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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 1998
INFONAUTICS, INC.
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(Exact name of registrant specified in Charter)
Pennsylvania 0-28284 23-2707366
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(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
900 West Valley Road, Suite 1000
Wayne, Pennsylvania 19087
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(Address of principal executive offices) Zip Code
Registrant's telephone, including area code: (610) 971-8840
(not applicable)
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(Former name and former address, if changed since last report)
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Item 5. Other Events.
On October 19, 1998, Infonautics, Inc. issued a press release announcing
its third quarter financial results and its appeal to Nasdaq regarding the
possible delisting of its shares of Class A Common Stock from the Nasdaq
National Market System. A copy of the press release is attached as Exhibit 99 to
this Current Report on Form 8-K and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following is filed as an exhibit to this Current Report on Form 8-K:
99 Press Release dated October 19, 1998
SIGNATURE
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 hereunto duly authorized.
INFONAUTICS, INC.
By: /s/Gerard Lewis
-------------------
Gerard Lewis
Vice President and General Counsel
Dated: October 19, 1998
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Exhibit Index
Exhibit
99 Press Release dated October 19, 1998
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EXHIBIT 99
Contact:
Infonautics, Inc.
Bob Wright
610.225.6356
[email protected]
or:
Freddi O'Brien
610.293.6891
[email protected]
INFONAUTICS, INC. REPORTS THIRD QUARTER FINANCIAL RESULTS
CONTINUED STRONG GROWTH IN BUSINESS FUNDAMENTALS
COMPANY GRANTED HEARING ON NASDAQ MINIMUM LISTING
REQUIREMENT
WAYNE, Pa. (October 19, 1998) -- Infonautics, Inc. (NASDAQ:INFO), a rapidly
growing Internet information company, today reported revenue of $4.1 million for
the third quarter of 1998. This represents a 149 percent increase over $1.7
million in last year's comparable period.
In the first three quarters of 1998, Infonautics generated revenue of $10.3
million, 136 percent more than the $4.4 million generated during the same period
last year.
New sales bookings were $5.8 million in this year's third quarter, an increase
of 107 percent over last year's third quarter performance. On a year-to-date
basis, sales bookings were $15.3 million, up 93 percent over the first nine
months of last year. Sales bookings represent the value of firm, non-cancelable
customer commitments that convert to revenue over the life of the contract.
Van Morris, president and chief executive officer of Infonautics, said "In the
beginning of the year, we set out to achieve two important financial goals for
our company. The first goal was to continue top line growth. Clearly, we are
achieving that goal."
At the end of the third quarter, more than 9,500 schools and libraries were
licensed to use Infonautics' Electric Library online reference service. This is
a 40 percent increase from the 6,800 institutions at the end of the second
quarter of 1998 and a 110 percent increase from 4,515 at the end of the second
quarter of 1997. Mr. Morris noted, "The market's acceptance of Electric
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Library continues and we are rapidly capturing a position of leadership in this
market. We believe this is an asset of real and significant value."
Mr. Morris continued, "Our second financial goal for the company was to move
towards a position of generating cash from operations."
Cash used in operations declined to $1.5 million in the third quarter, while
accounts receivable grew by $1.6 million to a seasonally high level of $4.2
million. Mr. Morris commented, "The fact that accounts receivable grew by
approximately the same amount as cash burn illustrates our very real progress
towards our second goal." Cash used in operations was $3.8 million in the
immediately preceding quarter and $2.3 million for the third quarter of 1997.
Infonautics' net loss for this year's third quarter was $4.2 million or $0.44
per share, compared with a net loss of $3.9 million or $0.41 per share during
the third quarter of 1997.
Operating costs were $7.3 million during the third quarter compared with $7.4
million in the immediately preceding quarter and $5.1 million in the third
quarter of 1997.
Infonautics had current assets of $10.5 million including $4.7 million of cash,
cash equivalents and investments as of September 30, 1998.
