================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 00-19813
InfoNow Corporation
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-3083360
-------- ----------
(State of incorporation) (I.R.S. Employer Identification No.)
1875 Lawrence Street, Suite 1100, Denver, Colorado, 80202
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
303-293-0212
------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
As of April 23, 1999, there were 7,061,243 shares of the Registrant's common
stock outstanding.
Transitional Small Business Disclosure Format Yes ___ No _X_
<PAGE>
INFONOW CORPORATION
INDEX
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Balance Sheets - March 31, 1999
and March 31, 1998....................................... 3
Unaudited Statements of Operations - For the Three Months
Ended March 31, 1999 and March 31, 1998.................. 4
Unaudited Statement of Stockholders Equity (Deficit)
- For the Three Months Ended March 31, 1999.............. 5
Unaudited Statements of Cash Flows - For the Three Months
Ended March 31, 1999 and March 31, 1998.................. 6
Notes to Unaudited Consolidated Financial Statements....... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS...................... 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................... 11
SIGNATURES................................................. 12
2
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
INFONOW CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(US Dollars in Thousands)
Assets March 31, December 31,
1999 1998
---------- ------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,516 $ 1,303
Restricted cash investments 76 76
Accounts receivable, net 477 379
Other current assets 17 20
-------- --------
Total current assets 2,086 1,778
Property and Equipment, net 795 760
Capitalized software development costs,
net of accumulated amortization of
$526 and $522 at March 31, 1999
and December 31, 1998 respectively 4 7
Other assets and deferred charges 34 9
-------- --------
Total assets $ 2,919 $ 2,554
======== ========
CURRENT LIABILITIES:
Notes Payable - current portion $ 92 $ 103
Accounts payable and accrued expenses 657 603
Unearned revenue and prepaid service fees 761 464
-------- --------
Total current liabilities 1,510 1,170
NOTES PAYABLE, net of current portion 76 89
STOCKHOLDER'S EQUITY
Preferred stock, $.001 par value; 1,962,335
shares authorized, none issued or outstanding -- --
Common stock, $.001 par value;
15,000,000 shares authorized,
7,061,243 and 6,815,243 shares issued
and outstanding at March 31, 1999 and
December 31, 1998 respectively 7 7
Additional paid-in capital 24,029 23,910
Accumulated deficit (22,703) (22,622)
-------- --------
Total stockholder's equity 1,333 1,295
-------- --------
Total liabilities and stockholder's equity $ 2,919 $ 2,554
======== ========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
INFONOW CORPORATION AND SUBSIDARY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share amounts)
For the Three Months
Ended March 31,
----------------------------
1999 1998
---- ----
REVENUES $ 1,104 $ 442
Cost of revenues 547 364
----------- -----------
Gross profit 557 78
OPERATING EXPENSES:
Selling and marketing 381 131
Product development 42 41
General and administrative 242 208
----------- -----------
Total operating expenses 665 380
----------- -----------
Operating loss (108) (302)
OTHER INCOME (EXPENSE):
Interest income (expense), Net 11 --
Other Non-operating income 15 5
----------- -----------
26 5
NET LOSS $ (82) $ (297)
=========== ===========
Basic and diluted EPS per common share:
Continued operations $ (.01) $ (.06)
Discontinued operations -- --
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 6,894,728 5,363,886
=========== ===========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
INFONOW CORPORATION AND SUBSIDARY
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
For the three months ended March 31, 1999
(US Dollars in Thousands)
Common Stock Additional Accumulated
Shares Amount Paid-in Capital Deficit
------ ------ --------------- -------
<S> <C> <C> <C> <C>
BALANCES, December 31, 1998 6,815,243 7 $ 23,910 $ (22,622)
Common shares issued in exchange
For outstanding warrants 100,000 -- -- --
Common shares issued upon
exercise of warrants and
options at prices ranging
from $0.29 to $2.19
per share 146,000 -- 119 --
Net loss -- -- -- (81)
--------- --------- --------- ---------
BALANCES, March 31, 1999 7,061,243 $ 7 $ 24,029 $ (22,703)
========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
INFONOW CORPORATION AND SUBSIDARY
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(US Dollars in Thousands)
For the Three Months Ended March 31,
-----------------------------------
1999 1998
---- ----
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss $ (82) $ (297)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 124 161
