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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
 <B>As filed with the Securities and Exchange Commission on
October&nbsp;20, 2000</B>
</DIV>

<DIV align="right">
<B>Registration
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</B>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center">
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center">
</DIV>

<P align="center">
<B><FONT size="5">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
Washington, D.C. 20549
</DIV>

<P align="center">
<HR size="1" width="30%" align="center">

<P align="center">
<B><FONT size="5">FORM S-1</FONT></B>

<DIV align="center">
<B><FONT size="5">REGISTRATION STATEMENT</FONT></B>
</DIV>

<P align="center">
Under

<DIV align="center">
<FONT size="4">THE SECURITIES ACT OF 1933</FONT>
</DIV>

<P align="center">
<HR size="1" width="30%" align="center">

<P align="center">
<FONT size="5">YELLOWBRIX, INC.</FONT>

<DIV align="center">
<FONT size="2">(Exact name of Registrant as specified in its
charter)</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="33%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="32%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="29%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="center" valign="top"><FONT size="2">
	<B>Delaware</B></FONT></TD>
	<TD></TD>
	<TD align="center" valign="top"><FONT size="2">
	<B>7389</B></FONT></TD>
	<TD></TD>
	<TD align="center" valign="top"><FONT size="2">
	<B>54-1869419</B></FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top"><FONT size="2">
	(State or other jurisdiction of<BR>
	incorporation or organization)</FONT></TD>
	<TD></TD>
	<TD align="center" valign="top"><FONT size="2">
	(Primary Standard Industrial<BR>
	Classification Code Number)</FONT></TD>
	<TD></TD>
	<TD align="center" valign="top"><FONT size="2">
	(I.R.S. Employer<BR>
	Identification Number)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">66 Canal Center Plaza, Suite&nbsp;700</FONT>
</B>

<DIV align="center">
<B><FONT size="2">Alexandria, Virginia 22314</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(703)&nbsp;548-3300</FONT></B>
</DIV>

<DIV align="center">
<FONT size="2">(Address, including zip code, and telephone
number, including area code, of Registrant&#146;s Principal
Executive Offices)</FONT>
</DIV>

<P align="center">
<B><FONT size="2">David C. Hoppmann</FONT></B>

<DIV align="center">
<B><FONT size="2">Chief Executive Officer and President</FONT>
</B>
</DIV>

<DIV align="center">
<B><FONT size="2">YellowBrix, Inc.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">66 Canal Center Plaza, Suite&nbsp;700</FONT>
</B>
</DIV>

<DIV align="center">
<B><FONT size="2">Alexandria, Virginia 22314</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(703)&nbsp;548-3300</FONT></B>
</DIV>

<DIV align="center">
<FONT size="2">(Name, address, including zip code, and telephone
number, including area code, of agent for service)</FONT>
</DIV>

<P align="center">
<B><FONT size="2">Copies to:</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="56%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="41%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="center" valign="top"><FONT size="2">
	<B>Stephen M. Feldhaus, Esq.<BR>
	Gregg J. Berman, Esq.<BR>
	Fulbright &#38; Jaworski L.L.P.<BR>
	666 Fifth Avenue<BR>
	New York, New York 10103<BR>
	(212) 318-3000<BR>
	Facsimile: (212)&nbsp;318-3400</B></FONT></TD>
	<TD></TD>
	<TD align="center" valign="top"><FONT size="2">
	<B>Brian J. Lynch, Esq.<BR>
	Sidney R. Smith, Esq.<BR>
	John W. Jones, Esq.<BR>
	Cooley Godward LLP<BR>
	One Freedom Square<BR>
	Reston, Virginia 20190<BR>
	(703) 456-8000<BR>
	Facsimile: (703)&nbsp;456-8100</B></FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public: </FONT></B><FONT size="2">As soon as
practicable after the effective date of this Registration
Statement.</FONT>

<P align="left">
<FONT size="2">If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act, check the following
box:&nbsp;[&nbsp;&nbsp;&nbsp;]</FONT>

<P align="left">
<FONT size="2">If this Form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under the
 Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective
registration statement for the same
offering.&nbsp;[&nbsp;&nbsp;&nbsp;]</FONT>

<P align="left">
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering.&nbsp;[&nbsp;&nbsp;&nbsp;]</FONT>

<P align="left">
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering.&nbsp;[&nbsp;&nbsp;&nbsp;]</FONT>

<P align="left">
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, please check the following
box:&nbsp;[&nbsp;&nbsp;&nbsp;]</FONT>

<P align="center">
CALCULATION OF REGISTRATION FEE

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="50%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="18%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="26%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="5"></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="5"><HR size="1"></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="5"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2">Proposed Maximum</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2">Title of Each Class of</FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2">Aggregate Offering</FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2">Amount of</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2">Securities to be Registered</FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2">Price(1)</FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2">Registration Fee</FONT></TD>
</TR>

<TR>
	<TD colspan="5"></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="5"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Common Stock, $.001 par value</FONT></TD>
	<TD></TD>
	<TD align="center" valign="bottom"><FONT size="2">
	$69,000,000</FONT></TD>
	<TD></TD>
	<TD align="center" valign="bottom"><FONT size="2">
	$18,216.00</FONT></TD>
</TR>

<TR>
	<TD colspan="5" align="left"><HR size="1"></TD>

</TR>

<TR>
	<TD colspan="5" align="left"><HR size="1"></TD>

</TR>

</TABLE>
</CENTER>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Estimated solely for purposes of calculating the
	registration fee in accordance with Rule&nbsp;457(o) of the
	Securities Act of 1933, as amended.</FONT></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="30%" align="center">

<P align="left">
<B><FONT size="2">The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment specifically stating that this Registration Statement
shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act of 1933, as amended, or
until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said
Section&nbsp;8(a), may determine.</FONT></B>

<P align="center">
<HR size="1" width="100%" align="center">

<DIV align="center">
<HR size="1" width="100%" align="center">
</DIV>
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<B><FONT size="2" color="#FF0000">The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting an
 offer to buy these securities in any state where the offer or
sale is not permitted. <BR>
</FONT></B>
</TD></TR></TABLE>

<P align="center"><B>SUBJECT TO COMPLETION, DATED OCTOBER 20, 2000</B>

<P align="left"><B><U>PROSPECTUS</U></B>

<P align="center"><B><FONT size="4">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
</FONT></B>

<P align="center">
<IMG src="w41224yelbril2.gif">

<P align="center"><B><FONT size="4">Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This is the initial public offering of common stock by
YellowBrix, Inc. We are selling
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 of common stock. The estimated initial public offering price is
between
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share.

<P align="center">
<HR size="1" width="100%" align="center">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has been no public market for our
common stock. We have applied to include the shares of our common
 stock for quotation on the Nasdaq National Market under the
symbol YBRX.

<P align="center">
<HR size="1" width="100%" align="center">

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="74%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Per Share</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Initial public offering price</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Underwriting discounts and commissions</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Proceeds to YellowBrix, before expenses</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
YellowBrix has granted the underwriters an option for a period of
 30&nbsp;days to purchase up to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
 shares of common stock at the offering price, less the
underwriting discount.

<P align="center">
<HR size="1" width="100%" align="center">

<P align="center">
<B>Investing in our common stock involves a high degree of risk.
</B>

<DIV align="center">
<B>See &#147;Risk Factors&#148; beginning on page&nbsp;6.</B>
</DIV>

<P align="center">
<HR size="1" width="100%" align="center">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.</B>

<P align="left">
<B><FONT size="4">CHASE H&#38;Q <BR>
 </FONT></B>

<DIV align="center">
<B><FONT size="4">DAIN RAUSCHER WESSELS</FONT></B>
</DIV>

<DIV align="center">

</DIV>

<DIV align="right">
<B><FONT size="4">WIT SOUNDVIEW <BR>
 </FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2000
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>[Artwork description of graphics on inside front cover and
gatefold to follow]</B>

<DIV>&nbsp;</DIV>

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<!-- TOC -->
<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PROSPECTUS SUMMARY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">DIVIDEND POLICY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">CAPITALIZATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">DILUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">SELECTED FINANCIAL DATA</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">BUSINESS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">RELATED PARTY TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">PRINCIPAL STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">DESCRIPTION OF CAPITAL STOCK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">SHARES ELIGIBLE FOR FUTURE SALE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">UNDERWRITING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#017">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#018">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#019">Index to Financial Statements</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex2-1.txt">Asset Acquisition Agreemwnt</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex2-2.txt">Securities Purchase Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex2-3.txt">Common Stock Purchase Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex3-1.txt">Amended And Restated Certificate Of Incorp.</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex3-2.txt">Amended And Restated Bylaws Of Yellowbrix</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-2.txt">Shareholders Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-3.txt">Rights Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-4.txt">Shareholder Rights Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-5.txt">Shareholder Rights Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-6.txt">Joinder In Shareholders Rights Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-7.txt">Joinder In Shareholders Rights Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex4-8.txt">Letter To Abn Amro Capital Inc.</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-3.txt">Current News License Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-4.txt">Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-5.txt">Distribution Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-6.txt">Custom Distro And Technology Services Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-7.txt">Distribution Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-8.txt">Confidential Interactive Services Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-9.txt">Employment Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-10.txt">Employment Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-11.txt">Contractor Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-12.txt">Settlement Agreement And General Release</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-13.txt">Settlement And Release Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-14.txt">Conversion Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-15.txt">Amendment to Conversion Agreement</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-16.txt">Bridge Note</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-17.txt">Warrant Issued to Infoseek Corporation</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-18.txt">Warrant Issued to Insight Investments Corp</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-19.txt">Warrant Issued to 3665,Inc</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-20.txt">Warrant Issued to Millennium Financial Group</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-21.txt">Warrant Issued to I-Bankers Securities</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-22.txt">Form of Warrant Issued to Mayflower Resources</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-23.txt">Warrants Issued to Mike Azzara</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-24.txt">Warrant Issued to Park & Vaughn</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-25.txt">Warrant Issued to AOL, Inc</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-26.txt">Warrant Issued to Stephen Canton</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-27.txt">LEASE AGRMNT BETWEEN BRYCE MOUNTAIN INC & BIZWATCH</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-28.txt">OFFICE LEASE</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-29.txt">Sublease Agmt -Challenger Center</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-30.txt">Sublease Agmt - Att. Div. Serv./Bizwatch</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex10-31.txt">Form of Agreement of Lease</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex21-1.txt">Subsidiaries of YellowBrix, Inc.</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex23-2.txt">Consent Of Independent Auditors</A></TD></TR>
<TR><TD colspan="9"><A HREF="w41224ex27-1.txt">FINANCIAL DATA SCHEDULE DATED 12/31/99</A></TD></TR>
</TABLE>
</CENTER>
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<P><HR noshade><P>

<P align="center"><B>TABLE OF CONTENTS</B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Page</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Prospectus Summary</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Risk Factors</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Forward-Looking Statements</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Use of Proceeds</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Dividend Policy</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Capitalization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Dilution</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Selected Financial Data</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Management&#146;s Discussion and Analysis of<BR>
	Financial Condition and Results of Operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Business</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Management</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Related Party Transactions</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Principal Stockholders</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Description of Capital Stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Shares Eligible for Future Sale</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Underwriting</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Legal Matters</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Experts</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Where You Can Find More Information</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">64</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Index to Financial Statements</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-1</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have applied for trademark and service mark protection for our
 &#147;YellowBrix,&#148; &#147;IntelliClix,&#148;
&#147;IndustryWatch,&#148; &#147;NewsReal,&#148;
&#147;MultiLinks,&#148; &#147;Contextual Merchandising,&#148;
&#147;Contextual eMerchandising&#148; and YellowBrix logo marks.
Other trademarks, tradenames and service marks referred to in
this prospectus are the property of their respective owners.

<DIV>&nbsp;</DIV>

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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">(This page intentionally left blank)

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PROSPECTUS SUMMARY" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center"><B>PROSPECTUS SUMMARY</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>This summary highlights selected information contained
elsewhere in this prospectus. This summary does not contain all
of the information you should consider before investing in our
common stock. You should read the entire prospectus carefully,
especially the risks of investing in our common stock discussed
under &#147;Risk Factors&#148; beginning on page&nbsp;6 and the
financial statements and notes to those financial statements
beginning on page F-1 before making an investment decision.</I>

<P align="center"><B>YellowBrix</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
YellowBrix is a leading provider of Internet infrastructure
services in the contextual commerce and personalized content
services markets. Our customers consist of consumer and
commercial Web sites and corporate intranets and extranets,
collectively, Web sites. Our proprietary technology solution
integrates content, commerce and advertising and delivers
personalized information to our customers&#146; users through Web
 pages, e-mails and wireless devices. Our system uses artificial
intelligence, text parsing and linguistic pattern analysis tools
to analyze documents and understand their meaning, focus and
ultimate relevancy to Web site users. Our technology enhances Web
 site user experiences through the automated distribution of more
 personalized content selected from a broader range of choices
and may increase our customers&#146; revenue by providing
targeted commerce opportunities. Our services can be provided
either individually or as an integrated solution.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe our services will facilitate the growth in electronic
commerce and address the fundamental needs of Web sites to
improve user experiences and increase revenue streams. Many
companies have built vertical Web sites in order to attract users
 who have common interests and who, therefore, will be attractive
 to potential advertisers and merchants. Many Web sites, however,
 have discovered that undifferentiated non-targeted content alone
 is not a sufficient driver to attract, retain and motivate user
interest and that traditional online advertising does not
generate sufficient revenues. In addition, corporations are
building intranets and extranets in order to communicate and
interact more effectively and efficiently with their employees,
customers and partners. As a result, Web sites and corporations
are searching for a solution that will integrate personalized
content and commerce opportunities in an effective manner.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe our services offer our Web site customers the ability
to deliver a more personalized, enhanced user experience and to
increase revenue streams. Our services provide our customers with
 an outsourced information infrastructure that features a low
cost, flexible and customized solution with a quick
implementation process. Our services include:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Contextual commerce. </I>Our contextual commerce services
	match and distribute highly targeted commerce and advertising
	opportunities to our customers&#146; users from a catalogue of
	over 2.1&nbsp;million products.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Targeted content. </I>Our targeted content services enable our
	 customers to use our artificial intelligence capability to
	electronically define and create, almost instantaneously, highly
	specialized categories of information such as news headlines,
	articles and press releases for automatic distribution to their
	end users.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Personalization. </I>Our personalization services facilitate
	the development of custom start pages for each user and create
	personalized e-mail newsletters.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to become the leading provider of customized commerce,
content and personalization infrastructure services. To achieve
this goal, we plan to:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	leverage the online convergence of commerce, content and
	personalization;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	provide additional value added services such as advanced
	personalization;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	develop and expand our strategic alliances and agency
	relationships;</TD>
</TR>

</TABLE>

<P align="center">1

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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	further penetrate existing markets and expand into new markets;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	maintain and extend our technology and service leadership; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	pursue global expansion using by applying our analysis tools to
	foreign languages.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we had entered into contracts with
156&nbsp;customers and implemented our services on 97&nbsp;Web
sites, including InfoUSA, Business 2.0 Online/Imagine Media,
Monster.com and Network Solutions. Our sales strategy is to
pursue opportunities with major accounts through our direct sales
 force of 58 personnel. In addition, we will penetrate other
targeted market segments through multiple indirect distribution
channels such as affilliate and agency relationships.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were incorporated as a Delaware corporation in
October&nbsp;1997. Our principal executive offices are located at
 66 Canal Center Plaza, Suite&nbsp;700, Alexandria, Virginia
22314. Our telephone number at that address is
(703)&nbsp;548-3300 and our Web address is <I>www.yellowbrix.com
</I>. Information contained on our Web site does not constitute
part of this prospectus, and you should rely only on the
information contained in this prospectus when deciding whether to
 invest in our common stock.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This prospectus refers to market research reports prepared by
various organizations, which typically do not disclose their
underlying limitations or assumptions. You should not rely on
these market reports as being necessarily indicative of future
developments.

