SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark one)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from_____to_____.
Commission File Number 1-11624
HyperMedia Communications, Inc.
-------------------------------
(Exact name of registrant as specified in its charter)
California 94-3104247
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
901 Mariner's Island Blvd., Suite 365,
- --------------------------------------
San Mateo, California 94404
--------------------- -----
(Address of principal executive offices) (Zip Code)
(415) 573-5170
--------------
(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. Yes X No _
As of May 5, 1997, 3,200,137 shares of the Registrant's common stock were issued
and outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HYPERMEDIA COMMUNICATIONS, INC.
BALANCE SHEET
(UNAUDITED)
March 31, December 31,
1997 1996
----------- -------------
ASSETS
Current assets:
Cash $ 81,000 $ 107,000
Accounts receivable, net of allowance for
doubtful accounts of $113,000 and $180,000 1,385,000 1,294,000
Prepaid expenses and other assets 499,000 557,000
----------- -------------
Total current assets 1,965,000 1,958,000
Property and equipment, net 579,000 622,000
Intangibles and other assets 2,000 4,000
----------- -------------
$2,546,000 $ 2,584,000
=========== =============
Current liabilities:
Accounts payable $ 795,000 $ 822,000
Accrued liabilities 355,000 326,000
Deferred revenue 35,000 33,000
Note payable 340,000 335,000
----------- -------------
Total current liabilities 1,525,000 1,516,000
----------- -------------
Shareholders' equity:
Convertible Preferred Stock, $.001 par value;
10,064,516 shares authorized;
8,146,766 shares issued and outstanding 1,209,000 1,209,000
Common Stock, $.001 par value;
50,000,000 shares authorized;
3,200,137 and 3,019,004 shares 10,427,000 10,377,000
issued and outstanding
Accumulated deficit (10,615,000) (10,518,000)
----------- -------------
Total shareholders' equity 1,021,000 1,068,000
----------- -------------
$ 2,546,000 $ 2,584,000
=========== =============
See the accompanying notes to these condensed financial statements.
<PAGE>
HYPERMEDIA COMMUNICATIONS, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
Three months ended March 31,
----------------------------
1997 1996
---------- ----------
Revenues $1,915,000 $2,175,000
Expenses:
Editorial 291,000 344,000
Production 476,000 780,000
Circulation 564,000 532,000
Sales and marketing 420,000 493,000
Product development 9,000 7,000
General and administrative 243,000 229,000
---------- ----------
Total expenses 2,003,000 2,385,000
---------- ----------
Loss from operations (88,000) (210,000)
Interest and other expense, net 10,000 4,000
---------- ----------
Net loss $ (98,000) $ (214,000)
========== ==========
Net loss per common share (Note 2) $ (0.03) $ (0.07)
========== ==========
Weighted average common shares 3,109,570 3,019,004
========== ==========
See the accompanying notes to these condensed financial statements.
<PAGE>
HYPERMEDIA COMMUNICATIONS, INC.
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
(UNAUDITED)
Three months ended March 31,
----------------------------
1996 1996
--------- ---------
Cash flow from operating activities:
Net loss $ (98,000) $(214,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 59,000 64,000
Allowance for doubtful accounts 21,000 (50,000)
Change in assets and liabilities:
Accounts receivable (111,000) (213,000)
Prepaid expenses and other assets 57,000 (210,000)
Accounts payable (27,000) 235,000
Accrued liabilities 29,000 66,000
Deferred revenue 3,000 203,000
--------- ---------
Net cash used in operating activities (67,000) (119,000)
--------- ---------
Net cash used in investing activities for:
Purchase of fixed assets (14,000) (36,000)
Cash flows from financing activities:
Proceeds from issuance of preferred stock 0 211,000
Proceeds from issuance of common stock 50,000 2,000
Repayment of shareholder note receivable -- 21,000
Proceeds from note payable 5,000 --
--------- ---------
Net cash provided by financing activities 55,000 234,000
--------- ---------
Net increase (decrease) in cash (26,000) 79,000
Cash at beginning of period 107,000 275,000
--------- ---------
Cash at end of period $ 81,000 $ 354,000
========= =========
Supplemental disclosure of cash
flow information:
Cash paid during the period for interest $ 10,000 $ 4,000
========= =========
See the accompanying notes to these condensed financial statements.
