-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RR/xeVRfQx2+XaGN8jHlBhj/WJG3F3ZnTjczcOAznMmBKhBLw2TB44yvwqO+b9xu QC1kcgkY4ZUkYbWdBSM6+Q== 0000352988-00-000008.txt : 20000516 0000352988-00-000008.hdr.sgml : 20000516 ACCESSION NUMBER: 0000352988-00-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMTEX NEWS NETWORK INC CENTRAL INDEX KEY: 0000352988 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380] IRS NUMBER: 133055012 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10541 FILM NUMBER: 633615 BUSINESS ADDRESS: STREET 1: 4900 SEMINARY RD STE 800 CITY: ALEXANDRIA STATE: VA ZIP: 22311 BUSINESS PHONE: 7038242000 MAIL ADDRESS: STREET 1: 4900 SEMINARY RD STREET 2: SUITE 800 CITY: ALEXANDRIA STATE: VA ZIP: 22311 FORMER COMPANY: FORMER CONFORMED NAME: COMTEX SCIENTIFIC CORP DATE OF NAME CHANGE: 19920703 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 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, 2000 or ___ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period from __________ to ___________ Commission file number 0-10541 COMTEX NEWS NETWORK, INC. (Exact name of registrant as specified in its charter) New York 13-3055012 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4900 Seminary Road Suite 500 Alexandria, Virginia 22311 (Address of principal executive offices) Registrant's Telephone number including area code (703) 820-2000 Former name, former address and former fiscal year, if changed since last report 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 9, 2000, 9,843,855 shares of the Common Stock of the registrant were outstanding. COMTEX NEWS NETWORK, INC. TABLE OF CONTENTS Part I Financial Information: Page No. Item 1. Financial Statements Balance Sheets 3 at March 31, 2000 (unaudited) and June 30, 1999 Statements of Operations 4 for the Three and Nine Months Ended March 31, 2000 and 1999 (unaudited) Statements of Cash Flows 5 for the Nine Months Ended March 31, 2000 and 1999 (unaudited) Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis 8 of Financial Condition and Results of Operations Part II Other Information: Item 1. Legal Proceedings 14 Item 2. Changes in Securities and Use of Proceeds 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15 COMTEX NEWS NETWORK, INC. BALANCE SHEETS
March 31, 2000 June 30, (Unaudited) 1999 ------------- ------------- ASSETS CURRENT ASSETS Cash $ 1,614,972 $ 95,283 Accounts Receivable, Net of Allowance of approximately $240,000 and $351,000 at March 31, 2000 and June 30, 1999, respectively 1,639,343 1,340,337 Prepaid Expenses and Other Current Assets 189,672 72,662 ------------- ------------- TOTAL CURRENT ASSETS 3,443,987 1,508,282 PROPERTY AND EQUIPMENT, NET 1,658,739 836,988 DEPOSITS AND OTHER ASSETS 69,916 62,255 ------------- ------------- TOTAL ASSETS $ 5,172,642 $ 2,407,525 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts Payable $ 650,641 $ 755,223 Accrued Expenses 1,539,515 819,381 Notes Payable 60,000 40,000 ------------- ------------- TOTAL CURRENT LIABILITIES 2,250,156 1,614,604 LONG-TERM LIABILITIES: Long-Term Notes Payable - Affiliate 986,954 986,954 Other Long-Term Notes Payable - 60,000 ------------- ------------- TOTAL LONG-TERM LIABILITIES 986,954 1,046,954 ------------- ------------- TOTAL LIABILITIES 3,237,110 2,661,558 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common Stock, $0.01 Par Value - Shares Authorized: 18,000,000; Shares issued and outstanding: 9,838,855 and 8,124,430, 98,389 81,244 respectively Additional Capital 11,344,673 10,031,801 Accumulated Deficit (9,507,530) (10,367,078) ------------- ------------- 1,935,532 (254,033) ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,172,642 $ 2,407,525 ============= ============= The accompanying "Notes to Financial Statements" are an integral part of these financial statements.