Allowance for bad debt -- 7
Compensation expense recognized in
connection with stock warrant issuance -- 47
Gain on extinguishment of debt -- (1)
Changes in operating assets and liabilities:
Increase in accounts receivable (98) (85)
Decrease in other assets and deferred charges (26) --
(Increase) decrease in other current assets 4 (16)
Increase in payables and accrued liabilities 54 69
Increase in unearned revenue 298 --
------- -------
Net cash flows from (used in) operating activities 274 (115)
CASH FLOWS FROM(USED IN)INVESTING ACTIVITIES:
Purchase of property and equipment (157) (14)
------- -------
Net cash flow used in investing activities (157) (14)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock -- 788
Proceeds from the exercise of options and warrants 119 --
Proceeds from notes payable -- 9
Principal payment on debt obligations (23) (21)
------- -------
Net cash flows from financing activities 96 776
Net increase (decrease) in cash and cash equivalents 213 647
CASH AND CASH EQUIVALENTS, beginning of period 1,303 325
------- -------
CASH AND CASH EQUIVALENTS, end of period $ 1,516 $ 972
======= =======
Supplemental Information:
Cash paid during period for interest $ 10 $ 5
The accompanying notes are an integral part of these financial statements.
6
</TABLE>
<PAGE>
INFONOW CORPORATION AND SUBSIDARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results for the interim periods.
The financial statements as of December 31, 1998, have been derived from
audited financial statements. The financial statements should be read in
conjunction with the financial statements and accompanying notes contained in
the Company's Form 10-KSB for the fiscal year ended December 31, 1998. The
results of operations for the three months ended March 31, 1999 are not
necessarily indicative of the results that will be achieved for the entire
fiscal year ending December 31, 1999.
Note 2. SUPPLEMENTAL CASH FLOW DISCLOSURES
On March 3, 1999, the Company issued common stock in a non-cash transaction
described in Note 3 below.
Note 3. EQUITY TRANSACTIONS
On March 3, 1999, in a non-cash transaction, the Company issued 100,000
shares of common stock in exchange for 200,000 of the Company's outstanding
stock warrants held by an investor.
During the three months ended March 31, 1999, the Company issued 146,000
shares of common stock in conjunction with the exercise of options and warrants.
The per-share price range of $0.29 to $2.19 resulted in gross proceeds to the
Company of $119,000.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis of the financial condition and
results of operations for InfoNow should be read in conjunction with our
financial statements and related notes appearing elsewhere in this Report. This
discussion contains statements that are not historical fact. These
forward-looking statements are based on our current expectations, assumptions,
estimates and projections about our industry and our business including
statements about markets for our services, planned development of products and
anticipated expense and revenue levels. These forward-looking statements contain
words such as "anticipate", "believe", "plan", "expect" or similar language.
These forward-looking statements are subject to business and economic risks. Our
actual results could differ materially from those anticipated in such
forward-looking statements as a result of many factors including those set forth
in this discussion and in documents we have filed with the Commission, including
our registration statement on Form SB-2.
General Information and Overview
We are in the business of Turning Inquiries Into Sales. InfoNow provides a
modular suite of inquiry management services that enable our clients to respond
to inquiries for dealer referrals over the phone or via their web sites. Our
services are designed to respond to the inquiry in a one-to-one manner and
effectively match an inquiry with the dealer or reseller that can best respond
to the specific needs of the user. Our services have the ability to generate
leads in real time for active follow-up of the inquiry by the reseller or
provide targeted incentives to further increase the chance that the inquiry will
be converted into a sale. We have developed proprietary software, which runs in
our two data centers, to respond to inquiries that come to us from our client
web sites and call centers. The interfaces to our system are customized to
duplicate the "look and feel" of the client's web site or automated voice
response system. Our use of Internet technology allows our clients to outsource
this function to us by seamlessly linking to our data centers over the public
Internet or a frame relay connection.
We currently have approximately fifty clients. Most of our clients are
large multinational companies who have extensive branch or reseller networks.