<P align="center">2
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>The Offering</B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="38%"></TD>
	<TD width="1%"></TD>
	<TD width="61%"></TD>
</TR>

<TR>
	<TD valign="top">
	Common stock offered by YellowBrix</TD>
	<TD></TD>
	<TD valign="top">
	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	Common stock outstanding after the offering</TD>
	<TD></TD>
	<TD valign="top">
	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	Use of proceeds</TD>
	<TD></TD>
	<TD valign="top">
	We expect to use the net proceeds from this offering for working
	capital, capital expenditures and purchase of software, sales and
	 marketing expenses, product development and other general
	corporate expenses.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR>
	<TD valign="top">
	Our proposed Nasdaq National Market symbol</TD>
	<TD></TD>
	<TD valign="top">
	YBRX</TD>
</TR>

</TABLE>

<DIV align="center">
<HR size="1" width="100%" align="center">
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The above information is as of June&nbsp;30, 2000 and excludes:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	8,927,137&nbsp;shares of our common stock issuable upon exercise
	of outstanding options at a weighted average exercise price of
	$2.90;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	1,157,200&nbsp;shares reserved for future grants under our
	Amended 1998 Stock Option Plan;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	1,355,662 shares reserved for future grants under our 2000 Stock
	Option Plan; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	3,040,189 shares of our common stock reserved for issuance upon
	the exercise of outstanding warrants at a weighted average
	exercise price of $3.08&nbsp;per share.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as otherwise indicated, all pro forma information in this
prospectus:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	reflects the conversion of our outstanding shares of series A
	preferred stock into 537,634 shares of our common stock upon the
	closing of this offering;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	assumes the issuance of up to 6,659,717 shares of common stock
	upon conversion of our outstanding convertible debt upon the
	closing of this offering;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	assumes the issuance of 986,130&nbsp;shares of our common stock
	pursuant to anti-dilution rights of certain of our stockholders
	and warrant holders for no additional cash as a result of the
	conversion of our outstanding convertible debt upon the closing
	of this offering;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	assumes the issuance of 81,806&nbsp;shares of our common stock
	pursuant to anti-dilution rights of certain of our stockholders
	and warrant holders for no additional cash as a result of the
	exercise of a warrant issued to Infoseek Corporation;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	reflects the amendment and restatement of our certificate of
	incorporation which increases the number of our authorized common
	 stock to 100,000,000 and the number of our preferred stock to
	10,000,000, which will occur before the closing of this offering;
	 and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	assumes no exercise of the underwriters&#146; over-allotment
	option.</TD>
</TR>

</TABLE>

<P align="center">3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>Summary Financial Data</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table is a summary of the financial data for our
business. You should read the following summary financial data in
 conjunction with our financial statements and accompanying notes
 and with the information under &#147;Selected Financial
Data&#148; and &#147;Management&#146;s Discussion and Analysis of
 Financial Condition and Results of Operations&#148; included
elsewhere in this prospectus.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The pro forma consolidated balance sheet data summarized below
gives effect to the conversion of our outstanding shares of
series&nbsp;A preferred stock into 537,634 shares of common
stock, the issuance of 6,659,717 shares of our common stock upon
conversion of our outstanding convertible debt, the issuance of
1,067,936&nbsp;shares of our common stock pursuant to
anti-dilution rights of certain of our stockholders and the
exercise of a warrant for the purchase of 1,077,500 shares of
common stock valued at $8,620,000. The pro forma as adjusted
consolidated balance sheet data summarized below reflects the
sale of the common stock offered by us at an assumed initial
offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
 share, after deducting underwriting discounts and estimated
offering expenses payable by us, and our receipt and application
of the net proceeds from the offering.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="47%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1, 1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception) to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="19"><FONT size="2"><B>(in thousands, except per share data)</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>Statement of Operations Data:</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total revenues</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">168</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,845</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">827</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,007</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Gross profit (loss)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(259</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,300</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">565</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,945</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Loss from operations excluding stock and warrant based non-cash
	expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(857</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,118</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,170</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,781</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,349</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,602</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,564</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Basic and diluted net loss per share</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.36</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Weighted average shares used in calculating basic and diluted net
	 loss per common share (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,811</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,420</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,182</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,329</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Pro forma basic and diluted net loss per common share (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Weighted average shares used in calculating pro forma basic and
	diluted common share amounts (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,134</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,201</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="54%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><FONT size="2"><B>June 30, 2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Pro Forma</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Actual</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Pro Forma</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>As Adjusted</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>Balance Sheet Data:</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Cash and cash equivalents</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,574</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,575</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Working capital</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,583</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,434</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total assets</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,437</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,438</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total stockholders&#146; equity</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,565</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12,416</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">4
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center"><B>RISK FACTORS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>You should carefully consider the risks and uncertainties
described below and all other information contained in this
prospectus before making an investment decision. Our business,
financial condition and results of operations could be severely
harmed by any of the following risks. The trading price of our
common stock could decline if any of these risks or uncertainties
 develop into actual events. You may lose all or part of the
money you paid to buy our common stock.</I>

<P align="center"><B>Risks Related to Our Business</B>

<P align="left"><B>We have a history of significant operating losses and expect
to incur significant losses for the foreseeable future.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to incur operating losses and negative cash flow for
the foreseeable future. We have incurred significant losses since
 we began our business in 1997. As of June&nbsp;30, 2000, we had
an accumulated deficit of $39.2&nbsp;million. We incurred net
losses of $17.6 million and $11.4&nbsp;million for the year ended
 December&nbsp;31, 1999 and the six months ended June&nbsp;30,
2000, respectively. We anticipate our losses will continue as we
incur additional costs and expenses related to:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	sales and marketing activities;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	employing additional personnel;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	software and service development;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	establishing strategic alliances;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	stock based arrangements with employees, independent contractors,
	 vendors and strategic alliances;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	funding our international expansion; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	increasing the number of our content providers.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In particular, our operating results will be impacted by the
extent we incur non-cash charges associated with stock-based
arrangements. Our warrants held by America Online, Inc. and
Infoseek Corporation have resulted, and are expected to result
in, charges and such charges will fluctuate based upon the
trading price of our common stock at the end of each quarter and
at the date certain milestones are achieved.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our ability to achieve profitability will depend on our ability
to generate and sustain substantially higher net sales while
maintaining reasonable expense levels. We cannot be certain that
if we were to achieve profitability, we would be able to sustain
or increase profitability.

<P align="left"><B>Because we have a limited operating history, it will be
difficult for you to evaluate our business.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
It is difficult to value our business and evaluate our prospects
because of our limited operating history. We were organized in
1997. Accordingly, we have limited financial and operating data
that is relevant to our current business. Our business model is
unproven, which creates a risk that our performance will not meet
 the expectations of investors and that the value of our common
stock will decline.

<P align="left"><B>The length of our sales and implementation cycle may make our
operating results more unpredictable.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our average sales and implementation cycle from the time a
potential customer is first contacted to the time the customer
accepts the services currently ranges from four to eight weeks.
Consequently, we may make considerable expenditures before any
revenues are realized with respect to a potential customer. In
addition, we may experience longer sales and implementation

<P align="center">5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
cycles in the future. Such a lengthening in sales and
implementation cycles could make our operating results more
unpredictable. Unsuccessful sales or marketing efforts or a
material lengthening of our sales and implementation cycle could
adversely affect our operating and financial results. Our
quarterly results also could fluctuate with great volatility
based upon variable stock-based expense recognition and other
quarterly expense variations, such as quarterly increases in
marketing, co-branding, product development and bad debt
expenses.
</DIV>

<P align="left"><B>Failure to effectively manage our growth and expansion could
adversely affect our business and operating results.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have grown quickly in the recent past and we anticipate that
we will continue to expand. For example, our number of full-time
employees increased from 31 on January&nbsp;1, 2000 to 158 on
August&nbsp;31, 2000. Any failure to manage our growth
effectively will result in less efficient operations, which may
adversely affect our operating and financial results.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To effectively manage our growth, we must, among other things:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	accurately estimate the number of employees we will require and
	the areas in which they will be required;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	upgrade and expand our office infrastructure so that it is
	appropriate for our level of activity;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	manage expansion into additional geographic areas; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	improve and refine our operating and financial systems.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect to devote considerable resources and management time to
 improving our operating and financial systems to manage our
growth.

<P align="left"><B>We will need to hire additional qualified personnel, which may
 become difficult, as our business grows.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our future success depends on our ability to identify, attract,
hire, train, retain and motivate highly skilled technical,
managerial, sales and marketing and business development
personnel. We intend to hire a significant number of technical,
sales and marketing, business development and administrative
personnel during the next year. Our services and the industries
to which we provide our services are relatively new. As a result,
 qualified technical personnel with relevant experience to our
business are scarce and therefore difficult to recruit. If we do
not attract, assimilate and retain a sufficient number of
qualified technical, managerial, sales and marketing, business
development and administrative personnel, our business could
suffer.

<P align="left"><B>Losing major content providers may leave us with insufficient
breadth of content to retain and attract customers.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not generate original content and are therefore highly
dependent upon third-party content providers. We have
arrangements with a limited number of content providers and from
September&nbsp;10, 2000 to October&nbsp;10, 2000, 71% of our
articles were received from two content providers. No other
content provider provided more than 10% of our articles during
this time period. If we were to lose one of our major content
providers and were not able to obtain similar content from
another source, our services would be less attractive to
customers. In addition, we cannot be certain that we will be able
 to license content from our current or new providers on
favorable terms in the future, if at all. If we are unable to add
 content providers to our network, we may not be able to attract
new customers in sufficient numbers to expand our business.

<P align="center">6

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<P align="left"><B>We depend on key personnel to manage our business effectively.
</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our future success depends on the continued services of our
executive officers and other key personnel such as David
Hoppmann, our Chief Executive Officer and President, Jeffrey
Massa, our Senior Vice President, Technology and Chief Technology
 Officer and Jace Wieser, our Senior Vice President, Technology/
Engineering. We do not have any key person life insurance
policies covering any of our employees. The loss of the services
of any of our executive officers or other key employees could
negatively impact our business, financial condition and results
of operations.

<P align="left"><B>We rely on Internet-related companies to purchase many of our
services.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A majority of the customers who purchase our services consist of
Internet-related companies. Many Internet-related companies have
faced or are currently facing problems achieving profitability or
 attracting financing at commercially reasonable terms, or at
all, to enable them to continue in business. If a significant
portion of our customers were to face such difficulties, our
business would be adversely affected.

<P align="left"><B>If we fail to keep up with rapid technology and competitive
changes that affect our business, we will be at a competitive
disadvantage.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Rapidly changing technology, evolving industry standards and
customer demands, and frequent new service introductions
characterize our market. Our future success depends in
significant part on our ability to develop and introduce
compelling services on a timely and competitive basis and to
improve the performance, content and reliability of our services
in response to both the evolving demands of the market and
competitive service offerings. Additionally, new Internet or
telecommunications technologies may require us to alter our
information analysis and distribution technology and/or services
so that they do not become obsolete. If our efforts in these
areas are not successful or sufficient, we will be at a
competitive disadvantage.

<P align="left"><B>We face intense competition that could impair our ability to
grow and achieve profitability.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our competition varies by service offerings. Currently, while we
believe no one company competes with us in all of our service
categories, many companies compete with us in individual service
categories of contextual commerce, targeted content and
personalization markets. Many of our competitors or future
competitors have longer operating histories than we do and
significantly greater financial, technical and marketing
resources.

<P align="left"><B>If the content we distribute is unlawful or causes injury, we
may have to pay fines or damages and our reputation may suffer.
</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We obtain content and commerce information from third parties.
When we integrate and distribute this information over the
Internet, we may be liable for the data that is contained in that
 content based on claims such as defamation, negligence, breach
of copyright, patent, trade secret or trademark infringement. Our
 content provider indemnification rights may be insufficient to
satisfy any claims against us.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we could be exposed to liability arising from the
activities of our customers or their users with respect to the
unauthorized duplication of, or insertion of inappropriate
material into, the content we supply. Although we carry general
liability insurance, our insurance may not cover claims of these
types or may be inadequate to protect us for all liability that
may be imposed on us.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the event we carry incorrect or misleading information, our
reputation as a provider of commerce and content could also be
harmed, hurting our prospects for future business.

<P align="center">7

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<P align="left"><B>Changes in laws relating to data collection and use practice
and the privacy of Internet users and other individuals could
harm our business.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The U.S. federal and various state governments have recently
proposed limitations on the collection and use of information
regarding Internet users. In October&nbsp;1998, the European
Union adopted a directive that may limit our collection and use
of information regarding Internet users in Europe. In the future,
 our technology will create user characteristic information
partly through the use of &#147;cookies.&#148; Government
regulations and the Federal Trade Commission&#146;s privacy
initiatives may affect our further refinement of enhanced
personalization features. If we are unable to offer distinctive
personalization features, our business may not grow as fast as
expected.

<P align="left"><B>We may be unable to expand our computer systems quickly enough
 to support demand for our services.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our future success will depend in part on our ability to expand
our computer systems rapidly in order to accommodate significant
increases in information processing volume. We may be unable to
expand the capacity of our existing linguistic data analysis,
vector categorization and information distribution systems or
develop new systems to enable us to process a larger amount of
commerce and content, or to provide our services to a larger
number of customers. If we are unable to expand our systems, we
may suffer service interruptions that could make our services
less attractive to customers.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may require additional servers to support our systems
infrastructure. Any failure in our system that is not backed up
by redundant servers could cause significant delays in our
business operations. Due to the time sensitive nature of our
distribution service, an interruption of service could be harmful
 to our business and reputation and could be very damaging to our
 relationship with that customer.

<P align="left"><B>Protection of our intellectual property is limited and efforts
 to protect our intellectual property may be inadequate,
time-consuming and expensive.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We regard our intellectual property as critical to our success.
The unauthorized use or misappropriation of our patent pending
processes, trademarks or other intellectual property could
diminish the value of our market position, proprietary rights or
reputation. If this were to occur, our business could be
materially and adversely affected.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We rely upon a combination of trademark and copyright law, patent
 law, trade secret protection and confidentiality and license
agreements with our employees, customers and others to protect
our proprietary rights. We have received and have filed a number
of trademarks and service marks, and have filed a patent
application with the United States Patent and Trademark Office.
However, registrations and patents may only be granted in
selected cases, and there can be no assurance that we will be
able to secure these or additional registrations or patents or
that these rights will not be challenged. Furthermore, policing
and enforcement against the unauthorized use of our intellectual
property rights could entail significant expenses and could prove
 difficult or impossible.