COMTEX NEWS NETWORK, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended Nine months ended March 31, March 31, 2000 1999 2000 1999 ---------- ---------- ----------- ----------- Revenues $3,369,881 $1,811,128 $8,679,326 $5,276,497 Cost of Revenues 955,355 677,326 2,677,288 2,049,703 ---------- ---------- ----------- ----------- Gross Profit 2,414,526 1,133,802 6,002,038 3,226,794 Operating Expenses Technical Operations & Support 470,552 227,562 1,401,383 639,378 Product Development 134,422 67,624 389,719 182,370 Sales and Marketing 703,064 292,756 1,424,778 840,125 General and Administrative 683,757 345,398 1,708,462 1,045,984 Depreciation and Amortization 70,390 22,145 134,911 84,101 ---------- ---------- ----------- ----------- Total Operating Expenses 2,062,185 955,485 5,059,253 2,791,958 Operating Income 352,341 178,317 942,785 434,836 Other income/(expense) Interest Expense (26,286) (20,813) (79,738) (65,888) Interest Income 22,171 327 28,076 786 Other Income/(Expense) (13,432) - (13,432) - ---------- ---------- ----------- ----------- Other Expense, net (17,547) (20,486) (65,094) (65,102) ---------- ---------- ----------- ----------- Income Before Income Taxes 334,794 157,831 877,691 369,734 Income Taxes 17,700 27 18,143 441 ---------- ---------- ----------- ----------- Net Income $ 317,094 $ 157,804 $ 859,548 $ 369,293 ========== ========== =========== =========== Basic Earnings Per Common Share $ .03 $ .02 $ .10 $ .04 ========== ========== =========== =========== Weighted Average Number of Common Shares 9,728,062 8,010,914 8,771,563 7,945,623 ========== ========== =========== =========== Diluted Earnings Per Common Share $ .02 $ .01 $ .07 $ .03 ========== ========== =========== =========== Weighted Average Number of Shares Assuming Dilution 13,015,757 12,055,635 12,483,208 11,090,868 ========== ========== =========== =========== The accompanying "Notes to Financial Statements" are an integral part of these financial statements.
COMTEX NEWS NETWORK, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended March 31, 2000 1999 ------------ ------------ Cash Flows from Operating Activities: Net Income $ 859,548 $ 369,289 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and Amortization Expense 134,911 84,100 Bad Debt Expense 145,500 160,000 Loss on disposal of assets 13,432 - Changes in Assets and Liabilities: Accounts Receivable (444,506) (500,623) Prepaid Expenses and Other Current Assets (117,010) (41,050) Deposits and Other Assets (7,661) 250 Accounts Payable (104,582) 236,253 Accrued Expenses 720,134 176,994 ------------ ------------ Net Cash provided by Operating Activities 1,199,766 485,213 Cash Flows from Investing Activities: Purchases of Property and Equipment (970,094) (414,555) ------------ ------------ Net Cash used in Investing Activities (970,094) (414,555) Cash Flows from Financing Activities: Repayments on Notes Payable (40,000) (94,660) Issuance of Stock - Private Placement 1,262,739 - Issuance of Stock under Employee Stock Purchase Plan 12,851 12,537 Exercise of Stock Options 54,427 17,706 ------------ ------------ Net Cash provided by (used in) Financing 1,290,017 (64,417) Activities ------------ ------------ Net Increase in Cash 1,519,689 6,241 Cash Balance at Beginning of Period 95,283 170,416 ------------ ------------ Cash Balance at End of Period $1,614,972 $ 176,657 ============ ============ Supplemental disclosure of cash flow information: Cash paid for interest $ 85,843 $ 14,782 Cash paid for income taxes $ 444 $ 441 The accompanying "Notes to Financial Statements" are an integral part of these financial statements.