Our clients include American Airlines, Apple, Bank of America, Cisco, Citibank,
Compaq, 3Com, FedEx, First Union, Hewlett Packard, IBM, Intel, Maytag,
NationsBank, United Health Care, UPS and Visa.
InfoNow was incorporated under the laws of the State of Delaware on October
29, 1990, and initially focused on the sale of software through the use of
encrypted CD-ROM technology. Early in 1995, we fundamentally changed our
business focus and began developing web-based inquiry management services for
large corporate clients. As part of our strategy, we acquired Cimarron
International, Inc. and Navigist, Inc. Cimarron provided interactive media
authoring and business services. Navigist offered network engineering and
Internet consulting services. These acquisitions allowed us to utilize the
resources and capabilities of Navigist and Cimarron to facilitate our change in
strategic direction as well as to provide an operating infrastructure and
revenues as we completed our transition to selling and providing web-based
services.
After the acquisitions of Cimarron and Navigist, we ceased selling software
using encrypted CD-ROM technology and installed a new senior management team,
led by Michael Johnson, who became President and Chief Executive Officer in
October of 1995. After the transition to our new business was completed in 1996,
we sold Navigist on December 13, 1996, and completed the sale of Cimarron on
December 11, 1997. We are now focused solely on the sale and provision of
web-based inquiry management services.
Our services are sold on the basis of multi-year service contracts. The
initial term of these contracts is one to three years and are renewable upon
mutual agreement of InfoNow and the client. A typical contract fee includes two
components, a setup fee and a recurring service fee. The setup fee covers the
initial development of a customized, client-specific access to our service, and
the design and implementation of client databases. The recurring monthly service
fee covers hosting of the service and performance of recurring maintenance to
the client databases and core applications.
8
<PAGE>
Currently, the combined fees for the initial year of service typically
range from $45,000 for a simple installation to greater than $750,000 for a
complex application involving multiple services across several customer "touch
points" and geographies. The actual setup and monthly service fees are
determined based on a variety of factors, including the type(s) of service
selected, the number of client locations supported, anticipated transaction
volumes, geographic coverage of the service and the level of service
customization requested by the client. We also may charge transaction fees for
some elements of our services depending upon the specific client configuration
such as fax transactions, voice recordings and dedicated telecommunication
lines. Our services are modular and all, or a portion of the services can be
selected depending on client requirements.
We recognize revenues from setup fees for implementation of our services on
the percentage of completion method using project milestones. Service fees for
our services are recognized as services are rendered over the term of the
contract.
We market our services through our direct sales force. During the last
eight quarters, we have experienced a significant increase in our backlog and
revenues from sales of our services and have reduced our losses from operations.
We believe that a substantial portion of our infrastructure costs, such as
servers, technical personnel to maintain our systems, telecommunications and
certain of our data costs are largely fixed and are not expected to vary
significantly with an increase in client contracts in the near future. We
believe that the majority of the infrastructure is in place to support a
sufficient number of clients that will enable us to achieve profitability in the
second quarter of 1999. Our success in achieving profitability is primarily
dependent on market acceptance and future sales of our services to additional
customers to offset operating costs. Although we have experienced significant
percentage revenue growth and a reduction in operating losses in recent periods,
these growth rates, or improvement in operating results, may not be sustainable
and may not be indicative of future performance. We may also choose to increase
our spending in sales and product development at a greater rate than our growth
of sales in the future in order to increase our market presence, which would
affect our future financial results.
Our limited operating history and the early stage of development in the
markets for our services makes it difficult or impossible to predict our
revenues and operating results. We believe that our prospects should be
considered in light of the risks and difficulties encountered by companies at an
early stage of development. We may not be successful in addressing these risks
and difficulties.
Results of Operations
The results from continuing operations for the periods presented reflect
the revenues and expenses of our inquiry management service operations. We sold
all the assets of Cimarron, which produced interactive media and other business
presentations, on December 11, 1997. The results of Cimarron's business have
been classified as discontinued operations for the year ended December 31, 1997.
