Jerusalem-based GuruNet Corporation (AMEX: GRU) yesterday announced its unaudited financial results for the fourth quarter and full year of 2004.
In the fourth quarter of 2004, GuruNet 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 million, net of fees and offering expenses. In conjunction with the offering, GuruNet repaid $3.16 million of its bridge debt.
On December 31, 2004, the company had cash and cash equivalents of $7.415 million.
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, GuruNet raised approximately $12.225 million, 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.
GuruNet 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.
"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 GuruNet CFO Steve Steinberg.
Revenue for the three months and full year ended December 31, 2004, were $76,245 and $193,283, respectively, compared with $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 $1.1 million and $3.54 million, respectively, compared with operating losses of $603,700 and $2.76 million for the same periods in 2003.
The net loss for the fourth quarter of 2004 was $855,131, or $.20 per share, compared with 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 $6.59 million or $2.90 per share, compared with a net loss of $2.8 million, 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 with 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 $1.1 million and $3.96 million, respectively, of non-cash charges resulting from the amortization of note discounts and deferred charges relating to the convertible bridge notes.
Gain on extinguishment of debt, for the three months and full year ended December 31, 2004 includes approximately $1.493 million 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.
The fourth quarter was the last before the company released Answers.com, on January 3, 2005. GuruNet stated that, through Answers.com, it 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 GuruNet CEO Bob Rosenschein. "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."
Published by Globes [online], Israel business news - www.globes.co.il - on Thursday, March 17, 2005