COMTEX NEWS NETWORK, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) March 31, 2000 1. Basis of Presentation The accompanying interim financial statements of COMTEX News Network, Inc. (the "Company" or "COMTEX") are unaudited, but in the opinion of management reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of results for such periods. The results of operations for any interim period are not necessarily indicative of results for the full year. The balance sheet at June 30, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1999 ("1999 Form 10-K"), filed with the Securities and Exchange Commission. In December 1999, the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin 101, Revenue Recognition in Financial Statements ("SAB 101"), which provides guidance related to revenue recognition based on interpretations and practices followed by the SEC. SAB 101 is effective the second fiscal quarter of fiscal years beginning after December 15, 1999. The Company does not expect the adoption of SAB 101 to have a significant impact on its results of operations, financial position or cash flows. Certain amounts for the three and nine months ended March 31, 1999, have been reclassified to conform to the presentation of the three and nine months ended March 31, 2000. 2. Related Party Transactions AMASYS Corporation ("AMASYS") is the Company's majority stockholder (approximately 50%). Of the Company's common stock owned by AMASYS, 2,540,503 shares are subject to option by C.W. Gilluly, Ed.D., the Chairman of the Board of Directors of both the Company and AMASYS. C.W. Gilluly, Ed.D., is also Chairman of Hadron, Inc. ("Hadron"), of which AMASYS owns approximately 12% of the outstanding shares. The Chairman and Corporate Secretary of the Company have similar duties with Hadron. More than 50% of their time is spent on other than Company business. 3. Notes Payable In September 1997, the Company obtained a $50,000 line of credit and a $140,000 three year term loan from Century National Bank with annual principal repayments of $40,000, $40,000 and $60,000 due September 1998, September 1999 and September 2000, respectively. Both facilities are guaranteed by C.W. Gilluly, Ed.D. The line of credit facility was renewed for one year in December 1998. In May 1999, the line of credit was increased to $250,000 bearing interest at a rate of prime plus one percent annually and expired November 30, 1999. The Company opted not to renew the line of credit at the end of its one- year term. The term note bears interest at a rate of prime plus two percent annually. 4. Net Income per Share The following table sets forth the computation of basic and diluted earnings per share:
Three Months Ended Nine Months Ended March 31, March 31, 2000 1999 2000 1999 --------- --------- --------- --------- Numerator: Net Income $ 317,094 $ 157,804 $ 859,548 $ 369,293 ========= ========= ========= ========= Denominator: Denominator for basic earnings per share - weighted average shares 9,728,062 8,010,914 8,771,563 7,945,623 Effect of dilutive securities: Stock Options 3,287,695 4,044,721 3,722,315 3,145,245 --------- --------- --------- --------- Denominator for diluted earnings per share 13,015,757 12,055,635 12,493,878 11,090,868 ========== ========== ========== ========== Basic Earnings Per Share $ .03 $ .02 $ .10 $ .04 Diluted Earnings Per Share $ .02 $ .01 $ .07 $ .03
5. Income Taxes The provision for income taxes is limited to the liability for alternative minimum tax as the majority of income for federal and state tax purposes has been offset by net operating loss and investment tax credit carryforwards. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Comparison of the three months ended March 31, 2000, to the three months ended March 31, 1999 The Company earned operating income of approximately $352,000 during the three months ended March 31, 2000, compared to operating income of approximately $178,000 during the three months ended March 31, 1999. The Company earned net income of approximately $317,000 during the three months ended March 31, 2000, compared to net income of approximately $158,000 for the three months ended March 31, 1999. As discussed below, the improvement in operating income and net income is due primarily to an increase in gross revenues and an improvement of gross profit margins on the sale of the Company's products, offset partially by higher operating expenses. Also contributing to the improvement of net income was increased interest income earned on cash balances, offset by increased income tax expense. The Company's revenues consist primarily of royalty revenues and fees from the licensing of content products to information distributors as well data communications charges for delivery of the Company's products. During the three months ended March 31, 2000, the Company's total revenues were approximately $3,370,000, or approximately $1,558,000 (86%) greater than the total revenues for the three months ended March 31, 1999. Of the increase in revenues, approximately 73% reflects revenues from new customers obtained during the twelve months ended March 31, 2000, and approximately 27% reflects growth in revenues from existing customers. The Company's cost of revenue consists primarily of content license fees and royalties to