Comparison of the Three Months Ended March 31, 1999 to the Three Months
Ended March 31, 1998
Net Revenues. Our revenues from continuing operations consist primarily of
setup fees from new contracts and monthly service fees from ongoing contracts
for our services. Total sales from our inquiry management services increased by
$662,000, or 150% for the three months ended March 31, 1999, compared to the
same period in the previous year. The increased revenues were generated by
additional contracts sold and implemented during the last twelve months. The
number of contracts in backlog at March 31, 1999 was 72 as compared with 40 on
March 31, 1998. Setup fees increased by 63%, from $219,000 to $356,000. The
higher fees were due to contracts with higher setup fees implemented during the
three months ended March 31, 1999 as compared to the same period in the previous
year. Service Fees increased by 225%, from $198,000 to $643,000. The higher fees
were due to the implementation of new contracts and higher average monthly
service fees per contract. Miscellaneous revenues increased by 218%, from
$33,000 to $105,000. The higher fees were due to an increase in the number of
contracts with charges for voice recordings, faxes, geocoding and
telecommunications.
9
<PAGE>
Cost of Revenues. The cost of revenues decreased from 83% of revenues for
the three-month period ended March 31, 1998, to 50% of revenues for the
three-month period ended March 31, 1999. The total cost of revenues over the
same period increased by 50% or $182,000. This increase is a result of increased
costs in creating and expanding an infrastructure for delivering our services.
These costs include technical personnel payroll, contract labor, data royalties,
depreciation and amortization for server equipment and capitalized software
development, telecommunications and other costs related to operating our data
center. Gross margins are expected to increase as sales are expected to increase
at a faster rate than costs.
Product Development. Product Development expenses consist of time spent on
development not specifically associated with a client contract. To date, product
development costs have been comprised of salaries and related costs. These
expenses have not significantly changed in the three-month period ended March
31, 1999 compared to the three-month period ended March 31, 1998. A majority of
product development expenses have been incurred in conjunction with delivery of
our services to customers and are classified in the cost of revenues. We plan to
accelerate spending on project development not directly associated with specific
customer contracts pending the acquisition of additional financing.
Selling and Marketing Expenses. Selling and marketing expenses, which
consist of payroll costs, sales commissions, travel and promotion expenses,
increased from 30% of revenues for the three-month period ended March 31, 1998,
to 35% of revenues for the three-month period ended March 31, 1999. The total
amount of selling and marketing expenses increased by 190%, or $250,000. The
overall increase is primarily the result of the addition of sales personnel and
other marketing and promotion costs during the last twelve months.
General and Administrative Expenses. General and administrative expenses
consist primarily of payroll costs for InfoNow's executive, accounting and
administrative personnel, facilities costs, insurance and other general
corporate expenses. General and administrative expenses decreased from 47% of
revenues for the three-month period ended March 31, 1998, to 22% of sales for
the three-month period ended March 31, 1999. The total amount of general and
administrative expenses increased by 16%, or $34,000. The overall increase is
the result of additional administrative costs related to growth in business
activity.
Provision for Income Taxes. InfoNow has paid no income taxes since its
inception. As of December 31, 1998, we had approximately $7,328,000 of net
operating loss carryforwards for federal income tax purposes, which expire
beginning in 2010.
Non-Operating Income (expense). Net non-operating income was $26,000 for
the three months ended March 31, 1999 compared to $5,000 for the three months
ended March 31, 1998. The increase is due to additional interest income on cash
and cash equivalents, and a $12,000 buyout earned based on Cimarron's gross
profits in accordance with the December 1997 sale agreement between InfoNow and
Cimarron Dog and Pony.
Net Loss from Continuing Operations. Our net loss for the three months
ended March 31, 1999 decreased by approximately $215,000 or 262%, as compared to
the results of the three-months ended March 31, 1998. This decrease is primarily
due to increased revenues generated by additional contracts sold and implemented
during the last twelve months without corresponding increases in operating
expenses.
Liquidity and Capital Resources
InfoNow has financed its operations through private placement of equity
securities and through borrowing arrangements. We have received a total of
approximately $4,815,000 from private offerings and an additional $1,495,000
from the exercise of stock options and warrants since we began marketing our
inquiry management services in 1995.
