GuruNet Announces Third Quarter 2004 Financial Results

GuruNet Announces Third Quarter 2004 Financial Results

GuruNet to Hold Investor Conference Call November 29, 2004, at 4:30 PM EST

WESLEY HILLS, N.Y., Nov. 29 /PRNewswire-FirstCall/ -- GuruNet Corporation (AMEX:GRU), a leading reference search engine, today announced its financial results for the third quarter of 2004, the last quarter before its Initial Public Offering on October 13, 2004.

On September 30, 2004, the Company had cash and cash equivalents of $651,871. On October 13, 2004, the Company completed its IPO of 2.35 million shares of its common stock at $5.00 per share pursuant to a Registration Statement on Form SB-2. Additionally, the underwriters exercised their over- allotment option and purchased 352,500 additional shares of the Company's common stock on November 18, 2004. Total proceeds, including the exercise of the over-allotment option, were approximately $10,800,000, net of underwriting fees and estimated offering expenses. In conjunction with the offering, the Company repaid $3,160,000 of the Bridge notes that it incurred in January 2004.

Revenues for the three and nine months ended September 30, 2004, were $53,163 and $117,038, respectively, compared to $10,604 and $19,080, respectively, for the same period in 2003. The operating losses for the three and nine months ending September 30, 2004 were $757,549 and $2,442,920, respectively, compared to operating losses of $690,440 and $2,158,626 for the same periods in 2003. The net loss for the third quarter of 2004 was $2,168,527, or $1.26 per share, compared to a net loss of $713,230, or $2.02 per share, for the same period in 2003. The net loss for the nine months ended September 30, 2004 was $5,735,388, or $3.64 per share, compared to a net loss of $2,149,023, or $6.07 per share, for the same period in 2003. The primary reason for the increase in the net loss for the three and nine months ending September 30, 2004 compared to the same periods in 2003 is the increase in operating losses noted earlier and increases in interest expense, net, of $1,398,450 and $3,253,879, respectively. Interest expense, net, for the three and nine months ended September 30, 2004 includes approximately $1,165,000 and $2,852,000 of non-cash charges resulting from the amortization of note discounts and deferred charges relating to the convertible bridge notes, which are described in the footnotes to the financial statements.

Commenting on the quarter, Robert Rosenschein, GuruNet's Chairman and CEO, said, "We are pleased with our progress and recognition achieved in the third quarter. As a result of partnerships with leading websites such as Amazon and FindWhat we believe that GuruNet is on the road to becoming a premier reference search tool on the Internet. With the company's expanded resources as a result of our successful IPO, we will be able to better respond to the heightened interest we are seeing in our products. These resources will allow the company to fulfill its mission: to offer users an easier way to find accurate information on the Web."

GuruNet will host a conference call today, Monday, November 29; at 4:30 PM EST. Hosting the call will be Robert S. Rosenschein, Chairman and Chief Executive Officer. To participate in the conference call, please call 888-889-2497 (toll-free US and Canada) or 973-582-2710 (direct dial / international). The conference call will also will be available for replay at www.gurunet.com, for a period of 15 days after the call.

About GuruNet

GuruNet is a leading reference search engine. Founded in 1999 by Robert Rosenschein, GuruNet Corporation (www.gurunet.com), formerly known as Atomica Corporation, provides patented technology and software tools to access authoritative definitions and facts from over 100 reference sources and over 750,000 topics over the Internet.

Cautionary Statement

Some of the statements included in this press release are forward-looking statements that involve a number of risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Important factors may cause our actual results to differ materially, including our inability to increase the number of persons who use our products and the number of partners who will generate increase traffic to our sites, and other risk factors identified from time to time in our SEC reports, including, but not limited to, the registration statement on Form SB-2 filed in connection with our initial public offering in October 2004. Any forward-looking statements set forth in this news release speak only as of the date of this news release. We do not intend to update any of these forward-looking statements to reflect events or circumstances that occur after the date hereof. This press release and prior releases are available at www.gurunet.com. The information in GuruNet's website is not incorporated by reference into this press release and is included as an inactive textual reference only.

Selected Consolidated Financial Data

Statements of Operations:

Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
2004 2003 2004 2003

Revenue 53,163 10,604 117,038 19,080
Cost of revenue 157,854 149,599 433,612 538,182

Gross margin (104,691) (138,995) (316,574) (519,102)

Operating expenses
Research and development 271,489 233,688 789,962 736,647
Sales and marketing 159,564 148,168 700,049 356,435
General and administrative 221,805 169,589 636,335 546,442

Total operating expenses 652,858 551,445 2,126,346 1,639,524

Operating loss (757,549) (690,440)(2,442,920)(2,158,626)

Interest income (expense),
net (1,397,322) 1,128 (3,247,774) 6,105
Other income (expense), net (6,646) (23,918) (10,671) 3,498

Loss before income taxes (2,161,517) (713,230)(5,701,365)(2,149,023)

Income tax expenses (7,010) -- (34,023) --

Net loss (2,168,527) (713,230)(5,735,388)(2,149,023)

Basic and diluted net loss
per common share (1.26) (2.02) (3.64) (6.07)
Weighted average shares used
in computing basic and
diluted net loss per common
share 1,727,373 353,876 1,574,923 353,876


Balance Sheets:


The following table summarizes our balance sheet data as of December 31, 2003, September 30, 2004 and September 30, 2004 as adjusted for the following events:

-- proceeds of the IPO, including the exercise of the over-allotment
option, of approximately $10,800,000, net of underwriting fees and
estimated offering expenses of approximately $2,700,000;
-- interest (cash and non-cash charges relating to the bridge note
discounts and deferred charges) through the IPO effective date, October
13, 2004; and
-- the conversion of $1,840,000 principal amount of our outstanding bridge
notes into 490,678 shares of common stock, and the repayment of the
other $3,160,000 of bridge notes.

As of As of
September 30, December 31,
2004 2003
As adjusted Actual Actual
(Unaudited) (Unaudited) (Audited)
$ $ $

Cash and cash equivalents 8,658,646 651,871 123,752
Working capital (deficiency) 8,139,791 (2,837,570) (752,934)
Total assets 9,953,582 3,495,433 1,043,292
Long-term liabilities 1,091,126 1,091,126 1,023,521
Total stockholders' equity (deficit) 7,962,840 (3,014,521) (1,044,446)



Source: GuruNet Corporation

CONTACT: Jay Bailey of GuruNet Corporation, +1-866-576-0352 or
ir@gurunet.com

Web site: http://www.gurunet.com/


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