<PAGE>
HYPERMEDIA COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
The financial statements of HyperMedia Communications, Inc. (the "Company") as
of March 31, 1997 and 1996 and for the three months then ended are unaudited,
and in the opinion of management, include all adjustments (consisting of only
normal recurring items) necessary for the fair presentation of the financial
position and results of operations for the interim periods. These financial
statements should be read in conjunction with the Financial Statements for the
year ended December 31, 1996 and notes thereto included in the Company's annual
report on Form 10-K. The results of operations for the three months ended March
31, 1997 are not necessarily indicative of the results expected for the entire
year.
The preparation of these financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - NET LOSS PER SHARE
Net loss per common share is based upon the weighted average number of
outstanding shares of Common Stock. Common stock equivalent shares from
Convertible Preferred Stock (using the if-converted method) and stock options
and warrants (using the treasury stock method) have been excluded from the
computation for the three months ended March 31, 1997 and 1996 as their effect
is anti-dilutive.
In February 1997, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). SFAS supersedes
Accounting Principles Board Opinion No. 15, "Earnings Per Share" and is
effective for financial statements for both interim and annual periods ending
after December 15, 1997. Under SFAS 128, the pro forma net loss per share for
the three month period ended March 31, 1997, was $(0.03) for both basic and
diluted earnings per share.
<PAGE>
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
This section and other parts of this Quarterly Report on Form 10-Q contain
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ significantly from those anticipated in these
forward-looking statements as a result of the factors set forth below and in
"Factors Affecting Operating Results and Market Price of Stock". Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Forward-looking statements are indicated by an
asterisk (*).
General
HyperMedia Communications, Inc. (the "Company" or "HyperMedia") publishes
NewMedia Magazine ("NewMedia"), the first periodical publication dedicated
solely to the professional market for new media technology. "New media" is a
term applied to a wide array of digital communications technologies, including
Internet development tools and services, desktop and portable personal
computers, workstations, servers, audio/video compression and editing equipment,
graphics hardware and software, high-density storage devices, and video
conferencing systems. Professional new media technology is actively employed in
a broad range of communications-related businesses and disciplines such as
publishing, advertising, sales, marketing, film production, broadcasting, game
development, education, and training. Many large multinational technology
corporations are developing and marketing products specifically targeted to the
professional market.
HyperMedia also publishes Hyperstand, an electronic service on the Internet for
professionals who develop new media content and applications, particularly World
Wide Web sites. The Company also produces an annual awards competition, the
NewMedia Invision Awards program, which honors professionals who employ new
media technology in the development of communications applications.
NewMedia is published 16 times per year and is distributed to more than 215,000
professionals who develop new media content and applications for the business,
government, education and consumer markets. According to a recent analysis
conducted by the Company of NewMedia subscriber demographic data, the average
subscriber to the publication has represented that they are personally involved
in the purchase of over $500,000 worth of new media-related hardware, software,
and services in a twelve-month period.* The magazine's primary mission is to
rate and review new professional-level products used in the development of new
media content and applications.
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
Results of Operations
The Company's gross revenues were $1,915,000 and $2,175,000 for the quarters
ended March 31, 1997 and 1996, respectively. The Company's revenues in the
quarter ended March 31, 1996 reflected one-time advertising promotions from
polybagging campaigns by online services. The costs of these promotions were
passed through to the customer and resulted in a disproportionate increase in
revenues. Excluding the revenues associated with the one-time promotions, net
revenue increased slightly in the first quarter of 1997 as compared to the year
earlier period. Net advertising pages in NewMedia increased by 19% from the
first fiscal quarter of 1996 to the first fiscal quarter of 1997. This increase
was primarily attributable to new advertising customers, such as Microsoft, IBM,
Kingston Technologies and others, who are targeting the digital professional
market that NewMedia serves.