<P align="left"><B>Third parties may claim that we have breached their
intellectual property rights, which could divert
management&#146;s attention and result in expenses to defend or
settle claims.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Third parties may bring claims of copyright or trademark
infringement, patent violation or misappropriation of creative
ideas or formats against us with respect to content that we
distribute or technology or marketing techniques and terminology
that we use. These claims, with or without merit, could be time
consuming to defend, result in costly litigation, divert
management attention, require us to enter into costly royalty or
licensing arrangements or limit our ability to distribute content
 or prevent us from utilizing important technologies, ideas or
formats.

<P align="center">8

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we license some material technology from a limited
number of vendors. If we are unable to license technology from
these vendors on commercially reasonable terms, or at all, or if
their technology infringes on the intellectual property rights of
 others, our business will suffer.

<P align="left"><B>Our international expansion involves considerable risks and we
 may face difficulties expanding our operations into
international markets.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of our business strategy, we have begun to seek
additional opportunities to expand our services into
international markets. We believe that such expansion is
important to our ability to continue to grow and to market our
services. In marketing our services internationally, however, we
face new competitors. If our revenues from international
operations do not exceed the expense of establishing and
maintaining international operations, our business may suffer. To
 date, we have limited experience in marketing and distributing
our services internationally.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, there are certain difficulties and risks inherent in
 doing business internationally, such as compliance with
regulatory requirements, increased privacy concerns, tariffs and
other trade barriers, protection of intellectual property rights,
 difficulties in staffing and managing international operations,
longer payment cycles, problems in collecting accounts
receivable, political instability, fluctuations in currency
exchange rates and potentially adverse tax consequences. One or
more of such factors could have a material adverse effect on any
international operations that we establish and, consequently, on
our business, results of operations and financial condition.

<P align="left"><B>We rely on a small number of customers for a significant
portion of our revenues.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We derive a substantial portion of our revenues from a small
number of customers. Two companies represented approximately 62%
of our revenues for the year ended December&nbsp;31, 1999 and
three companies represented approximately 43% of our revenues for
 the six months ended June&nbsp;30, 2000. No other customer was
responsible for in excess of 10% of our revenues during these
periods. We expect that this will continue in the foreseeable
future. If we lose any of these customers, or if any of these
customers are unable or unwilling to pay us amounts that they owe
 us, our financial results will suffer. A customer contract
recently expired for CNNfn, which accounted for 50%, and 13% of
our total revenues for the year ended December&nbsp;31, 1999 and
for the six months ended June&nbsp;30, 2000, respectively, and we
 cannot assure you that a new contract will be signed or that we
will continue to provide future services to this customer.

<P align="left"><B>Potential acquisitions and strategic investments may result in
 increased expenses, difficulties in integrating target companies
 and diversion of management&#146;s attention.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although we are not currently in discussions with any party, we
may undertake one or more acquisitions or strategic investments
in the near future to expand our range of technology and services
 and to gain access to new markets. Growth through acquisitions
entails many risks, including the following:
<P>

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	<TD width="2%"></TD>
	<TD width="94%"></TD>
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	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	our management&#146;s attention may be diverted during the
	acquisition and integration process;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	costs, delays and difficulties of integrating the acquired
	company&#146;s operations, technologies and personnel into our
	existing operations, organization and culture;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the adverse impact on earnings of amortizing the acquired
	company&#146;s intangible assets may be significant, particularly
	 in light of the high valuations of many Internet and other
	information technology services companies;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	new equity securities to pay for acquisitions, which would dilute
	 the holdings of existing stockholders;</TD>
</TR>

</TABLE>

<P align="center">9

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<P>

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	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the timing of an acquisition or our failure to meet operating
	expectations for acquired businesses may impact adversely on our
	financial condition; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	any undisclosed or potential legal liabilities, or related
	expenses of an acquired company, including intellectual property,
	 employment and warranty and service liability-related problems.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If realized, any of these risks could have a material adverse
effect on our business, financial condition and operating
results.

<P align="left"><B>We may require additional funding for our existing and future
operations.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although we believe that our cash reserves, including the net
proceeds from this offering, and cash flows from operations will
be adequate to fund our operations for at least the next
12&nbsp;months, such sources may be inadequate. Consequently, we
may require additional funds during or after such period.
Additional financing may not be available on favorable terms or
at all. If we raise additional funds by selling stock, the
percentage ownership of our then current stockholders will be
reduced. If we cannot raise adequate funds to satisfy our capital
 requirements, we may have to limit our operations significantly.
 Our future capital requirements depend upon many factors,
including, but not limited to:
<P>

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<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the rate at which we expand our sales and marketing operations;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the extent to which we develop and upgrade our technology and
	data network infrastructure;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the occurrence, timing, size and success of acquisitions;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the cash requirements of entities we may acquire;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the rate at which we may expand internationally; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the response of competitors to our service offerings.</TD>
</TR>

</TABLE>

<P align="center"><B>Risks Related to the Internet Industry</B>

<P align="left">
<B>If the Internet does not continue to grow in acceptance, we
may not be able to meet our business plan.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Because a majority of our present and anticipated customers are
operators of Web sites, demand for our services will depend in
large part on continued growth in use of the Internet. There are
critical issues concerning the commercial use of the Internet
that remain unresolved, such as security and profitability
concerns. If the Internet develops more slowly than we expect as
a commercial or business medium, demand for our services will be
lower than we expect and our business may suffer.

<P align="left"><B>We rely on the Internet system infrastructure.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our success depends, in large part, on other companies
maintaining the Internet system infrastructure. In particular, we
 rely on other companies to maintain a reliable network backbone
that provides adequate speed, data capacity and security and to
develop services that enable reliable Internet access and
services. If the Internet continues to experience significant
growth in the number of users, frequency of use and amount of
data transmitted, the Internet system infrastructure may be
unable to support the demands placed on it, and the
Internet&#146;s performance or reliability may suffer as a result
 of this continued growth. In addition, the Internet could lose
its commercial viability as a form of media due to delays in the
development or adoption of new standards and protocols to process
 increased levels of Internet activity. Any such degradation of
Internet performance or reliability could cause advertisers to
reduce their Internet expenditures. If

<P align="center">10

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<DIV align="left">
other companies do not develop the infrastructure or
complementary services necessary to establish and maintain the
Internet as a viable commercial medium, or if the Internet does
not become a viable commercial medium or platform for
advertising, promotions and electronic commerce, our business
could suffer.
</DIV>

<P align="left"><B>Legal uncertainties and government regulation of the Internet
could inhibit growth of the Internet and e-commerce.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Many legal questions relating to the Internet remain unclear and
these areas of uncertainty may be resolved in ways that damage
our business. It may take years to determine whether and how
existing laws governing matters such as intellectual property,
trade secrets, personal privacy, libel and taxation apply to the
Internet.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
New laws and regulations that apply directly to Internet
communications, commerce and advertising are becoming more
prevalent. For example, the U.S. Congress has recently passed
Internet-related legislation concerning copyrights, taxation, and
 the online privacy of children. As the use of the Internet and
the prevalence of e-commerce grow, there may be calls for further
 regulation by the Federal Trade Commission or others on issues
such as user privacy, pricing, content, taxation, copyrights,
distribution and service and services quality. Finally, our
distribution arrangements and customer contracts could subject us
 to the laws of foreign jurisdictions in unpredictable ways.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These possibilities could affect us adversely in a number of
ways. New regulations could make the Internet less attractive to
users, resulting in slower growth in its use and acceptance than
we expect. Complying with new regulations could result in
additional cost to us, which could reduce our margins, or it
could leave us at risk of potentially costly legal action. We may
 be affected indirectly by legislation that fundamentally alters
the practicality or cost-effectiveness of utilizing the Internet,
 including the cost of transmitting over various forms of network
 architecture, such as telephone networks or cable systems, or
the imposition of various forms of taxation on Internet-related
activities. Regulators continue to evaluate the best
telecommunications policy regarding the transmission of Internet
traffic.

<P align="center"><B>Risks Related to this Offering</B>

<P align="left"><B>Our stock price may decline after this offering and may be
volatile in the future.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The market for shares in newly public technology companies is
subject to extreme price and volume fluctuations. Our shares will
 be exposed to these fluctuations. You may not be able to resell
any shares you buy from us at or above the initial public
offering price due to a number of factors, including:
<P>

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	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	fluctuations in our operating results due to deviations between
	actual and expected sales;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	announcements of technological innovations, new systems or
	services, or service enhancements by us or our competitors;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	announcement of new or lost customers;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	changes in investors&#146; and securities analysts&#146;
	perception or expectations as to our future financial performance
	 or changes in financial estimates of securities analysts; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the operating and stock price performance of comparable
	companies.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, although our common stock will be quoted on the
Nasdaq National Market, an active trading market may not develop
or sustain itself after this offering.

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<P align="left"><B>We are at risk of securities class action litigation if our
stock price becomes volatile.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the past, holders of securities have often instituted class
action litigation against companies following periods of
volatility in the market price of the securities. If we become
involved in this type of litigation, regardless of the outcome,
we could incur substantial legal costs defending such litigation
and our management&#146;s attention and resources could be
diverted from our business.

<P align="left"><B>Management will have broad discretion in the way we use the
net proceeds from this offering.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business plan is subject to change based upon changing
conditions and opportunities. Our management has significant
flexibility in applying the net proceeds we receive from this
offering. Because the net proceeds are not required to be
allocated to any specific investment or transaction, you cannot
determine at this time the value or propriety of our application
of the proceeds and you and other stockholders may not agree with
 our decisions. See &#147;Use of Proceeds&#148; for a more
detailed description of how management intends to apply the
proceeds of this offering.

<P align="left"><B>You will experience immediate and significant dilution as a
result of this offering and may experience further dilution as a
result of future equity issuances.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The initial public offering price of our common stock will be
substantially higher than the pro forma net tangible book value
per share of our outstanding common stock. Pro forma net tangible
 book value per share represents the pro forma amount of total
tangible assets less total liabilities, divided by the pro forma
number of shares of our common stock outstanding immediately
after the offering. If you purchase our common stock in this
offering, you will incur immediate dilution of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
the pro forma net tangible book value per share of common stock
from the price you pay for our common stock in this offering. We
also have outstanding a large number of stock options and
warrants with exercise prices significantly below the initial
public offering price of the shares. To the extent these options
are exercised, there will be further dilution. We intend to
continue to grant stock options to our employees as part of our
general compensation practices.

<P align="left"><B>Future sales of a substantial amount of our common stock after
 this offering may cause our stock price to decline.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Future sales of substantial amounts of our common stock in the
public market following this offering or the perception that
substantial sales could occur may cause the market price of our
common stock to decline. Of the
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 that will be outstanding upon the closing of this offering:
<P>

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<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	all of the shares offered under this prospectus will be freely
	tradable in the public market, except as to affiliates;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	approximately
	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
	 shares may be sold after the expiration of 180-day lock-up
	agreements entered into by our officers, directors and certain
	existing stockholders; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	approximately
	&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
	 shares may be sold upon the exercise of stock options and
	warrants after the expiration of 180-day lock-up agreements.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You should read &#147;Shares Eligible for Future Sale&#148; for a
 more detailed discussion of when and how many shares of our
common stock may be sold after this offering.

<P align="left"><B>We will continue to be effectively controlled by our executive
 officers and directors after this offering, and the interests of
 these stockholders could conflict with your interests.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Immediately upon completion of this offering, our executive
officers and directors and institutions affiliated with them, in
the aggregate, will beneficially own approximately
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our

<P align="center">12

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
outstanding common stock. As a result, these stockholders, if
acting together, would be able to exert considerable influence on
 any matters requiring approval by our stockholders, including
the election of directors, amendments to our charter and bylaws
and the approval of mergers or other business combination
transactions. The ownership position of these stockholders could
delay, deter or prevent a change in control of YellowBrix and
could adversely affect the price that investors might be willing
to pay in the future for shares of our common stock.
</DIV>

<P align="left"><B>Provisions of our governing documents and Delaware law may
make it difficult for a third party to acquire us and may delay a
 change in our control.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our certificate of incorporation and bylaws contain anti-takeover
 provisions, including those listed below, that could make it
more difficult for a third party to acquire control of us, even
if that change in control would be beneficial to stockholders:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	our board of directors has the authority to issue common stock
	and preferred stock and to determine the price, rights and
	preferences of any new series of preferred stock without
	stockholder approval;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	our board of directors is divided into three classes, each
	serving three-year terms;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	there are limitations on who can call special meetings of
	stockholders;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	stockholders may only take action without a meeting on the
	written consent of the holders of shares representing
	66&nbsp;2/3% of our capital stock; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	advance notice is required for nominations of directors and for
	stockholder proposals.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, provisions of Delaware law and our stock option
plans may also discourage, delay or prevent a change of control
of our company or unsolicited acquisition proposals.

<P align="left"><B>The absence of an active public market for our common stock
may make it difficult for you to resell your shares at or above
the offering price.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has been no public market for our
common stock, and an active market for common stock may not
develop. The initial public offering for our common stock was
determined by negotiations between us and the representative of
the underwriters. This price does not necessarily relate to our
book value, assets, past operating results, financial condition
or other established criteria of value. Therefore, you may be
unable to resell your shares of common stock at or above the
initial public offering price.

<!-- link1 "FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center"><B>FORWARD-LOOKING STATEMENTS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This prospectus includes forward-looking statements. We have
based these forward-looking statements largely on our current
expectations and projections about future events and financial
trends affecting the financial condition of our business. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions about YellowBrix including, among
other things:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the rapid technological change in our industry;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the intense competition in our industry;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	our need to continually develop new or improved services;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	our estimates regarding our capital requirements and our needs
	for additional financing;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	anticipated trends in our business;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	existing and future regulations affecting our business; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the risk factors set forth under &#147;Risk Factors&#148; in this
	 prospectus.</TD>
</TR>

</TABLE>

<P align="center">13

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, in this prospectus, the words &#147;believe,&#148;
&#147;may,&#148; &#147;will,&#148; &#147;estimate,&#148;
&#147;continue,&#148; &#147;anticipate,&#148; &#147;intend,&#148;
 &#147;expect&#148; and similar expressions, as they related to
YellowBrix, our business or our management, are intended to
identify forward-looking statements.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In light of these risks and uncertainties, the forward-looking
events and circumstances discussed in this prospectus may not
occur and actual results could differ materially from those
anticipated or implied in the forward-looking statements.