information providers as well as data communication costs for the delivery of the Company's products to customers. The cost of revenue for the three months ended March 31, 2000 was approximately $955,000, or approximately $278,000 (41%) greater than the cost of revenue for the three months ended March 31, 1999. The increase in cost is primarily due to an increase in royalties and fees for the distribution of content related to the increase in revenues for the period. The increase is offset partially by a decrease in data communications costs resulting from the continued implementation of a more cost effective vehicle for the delivery of the Company's products to customers. The gross profit for the three months ended March 31, 2000 was approximately $2,414,000, or approximately $1,280,000 (113%) better than the gross profit for the same period in the prior year. The gross profit percentage improved for the three months ended March 31, 2000 to approximately 72% from approximately 63% for the three months in the prior year due to both a decrease in the royalty percentage paid for content and the decrease in data communications costs. The decrease in the royalty percentage was a result of the improvement in earned minimum royalties earned by certain information providers. Total operating expenses for the three months ended March 31, 2000 were approximately $2,062,000, representing an approximately $1,107,000 (116%) increase in operating expenses from the three months ended March 31, 1999. The increase in operating expenses is generally due to increases in the investment in personnel, operations and infrastructure in all areas, as well as increases in sales commissions on increased revenues. In addition, the Company increased its marketing and public relations activities and expenditures to promote the Company and its products and services. The Company also recorded additional reserves for doubtful accounts in the current three month period. Technical operations and support expenses during the three months ended March 31, 2000 increased approximately $243,000 (107%) over these expenses in the three months ended March 31, 1999. This increase was due primarily to increased personnel and consulting costs associated with technology projects and improved client support infrastructure. Product development expenses increased by approximately $67,000 (99%) for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. This increase is the result of additional personnel in this department as well as expenses relating to the development of new products and services. Product development activities include quality assurance, enhancements to the Company's products, and the development of proprietary news products. Sales and marketing expenses increased by approximately $410,000 (140%) for the three months ended March 31, 2000 compared to the three months ended March 31, 1999. This increase was due primarily to increased compensation arising from the addition of sales and marketing personnel, additional commissions based on the increase in revenues during the period and marketing and public relations expenses related to the promotion and branding of the Company and its products and services. General and administrative expenses for the three months ended March 31, 2000 were approximately $338,000 (98%) greater than these expenses during the three months ended March 31, 1999. This increase was due to increased expenses related to additional headcount, expanded office space, recruitment, professional fees and general business consulting. In addition, the Company recorded additional reserves for doubtful accounts related primarily to the significant increase in revenues. Depreciation and amortization expense for the three months ended March 31, 2000 was approximately $48,000 (218%) higher than the expense during the same period in the prior year. The increase was due primarily to the deployment of new platforms for the Company's products and services. Other expense decreased approximately 14% due primarily to interest earned on the Company's cash balances, offset by a loss on the disposal of certain assets. Income tax expense increased due to the accrual of the Company's tax liability for the Federal Alternative Minimum Tax. Comparison of the nine months ended March 31, 2000, to the nine months ended March 31, 1999 The Company earned operating income of approximately $943,000 during the nine months ended March 31, 2000, compared to operating income of $435,000 during the nine months ended March 31, 1999. The Company earned net income of approximately $860,000 during the nine months ended March 31, 2000, compared to net income of approximately $369,000 for the nine months ended March 31, 1999. As discussed below, the improvement in operating income and net income is due primarily to a 65% growth in revenues and an improved gross profit margin offset with only a 60% corresponding increase in cost of revenues and operating expense. The improvement in net income also included an increase in interest income earned on cash balances and was partially offset by higher income taxes and a loss on the disposal of certain assets. The Company's revenues consist primarily of royalty revenues and fees from the licensing of content products to information distributors, as