The Company's total expenses were $2,003,000 and $2,385,000 for the quarters
ended March 31, 1997 and 1996, respectively, a decrease of 16%. Approximately
$220,000 of the decrease was attributable to the costs of the one-time
promotions in the quarter ended March 31, 1996 which were passed through to the
customer. The decrease of $75,000, or 5%, in total expenses (excluding variable
and polybag production costs) in the first quarter of 1997 as compared to the
first quarter of 1996 is primarily attributable to strong cost control measures.
Editorial expenses, comprised principally of salaries and fees paid to the
writers for the Company's publications, were $291,000 for the quarter ended
March 31, 1997, as compared to $344,000 for the same quarter in 1996. Editorial
expenses decreased because of the sale of the Macromedia User Journal ("MUJ") in
the third quarter of 1996 and from lower headcount. As a percentage of revenues,
editorial expenses decreased slightly from 16% in the first quarter of 1996 to
15% in the first quarter of 1997. The Company expects editorial costs to rise in
the balance of 1997 as a result of higher paid contributor and staffing costs
associated with NewMedia and the expansion of the Internet World Wide Web site,
Hyperstand. *
Gross production expenses, including costs for design, materials and printing of
the Company's publications, were $476,000 for the quarter ended March 31, 1997.
This compares to $780,000 for the quarter ended March 31, 1996. The decrease of
$304,000, or 39%, is primarily attributable to the one time advertiser promotion
costs associated with polybagging 4 issues of NewMedia for various online
services in 1996. Net production expenses for NewMedia, excluding one time
advertiser promotion costs, decreased primarily as a result of decreased
year-over-year paper costs. Net production expenses are expected to remain
relatively unchanged for the balance of 1997 as a result of projected increase
in advertising pages, if any, which are expected to be offset by decreased
year-over-year paper costs. *
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
Circulation expenses, consisting primarily of costs associated with subscription
fulfillment, mailing and the direct mail promotions of the Company's
publications, were $564,000 and $532,000 for the quarters ended March 31, 1997
and 1996, respectively. The Company currently capitalizes its circulation
development expenditures and amortizes them over a 12 month period. The increase
of $32,000, or 6%, is primarily attributable to the larger amount of circulation
development expenditure amortization included in the first quarter of 1997 as
compared to the same period in 1996 as a result of the Company's 1996 publishing
strategy to increase the minimum readership qualifications to receive the
magazine. As a result of these new criteria, the purchasing power of new media
products and services of the average subscriber increased to more than $500,000
at the end of 1996 from less than $200,000 for 1995, an increase of
approximately 150 percent. The Company intends to maintain the higher minimum
readership qualifications throughout 1997. * Circulation expenses represented
29% of revenues for the first quarter of 1997 as compared to 24% of revenues for
the same period of 1996. Circulation expenses are expected to increase during
the balance of 1997 as the result of the impact of a projected expansion in
advertising pages, if any, on mailing costs and higher circulation development
expenditure amortization associated with the more stringent minimum
qualifications to receive the magazine. *
Sales and marketing expenses were $420,000 for the quarter ended March 31, 1997,
as compared to $493,000 for the same quarter in 1996. The decrease of $73,000,
or 15%, is attributable to reduced marketing compensation costs. Sales and
marketing expenses represented 22% of revenues for the first quarter of 1997 as
compared to 23% of revenues for the same period of 1996. Sales and marketing
expenses are expected to increase during the balance of 1997, with larger
commission costs associated with increased advertising pages, if any, higher
sales and marketing management compensation expenses, and higher expenditures on
sales and marketing programs. *
Product development costs totaled $9,000 for the quarter ended March 31, 1997,
as compared to $7,000 for the comparable quarter in 1996, and consist of costs
incurred in the development of new products, including the Internet World Wide
Web site, Hyperstand. The Company plans to continue its product development
efforts during 1997. *
General and administrative expenses were $243,000 and $229,000 for the quarters
ended March 31, 1997 and 1996, respectively. The increase of $14,000, or 6%,
primarily reflects increased bad debt expense offset by lower consulting costs.