<P align="center">14

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<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center"><B>USE OF PROCEEDS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assuming an initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, we will receive net
proceeds of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, or
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million if the
underwriters exercise their over-allotment option in full. This
estimate is after deducting underwriting commissions and
discounts of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
 or approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million if the
underwriters exercise their over-allotment option in full, and
estimated expenses of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we currently do not have any specific plans or proposals
for the allocation of the net proceeds of this offering, we
currently anticipate using proceeds for working capital of
approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
capital expenditures and purchase of software of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, sales and marketing
 expenses of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, product development
 expenses of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million and other general
corporate expenses of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we may also use a portion of the net proceeds to
acquire businesses, assets, technologies or service lines that
complement our existing business if these transactions could be
effected on terms which we deem to be favorable. We do not have
any commitments to make any acquisition and have not allocated a
specific amount of the net proceeds for this purpose. Our
management will have significant flexibility in applying the net
proceeds of the offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pending any use as described above, we intend to invest the net
proceeds in short-term, interest-bearing investment-grade
instruments.

<!-- link1 "DIVIDEND POLICY" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center"><B>DIVIDEND POLICY</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have never declared nor paid any cash dividends on our capital
 stock. Our board of directors will determine future declaration
and payment of dividends, if any, in light of the then-current
conditions, including our earnings, operations, capital
requirements, financial condition, restrictions in financing
agreements and other relevant factors. It is the current policy
of our board of directors to retain any future earnings to
finance the development and expansion of the operations of our
business. Accordingly, we do not anticipate paying cash dividends
 on our capital stock in the foreseeable future.

<P align="center">15
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<!-- link1 "CAPITALIZATION" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center"><B>CAPITALIZATION</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our capitalization as of
June&nbsp;30, 2000 on a pro forma as adjusted basis to reflect
the sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock in this offering at an
assumed initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, after deducting
commissions and other estimated offering expenses and the
application of the estimated net proceeds, on an actual basis and
 on a pro forma basis after giving effect to the:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="2%"></TD>
        <TD width="94%"></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        automatic conversion of all outstanding shares of our series A
        preferred stock into 537,634 shares of our common stock upon the
        closing of this offering;</TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        issuance of up to 6,659,717 shares of common stock upon
        conversion of our outstanding convertible debt upon the closing
        of this offering;</TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        issuance of 986,130&nbsp;shares of our common stock pursuant to
        anti-dilution rights of certain of our stockholders and warrant
        holders for no additional cash consideration as a result of the
        conversion of our outstanding convertible debt upon the closing
        of this offering;</TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        issuance of 81,806 shares of our common stock pursuant to
        antidilution rights of certain of our stockholders and warrant
        holders for no additional consideration as a result of the
        exercise of a warrant issued to Infoseek Corporation; and</TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        exercise of a warrant issued to Infoseek for the purchase of
        1,077,500 shares of common stock with an exercise price of $0.001
         per share with an assumed value of $8,620,000 as of the date the
         warrant vests.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table should be read in conjunction with our financial
statements and the related notes, which are included elsewhere in
 this prospectus.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="51%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="4%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD colspan="11"></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="11"><FONT size="2"><B>June 30, 2000</B></FONT></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="11"><HR size="1"></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD colspan="7"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>Pro Forma</B></FONT></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>Actual</B></FONT></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>Pro Forma</B></FONT></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>As Adjusted</B></FONT></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD colspan="11"></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="11"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="4" align="left" valign="top"><FONT size="2">
        Cash and cash equivalents</FONT></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">9,574,168</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">9,575,246</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="4" align="left" valign="top"><FONT size="2">
        Stockholder notes payable</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,850,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="4" align="left" valign="top"><FONT size="2">
        Capital lease obligation</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">84,710</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">84,710</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="4" align="left" valign="top"><FONT size="2">
        Officer loan</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">374,883</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">374,883</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="4" align="left" valign="top"><FONT size="2">
        Stockholders&#146; equity:</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD colspan="3" align="left" valign="top"><FONT size="2">
        Preferred stock, par value $0.001 per share, 5,000,000 shares
        authorized, 200,000 shares issued and outstanding, actual;
        10,000,000 shares authorized, no shares issued and outstanding
        pro forma or<BR>
        pro&nbsp;forma as adjusted</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">200</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD colspan="3" align="left" valign="top"><FONT size="2">
        Common stock, par value $0.001 per share, 50,000,000 shares
        authorized,11,179,567 shares issued and outstanding, actual;
        100,000,000&nbsp;shares authorized, 20,522,354 shares issued and
        outstanding, pro forma; &nbsp;&nbsp; &nbsp;shares authorized,
        shares issued and outstanding, pro forma as adjusted</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">11,180</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">20,524</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD colspan="3" align="left" valign="top"><FONT size="2">
        Additional paid-in capital</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">43,747,909</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">60,209,843</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD colspan="3" align="left" valign="top"><FONT size="2">
        Deferred stock compensation</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(18,580</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(18,580</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD colspan="3" align="left" valign="top"><FONT size="2">
        Accumulated deficit</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(39,175,433</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(47,795,433</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD></TD>
        <TD></TD>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Total stockholders&#146; equity</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,565,276</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">12,416,354</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Total capitalization</FONT></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">12,874,869</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">12,875,947</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="4"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">16

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DILUTION" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center"><B>DILUTION</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our pro forma net tangible book value on June&nbsp;30, 2000 was
approximately $12,405,478 or $0.60&nbsp;per share. Pro forma net
tangible book value is total assets minus liabilities minus
intangible assets. Pro forma net tangible book value per share is
 pro forma net tangible book value divided by the total pro forma
 number of shares outstanding before the offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The adjustments to net tangible book value made to determine pro
forma net tangible book value per share are the following:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the automatic conversion of all outstanding shares of our series
	A preferred stock into 537,634 shares of our common stock upon
	the closing of this offering;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the issuance of up to 6,659,717 shares of common stock upon the
	conversion of our outstanding convertible debt upon the closing
	of this offering;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the issuance of 986,130&nbsp;shares of our common stock pursuant
	to anti-dilution rights of certain of our stockholders and
	warrant holders for no additional consideration as a result of
	the conversion of the outstanding convertible debt;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the issuance of 81,806&nbsp;shares of our common stock pursuant
	to anti-dilution rights of certain of our stockholders and
	warrant holders for no additional consideration as a result of
	the exercise of a warrant issued to Infoseek Corporation;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the exercise of a warrant issued to Infoseek for the purchase of
	1,077,500 shares of common stock with an exercise price of $0.001
	 per share with an assumed value of $8,620,000 as of the date the
	 warrant vests;</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The adjustments to as adjusted pro forma net tangible book value
reflect the sale and issuance of
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock in the
 offering at an assumed initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, after deducting
commissions and other estimated offering expenses and the
application of the estimated net proceeds.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth on a pro forma as adjusted basis
as of June&nbsp;30, 2000, the increase in pro forma net tangible
book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share and the
dilution (the difference between the offering price per share and
 net tangible book value per share) to new investors:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="73%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Assumed initial public offering price per share</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Pro forma net tangible book value per share as of June&nbsp; 30,
	2000</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.60</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Increase in pro forma net tangible book value per share
	attributable to the offering</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Pro forma as adjusted net tangible book value per share as of
	June&nbsp;30, 2000 after giving effect to the offering</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Pro forma dilution per share to new investors in the offering</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth, as of June&nbsp;30, 2000, on the
pro forma basis described above, the number of shares of capital
stock purchased from us, the total consideration paid to us and
the average price per share paid by existing stockholders and by
new investors who purchase shares of common stock in this
offering, before deducting the estimates underwriting discounts
and commissions and offering expenses.

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="35%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Shares Purchased</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Total Consideration</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price Per</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percent</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Share</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Existing stockholders</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,522,354</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,012,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.80</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	New stockholders</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If the underwriters exercise their over-allotment option in full,
 the number of shares held by new investors will be increased to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total number of shares of
common stock outstanding after the offering. In that case, the
shares held by &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;would represent
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total number of shares of
common stock to be outstanding after the offering.

<P align="center">17

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SELECTED FINANCIAL DATA" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center"><B>SELECTED FINANCIAL DATA</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following selected financial data as of and for the period
from October&nbsp;1, 1997 (inception) to December&nbsp;31, 1997
and for years ended December&nbsp;31, 1998 and 1999 are derived
from our financial statements, which have been audited by Ernst
&#38; Young LLP, independent auditors. The following selected
financial data as of and for the six months ended June&nbsp;30,
1999 and June&nbsp;30, 2000 are derived from our unaudited
financial statements which, in our opinion, include all
adjustments, consisting only of normal recurring adjustments,
that we consider necessary for fair presentation of our financial
 position and results of operations for those periods. The data
should be read in conjunction with the financial statements,
related notes and other financial information included elsewhere
in this prospectus. Our historical results are not necessarily
indicative of future results. The results of operations for the
six months ended June&nbsp;30, 2000 are not necessarily
indicative of the results to be realized for the year ending
December&nbsp;31, 2000.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="42%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1,</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception) to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="19"><FONT size="2"><B>(in thousands, except per share data)</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	<B>Statement of Operations Data:</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Total revenues</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">34</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">168</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,845</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">827</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,007</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Cost of revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">426</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">545</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">262</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,062</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Gross profit (loss)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,300</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">565</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,945</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Operating expenses:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Sales and marketing</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,160</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,474</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,330</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,535</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Research and development</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">274</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,758</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,142</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">814</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,790</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	General and administrative</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">310</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,527</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,034</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,503</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,216</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,414</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">174</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Stock and warrant non-cash based compensation</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,690</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,369</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total operating expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">792</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,908</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,514</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,760</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,095</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Loss from operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(857</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,166</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,214</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,195</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,150</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Other income (expense):</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Interest income</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">140</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Interest expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(220</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(558</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(255</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(353</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Beneficial interest expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,850</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,114</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total other income (expense)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(182</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,388</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,367</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(213</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(862</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,348</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,602</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,562</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Basic and diluted net loss per share</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.36</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Weighted average shares used in calculating basic and diluted net
	 loss per common share (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,811</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,420</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,182</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,328</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Pro forma basic and diluted net loss per common share (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.23</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Weighted average shares used in calculating pro forma basic and
	diluted common share amounts (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,134</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,201</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="56%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="15"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>Balance Sheet Data:</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Cash and cash equivalents</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">924</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">223</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,767</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,574</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Working capital</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">455</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,816</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,263</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,583</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total assets</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,864</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">887</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,745</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,437</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total stockholders&#146; equity (deficit)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,373</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,427</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,954</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,565</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">18

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center"><B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF</B>

<DIV align="center">
<B>FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>The following discussion should be read in conjunction with
&#147;Selected Financial Data&#148; and our financial statements
and the notes to those financial statements included elsewhere in
 this prospectus. Our discussion contains forward-looking
statements based upon current expectations that involve risks and
 uncertainties, such as our plans, objectives, expectations and
intentions. Our actual results and the timing of events could
differ materially from those anticipated in these forward-looking
 statements as a result of various factors, including those set
forth under &#147;Risk Factors,&#148; &#147;Forward Looking
Statements,&#148; &#147;Business&#148; and elsewhere in this
prospectus.</I>

<P align="left"><B>Overview</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
YellowBrix is a leading provider of Internet infrastructure
services in the contextual commerce and personalized content
services markets. Our customers consist of consumer and
commercial Web sites and corporate intranets and extranets,
collectively, Web sites. Our proprietary technology solution
integrates commerce and content and delivers personalized
information to our customers&#146; users through Web pages,
e-mails and wireless devices. During the six months ended
June&nbsp;30, 2000, we increased the number of customers that had
 implemented our services from 18 to 73, an increase of 306%.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We commenced operations in the fourth quarter of 1997. On
December&nbsp;11, 1997, we acquired intellectual property and
other assets of Infoseek Corporation pursuant to an asset
acquisition agreement for $1.0&nbsp;million in cash,
850,000&nbsp;shares of our common stock and a warrant to purchase
 1,077,500&nbsp;shares of our common stock. In the first quarter
of 1998, we began to generate revenue from our IndustryWatch
service. IndustryWatch analyzes, categorizes and distributes news
 and information. Revenues from IndustryWatch remained
insignificant until the fourth quarter of 1998, when we altered
our business model from a primarily ad-share model to a new model
 based on implementation fees and monthly service charges. During
 the second quarter of 2000, we introduced IntelliClix, an
automated contextual commerce service, for which we charge
customers an implementation fee in addition to a per transaction
fee. We anticipate that our revenue model will continue to evolve
 in the future as we introduce additional new services. For
example, we recently introduced our e-mail and newsletter
services for which we charge customers on a monthly per person
basis.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the consideration for the assets acquired from
Infoseek, we issued a warrant to Infoseek to purchase 1,077,500
shares of our common stock at an exercise price of $0.001 per
share. The warrant expires ten years from the date of issue, and
is subject to a vesting schedule that was dependent upon our
attaining predefined revenue and operating income targets prior
to December&nbsp;31, 1999, which we did not meet. However, if the
 QIP Investors sell a portion of their shares at a profit over
and above a predetermined rate of return or if an IPO occurs and
certain returns on investment are achieved by the QIP Investors,
the warrant will vest automatically. In the event that the
warrant vests, we anticipate that we may record an estimated
expense of $8.6&nbsp;million.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;7, 2000, we entered into an interactive services
agreement whereby we provide America Online, Inc., or AOL, with
customized contextual commerce and content services for their
small business Web site. Under this agreement, we design, create,
 edit, manage, review, update and maintain a customized site for
AOL, and AOL provides us with at least one hundred million page
impressions on its network. The agreement provides for YellowBrix
 and AOL to share advertising revenue and IntelliClix transaction
 revenue from AOL&#146;s small business Web site. This agreement
terminates on October&nbsp;4, 2001. Upon fulfillment of certain
of AOL commitments, AOL has the right to extend this agreement
for an additional one year period on the later of the termination
 or the date when AOL has fulfilled certain of its commitments.

<P align="center">19

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have agreed to pay AOL an aggregate of $3.0&nbsp;million in an
 initial up front payment of $1.5&nbsp;million and 5 quarterly
installments of $300,000 each, $1.8&nbsp;million of which has
been paid as of August&nbsp;31, 2000. We have also granted AOL a
warrant to purchase up to 832,691 shares of our common stock at
an exercise price of $3.72 per share, of which 277,563 shares
have vested as of September&nbsp;30, 2000. The remainder will
vest upon achievement of two additional revenue payment
milestones from AOL to us resulting from site activity. The value
 of the shares underlying the second and third milestones will be
 measured when it becomes probable that the vesting targets will
be met. At each subsequent reporting date, until the achievement
of the AOL warrant revenue milestone, YellowBrix will revalue the
 warrant using the Black-Scholes option pricing model and will
record any increases or decreases in the value of the warrant.
The value of the warrant will be amortized ratably over the term
of the agreement. In addition to amortization of the initial fair
 value of this warrant, which totaled $741,000, we expect that
future changes in the trading price of our common stock at the
end of each quarter and at the date certain milestones are
achieved, will cause additional substantial changes in the
ultimate amount of such amortization.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A customer contract recently expired for CNNfn, which accounted
for 13% and 50% of our total revenues for the six months ended
June&nbsp;30, 2000 and for the year ended December&nbsp;31, 1999,
 respectively. There is a possibility that this contract will not
 be renewed.

