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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): NOVEMBER 16, 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 January 4, 1999, Infonautics, Inc. (the "Company") issued a press release
updating information regarding the Company's Nasdaq listing and announcing plans
to reduce operating expenses and retention of Allen & Company Incorporated to
assist the Company in looking for strategic alternatives. With respect to the
Company's Nasdaq listing, the Company announced that trading in the Company's
Class A Common Stock (the "Common Stock") will move from the Nasdaq National
Market to the Nasdaq SmallCap Market, effective January 5, 1999.
With respect to operating expenses, the Company announced that while it
achieved revenue growth for both the fourth quarter of 1998 and for the year
ended December 31, 1998, new sales bookings fell below expectations during the
fourth quarter. It also announced that it was taking steps to reduce operating
expenses. Such steps include the reduction of 10 percent of its workforce and
the consolidation of development and technical operations. The Company
additionally announced that it expects its cash balance as of the end of 1998
will be lower than the $4.8 million that it reported at the end of the third
quarter of 1998. Further, the Company announced that it was seeking a working
capital facility. Finally, the Company announced the retention of Allen &
Company Incorporated to assist the Company in exploring strategic alternatives.
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.
On November 16, 1998, the Company received a notice of conversion from the
holder of the Series A Convertible Preferred Stock (the "Preferred Stock") for
717 shares of Preferred Stock which converted into 502,282 shares of Common
Stock. As a result, as of December 31, 1998, the Company had 11,622,692 shares
of Common Stock outstanding.
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 January 4, 1999.
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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 J. Lewis, Jr.
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Gerard J. Lewis, Jr.
Vice President and General Counsel
Dated: January 20, 1999
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EXHIBIT INDEX
Exhibit
99 Press Release dated January 4, 1999.
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Exhibit 99
Contact:
Infonautics, Inc.
Van Morris
610.902.8800
[email protected]
INFONAUTICS ANNOUNCES CONTINUED LISTING ON NASDAQ
COMPANY TO MOVE TO SMALLCAP MARKET; RETAINS ALLEN & COMPANY INCORPORATED AS
INVESTMENT BANKER
WAYNE, Pa. (January 4, 1999) -- Infonautics, Inc. (NASDAQ: INFO), a rapidly
growing Internet information company, today announced that the Nasdaq Stock
Market has agreed to continue to list the Company's common stock. Trading in
Infonautics shares will move from the Nasdaq National Market to the Nasdaq
SmallCap Market, effective January 5, 1999. The Company will retain its symbol,
INFO, and daily price quotations for its stock will continue to be available in
leading financial newspapers, on-line services and many general-circulation
newspapers.
The decision follows a hearing held before a Nasdaq panel last November at which
the Company addressed its non-compliance with Nasdaq's net tangible asset
requirements for continued listing.
Infonautics CEO Van Morris was pleased with the decision. "It's a great outcome
for our shareholders and for everyone who cares about the Company's future," he
said. "The SmallCap Market preserves the liquidity in our stock and is certainly
an acceptable and appropriate place for us to trade right now."
Infonautics also announced today that it has retained Allen & Company
Incorporated, a New York investment bank, to act as its financial advisor to
explore strategic alternatives for the Company.
"Infonautics has built and continues to build real value through the growing
Electric Library customer base and through the development of new services like
Company Sleuth," said Mr. Morris. "But achieving an even higher degree of brand
awareness and market penetration will require greater resources than we have at
hand. We can think of no one better than Allen & Company to help match us with
the right strategic partner or investor to take us to the next level."
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Exhibit 99
The Company said that revenue growth continued both for the fourth quarter of
1998 and for the year ended December 31, 1998. The Company expects that cash on
hand at the end of the year will be somewhat lower than the $4.8 million
reported at the end of the third quarter. New sales bookings fell below
expectations during the fourth quarter. The Company is taking steps to reduce
operating expenses, including the reduction of approximately 20 positions, or 10
percent of its workforce, the consolidation of development and technical
operations and the narrowing of its focus on certain markets. The Company is
also seeking a working capital facility.
In conjunction with these actions, the Company has named Ram Mohan as Vice
President and Chief Technical Officer and Alan Preston as Vice President of
Human Resources.
About Infonautics
Infonautics, Inc. (NASDAQ: INFO) is a leading Internet information company that
provides online information services to 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 one of the fastest growing
electronic reference product for schools and libraries, serving more than 10,000
institutions in all 50 states. Electric Library is also one of the largest paid
subscription sites on the Web with more than 60,000 paying subscribers. The
Company's newest service, Company Sleuth, is a free service that uncovers
hard-to-find and seemingly hidden business information on the Internet, and has
tens of thousands of registered users. 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.
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 PRESS RELEASE CONTAINS, IN ADDITION TO HISTORICAL INFORMATION, FORWARD
LOOKING STATEMENTS BY THE COMPANY WITH REGARD TO ITS EXPECTATIONS AS TO ITS
FINANCIAL RESULTS AND OTHER ASPECTS OF ITS BUSINESS THAT INVOLVE RISKS AND
UNCERTAINTIES AND MAY CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH STATEMENTS ARE
BASED ON MANAGEMENT'S CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE ADDRESSED IN THE FORWARD-LOOKING STATEMENT. FACTORS THAT MAY CAUSE SUCH A
DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, COMPLETION OF THE COMPANY'S AND ITS
AUDITORS REVIEW OF THE COMPANY'S FINANCIAL RESULTS FOR THE 1998 FISCAL YEAR, THE
ABILITY OF THE COMPANY TO SECURE A WORKING CAPITAL FACILITY, AND CONTINUED
GROWTH IN THE COMPANY'S CUSTOMER BASE AND THE DEVELOPMENT OF NEW SERVICES.
FURTHER INFORMATION ABOUT THESE AND OTHER RELEVANT RISKS AND UNCERTAINTIES MAY
BE FOUND IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION,
ALL OF WHICH ARE AVAILABLE FROM THE COMMISSION AS WELL AS OTHER SOURCES. THE
COMPANY DOES NOT INTEND TO UPDATE THESE CAUTIONARY STATEMENTS OR ANY FORWARD
LOOKING STATEMENTS.