We had cash and equivalents of $1,516,000 at March 31, 1999, compared to
$1,303,000 at December 31, 1998, a net increase of $213,000. Improvement in our
cash position was due primarily to improvements in our operations and additional
funds received from the exercise of stock options.
10
<PAGE>
Net cash from operating activities during the three months ended March 31,
1999 was $274,000, compared to net cash loss of $8,000 during the three months
ended December 31, 1998. This increase is primarily due to improvement in net
loss and the receipt of advance fees on contracts.
Cash used in investment activities increased $143,000 from $14,000 for the
three-month period ended March 31, 1999. This increase related to the purchase
of computer hardware and software for our data centers and additional personnel.
Net cash generated from Financing activities during the three months ended
March 31, 1999 was $96,000 that included $119,000 of cash received from the
exercise of stock options and warrants.
We currently project that available cash balances, together with projected
cash flow from contracted backlog and anticipated new sales, will be sufficient
to fund our operations for at least the next twelve months. These projections
assume that revenues from new sales and from backlog will continue to provide
cash from its operations and that our overall operating costs will not change
significantly as new client contracts are added.
We are currently seeking additional equity financing to accelerate planned
investments in sales and marketing, product development and to increase general
working capital and license additional intellectual property. We have not made a
final determination regarding the terms and conditions of an equity placement
but anticipate that a placement would involve the issuance of up to 2,000,000
shares of common stock and generate net proceeds of approximately $9.0 million.
Our ability to successfully complete an offering is dependent on a number of
factors. There can be no assurance that we will successfully complete an equity
placement, or that a placement will be concluded on the terms and conditions
that we anticipate.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of certain computer programs being
written using two digits rather than four to indicate the applicable year. As a
result, computer programs with date-sensitive software may incorrectly recognize
a date using "00" as the year 1900 rather than the year 2000. Such an error
could result in a system failure or miscalculations resulting in disruptions of
operations, including a temporary inability to process normal business
transactions or provide service to our customers.
InfoNow has undertaken a review of its own computer systems and
applications to determine if significant problems exist with the operations of
those systems as a result of the Year 2000 Issue. As a result of that review, we
do not expect that any modifications required to address Year 2000 problems will
have a material impact on our business, operations or financial condition. In
addition, InfoNow has implemented a Year 2000 compliance inquiry program with
its major vendors and suppliers as to both the status of the Year 2000
compliance of their own systems and any delays they anticipate in supplying
goods and services to us.
We cannot guarantee that the systems of our vendors and suppliers will be
Year 2000 compliant. However, based on our initial surveys, we do not anticipate
replacement or major modification of any hardware or software components in our
systems if third party supplied hardware and software is not year 2000
compliant. Nevertheless, we may be required to install software updates to our
systems and hardware so that they will run properly after December 31, 1999. We
believe that these needed software updates are currently available or will be
available based on announcements made by our vendors through our normal software
maintenance licenses.
We have not incurred material costs to date in our Year 2000 review process
and do not anticipate that we will incur material expenses outside the normal
course of business to modify our own systems or third party supplied systems to
be Year 2000 compliant. However, our systems and third party systems may contain
undetected errors or defects that may cause us to incur material costs and could
result in a material adverse effect on our operations and financial condition.
In addition, if our suppliers or other third parties fail to address and correct
their Year 2000 issues, we could face business interruption and material
unexpected costs.
11
<PAGE>
We have not yet fully developed a contingency plan to address situations
that may result if we are unable to achieve year 2000 readiness of our critical
operations. The cost of developing and implementing such a plan may itself be
significant. In addition, we are also subject to external forces that might
generally affect industry and commerce, such as electric utility or
telecommunications interruptions caused by Year 2000 failures.
Risks of Forward Looking Statements
Our actual results may vary materially from the forward-looking statements
made above. We intend that such statements be subject to the safe harbor
provision of the Securities Act. Our forward-looking statements include the
plans and objectives of management for future operations and relate to a variety
of factors, including management's assumptions about our ability to:
- Gain market acceptance of our inquiry management services
- Accurately forecast and meet demands for our services, including our
ability to maintain technical performance of the system as new clients
are added
- Improve our operational and financial systems in order to address
planned growth in our operations
- Maintain pricing and adequate profit margins on our products and
services
- Retain and attract qualified technical personnel
- Develop future enhancements to our services and control development
costs of those enhancements
- Respond to competitive threats
- Raise additional capital, if needed.