<P align="left"><B>Revenues</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We generate revenues primarily from monthly service fees and
implementation fees charged to customers for our services. The
amount of the service and implementation fees is calculated based
 on the type and breadth of the services provided. Other revenues
 are generated from contextual commerce revenue share agreements,
 per person monthly charges for e-mail and newsletter services,
custom consulting projects, and ad-share agreements. Revenues
from service fees and implementation fees are deferred and
recognized in the periods our services are implemented and
accepted by the customer. Throughout 1998, the majority of our
customers were converted from a primarily ad-share model to a
monthly service model. However, certain customers continued under
 the ad-share model, in which revenues are recognized in the
month they are received. We share such advertising and
sponsorship revenues with our customers, based upon individually
negotiated agreements. We record advertising revenues net of
agency commissions and fees.

<P align="left"><B>Expenses</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Cost of Revenues</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our cost of revenues consists of flat monthly fees to content
providers for access to their content and fees to merchandise
suppliers for access to their product inventory. Cost of revenues
 also includes fees related to the management of our data centers
 and certain commissions paid as a result of our strategic
alliances and agency agreements.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Sales and Marketing</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our sales and marketing expenses include salaries, benefits,
commissions, advertising, sponsorship, and other marketing
communication costs.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Research and Development</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Research and development expenses include salaries, benefits,
bonuses, and other employee related costs for all development and
 engineering employees. Also included in research and development
 are the costs of independent contractors and consultants and
software licenses. Currently, all research and development costs
are expensed as incurred.

<P align="center">20

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>General and Administrative</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General and administrative expenses consist of personnel and
related costs of the corporate development, finance and
administrative departments. General and administrative expenses
also include production related facility and telecommunication
costs, professional fees and other general office costs.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Depreciation and Amortization</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Depreciation and amortization expenses consist of the costs
associated with depreciation of our fixed assets and amortization
 of our intangible assets.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Stock and Warrant Based Non-Cash
Expenses</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Stock and warrant based non-cash expenses include all non-cash
charges related to the issuance of equity, including stock
options, warrants, and other securities. Most of the expenses in
this category are related to warrants issued to vendors and
consultants valued using the Black-Scholes option pricing model.

<P align="left"><B>Results of Operations</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below shows operating data, as a percentage of
revenues, for the periods indicated:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="54%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	<B>Statement of Operations Data:</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Total revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Cost of revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">254</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Gross profit (loss)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(154</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Operating expenses:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Sales and marketing</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1289</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">157</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">282</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">151</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Research and development</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1049</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">60</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	General and administrative</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2106</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">107</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">182</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">74</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">844</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Stock and warrant based non-cash expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">59</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total operating expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,317</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">404</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">577</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">436</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Loss&nbsp;from operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,471</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(323</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(509</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(371</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Other income and expenses:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Interest income</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Interest expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(131</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(31</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Beneficial interest expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(276</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(498</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,580</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(618</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,038</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(377</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">21

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><B>Six Months Ended June&nbsp;30, 2000 Compared to Six Months
Ended June&nbsp;30, 1999</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Revenues.</I> Total revenues, for the six months ended
June&nbsp;30, 2000, were $3.0&nbsp;million as compared to
$827,000 for the same period in 1999. This reflects an increase
of 264% between the two periods due to an increase of the number
of our customers from 12 to 73 as well as a greater proportion of
 customers paying a monthly recurring fee for our targeted
content services. Three of our customers accounted for
approximately 43% of total revenues for the six months ended
June&nbsp;30, 2000 and one customer accounted for approximately
58% of total revenues for the six months ended June&nbsp;30,
1999. Revenues from enhanced services such as personalization and
 contextual commerce were insignificant during the first half of
2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Cost of Revenues.</I> Cost of revenues, for the six months
ended June&nbsp;30, 2000, was $1.1&nbsp;million, as compared to
$262,000 for the same period in 1999. This reflects an increase
of 306% between the two periods. As a percentage of revenues,
cost of revenues increased to 35% for the six months ended
June&nbsp;30, 2000 from 32% for the six months ended
June&nbsp;30, 1999. This increase was due primarily to costs for
additional content sources and fees related to the addition of
our West Coast data center.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Sales and Marketing.</I> Sales and marketing expenses, for the
 six months ended June&nbsp;30, 2000, were $4.5&nbsp;million, as
compared to $2.3&nbsp;million for the same period in 1999. This
reflects an increase of 95% between the two periods due to growth
 in our sales force from 8 salespeople to 32 salespeople.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Research and Development.</I> Research and development
expenses, for the six months ended June&nbsp;30, 2000, were
$1.8&nbsp;million, as compared to $814,000 for the same period in
 1999. This reflects an increase of 120% between the two periods
due to an increase in the number of research and development
personnel, the cost of independent contractors and the
amortization of certain software maintenance agreements.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>General and Administrative.</I> General and administrative
expenses, for the six months ended June&nbsp;30, 2000, were
$2.2&nbsp;million, as compared to $1.5&nbsp;million for the same
period in 1999. This reflects an increase of 48% between the two
periods due to increased rent, utilities, professional and
telecommunications expenses incurred to support our growth.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Depreciation and Amortization.</I> Depreciation and
amortization expenses, for the six months ended June&nbsp;30,
2000, were $185,000, as compared with $87,000 for the same period
 in 1999. This reflects an increase of 112% between the two
periods due to additional software license and server costs and
investments in our internal business information systems.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Stock and Warrant Based Non-Cash Expenses.</I> Stock and
warrant based non-cash expenses, for the six months ended
June&nbsp;30, 2000, were $4.4 million, as compared to $26,000 for
 the same period in 1999. This increase was due to warrants
issued to vendors and contractors in lieu of, or in addition to,
cash payments and to the modification of certain provisions of a
stock option agreement issued to a former employee. The majority
of these expenses are related to warrants issued pursuant to
certain contractor agreements for the six months ended
June&nbsp;30, 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Income and Expenses.</I> Total other income and
expenses, including interest income, interest expense and
beneficial interest expense, for the six months ended
June&nbsp;30, 2000 were $213,000 as compared to $4.4 million for
the same period in 1999. Interest income for the six months ended
 June&nbsp;30, 2000 was $140,000 as compared to $2,000 for the
same period in 1999. This increase reflects a higher average
balance of interest-bearing cash and cash equivalents for the
period ended June&nbsp;30, 2000 as compared to the same period
1999. Interest expense for the six months ended June&nbsp;30,
2000 was $353,000 as compared to $255,000 for the same period in
1999. This increase was due to an increase in indebtedness.
Beneficial interest expense is a non-cash expense related to the
conversion feature of the QIP loan. See &#147;Liquidity and
Capital Resources.&#148; No beneficial interest expense was
recorded for the six months ended June&nbsp;30, 2000, as compared
 to $4.1 million for the same period in 1999 due to the fact that
 convertible indebtedness was

<P align="center">22

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
incurred in the 1999 period only. We had losses, for tax
purposes, for the six months ended June&nbsp;30, 2000.
Accordingly, no provision for income taxes has been included in
the financial statements. It is uncertain whether we will be able
 to utilize the tax benefit derived from such losses.
</DIV>

<P align="left"><B>Year Ended December&nbsp;31, 1998 Compared with Year Ended
December&nbsp;31, 1999</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Revenues.</I> Total revenues, for the year ended
December&nbsp;31, 1999, were $2.8&nbsp;million as compared to
$168,000 for the same period in 1998. This increase was due to an
 increase in the number of customers as well as a fundamental
shift in our business model, from a primarily ad-share model, to
a new model, based on implementation fees and monthly service
charges. Revenues from enhanced services such as personalization
and contextual commerce, were insignificant during 1998 and 1999.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Cost of Revenues.</I> Cost of revenues, for the year ended
December&nbsp;31, 1999, was $545,000, as compared to $426,000 for
 the same period in 1998. This reflects an increase of 28%
between the two periods due primarily to price increases from
existing content suppliers and costs incurred from adding new
content.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Sales and Marketing.</I> Sales and marketing expenses, for the
 year ended December&nbsp;31, 1999, were $4.5&nbsp;million, as
compared to $2.2&nbsp;million for the same period in 1998. This
reflects an increase of 107% between the two periods primarily
due to a co-branding agreement with CNNfn entered into during
1999.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Research and Development.</I> Research and development
expenses, for the year ended December&nbsp;31, 1999, were
$2.1&nbsp;million, as compared to $1.8&nbsp;million for the same
period in 1998. This reflects an increase of 22% between the two
periods due to an increase in the number of research and
development personnel.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>General and Administrative.</I> General and administrative
expenses, for the year ended December&nbsp;31, 1999, were
$3.0&nbsp;million, as compared to $3.5&nbsp;million for the same
period in 1998. This reflects a decrease of 14% between the two
periods due to increased efficiencies in the administrative
areas.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Depreciation and Amortization.</I> Depreciation and
amortization expenses, for the year ended December&nbsp;31, 1999,
 were $174,000, as compared to $1.4 million for the same period
in 1998. This reflects a decrease of approximately 88% between
the two periods due to the completion in 1998 of the one year
amortization period of a substantial portion of the intangible
assets acquired from Infoseek.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Stock and Warrant Based Non-Cash Expenses.</I> Stock and
warrant based non-cash expenses, for the twelve months ended
December&nbsp;31, 1999 were $1.7 million as compared to $49,000
for the same period in 1998. The majority of these expenses were
due to a warrant issued to an independent contractor employed by
us.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Other Income and Expenses.</I> Total other income and
expenses, including interest income, interest expense and
beneficial interest expense, for the year ended December&nbsp;31,
 1999, were $8.4 million as compared to $182,000 for the same
period in 1998. Interest income, for the year ended
December&nbsp;31, 1999, was $20,000 as compared to $38,000 for
the same period in 1998. This decrease reflects a lower average
balance of interest-bearing cash and cash equivalents for the
year ended December&nbsp;31, 1999 as compared to the same period
in 1998. Interest expense, for the year ended December&nbsp;31,
1999, was $558,000 as compared to $220,000 for the same period in
 1998. This increase was due to an increase in indebtedness.
Total beneficial interest expense was $7.9 million for the year
ended December&nbsp;31, 1999. No beneficial interest expense was
recorded for the year ended December&nbsp;31, 1998. The
beneficial interest expense recorded in 1999 was a non-cash
expense related to the conversion feature of the QIP
indebtedness. See &#147;Liquidity and Capital Resources.&#148;

<P align="center">23

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<P align="left"><B>October 10, 1997 (Inception) to December&nbsp;31, 1997</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We commenced operations on October&nbsp;10, 1997. Revenues for
the three months ended December&nbsp;31, 1997 amounted to less
than $35,000. Expenses for the period amounted to less than
$900,000. We do not believe this period is meaningful for
purposes of comparing to other financial periods. We have
therefore excluded financial information for this period from our
 discussion above.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Quarterly Results of Operations</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following tables present unaudited quarterly operating
results in dollars and as a percentage of revenues. We believe
this information reflects all adjustments, consisting only of
normal recurring adjustments, that we consider necessary for a
fair presentation of this information in accordance with
generally accepted accounting principles. The results for any
quarter are not necessarily indicative of results for any future
period.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="31%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="23"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="23"><FONT size="2"><B>Three Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="23"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June&nbsp;30,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Sept. 30,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Dec.&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June&nbsp;30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="23"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="23"><FONT size="2"><B>(in thousands)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Total revenues</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">195</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">632</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,050</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">968</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,398</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,609</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Cost of revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">126</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">135</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">148</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">468</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">594</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Gross profit</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">69</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">496</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">915</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">820</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">930</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,015</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Operating expenses:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Sales and marketing</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">376</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,954</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">895</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,249</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,854</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,681</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Research and development</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">342</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">472</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">598</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">730</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">783</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,007</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	General and administrative</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">822</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">681</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">683</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">848</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">732</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,484</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">128</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Stock and warrant based non-cash expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">413</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,251</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,835</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,922</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Total operating expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,608</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,152</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,632</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,121</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,261</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,222</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Loss from operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,539</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,656</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,717</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,340</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,331</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,207</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Other income (expense), net</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,744</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(624</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,332</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(688</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(144</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,283</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,280</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,049</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,989</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,475</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,276</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="31%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD colspan="23"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="23"><FONT size="2"><B>Three Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="23"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June&nbsp;30,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Sept. 30,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Dec.&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>March&nbsp;31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June&nbsp;30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Total revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Cost of revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Gross profit</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">67</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Operating expenses:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Sales and marketing</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">193</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">309</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">129</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">133</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Research and development</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">175</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">57</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	General and administrative</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">421</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">65</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">92</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Stock and warrant based non-cash expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">129</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">131</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Total operating expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">824</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">499</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">250</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">425</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">376</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">449</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Loss from operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(789</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(421</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(163</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(340</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(309</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(386</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="4" align="left" valign="top"><FONT size="2">
	Other income (expense), net</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,920</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(99</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(317</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(71</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,709</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(520</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(480</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(411</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(319</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(390</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)%</FONT></TD>
</TR>

<TR>
	<TD colspan="4"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">24

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><B>Analysis of 1999 Quarterly Results</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenues increased from $195,000 in the first quarter to $968,000
 in the fourth quarter due to an increase in the number of
customers who implemented our services. Revenues decreased by
$82,000 from the third quarter to the fourth quarter due to a
substantial decrease in advertising revenue generated from CNNfn.
 Cost of revenues increased from $126,000 in the first quarter to
 $148,000 in the fourth quarter due to an increase in costs for
additional content sources. Sales and marketing expenses
increased from $376,000 in the first quarter to $1.2&nbsp;million
 in the fourth quarter due to the increase in our direct sales
force, as well as a marketing campaign in the fourth quarter.
Sales and marketing expenses in the second quarter were
$2.0&nbsp;million primarily due to an expense relating to a
co-branding agreement with CNNfn. Research and development
expenses increased from $342,000 in the first quarter to $730,000
 in the fourth quarter due to an increase in the number of
research and development personnel, the cost of independent
contractors, and the amortization of certain software
maintenance. General and administrative expenses decreased from
$822,000 in the first quarter to $681,000 in the second quarter
due to increased operational efficiencies across most
administrative areas. These expenses increased from $683,000 in
the third quarter to $848,000 in the fourth quarter due to bad
debt expenses and professional fees related to audit and legal
fees. Stock and warrant based non-cash expenses increased from
$7,000 in the second quarter to $1.3&nbsp;million in the fourth
quarter due to warrants issued to vendors and contractors in lieu
 of, or in addition to, cash payments and to the modification of
certain provisions of stock option agreements issued to
employees.