well as revenues from data communications charges for delivery of the Company's products. During the nine months ended March 31, 2000, the Company's total revenues were approximately $8,679,000, or approximately $3,403,000 (65%) greater than the total revenues for the nine months ended March 31, 1999. Of the increase in revenues, approximately 71% reflects revenues from new customers obtained during the twelve months ended March 31, 2000, with the remaining 29% reflecting growth in revenues from the existing customer base. The Company's cost of revenue consists primarily of content license fees and royalties to the Company's information providers for the distribution of content, as well as data communication costs for the delivery of the Company's products to customers. The cost of revenue for the nine months ended March 31, 2000 was approximately $2,677,000, or $628,000 (31%) greater than the cost of revenue for the nine months ended March 31, 1999. The increase in cost is primarily due to an increase in royalties and fees related to the increase in revenues for the period. The increase is offset partially by decreases in data communications costs resulting from the implementation of a more cost effective method for delivery of the Company's products to customers. The gross profit for the nine months ended March 31, 2000 was approximately $6,002,000, or a $2,775,000 (86%) improvement in gross profit over the same period in the prior year. The gross margin percentage improved for the nine months ended March 31, 2000 to approximately 69% from approximately 61% in the prior year's nine months due to both a decrease in the royalty percentage paid for content and the decrease in data communications costs. The decrease in royalty percentage was the result of an improvement in earned minimum royalties for certain information providers. Total operating expenses for the nine months ended March 31, 2000 were approximately $5,059,000, representing an approximately $2,267,000 (81%) increase in operating expenses from the nine months ended March 31, 1999. This increase in operating expenses is due primarily to increases in expenses associated with increased headcount and technology and general business consultants as the Company makes investments in infrastructure. In addition, the Company increased its marketing and public relations activities and expenditures to promote the Company and its products and services. Technical operations and support expenses during the nine months ended March 31, 2000 increased approximately $762,000 (119%) over these expenses in the nine months ended March 31, 1999. This increase was due primarily to increased headcount and consulting costs associated with technology projects and client support. Product development expenses increased by approximately $207,000 (114%) for the nine months ended March 31, 2000 compared to the nine months ended March 31, 1999. This increase is the result of additional personnel in this department as well as expenses associated with the deployment of new products. Product development activities include quality assurance, enhancements to the Company's products, and the development of proprietary news products. Sales and marketing expenses increased by approximately $585,000 or approximately 70% for the nine months ended March 31, 2000 compared to the nine months ended March 31, 1999. This increase was due to increased compensation arising from the addition of sales and marketing personnel, additional commissions based on the increase in revenues during the period, as well as marketing and public relations expenses related to the promotion and branding of the Company and its products and services. General and administrative expenses for the nine months ended March 31, 2000 were approximately $662,000 (63%) greater than these expenses during the nine months ended March 31, 1999. This increase was due to increased expenses related to additional headcount, expanded office space, recruitment professional fees and general business consulting. Depreciation and amortization expense for the three months ended March 31, 2000 were approximately $51,000 (60%) higher than these expenses during the same period in the prior year. The increase was due primarily to the development and deployment of new platforms for the Company's products and services. Other expense remained essentially unchanged and reflected an increase in interest income earned on the Company's cash balances offset by increased interest expense and a loss on the disposal of certain assets. Income tax expense increased significantly due to the recording of the Company's tax liability for the Federal Alternative Minimum Tax. