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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) April 4, 2002
ADSTAR, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 001-15363 22-3666899
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
4553 Glencoe Avenue, Suite 325
Marina del Rey, California 90292
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(Address Of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (310) 577-8255
AdStar.com, Inc.
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(Former name or former address, if changed since last report)
Item 5: Other Events
On April 4, 2002 the Registrant issued the following press release:
AdStar Announces Preliminary Annual Results for 2001
Company experiences significant growth in revenues and gross profit
MARINA DEL REY, Calif. - April 4, 2001 - AdStar, Inc. (Nasdaq: ADST, ADSTW), a
leading software and application service provider for the classified advertising
industry, today announced preliminary financial results for the year ended
December 31, 2001.
AdStar reported net revenues of $2,081,000 for 2001, an increase of more than 51
percent compared to 2000 revenues of $1,375,000. Gross profits for 2001
increased by 217 percent to $1,275,000, compared to gross profits of $402,000 in
2000. The company had a net loss of $1,884,000 in 2001, or $0.30 per share,
compared with a loss of $4,629,000, or $1.34 per share in 2000.
"The strong increase in revenues in 2001 is a direct result of the introduction
of AdStar's new application service provider model for publishers," said Leslie
Bernhard, president of AdStar. "As a result of contracts with newspapers,
including certain Knight Ridder publications, we have experienced significant
growth in monthly hosting revenue, processing fees and services revenue. This
increase in gross profits demonstrates the viability of our new business model,
and we are enthusiastic about 2002 - particularly given our recent agreements
with Tribune Company and CareerBuilder."
"We are continuing to see the benefits of our shift to an ASP model as more
publishers are beginning to recognize the need to integrate the Web with their
overall classified ad sales strategies. AdStar is in a great position to benefit
from the integration of print and Web classified advertising because our
technology stands alone in the market in its compatibility with all major
vendors' publishing systems and is truly designed to help advertisers target
local and regional areas as part of an overall national advertising campaign. In
addition, our company continues to improve financially with the recent $1.8
million investment from Tribune Company in early 2002. We are confident that we
have enough working capital to meet our needs for the remainder of the year."
During 2001, total Web-based transactions increased to more than 86,000, from
55,000 in 2000. The related gross billings generated from these transactions, on
a combined basis, rose to more than $7,300,000 in 2001, from $4,300,000 in 2000.
AdStar estimates that during 2001 more than $400 million in classified ads were
placed in newspapers using AdStar's remote entry systems."AdStar's strength lies
in the knowledge gained from working directly with advertisers and publishers
for the past 16 years," Bernhard added. "We designed our current ASP model to
take advantage of this strength and to become the preeminent supplier of
technology that connects publishers with classified advertisers - the main
source of newspapers' advertising revenue."
AdStar has requested an extension from the Securities and Exchange Commission
for its 2001 10-KSB filing as a result of concluding three financings subsequent
to the end of the year for an aggregate of $2.5 million, of which $500,000 was
received prior to year-end. The company felt that year-end financials could not
be completed without assessing the impact of these financings on the
presentation of year-end information. AdStar expects to file its 2001 Form
10-KSB no later than April 16, 2002.
AdStar had 7,729,851 total shares outstanding at the end of 2001 compared with
5,217,119 shares at the end of 2000.
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About AdStar, Inc.
AdStar (Nasdaq: ADST, ADSTW), based in Marina del Rey, Calif., serves as an
application service provider (ASP) for the $20+ billion classified advertising
industry. AdStar turns publishers' Web sites into full-service classified ad
sales channels for their print and online classified ad sections. Since 1986,
AdStar has set the standard for remote ad entry software by giving advertisers
the ability to place ads electronically with many of the largest newspapers in
the United States. Today, AdStar's infrastructure, through its private label
model, powers classified ad sales for more than 20 of the largest newspapers in
the United States and the Newspaper Association of America's
bonafideclassifieds.com, where ads can be placed in more than 120 newspapers.
Forward Looking Statements
This release contains forward-looking statements concerning the business
andproducts of the company. Actual results may differ from those projected or
implied by such forward-looking statements depending on a number of risks and
uncertainties including, but not limited to, the following: historical business
has already matured, new online business is unproven and may not generate
expected revenues, and Internet security risks. Other risks inherent in the
business of the company are described in Securities and Exchange Commission
filings, including the company's annual report on Form 10-KSB. The company
undertakes no obligation to revise or update any forward-looking statements to
reflect events or circumstances after the date of this release.
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AdStar, Inc.
Balance Sheet
December 31,
2001 2000
Assets
Cash and cash equivalents $ 411,449 $1,606,999
Restricted cash 45,547 100,000
Accounts receivable, net of allowance for doubtful
accounts of $15,000 and $73,000 210,370 227,144
Prepaid and other assets 174,387 154,648
Total current assets 841,753 2,088,791
Property and equipment, net 1,917,778 1,616,163
Intangible, net 86,835 124,383
Other assets, net 24,863 34,571
Total assets $2,874,960 $3,863,908
Liabilities and stockholders' equity
Accounts payable $ 416,732 $ 298,547
Accrued expenses 446,628 542,868
Deferred revenue and
other current liabilities 153,213 165,304
Notes payable -- 1,100,000
Capital lease obligations 5,162 15,009
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Total current liabilities 1,021,735 1,021,735
Other liabilities 8,473 45,594
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Total liabilities 1,030,208 2,167,322
Stockholders' equity 1,844,752 1,696,586
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Total liabilities and stockholders' equity $2,871,229 $3,863,908
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Statements of Operations
Year ended December 31,
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2001 2000
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Net revenues $ 2,080,612 $ 1,374,697
Cost of revenues 805,964 972,679
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Gross profit 1,274,648 402,018
Sales expense 656,349 1,428,574
Administrative expenses 1,881,957 2,269,331
Development costs 639,503 1,386,518
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Loss from operations (1,903,161) (4,682,405)
Interest income (expense), net 23,871 58,763
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Loss before taxes (1,879,290) (4,623,642)
Provision for income taxes (5,208) (5,167)
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Net loss $ (1,884,498) $ (4,628,809)
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Loss per share - basic and diluted $(0.30) $(1.34)
Weighted average number of shares - basic and diluted 6,373,037 3,452,619
Statements of Operations
Quarter ended December 31,
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2001 2000
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Net revenues $ 468,356 $ 301,091
Cost of revenues 229,204 230,197
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Gross profit 239,152 70,894
Sales expense 144,364 309,273
Administrative expenses 448,297 786,391
Development costs 247,478 344,181
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Loss from operations (600,987) (1,368,951)
Interest income (expense), net 2,267 26,498
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Loss before taxes (603,254) (1,342,453)
Provision for income taxes (1,669) (4,567)
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Net loss $ (604,923) $ (1,347,020)
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Loss per share - basic and diluted $(0.09) $(0.26)
Weighted average number of shares - basic and diluted 6,725,146 5,187,429
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned, hereunto duly authorized.
AdStar, Inc.
Dated: April 8, 2002 By: /s/ Leslie Bernhard
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Leslie Bernhard, President and Chief
Executive Officer
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