<P align="left"><B>Liquidity and Capital Resources</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since our inception in 1997, we have financed our operations and
capital expenditures through the sale of equity and debt
securities and leases for capital equipment, which totaled
approximately $37.0&nbsp;million in aggregate net proceeds
through June&nbsp;30, 2000. In October 1997, we sold 3,250,000
shares of common stock for $3.0&nbsp;million to the QIP
investors. In November 1999, we sold 593,000 shares of our common
 stock for $3.5 million to certain investors. In the spring of
2000, we sold 4,841,000 shares of our common stock for an
aggregate purchase price of $18.0 million. In May&nbsp;2000, we
sold 200,000 shares of our series A convertible preferred stock
for an aggregate purchase price of $2.0 million. In 1998 and
1999, we borrowed $1.2 million and $2.65 million respectively
from the QIP Investors pursuant to demand promissory notes and
security agreements. In March 2000, we executed a bridge note in
favor of QIP to repay a term loan and line of credit in the
amount of $4.0&nbsp;million. We have granted QIP conversion
rights on all of our outstanding debt to them. Upon the closing
of this offering, the QIP investors will convert the principal
amount of these notes in shares of our common stock and all
accrued interest thereon will be paid in cash. As of
June&nbsp;30, 2000, we had cash and cash equivalents of $9.6
million.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash used in operating activities, for the six months ended
June&nbsp;30, 2000, was $9.2&nbsp;million, as compared to
$1.6&nbsp;million for the same period in 1999. The net cash used
in operating activities for the six months ended June&nbsp;30,
2000 resulted primarily from net losses of $11.4&nbsp;million, an
 increase in trade accounts receivable of $1.0&nbsp;million, a
decrease of accounts payable of $1.1&nbsp;million, and an
increase of $2.2&nbsp;million in other current assets. The
decrease in accounts payable was primarily due to a payment to
CNNfn under our original distribution agreement. The increase in
prepaid expenses was due to an initial payment to AOL under our
interactive services agreement, and a one-year advance payment to
 InfoUSA in connection with our content agreement. This was
offset by substantial non-cash expenses related to warrants
issued to certain vendors and contractors, an increase in
deferred revenue, and an increase in accrued expenses.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash used in investing activities, for the six months ended
June&nbsp;30, 2000, was $1.2&nbsp;million, as compared to
$233,000 for the same period in 1999. The net cash used in
investing activities for the six months ended June&nbsp;30, 2000
was primarily due to the purchase of computers, software,
networking equipment and office equipment and furniture.

<P align="center">25

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Net cash provided by financing activities, for the six months
ended June&nbsp;30, 2000, was $18.2&nbsp;million, as compared to
$1.8&nbsp;million for the same period in 1999. Net cash provided
by financing activities in the six months ended June&nbsp;30,
2000 was provided substantially by net proceeds generated from
our offerings of capital stock, which together totaled
$17.9&nbsp;million, net of $2.1&nbsp;million in expenses, and to
a lesser extent by officer loans.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of June&nbsp;30, 2000, our principal commitments consisted of
obligations outstanding under a series of capital leases of
computer and networking equipment and our facility leases. We
operate from leased premises in Alexandria, VA, San Francisco,
CA, and Newport Beach, CA. Our current aggregate annual rental
obligations under these leases are approximately
$1.1&nbsp;million for 2000 and $2.1&nbsp;million for 2001. We
have leased capital equipment under certain lease lines entered
into during 1998 and 1999. Borrowings under these lines of credit
 are secured by the assets purchased, and bear interest at
various rates.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We anticipate that the net proceeds of this offering, together
with our current cash and cash equivalents, will be sufficient to
 meet our working capital and capital expenditure requirements
for at least the next 12&nbsp;months. However, our future capital
 requirements will depend upon many factors, including the sale
of our services, the timing of research and development and the
expansion of our sales and marketing efforts. We may need to
raise additional funds in order to support our growth, to expand
our operations, to develop new and enhance existing services, to
respond to competitive pressures or to acquire complementary
products, businesses or technologies. If we need to raise
additional funds, we will likely do so through the issuance and
sale of equity securities. If this were to occur, the percentage
ownership of our stockholders could be reduced, our stockholders
may experience additional dilution and such securities may have
rights, preferences or privileges senior to those of our
stockholders. We cannot assure you that additional financing will
 be available on terms favorable to us, or at all. If adequate
funds are not available or are not available on acceptable terms,
 our ability to fund our expansion, take advantage of
unanticipated opportunities, develop or enhance services or
products or otherwise respond to competitive pressures would be
significantly limited. Our business, results of operations and
financial condition could be materially adversely affected by
such limitations.

<P align="left"><B>Market Risk</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our investments are exposed to changes in interest rates
primarily on our investments in certain held-to-maturity
securities. Under our current policies, we do not use interest
rate derivative instruments to manage exposure to interest rate
derivative instruments to manage exposure to interest rate
change. A hypothetical 100 basis point adverse move in interest
rates along the entire interest rate yield curve would not
materially affect the fair market value of interest sensitive
financial instruments we held at June&nbsp;30, 2000.

<P align="left"><B>Recent SEC Interpretations</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December&nbsp;1999, the Securities and Exchange Commission
issued Staff Accounting Bulletin No.&nbsp;101, <I>&#147;Revenue
Recognition in Financial Statements&#148;</I>(&#147;SAB
No.&nbsp;101&#148;). Effective October&nbsp;1, 2000, SAB
No.&nbsp;101 summarizes certain areas of the Staff&#146;s views
in applying generally accepted accounting principles to revenue
recognition in financial statements. We believe that our current
revenue recognition principles comply with SAB No.&nbsp;101.

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<DIV align="left"><A NAME="009"></A></DIV>

<P align="center"><B>BUSINESS</B>

<P align="left"><B>Overview</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
YellowBrix is a leading provider of Internet infrastructure
services in the contextual commerce and personalized content
services markets. Our customers consist of consumer and
commercial Web sites and corporate intranets and extranets,
collectively, Web sites. Our proprietary technology solution
integrates content, commerce and advertising and delivers
personalized information to our customers&#146; users through Web
 pages, e-mails and wireless devices. Our outsourced hosted
Internet services provide an easy to implement, cost-effective
solution that allows Web sites to focus on their core
competencies. Our technology enhances Web site user experiences
through the automated distribution of more personalized content
selected from a broader range of choices and may increase their
revenue generation by providing targeted commerce opportunities.
Our services can be provided either individually or as an
integrated solution.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our services include:
<P>

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	<TD align="left">
	<I>Contextual commerce. </I>Our contextual commerce services
	match and distribute highly targeted commerce and advertising
	opportunities to our customers&#146; users from a catalogue of
	over 2.1&nbsp;million products.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Targeted content. </I>Our targeted content services enable our
	 customers to use our artificial intelligence capability to
	electronically define and create, almost instantaneously, highly
	specialized categories of information such as news headlines,
	articles and press releases for automatic distribution to their
	end users.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Personalization. </I>Our personalization services facilitate
	the development of custom start pages for each user and create
	personalized e-mail newsletters.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our core technology uses artificial intelligence, text parsing
and linguistic pattern analysis tools to analyze documents and to
 understand their meaning, focus and ultimate relevancy to Web
site users. This knowledge enables us to more efficiently and
effectively create content channels and automatically distribute
news and information through Web sites, e-mails and wireless
devices. In addition, we are able to discern user preferences
through their interactions with our customers&#146; Web sites and
 disseminate, almost instantaneously, personalized commerce
opportunities. We plan to implement advanced personalization
features and leverage customer utility data from our network of
Web sites.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we had entered into contracts with
156 customers and implemented our solutions on 97 Web sites,
including Business 2.0 Online/Imagine Media, InfoUSA,
Monster.com, and Network Solutions. We typically enter into one
year contracts with our customers and receive an implementation
fee, a fixed monthly service fee, and with our contextual
commerce service, transaction-based fees. We have created an
expansive network of relationships that allows us to access over
2.1&nbsp;million commerce products and 2,500 publications
providing access to approximately 60,000 news stories and press
releases each day.

<P align="left"><B>Industry Background</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Rapid Growth of the Internet</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Internet has emerged as a global medium encompassing
communication and commerce, and has grown to include multiple
platforms including broadband and wireless devices. International
 Data Corporation, or IDC, estimates the number of Web users
worldwide will increase from approximately 245&nbsp;million in
1999 to more than 640&nbsp;million by the end of 2003. IDC also
estimates that the number of Web pages available for viewing will
 grow from 2.2&nbsp;billion in 1999 to 4.3&nbsp;billion in 2000,
and will exceed 16.5&nbsp;billion in 2003. As the number of users
 has increased, the Internet has become an effective means to
market services, helping to fuel its growth as a commercial
medium.

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<DIV align="left">
According to IDC, worldwide e-commerce revenues, including
business-to-business and business-to-consumer, are expected to
increase from approximately $131&nbsp;billion in 1999 to more
than $1.6 trillion in 2003. In addition, IDC estimates that
Internet advertising will grow from $3.4&nbsp;billion in 1999 to
$10.8&nbsp;billion in 2003.
</DIV>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Proliferation of Vertical Web Sites
</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Individual Web sites have recognized the need to differentiate
themselves in order to attract Web users amid the growing number
of online offerings. In response to this more competitive
environment, a new category of Web sites has developed as
vertical communities, which are designed to target specific
interest groups more directly. These vertical Web sites aim to
become the respective single access point for content and
commerce within an industry or affinity group. By narrowing their
 focus on groups with a common interest, these vertical Web sites
 seek to attract an audience that is desirable to merchants and
advertisers. Vertical Web sites represent one of the fastest
growing segments of the Internet and are projected to attract a
greater portion of commerce and advertising dollars than general
portal sites. According to Forrester Research, the share of
Internet advertising revenue generated by vertical and niche Web
sites will grow from 35% in 1999 to 57% in 2004.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Proliferation of Corporate Online
Presence</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In an increasingly competitive environment, corporations are
recognizing the need to communicate and interact effectively and
efficiently with their customers, partners and employees. The
benefits and related cost savings of online communications, via
corporate intranets and extranets, are potentially significant
for corporations. As a result, corporations are focusing
significant time, capital and resources on developing their
online capabilities. IDC estimates that corporate intranet and
extranet spending will exceed $45.8&nbsp;billion in 2000.
Additionally, small businesses are seeking an online presence to
leverage their sales and marketing capabilities. IDC expects that
 the number of U.S. small businesses with home pages will reach
4.5&nbsp;million by 2003.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Convergence of Commerce and Content
</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Many Web sites have found over time that online advertising and
content alone are not sufficient to attract, retain and motivate
users in a way that translates into increased revenue
opportunities. According to Nielsen/ NetRatings, during the month
 of September&nbsp;2000, the average home Internet user spent 50
seconds on a Web site and click through rates for the top banner
advertisements averaged just under 0.44%. As a result, Web sites
are recognizing the need to move toward the integration of
commerce and content in order to enhance the utility and
desirability of their Web sites.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Growth of Personalization</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Personalization represents the opportunity for Web sites to
deliver customized relevant content, commerce and advertising
opportunities to individual users in an automated manner. The
foundation for such delivery can be derived from a user-specified
 profile or a profile based on contextual analysis of currently
viewed content, known demographics, experience expressed through
the past activity of the user and other data. In addition, the
criteria for presenting the information may be either user or Web
 site defined. According to the Appian Personalization Report,
the Web personalization market is expected to grow from
approximately $1.4&nbsp;billion by the end of 2000 to
$5.3&nbsp;billion in 2003. This trend towards personalization
will improve user experiences through more customized
presentations of relevant information and Web site performance
through increased frequency and duration of site visits, click
through rates and sales conversions.

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<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Remaining Challenges to Web sites</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Despite the advantages to be gained through improved
personalization and tightly integrated content and commerce
offerings, to date many Web sites and corporations have been
unable to successfully implement solutions that effectively
enhance user experiences and increase revenues. Web sites are
faced with building the solutions internally or finding a
desirable third party provider. Developing and maintaining a
solution internally is difficult because:
<P>

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	<TD align="left">
	the time and expense associated with updating, maintaining and
	managing the infrastructure is significant and delays the
	delivery of services to the target market;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	contracting with multiple content providers is difficult and
	inefficient;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the technology is very complex; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	additional internal technical personnel is costly.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While Web sites can meet some of their needs by utilizing
multiple vendors, this may be more costly, increase delivery
times and present technology integration issues. To date, we
believe no other company provides a comprehensive, flexible and
customized Internet infrastructure solution integrating
contextual commerce, content and personalization services.

<P align="left"><B>The YellowBrix Solution</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide our customers with a comprehensive Internet
infrastructure solution that integrates commerce, content and
personalization, and provides users with a highly personal
experience. Our services can be deployed individually or in an
integrated package that is specifically designed to complement
the Web sites, intranets or extranets of our customers. Our core
patent pending technology can, with limited human intervention,
determine the context, meaning and relevancy of information which
 can then be used to integrate and link elements from disparate
sources such as news feeds, commerce catalogues or advertising
inventories. Through our proprietary technology, we generate a
hosted Web page service that combines the look and feel of each
customer&#146;s Web site. Our service offerings can be
distributed through Web pages, e-mails and wireless devices.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our solution offers the following benefits to our customers:
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	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Enhanced user experience. </I>We believe our solution enhances
	 user experiences by tailoring and integrating the presentation
	of commerce and content on Web sites. Web sites can select from
	our inventory of 525 unique channels or use our artificial
	intelligence capability to create and define their own customized
	 channels. By providing continuously updated information specific
	 to a Web site&#146;s focus, we enable our customers to meet the
	information needs of their targeted audiences, thereby enhancing
	their users&#146; experiences on those sites. Our personalization
	 service enables our customers to offer their users the ability
	to create customized home pages that are designed to increase the
	 frequency and duration of Web site visits. We can also offer our
	 customers personalized e-mail services enabling them to
	distribute daily newsletters and notifications of news, articles
	and stories, in conjunction with relevant commerce opportunities,
	 that are targeted to their own user base.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Increased revenue streams.</I> We believe we can increase our
	customers&#146; revenue streams not only by providing
	contextually relevant content which drives more page views with
	longer durations, but also by presenting users with buying
	opportunities that match the users&#146; interests. By analyzing
	the content being reviewed by Web site users and, in the future,
	utilizing our individual profiles and network database of
	effective presentation metrics, we are able to present relevant
	real-time commerce and advertising information to the users. As a
	 result, we believe click through rates and conversion rates for
	Web sites will increase significantly beyond existing averages.</TD>
</TR>

</TABLE>

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	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Outsourced information infrastructure.</I> We provide
	customers with an automated, outsourced and fully managed
	solution that requires limited human intervention on the part of
	our customers. We manage the provisioning, hosting and support of
	 our services 24 hours per day, seven days a week. We assign an
	account manager to oversee the implementation and ongoing use of
	our services on the customer&#146;s Web site throughout the full
	life cycle of our relationship with the customer.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Flexible and customized solution.</I> Our technology solution
	can be easily adapted to the needs of individual Web sites. We
	utilize our artificial intelligence capability to analyze the
	information, enabling us to create new, customized and highly
	focused content channels to meet the needs of Web sites. We are
	then able to automatically provide targeted content through these
	 channels. In addition, certain of our services allow customers
	to continually customize our commerce and content solution,
	including the ability to insert their own products into our
	catalogue.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Decreased infrastructure costs and quick implementation.</I>
	Our single-sourced solution allows our customers to avoid the
	time and expense associated with maintaining additional internal
	technical staff, editorial staff, or contracting with multiple
	content providers, enabling them to focus on their core business.
	 Due to our template-based solution and our dedicated
	implementation team, our services are easy to implement and easy
	to use with limited ongoing effort required by the customer. In
	addition, our solution is reliable and fully scalable so that it
	can grow with the needs of our customers. Our fixed price model
	allows our customers to accurately predict the monthly costs for
	our services.</TD>
</TR>