General and administrative expenses represented 13% of revenues for the first
quarter of 1997 as compared to 11% for the same period in 1996. General and
administrative costs are expected to grow in the balance of 1997 with expected
increases in general and administrative expenses that accompany anticipated
revenue growth.*
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
The Company incurred a net loss of $98,000 and $214,000 in the first quarters of
1997 and 1996, respectively. The $116,000, or 54%, decrease in net loss in the
first quarter of 1997 as compared to 1996 is primarily a result of strong cost
control programs.
In February 1997, the Financial Accounting Standards Board issued Statement of
Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). SFAS supersedes
Accounting Principles Board Opinion No. 15, "Earnings Per Share" and is
effective for financial statements for both interim and annual periods ending
after December 15, 1997. Under SFAS 128, the pro forma net loss per share for
the three month period ended March 31, 1997, was $(0.03) for both basic and
diluted earnings per share.
Liquidity and Capital Resources
At March 31, 1997, the Company had approximately $440,000 in net working capital
and its principal sources of liquidity consisted of approximately $81,000 in
cash, a $1 million line of credit limited to 70% of qualified accounts
receivable and an agreement with MK Global Ventures to purchase up to $250,000
of the Company's Series G Preferred Stock at the Company's request at any time
up to and including June 30, 1997. At March 31, 1997, there was $340,000
outstanding under this line of credit. As a result of the conditions of the line
of credit and financial results of the 1997 first fiscal quarter, the Company
had unused borrowing capacity of $450,000. Partial usage of unused borrowing
capacity could be restricted by financial operating covenants. In March 1997,
the $1,000,000 line of credit secured by 70% of qualified accounts receivable
was renewed with similar terms, conditions and covenants for a period through
March 1998.
The Company expects that it will continue to require significant amounts of cash
to finance operations.* The Company has not committed to make significant
capital expenditures, but may make such expenditures in the future.* The Company
believes that the existing cash balances, together with cash generated from
operations and borrowings available under its line of credit, will be sufficient
to meet its cash requirements through at least the end of 1997.* There can be no
assurance, however, that the Company's anticipation of its future cash
requirements will be correct. Thereafter, the Company may seek to raise
additional working capital, primarily through sales of debt or equity
securities.* In addition, the Company may seek to raise additional working
capital prior to the end of 1997 if it can raise such capital on acceptable
terms.*
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
The terms of the Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock and the Company's outstanding warrants grant the holders thereof
certain preferential rights including antidilution and conversion and/or
registration rights which may have a dilutive effect on existing shareholders
and may therefore limit the availability of financing, particularly equity
financing. The Company has no commitments for any such financing and there can
be no assurance that the Company will be able to raise such working capital on
reasonable terms or at all. The Company's ability to borrow under the line of
credit is subject to compliance with certain financial covenants, including, but
not limited to, quarterly loss not to exceed $100,000 in the second fiscal
quarter of 1997, quarterly profitability beginning with the third fiscal quarter
of 1997 and maintaining a minimum $1,000,000 tangible net worth. There can be no
assurance that the Company will be successful in complying with these financial
covenants. The Company's failure to comply with the financial covenants could
preclude it from utilizing the line of credit which would have a material
adverse effect on the Company's liquidity and financial condition. In addition,
the Company's inability to raise capital, if required, could have a material
adverse effect on the Company's business and results of operations.