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES For the nine months ended March 31, 2000, the Company's operations produced operating income of approximately $943,000 and net income of approximately $859,000. At March 31, 2000, the Company had working capital of approximately $1,254,000 as compared with negative working capital of approximately $106,000 at June 30, 1999. The Company also had net stockholders' equity of approximately $1,936,000 at March 31, 2000, as compared to a net stockholders' deficit at June 30, 1999, of approximately $254,000. The increase in working capital and stockholders' equity was due primarily to the proceeds from the issuance of restricted common stock to accredited investors in a private placement during December 1999, and the increase in, and retention of, net income. For the nine months ended March 31, 2000, the Company's operating activities generated approximately $1,200,000 in cash. The Company had cash of approximately $1,615,000 at March 31, 2000, compared to approximately $95,000 at June 30, 1999. To date, the Company's operations have generated cash flow sufficient to cover its monthly expenses. The Company contemplates continued spending, to make necessary investments in technology, human resources, marketing, content acquisition to enhance current products and services, development of new products and support infrastructure. The Company has reinvested a significant portion of its operating cash flows in operations. This includes investments in administrative, sales, marketing and technical staff; in expanding its contractual base with information providers so as to improve the quality and flexibility of its information products; and in expanding its contracts with information distributor customers. All of these factors contribute to improving the Company's ability to sell and deliver quality products and services. In addition, the Company has made capital expenditures of approximately $970,000 in the nine months ended March 31, 2000, primarily to upgrade its software and hardware platforms thus expanding both its product capabilities and its ability meet future content and client processing requirements. The Company anticipates continued investment for the remainder of fiscal year 2000 to continue to expand its product capabilities, technology platforms and infrastructure. The Company expects these investments to be funded primarily with cash flows from operations. YEAR 2000 ISSUE The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Therefore, these computer programs do not properly recognize a year that begins with "20" instead of the familiar "19", resulting in possible system failure or miscalculations causing disruption of operations. The Company has not experienced any significant operational problems or costs associated with the Year 2000 issue to date. Given that the critical date of December 31, 1999 has passed without such problems or costs being incurred, the Company believes that it is unlikely that such problems or costs related to the Year 2000 issue will be experienced in the future. CAUTIONARY STATEMENTS CONCERNING FORWARD-LOOKING STATEMENTS Except for the historical information contained herein, the matters discussed in this 10-Q include forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may be identified by reference to a future period or by use of forward-looking terminology such as "anticipate", "expect", "could", "may" or other words of a similar nature. Forward-looking statements, which the Company believes to be reasonable and are made in good faith, are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. Among such important external factors and risks are business conditions and growth in the demand for real-time, aggregated custom online news delivery services, and growth in the economy in general; the impact of competitive products and pricing; the proliferation of large, global information networks and the evolution of the Internet. Among such important internal factors and risks are continued success in the acquisition and growth of new information re- distributor and corporate end-user client accounts; the ability to continue the Company's program of technical system upgrades; the timely creation and market acceptance of new products; the Company's ability to continue to increase the variety and quantity of sources of information available to create its products; the Company's ability to continue to recruit and retain highly skilled technical, editorial, managerial and sales/marketing personnel; the Company's ability to generate cash flow sufficient to cover its current obligations while meeting its long-term debt obligations; and the other risks detailed from time to time in the Company's SEC reports, including quarterly reports on Form 10-Q, that could cause results to differ materially from those anticipated by the statements contained herein. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. The information required by this item has been omitted as the Company's market risk exposure is not material. Part II. Other Information Item 1. Legal Proceedings None. Item 2. Changes in Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 27 Financial Data Schedule (b) Reports on Form 8-K None. 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 there unto duly authorized. COMTEX NEWS NETWORK, INC. (Registrant) Dated: May 15, 2000 By: /S/ CHARLES W. TERRY Charles W. Terry President and Chief Executive Officer (Principal Executive Officer) By: /S/ AARON N. DANIELS Aaron N. Daniels Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) EX-27 2
5 1 9-MOS JUN-30-2000 MAR-31-2000 1,614,972 0 1,879,174 239,831 0 3,443,987 2,606,719 947,980 5,172,642 2,250,156 0 0 0 98,389 1,837,143 5,172,642 8,679,326 8,679,326 2,677,288 7,736,541 13,432 0 51,662 877,691 18,143 859,548 0 0 0 859,548 0.10 0.07
-----END PRIVACY-ENHANCED MESSAGE-----