</TABLE>

<P align="left"><B>Our Strategy</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our objective is to become the leading provider of customized
commerce, content and personalization infrastructure services.
The following are the key elements of our strategy to achieve
this objective:
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	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Leverage the convergence of commerce, content and
	personalization.</I> Our ability to integrate commerce, content
	and personalization services provides us with a significant
	competitive advantage. Web sites benefit from an integrated
	solution that not only provides a comprehensive information
	package, but also works in concert with the sites to increase
	their functionality. In addition, our future service enhancements
	 will gather data from our different services and leverage our
	personalization capability across our service line and customer
	base, enhancing the effectiveness of each service.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Provide additional value added services. </I>We seek to
	develop and actively market additional commerce and content
	services with broad appeal to our existing and new customers.
	These new services will allow us to leverage our existing
	deployment of services to customers and increase the value and
	functionality of our solution. For example, we have developed and
	 implemented new services that put more control in our
	customers&#146; hands, allowing them to create and structure
	commerce and content delivery for their sites. In addition, we
	plan to enhance our personalization services through the
	development of individual-specific analysis and personalization
	functions, and the creation of a database of presentation
	analysis and information from our network of customer
	relationships.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Develop and expand strategic relationships.</I> We intend to
	continue to develop strategic relationships to improve our
	distribution capabilities, enhance our solutions and services and
	 augment our sales and marketing efforts. For added distribution
	channels, we have and will continue to partner with established
	industry organizations to help promote our services. We may also
	partner with Web design companies, online advertising companies,
	or outsourced e-mail distribution companies to increase the
	utilization of our services. During the past three months, we
	have signed affiliate and agency agreements with Exodus,
	Commission Junction and Camp6 to increase the utilization of</TD>
</TR>

</TABLE>

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	<TD></TD>
	<TD align="left">
	our services. We have also entered into a strategic relationship
	to enhance the catalogue of commerce products we provide and have
	 signed an agreement whereby we are paid for including items in
	our commerce catalogue.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Further penetrate existing markets and expand into new
	markets.</I> We have developed expanded distribution mechanisms
	and new service offerings which enable us to target virtually all
	 segments of the Web site market. We will continue to target
	vertical Web sites, industry exchanges and corporate intranets
	and extranets. We believe these types of Web sites are
	particularly well suited to our service offerings due to their
	need to enhance their Web site by blending internal information
	with relevant industry-specific news and commerce opportunities.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Maintain and extend technology and service leadership.</I> We
	believe that we are currently a technology leader in providing
	contextual analysis based commerce, content and personalization
	services to our customers. We intend to introduce additional
	personalization services as well as enhance our ability to
	distribute audio and video information to our customers&#146;
	users through Web pages, e-mails and wireless devices. By
	responding to changing customer needs and evolving technologies
	and standards, we intend to become the leading source for
	services that build and enhance our Web site customers&#146;
	relationships with their users. For example, our learned behavior
	 service will work with our contextual analytical abilities to
	enable our customers to deliver information to users based on the
	 user&#146;s past viewing decisions.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Pursue global expansion opportunities.</I> We intend to
	capitalize on what we perceive to be a significant opportunity
	for our solution in international markets. We have adapted our
	core technology to contextually analyze content in foreign
	languages such as Spanish, Dutch, German, French, Italian,
	Finnish and Swedish, positioning us to deliver relevant news and
	information to a broader market. We also plan to expand
	internationally and may evaluate strategic alliances, joint
	ventures, acquisitions or other international opportunities.</TD>
</TR>

</TABLE>

<P align="left"><B>Our Services</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our services address the information and presentation needs of
commercial and consumer Web sites, and corporate intranets and
extranets. As a result, we believe that we are well positioned to
 participate in the worldwide growth of the Web without regard to
 its composition, and in new emerging forms of commerce and
content distribution including video, audio and wireless.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our core technology can, with limited human intervention,
determine the context, meaning and relevancy of information and
categorize it into existing or customer created categories. This
information is almost instantaneously distributed through Web
pages, e-mails and wireless devices. Our services are offered on
a hosted basis and reflect our customer&#146;s own look and feel.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our services are primarily offered on a monthly subscription
basis. Our principal content information solutions and
personalization capabilities generate initial implementation fees
 and monthly recurring service fees that are based on the type of
 service provided. Our contextual commerce services generate
implementation fees as well as recurring transaction fees. We
offer additional value-added services such as newsletter and
industry brief e-mail services, which are priced depending on the
 number of enrolled Web site customers, and enriched targeted
content such as executive summaries and detailed corporate
profiles, which include an initial installation fee and monthly
recurring services fees. We also receive solution specific
implementation fees for the creation of custom categories and
other specialized services. The following is a description of our
 services.

<P align="center">31

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<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Contextual Commerce</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>IntelliClix&#153;.</I> Our automated contextual commerce
service, IntelliClix, analyzes articles requested by Web site
users and presents the users with related commerce and
advertising opportunities almost instantaneously. Our customers
can take advantage of our outsourced merchandise relationships
which currently consist of a catalogue of over 2.1&nbsp;million
products or can integrate their own inventory to display relevant
 commerce opportunities. Web sites can also utilize IntelliClix
in conjunction with our e-mail service to create new revenue
opportunities. We also plan to leverage our IntelliClix
technology across various other platforms including chat rooms,
wireless and other networked applications. We believe that our
IntelliClix information input and distribution process can also
be reversed to enable us to match and deliver content to products
 and services offered on commerce-focused Web sites. Our
IntelliClix service can be used individually or can be bundled
with our other targeted content services.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Commerce Dashboard. </I>We have created a commerce dashboard
to allow our customers more daily control over the management of
their commerce programs. Our commerce dashboard provides our
customers with the ability to tailor IntelliClix to meet the Web
site&#146;s individual needs. The commerce dashboard allows
merchants to submit product inventory, determine service
presentation and update promotional items. It also allows the Web
 site to:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	establish certain business parameters for the display of
	merchandise;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	select among closely matched services;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	monitor and track click through and sales conversion activity;
	and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	adjust these parameters based on revenue and profitability
	performance.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the future, our customers will be able to compare their
commerce metrics against standards established through the
aggregation of information across our network of Web sites.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Targeted Content</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Core Targeted Content.</I> Our core targeted content services
enable our customers to utilize our artificial intelligence
capability to define and create highly targeted categories of
information, on an almost instantaneous basis, that can be
integrated with our large and growing library of categories for
distribution to their end users. The following is a description
of each of our core targeted content services which can provide
our customers with text and pictorial information:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>IndustryWatch&#153;.</I> IndustryWatch is our primary service
	that consolidates news and information from thousands of
	published sources as well as company and financial information.
	This service also includes our Executive Summary and MultiLinks
	features. Customers can utilize up to 150 channels which are
	either customer created or selected from our existing 525 topic
	categories. IndustryWatch uses contextual analysis of community
	and category based content to categorize the information into
	industry-specific categories, and then presents the information
	to users on each Web site.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>SmartNews&#153;.</I> Our SmartNews combines our IndustryWatch
	and StartPage services with our newsletter and personalized
	e-mail features to create a fully integrated service offering.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>NewsReal&#153;.</I> Our NewsReal service is a scaled down
	version of our IndustryWatch service and enables our customers to
	 utilize up to 35 custom or existing topic categories.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>NewsMaker&#153;.</I> Our NewsMaker service was introduced in
	October&nbsp;2000. NewsMaker represents a low-cost, entry-level
	content delivery system that distributes news, information and
	contextual advertisements to customers. This self-publishing
	service is designed to provide customers with a quick,
	inexpensive way to improve their Web sites using targeted content
	 on their sites.</TD>
</TR>

</TABLE>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Enhanced Targeted Content Features.</I> We augment our core
targeted content services with a variety of features designed to
enhance the utility of our customers&#146; Web sites and promote
higher frequency and longer duration of user visits to Web sites.
 The following is a summary of the enhanced features:
<P>

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	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>Executive Summary&#153;.</I> Our Executive Summary technology
	provides users with the ability to easily scroll over a headline
	and review the top three relevant sentences within the story,
	providing the user with the relevant information quickly and
	efficiently. Executive Summary is bundled with our SmartNews and
	IndustryWatch services and offered as a premium addition to our
	NewsReal service.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>MultiLinks&#153;.</I> Our proprietary MultiLinks technology
	provides the user with greater detail on the information
	contained in the publication that the user is reading. MultiLinks
	 connects the user directly to current business intelligence
	about companies and people in the news, and includes vital
	information such as financial and competitor information, the
	latest stock quote or earnings announcement or other news
	releases. All of this information is contained on the site
	without sending the user to another page.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<I>Content Dashboard.</I> For customers who want greater control
	over their Web sites, our content dashboard enables Web sites to
	track and monitor all activities, and improve information
	presentation. Our content dashboard provides customers with the
	ability to:</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="8%"></TD>
	<TD width="2%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	prioritize, rewrite and delete headlines;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	add and publish stories to categories almost instantaneously;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	utilize advanced search features to create new information
	categories on demand;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	incorporate a feature to find similar information that allows
	customers to quickly isolate related stories from archives to add
	 to the customer&#146;s categories; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	publish images and photos on the Web site.</TD>
</TR>

</TABLE>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Personalization</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>E-mail Services.</I> Our suite of e-mail services allows our
customers to provide their users with the ability to select which
 categories of information to receive in their e-mail newsletters
 and daily e-mails as well as to provide links to additional or
related information on the Web site. These services also allow
our customers to deliver contextual-based news and commerce
opportunities through multiple delivery platforms including
wireless devices such as mobile phones, pagers and handheld
Internet access devices. Our customers can imbed our IntelliClix
service offerings directly into e-mails, enabling them to
generate additional revenue streams from their established user
base. We also offer customized, self-publishing e-mail newsletter
 services.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>StartPage&#153;.</I> StartPage allows Web site users to create
 customized home pages integrating our content which includes
headline and local news and information, weather, stock
portfolio, horoscopes, company and directory information,
delivered into an individualized user interface. We believe the
advantage of the StartPage service is that it allows our
customers to automatically customize the user&#146;s Web page by
integrating content and information into a comprehensive and
personalized page.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Learned Behavior.</I> We anticipate the release of our learned
 behavior service by the end of the second quarter of 2001. This
service will work in conjunction with our existing services to
help personalize the delivery of commerce and content to
individual users. Our learned behavior service will create a
profile that is continually updated based on the viewing history
of the Web site user, enabling Web sites to engage their users
with one-to-one marketing. Utilization of this service will
enable us to analyze user activity for our customers, building on
 our existing contextual matching technology. We believe that
this service will protect the privacy of Web site users by
creating

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<DIV align="left">
profiles that indicate areas of interest while not keeping
records of the Web sites visited or specific actions taken on the
 site by the user.
</DIV>

<P align="left"><B>Our Technology</B>

<P align="left"><I>&nbsp;&nbsp;&nbsp;Core Technology</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our core technology enables us to read and analyze the context
and meaning of articles and commerce descriptions in both text
and pictorial formats, categorize information, and distribute
information through Web sites, e-mails or wireless devices. Our
services are based on proprietary advanced artificial
intelligence capability and linguistic analysis, text
categorization, and information presentation software that
incorporates third-party analysis and management tools. The
utilization and integration of these technology techniques
provides us with an enhanced ability to derive an in-depth
understanding of the meaning, relevance and ultimate
classification of text. This knowledge enables us to more
efficiently and effectively create content channels and
automatically distribute news and information to Web sites and
present Web site users with relevant commerce opportunities
matched to currently viewed content or an analysis of content
they have demonstrated an interest in through prior activity.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Content Data Collection</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our proprietary content administration system enables us to
manage the acquisition and aggregation of electronic data. Our
system can be expanded by increasing the number of servers we
utilize. Currently, our system can receive data in the form of
text or pictures, and we anticipate expanding our service to also
 encompass video and audio data.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Commerce and Advertising Data
Collection</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our automated data processing system has also been adapted to
handle commerce and advertising information. This information is
stored either as plain text or XML tagged data. We have access to
 a catalogue of 2.1&nbsp;million products. Our storage and
processing capability can be expanded to meet our business needs.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Data Analysis</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our proprietary system uses artificial intelligence, text parsing
 and linguistic pattern analysis tools to analyze documents to
determine their meaning, focus and relevancy to Web site users.
The artificial intelligence capability utilizes vectoring
techniques to create a mathematical value for content, commerce
products and advertisements. This mathematical value represents
the meaning and focus of the information and is utilized in
determining its relevance to established content channels or
customized content channels requested by our customers.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Data Utilization</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are able to compare, almost instantaneously, the
characteristics of an article against the characteristics of our
pre-defined or customer-defined content and commerce channels.
This allows us to more effectively and efficiently provide news
and information to Web sites. The storage and content
classification portion of our system works with Oracle&#146;s
database storage software to create a reliable and efficient
information provision solution. Our automated, flexible system
also enables us to create new content categories for our
customers using full-text analysis of sample articles. For
example, the artificial intelligence capability can use sample
articles provided by our customers to enable us to create the
appropriate vector characteristics of this new content channel.
As of August&nbsp;31, 2000, we had created over 325 new custom
channels for our customers.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have adapted our contextual content analysis and vector-based
categorization engine to match commerce opportunities and
advertising descriptions with relevant content. Our IntelliClix

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<DIV align="left">
service automatically compares the mathematical characterization
of a commerce opportunity or advertising description to the
mathematical value of currently viewed content. Our service then
presents the user with the most relevant products or
advertisements.
</DIV>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Data Distribution</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The modular structure of our technology system allows us to
provide our customers with information through different media.
We can either adapt parts of our technology system or attach new
software components to work with different architectures or
software versions to provide information to our customers.
Currently, we are providing data through Web based, wireless and
e-mail distribution systems. In the future, we anticipate the
ability to distribute audio and video content that more fully
utilize broadband capabilities.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Advantages of Our Technology System
</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our technology provides numerous competitive advantages. Our
analysis, classification and distribution system is an automated,
 outsourced infrastructure solution. Our flexible technology
system is able to work with multiple distribution media and
platforms as well as software packages and Web hosting solutions.
 In addition, our services and systems are scalable and
load-balanced and, therefore, are capable of operating across
multiple servers and systems.