Factors Affecting Operating Results and Market Price of Stock
This section and other parts of this Quarterly Report on Form 10-Q contain
forward-looking statements that involve risks and uncertainties. The Company's
actual results may differ significantly from those anticipated in these
forward-looking statements as a result of the factors set forth below and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of these date hereof.
Forward-looking statements are indicated by an asterisk (*).
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
Among the factors that could cause actual results to differ materially are those
listed below and those listed from time to time in the Company's SEC reports
including but not limited to the annual report on Form 10-K for the year ended
December 31, 1996.
Limited Operating History; History of Losses and Accumulated Deficits
The Company has a limited operating history and is subject to all the risks and
difficulties experienced by any new business. The Company's prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered in the establishment of a new business and a continually evolving
industry characterized by intense competition. The Company incurred total net
losses of $10,615,000 from inception to March 31, 1997, including net losses of
$291,000 for the year ended December 31, 1996 and net losses of $98,000 for the
quarter ended March 31, 1997. The Company expects to incur losses for at least
the second quarter of 1997 as it continues to promote and expand its current
publications and develop and launch new products.* There can be no assurance
that during 1997 or thereafter the Company will be able to increase its revenues
or become profitable. The Company's potential future growth depends on many
factors, including the ability of the Company to attract sufficient advertising
customers for NewMedia, maintain the circulation base of NewMedia, control its
costs and successfully implement its marketing and product strategy.* There can
be no assurance that the Company will be successful in any of these efforts.
New Publishing Strategy; Sales and Marketing Strategy
The key elements of the Company's publishing strategy are to focus on the
professional market for new media technology, to publish at a frequency of 16
times per year, to maintain the stringent minimum qualification criteria that
potential subscribers were required to meet in 1996 in order to qualify for a
subscription, and to maintain the guaranteed circulation base of 215,000
qualified NewMedia readers.* There can be no assurance that the Company's
publishing strategy will result in increased revenues or in profitability.
Certain components of production, circulation and editorial expenses associated
with this publishing strategy will increase.* The Company has been undergoing an
advertising category transition since the second half of 1995, away from the
consumer market and toward the above mentioned professional market for new media
technology. To replace these consumer market advertisers and to grow advertising
revenues, the Company needs to sell advertisements oriented to the professional
market for new media technology. There can be no assurance that the Company will
be able to sell a sufficient number of advertisements to the professional market
to make its strategy successful. Until the circulation direct mail (and
associated) campaigns for qualified readers using the new qualification criteria
is completed, there can be no assurance that the estimated purchasing power of
new media products and services will be maintained with a reasonable level of
circulation expenditures. As a result, the Company does not expect growth in
NewMedia advertising revenues until at least the second quarter of 1997, if at
all.*
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
Highly Competitive Market
Revenues from NewMedia are derived primarily from the sale of advertising
in the magazine and will continue to be derived primarily from such sales in the
foreseeable future.* The technology publishing industry is highly competitive.
Many of the Company's competitors have substantially greater financial, sales
and marketing resources than the Company. Although the market for new media
products is an evolving market, the Company competes for advertising revenue
with numerous magazines and newspapers, including personal computer magazines.
There can be no assurance that the Company will not experience increased
competition from new or existing technology periodicals or other media, such as
the Internet. Such increased competition, if experienced, would have a material
adverse impact on the Company's ability to increase its advertising revenues.
Growth of New Media Market
NewMedia is targeted toward professionals users of new media products and
services in connection with computers. The computer industry has historically
been characterized by business cycles. To the extent that the computer industry
or professional new media market experiences a significant downturn, the Company
would expect a similar downturn in its business. The professional market for new
media products and services is in the early stages of development, and
predictions as to its size and the factors which will affect it are
inconclusive. To the extent that the professional new media market does not
develop as quickly as the Company anticipates or that it experiences a
significant downturn following growth, the Company's ability to generate revenue
or profits may be adversely affected. Furthermore, even if the professional new
media market does develop as anticipated, there can be no assurance that the
demand for NewMedia will also increase.