The company also announced that it no longer meets the minimum net tangible
asset requirements for continued listing on the Nasdaq National Market. The
company's net tangible asset value is directly impacted by accounting
conventions that defer revenue ($8.0 million, as of September 30, 1998), thereby
reducing its net tangible asset value below the Nasdaq required minimum.
In response to a delisting letter from Nasdaq, the company has requested -- and
has been granted -- a hearing before a Nasdaq panel. Nasdaq has informed the
company that any potential action with respect to the listing of its stock will
be postponed pending the decision of the hearing panel, which could be issued
between several days and several months following the date of the hearing. The
hearing is scheduled for November 5, 1998. Should the company receive an
unfavorable decision from the Nasdaq panel, it would expect that its stock would
be quoted on the OTC Bulletin Board. Regardless, the company said it expects to
make no changes in its day-to-day business operations, though an unfavorable
decision by Nasdaq could have an adverse effect on the liquidity of the
company's common stock.
In a separate press release issued today, Infonautics also announced Company
Sleuth(TM), a free service that uncovers hard-to-find and seemingly hidden
business information on the Internet. This new service automatically locates
competitive intelligence by scanning financial, regulatory, investment and
business sources. Users receive a daily e-mail report detailing the business
activities, financial moves and Internet dealings of selected companies. The
service is accessible from http://www.companysleuth.com.
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About Infonautics
Infonautics Inc. (NASDAQ: INFO) is a rapidly growing Internet information
company that provides online information services for schools, libraries,
consumers and businesses. Its award- winning Electric Library service was the
first reference service of its type on the Internet and today is the fastest
growing electronic reference product for schools and libraries, serving more
than 9,500 institutions in all 50 states. Electric Library is also one of the
largest paid subscription sites on the Web with more than 50,000 paying
subscribers. The company also provides custom content-management and online
archive services to major publishers and other content creators. Infonautics was
founded in November 1992, and is headquartered in Wayne, PA.
To view Infonautics financial charts, go to http://solo.infonautics.com/
progress/
To receive additional information on Infonautics, via fax at no charge, dial
1-800-PRO-INFO and enter code INFO.
INFONAUTICS and ELECTRIC LIBRARY are registered trademarks of Infonautics, Inc.
or its subsidiaries. COMPANY SLEUTH is a trademark of Infonautics, Inc. or its
subsidiaries. All other trademarks and service marks are the properties of their
respective holders.
###
This news release contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. These
forward-looking statements include statements regarding the Company's
growth and expansion plans and the sufficiency of the Company's liquidity
and capital. Such statements are based on management's current expectations
and are subject to a number of uncertainties and risks that could cause
actual results to differ materially from those described in the
forward-looking statements. More information about potential factors which
could affect the Company's financial results is included in the Risk
Factors sections of the Company's filings with the Securities and Exchange
Commission. All forward-looking statements included in this document are
based on information available to the company as of the date of this
document, and the company assumes no obligation to update any such
forward-looking statements.
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INFONAUTICS, INC.
SUMMARY FINANCIAL DATA
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Statement of Operations Data:
Total revenues $ 4,148,000 $ 1,667,000 $ 10,313,000 $ 4,378,000
Total costs and expenses $ 8,371,000 $ 5,793,000 $ 24,128,000 $ 18,476,000
Loss from operations $ (4,223,000) $ (4,126,000) $(13,815,000) $(14,098,000)
Net loss $ (4,214,000) $ (3,898,000) $(13,661,000) $(13,263,000)
Net loss per common share - $ (0.44) $ (0.41) $ (1.42) $ (1.40)
basic and diluted
Weighted average shares 9,640,900 9,491,600 9,589,700 9,491,600
outstanding - basic and
diluted
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<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
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<S> <C> <C>
Balance Sheet Data:
Cash, cash equivalents and investments $ 4,679,000 $ 12,997,000
Working capital $ (2,745,000) $ 7,163,000
Total assets $ 13,701,000 $ 18,794,000
Long-term debt, less current portion $ 135,000 $ 404,000
Total shareholders' equity (deficit) $ (2,424,000) $ 10,460,000
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