Our assumptions are based on judgments with respect to, among other things,
future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our ability to control.
We believe that the assumptions underlying our forward-looking statements
are reasonable. However, our assumptions may prove to be inaccurate and
therefore there can be no assurance that the results contemplated in
forward-looking statements will be realized. You should not regard any
statements made in this Report as a representation by InfoNow or any other
person that we will achieve our objectives.
12
<PAGE>
PART II. OTHER INFORMATION
--------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits- Included, as exhibits are the items listed on the Exhibit
Index. The Registrant will furnish a copy of any of the exhibits
listed upon payment of $5.00 per exhibit to cover the costs to the
Registrant of furnishing such exhibit.
(b) Reports on Form 8-K
No reports were filed on form 8-K during the three months ended March
31, 1999
13
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: May 13, 1999
INFONOW CORPORATION
(Registrant)
/s/ Michael W. Johnson
-------------------------------------------------
Michael W. Johnson
Chief Executive Officer, President and Director
(Principal Executive Officer)
/s/ Kevin D. Andrew
-------------------------------------------------
Kevin D. Andrew
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)
14
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
------ -----------
3.1 Certificate of Incorporation of the Company, as Amended.(A)
3.3 Bylaws of the Company, as Amended.(B) 4.1 Form of Common Stock
Certificate for the Registrant's Common Stock, $.001 par value per
share.(B)
4.4 Form of Class C Warrant.(C)
10.14 InfoNow Corporation 1990 Stock Plan as amended.
10.29 Employment Agreement between the Company and W. Brad Browning dated
January 9, 1996.(E)
10.30 Employment Agreement between the Company and Kevin Andrew dated March
1, 1996.(E)
10.32 Agreement between the Company and Environmental Systems Research
Institute, Inc. ("ESRI") dated March 6, 1996.(E)
10.33 Stock Purchase and Sale Agreement by and among VDC Paradigms, Inc.,
Craig Michaelis, David Wertzberger and InfoNow Corporation dated
December 13, 1996.(A)
10.34 Employment Agreement between the Company and Donald E. Cohen dated May
22, 1995, as amended.(A)
10.35 Asset Sale Agreement for sale of assets to Cimarron Dog and Pony
Company, Inc. dated December 11, 1997.(F)
10.36 Michael W. Johnson employment agreement dated January 1, 1998.(F)
10.37 Agreement dated October 23, 1997 between the Company and Michael W.
Johnson regarding sale of the Company.(F)
10.38 Letter Agreement between the Company and Michael Basch dated September
21, 1998.
27.1 Financial Data Schedule
- ----------------------
(A) Incorporated by reference from the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
(B) Incorporated by reference from Registration Statement No. 33-43035 on Form
S-1 dated February 14, 1992.
(C) Incorporated by reference from Post-Effective Amendment No. 2 to
Registration Statement No. 33-43035 on Form S-1 dated July 13, 1993.
(D) Incorporated by reference from Post-Effective Amendment No. 3 to
Registration Statement No. 33-43035 on Form S-1 dated September 30, 1996.
(E) Incorporated by reference from the Company's Annual Report on Form 10-K for
year ended December 31, 1995.
(F) Incorporated by reference from the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1997.
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from InfoNow's
Quarterly report to stockholders for the three months ended March 31, 1999, and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1516
<SECURITIES> 0
<RECEIVABLES> 477
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2086
<PP&E> 1865
<DEPRECIATION> 1070
<TOTAL-ASSETS> 2919
<CURRENT-LIABILITIES> 1510
<BONDS> 0
0
0
<COMMON> 7
<OTHER-SE> 1326
<TOTAL-LIABILITY-AND-EQUITY> 2919
<SALES> 1104
<TOTAL-REVENUES> 1104
<CGS> 590
<TOTAL-COSTS> 1213
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (16)
<INCOME-PRETAX> (82)
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<INCOME-CONTINUING> (82)
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<CHANGES> 0
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<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