Dependence on Key Personnel
The Company's success depends to a large extent upon the efforts and
abilities of key managerial employees, including without limitation, Richard
Landry, Todd Hagen and Dan Ruby, the Chief Executive Officer, Chief Financial
Officer and Vice President, Editorial, respectively, of the Company. The loss of
any of these key managers could have a material adverse effect on the Company.
The Company has not entered into employment agreements with its executive
officers and carries no key man insurance on their lives. The success of the
Company's business will also depend upon its ability to continue to attract and
retain qualified employees. There can be no assurance that the Company will be
successful in attracting or retaining such personnel.
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
Possible Delisting of Securities from Nasdaq System
The Common Stock is listed on the Nasdaq SmallCap Market and the
Pacific Stock Exchange. The Company's failure to meet Nasdaq's listing
maintenance criteria in the future for any reason may result in the
discontinuance of the inclusion of the Company's securities on Nasdaq. In order
to remain quoted on Nasdaq, under the current Nasdaq rules, a company must
maintain $2,000,000 in assets, a $200,000 market value of the public float and
$1,000,000 in total capital and surplus. In addition, continued inclusion
requires two market-makers and a minimum bid price of $1.00 per share except
that if a company falls below such minimum bid price, it will remain eligible
for inclusion in Nasdaq if the market value of the public float is at least
$1,000,000 and the Company has $2,000,000 in capital and surplus. In November
1996, the Commission announced proposed revisions to the listing and maintenance
requirements, which would increase the requirements for continued listing on the
Nasdaq Market. Under the proposed rules, a listed company will no longer be able
to remain listed if its minimum bid price falls below $1.00. In addition, the
Company will have to maintain a $1,000,000 market value or public float and
either $2,000,000 net tangible assets, $35,000,000 market capitalization or net
income in two of its last three years of $500,000. In the event of Nasdaq
delisting, trading, if any, in the Company's securities may then continue to be
conducted on the OTC Electronic Bulletin Board or in the non-Nasdaq
over-the-counter market. As a result, an investor may find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of the
Company's securities.
- ---------------
* This statement is a forward looking statement reflecting current expectations.
There can be no assurance that the Company's actual performance will meet the
Company's current expectations. Investors are strongly encouraged to review the
sections entitled "Factors Affecting Operating Results and Market Price of
Stock" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of factors that could affect future
performance.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) No reports on Form 8-K were filed by the Company
during the fiscal quarter ended March 31, 1997.
Items 1, 2, 3, 4, and 5 are not applicable and have been omitted.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 13, 1996 HyperMedia Communications, Inc.
By: /s/ Todd Hagen
----------------------------------------
Todd Hagen
Vice President of Finance and
Administration and Chief Financial
Officer (Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 Fin. Data Schedule for the 1st Qtr 10-Q
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-31-1997
<CASH> 81
<SECURITIES> 0
<RECEIVABLES> 1385
<ALLOWANCES> 113
<INVENTORY> 0
<CURRENT-ASSETS> 1965
<PP&E> 1376
<DEPRECIATION> 797
<TOTAL-ASSETS> 2546
<CURRENT-LIABILITIES> 1525
<BONDS> 0
<COMMON> 10427
0
1209
<OTHER-SE> (10615)
<TOTAL-LIABILITY-AND-EQUITY> 2546
<SALES> 1915
<TOTAL-REVENUES> 1915
<CGS> 0
<TOTAL-COSTS> 2003
<OTHER-EXPENSES> 10
<LOSS-PROVISION> 21
<INTEREST-EXPENSE> 10
<INCOME-PRETAX> (98)
<INCOME-TAX> 0
<INCOME-CONTINUING> (98)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (98)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
