,101,893) (603,700) (3,544,812) (2,762,325) Interest income
(1,134,809) (5,386) (4,382,583) 719 (expense), net Gain on
1,493,445 - 1,493,445 extinguishment of debt Other income (105,340)
(16,084) (116,012) (12,586) (expense), net Loss before income
(848,597) (625,170) (6,549,962) (2,774,192) taxes Income taxes
(6,534) (34,591) (40,557) (34,591) Net loss (855,131) (659,761)
(6,590,519) (2,808,783) Basic and diluted net loss per common share
(0.20) (1.86) (2.90) (7.93) Weighted average shares used in
computing basic and diluted net loss per common share 4,369,929
354,842 2,273,675 354,112 Balance Sheets: The following table
summarizes our balance sheet data as of December 31, 2004 and 2003:
2004 2003 Cash and short-term investments * $7,415,415 $123,752
Working capital (deficiency) $6,688,721 ($752,934) Total assets
$8,907,183 $1,043,292 Long-term liabilities $1,078,548 $1,023,521
Total stockholders' equity (deficit) $6,824,122 ($1,044,446) * In
February 2005, GuruNet received gross consideration of
approximately $12.5 million from the exercise of warrants. As this
event took place after December 31, 2004, such amount is not
reflected above. DATASOURCE: GuruNet Corporation CONTACT: GuruNet
Contact: , Jay Bailey, Director of Communications, +1-866-576-0352
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