<P align="left"><B>Customers</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we had entered into contracts with
156 customers and implemented our services on 97 Web sites. Our
customers include Web-based businesses and corporate customers
whose business models encompass both offline and online
components. The following is a representative list of our August
2000 customers:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="72%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Corporate Customers</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Web Site Customers</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Brown &#38; Williamson<BR>
	Business 2.0 Online/ Imagine Media<BR>
	Chase Manhattan Small Business<BR>
	InfoUSA<BR>
	National Association of Chain Drug Stores</FONT></TD>
	<TD></TD>
	<TD colspan="3" align="left" valign="top"><FONT size="2">CareerPath.com<BR>Monster.com<BR>Network Solutions<BR>Onvia.com<BR>PaperExchange.com</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our contracts with our customers typically have one-year terms.
CNNfn, InfoUSA and Network Solutions accounted for approximately
13%, 17% and 13%, respectively, of our revenues for the six
months ended June&nbsp;30, 2000 and, CNNfn and Network Solutions
accounted for approximately 50% and 12%, respectively, of our
revenues for the fiscal year ended December&nbsp;31, 1999.

<P align="left"><B>Research and Development</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Chief Technology Officer, Jeff Massa, worked with artificial
intelligence and contextual analysis technology while at the
Executive Office of the President of the National Security
Council, NSC. The intelligence community utilized artificial
intelligence and contextual analysis technology to implement
real-time analysis, filtering and categorization of information.
Upon leaving the NSC, Mr.&nbsp;Massa worked with third party
vendors to assist in the commercialization of a similar
technology. The YellowBrix technology capability developed from
this work.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Since our inception, we have continued to focus our efforts on
enhancing our contextual analysis, vector categorization and
artificial intelligence capability and applying these
technologies to our commerce, content and personalization
services. We believe that strong product development capabilities
 are essential to enhancing our core proprietary technologies,
developing new applications for our technology and maintaining
our competitive advantage. We have invested and intend to
continue to invest a significant amount of human and financial
resources in our research

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<DIV align="left">
and development divisions. We are currently working on completing
 the development of our learned behavior advanced personalization
 service, audio and video analysis technology, and foreign
language analysis and categorization services.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have hired and will continue to actively recruit key computer
scientists, engineers, PhDs, and software developers with
expertise and degrees in the areas of computer science,
electrical engineering, software engineering, information
sciences and applied mathematics, and have complemented these
individuals by hiring senior management with extensive
backgrounds in the real-time processing and information
distribution industries. Our research and development expenses
totaled $1.8&nbsp;million for the six month period ended
June&nbsp;30, 2000 and $2.1 for the year ended December&nbsp;31,
1999.

<P align="left"><B>Sales and Marketing</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our sales strategy is to pursue opportunities with major accounts
 through our direct sales force, and to penetrate various
targeted market segments through multiple indirect distribution
channels such as affiliate and agency agreements. We employ 58
direct sales personnel in three offices located in Alexandria,
Virginia, Newport Beach, California and San Francisco,
California. The direct sales force is organized into four
territorial groups each of which is managed by one director. We
generate leads from contacts made through seminars, conferences,
trade shows, customers and ongoing public relations and
advertising programs. We intend to increase the size of our
direct sales force and to establish additional sales offices
domestically and internationally.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We complement our direct sales force by actively pursuing two
types of business development relationships designed to establish
 multiple indirect distribution channels.
<P>

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	<TD>&#149;</TD>
	<TD align="left">
	<I>Affiliate Agreements.</I> In an effort to penetrate new market
	 segments, we seek to develop alliances with a wide variety of
	other Internet companies including consultants, Web design firms,
	 trade associations, hardware and software providers, and other
	firms dedicated to assisting companies in establishing and
	maintaining a presence on the Internet. These alliances work in
	conjunction with our direct sales force by generating qualified
	sales opportunities. These are intended to increase geographic
	sales coverage and to address specific industry segments and
	large corporate customers. As of August&nbsp;31, 2000, we had
	entered into two affiliate agreements.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Agency agreements.</I> In order to leverage our internal
	direct sales force, we entered into agency agreements with
	broadband access providers. These companies utilize their sales
	force and customer relationships to find new market opportunities
	 for our services. We typically pay our agents a commission for
	new customers that they provide to us. As of August&nbsp;31,
	2000, we had entered into five agency agreements.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conduct a variety of programs to stimulate market demand for
our services, including public relations, advertising, trade
shows and collateral development. These programs are focused on
our target markets and are designed to create awareness and
generate sales leads.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we employed 89 persons dedicated to
sales and marketing. We intend to hire additional sales people as
 we expand.

<P align="left"><B>Customer Service and Management</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that a high level of customer service and support is
critical to the successful sales and marketing of our services
and to customer retention. In August&nbsp;2000, we established
the account manager program to provide our customers with a
single point of contact that will support the account through its
 full life cycle. The account manager is responsible for working
with the customer through the implementation process to ensure
customer expectation and satisfaction levels are met. Our service
 management team works with customers in customizing content

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<DIV align="left">
channels to suit their Web site needs, and assists our customers
in developing templates that frame content delivery and ensuring
that technical interfaces facilitate the ongoing delivery of
information. The account manager also provides ongoing support
after the services are delivered to the customer. Our account
managers are compensated based on their ability to meet customer
retention goals, sell new services into their assigned customer
base and ensure customer satisfaction. We intend to continue to
refine and grow this program along with our customer base. In
conjunction with this personalized approach to customer support,
we also provide assistance 24 hours per day, seven days a week
for our services.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, our service management team consisted
 of 11&nbsp;employees managing three distinct areas: service
design/development, client services and content management. The
team is engaged in activities encompassing the complete service
lifecycle from the development and launch of new services to the
implementation, maintenance and subsequent management of customer
 Web sites.

<P align="left"><B>Supplier Relationships</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we were able to access over 2,500
publications and to receive up to 60,000 news stories daily
through our contractual relationships with 12 content providers.
Our content providers range from traditional news syndication
services to specialized media sources. They include APWire, Bell
&#38; Howell, InfoUSA, Knight-Ridder, Media General, NewsBytes,
Reality Online and UPI. Our distribution contracts with content
providers typically provide for a monthly flat fee for certain
redistribution rights. Since the inception of our business, we
have not had any difficulty renewing such contracts on
commercially reasonable terms.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, we have merchandise supplier relationships with
E-Commerce Solutions, iConomy and a variety of small merchants
that give us access and use of over 2.1&nbsp;million products to
provide targeted commercial opportunities throughout our
IntelliClix service network.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We offer our network of suppliers the ability to increase their
brand exposure while generating revenue. The pricing on our
commerce relationships varies, but all revenues obtained for the
parties are based on a share of the transaction. We continue to
pursue and secure long-standing relationships with suppliers for
the benefit of our entire network.

<P align="left"><B>Competition</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our competition varies by service offerings. Currently, while we
believe no one company competes with us in all of our service
categories, many companies compete with us in the individual
service categories of contextual commerce, targeted content and
personalization. Our main competitors in our targeted markets
include:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Contextual commerce:</I> Blue Martini Software, Escalate, Net
	Perceptions and Trapezo.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Targeted content:</I> Dow Jones, InfoSpace, iSyndicate,
	NewsEdge, Nexis and ScreamingMedia.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	<I>Personalization:</I> Art Technology Group, Blue Martini
	Software, BroadVision, Interwoven, Open Market and Vignette.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Many of our competitors or future competitors have longer
operating histories than we do and significantly greater
financial, technical and marketing resources than us. These
competitors can devote substantially more resources than we can
to business development and may adopt aggressive pricing
policies.

<P align="center">37

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We compete on the following factors:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	effectiveness and timeliness of content classification;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	automated content distribution capability;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	ability to provide relevant commerce;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	effectiveness of personalization;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	ease of implementation;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	breadth, depth and timeliness of content; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	effectiveness of pricing.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Notwithstanding our proprietary technology, it is possible for
competitors or potential competitors to develop competitive
proprietary technology that leverages third party licensed
technology to further provide competitive services. Therefore,
the barriers to entry in our markets are relatively low.

<P align="left"><B>Intellectual Property</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We regard the protection of our intellectual property rights to
be important to our success. We rely or expect to rely on a
combination of patent, trademark, copyright, service mark, trade
secret restrictions and contractual provisions to protect our
intellectual property rights. We require employees and
independent contractors to enter into proprietary information and
 confidentiality agreements. The contractual provisions and the
other steps that we have taken to protect our intellectual
property may not prevent misappropriation of our technology or
deter third parties from developing similar or competing
technologies.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have filed a provisional U.S. Patent application for our
contextual matching systems and method. This application
describes a system and method that provide advertisements and
content services that are contextually related to a document
currently being read or displayed to a user, and that are also
likely to be of interest to the user. The system utilizes a
user&#146;s demographic information, such as buying habits and
Web browsing behavior in determining what contextually related
commerce products are likely to be purchased by the user.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have applied for trademark and service mark protection for our
 YellowBrix, IntelliClix, IndustryWatch, NewsReal, MultiLinks,
Contextual Merchandising and Contextual eMerchandising and the
YellowBrix logo marks in the United States. We cannot assure you
that the steps we have taken to protect our intellectual property
 will be adequate or that third parties will not independently
develop similar proprietary information, infringe or
misappropriate our proprietary rights. Any independent
development, infringement or misappropriation could harm our
financial results in the future. Additionally, effective patent,
trademark, copyright and trade secret protection may not be
available in every country where we provide services. We may, at
times, have to incur significant legal costs and spend time
defending our intellectual property rights. Any defense efforts,
whether successful or not, would divert both time and resources
from the operation and growth of our business.

<P align="left"><B>Government Regulation</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Government regulation may present a risk to our business. See
&#147;Risk Factors&nbsp;&#151; Legal Uncertainties and Government
 Regulation of the Internet could Inhibit Growth of the Internet
and E-commerce.&#148;

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Recent concerns regarding Internet user privacy has led to the
introduction of international federal and state legislation to
protect Internet user privacy. In October&nbsp;1998, the European
 Union adopted a directive that may limit our collection and use
of information regarding Internet users in

<P align="center">38

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<DIV align="left">
Europe. In addition, the Federal Trade Commission, or the FTC,
has initiated investigations and hearings regarding Internet user
 privacy that could result in rules or regulations that could
adversely affect our business. As a result, we could become
subject to new laws and regulations that could limit our ability
to conduct targeted advertising, or to distribute or collect user
 information. Because of the increasing use of the Internet, the
government may adopt laws and regulations relating to the
Internet, addressing issues such as user privacy, pricing,
content, taxation, copyrights, distribution and service quality.
We also may be regulated by recent consent decrees involving the
FTC and online advertisers regarding the collection and use of
personal information.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may be subject to provisions of the Federal Trade Commission
Act that regulate advertising in all media, including the
Internet, and require advertisers to substantiate advertising
claims before disseminating advertising. The FTC has the power to
 enforce this Act. It has recently brought several actions
charging deceptive advertising via the Internet and is actively
seeking new cases involving advertising via the Internet.

<P align="left"><B>Our Employees</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we had 158 employees, including:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	89 in sales and marketing;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	11 in customer support;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	43 in product development; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	15 in general and administration.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our employees who successfully participate in our cross-selling
efforts are eligible for incentive-based compensation. None of
our employees is represented by a labor union. We believe that
our relations with our employees are good.

<P align="left"><B>Our Facilities</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We lease a 16,000 square foot facility in Alexandria, Virginia,
which serves as our principal executive offices. The current
lease for this facility expires in 2008. We also lease an
additional 5,000 square foot facility in Alexandria, Virginia.
This lease expires in February&nbsp;2001. In addition, we lease
approximately 10,060 square feet for two regional sales offices
in Newport Beach and San Francisco, California. The leases for
these facilities expire in October&nbsp;2002 and
December&nbsp;2003, respectively. We recently signed a lease for
approximately 59,000 square feet in Roslyn, Virginia which
expires in December&nbsp;2011. We are not scheduled to occupy
this facility until the beginning of 2002. We estimate that we
will need additional temporary space through 2002. We have not
yet identified suitable facilities. We believe that additional
space will be available on commercially reasonable terms as and
when needed.

<P align="left"><B>Legal Proceedings</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are not currently a party to any material legal proceedings.

<P align="center">39

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<DIV align="left"><A NAME="010"></A></DIV>

<P align="center"><B>MANAGEMENT</B>

<P align="left"><B>Executive Officers and Directors</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth certain information regarding our
executive officers and directors:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="35%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="56%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Name</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Age</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Position(s)</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	David C. Hoppmann<SUP>(1)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">45</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Executive Officer, President and<BR>
	Chairman of the Board</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Jeffrey P. Massa</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">41</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Senior Vice President, Technology, Chief Technology Officer and
	Director</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Jace D. Wieser</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">36</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Senior Vice President, Technology/ Engineering</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	S. Randy Lampert</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">45</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Financial Officer</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	David Lynch</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Business Officer</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Kevin S. Lapidus</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">30</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Vice President, General Counsel and Corporate Secretary</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Michael McCrory</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">39</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Stewart J. Paperin<SUP>(2)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">52</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Keith Walz<SUP>(1)(2)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">33</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Douglas M. Reid<SUP>(1)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">32</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Member of Compensation Committee</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Member of Audit Committee</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>David C. Hoppmann,</I> one of our founders, has served as our
Chief Executive Officer and President, as well as the Chairman of
 the Board of Directors, since our inception in
October&nbsp;1997. Prior to YellowBrix, Mr.&nbsp;Hoppmann was the
 President of the Corporate Information Division of Infoseek
Corporation from January&nbsp;1997 to July&nbsp;1997. From
September&nbsp;1994 to October&nbsp;1996, Mr.&nbsp;Hoppmann
served as President and CEO of Intell-X, a division of DataTimes
Corporation dedicated to aggregating and distributing business
news and information. From May&nbsp;1993 to September&nbsp;1994,
Mr.&nbsp;Hoppmann served as President and CEO of COMTEX
Scientific Corporation, an aggregator and distributor of
information news, wires and other content. Mr.&nbsp;Hoppmann
received a B.A. degree in International Economics from George
Washington University.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Jeffrey P. Massa,</I> one of our founders, has served as our
Senior Vice President, Technology, Chief Technology Officer and
as a Director, since our inception in October&nbsp;1997. Prior to
 YellowBrix, Mr.&nbsp;Massa was the Senior Vice President of
Technology of the Corporate Information Division of Infoseek
Corporation from January&nbsp;1997 to July&nbsp;1997. From
September&nbsp;1994 to October 1996, Mr.&nbsp;Massa served as
Senior Vice President of Technology and Business Development of
Intell-X, a division of DataTimes Corporation, and from
October&nbsp;1994 to October&nbsp;1996, he was the Vice President
 of Technology of COMTEX Scientific Corporation. From
May&nbsp;1987 to September&nbsp;1993, Mr.&nbsp;Massa was the
Manager of Information Systems and Deputy Director of Systems at
the Executive Office of the President, National Security Council,
 The White House. Mr.&nbsp;Massa completed the Computer Science
Program at Texas Lutheran College.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Jace D. Wieser </I>has served as our Senior Vice President,
Technology/ Engineering, since our inception in
October&nbsp;1997. Prior to joining YellowBrix, Mr.&nbsp;Wieser
was Senior Director of Service Development in the Corporate
Information Division of Infoseek Corporation from
February&nbsp;1997 to July&nbsp;1997. From December&nbsp;1996 to
February&nbsp;1997, Mr.&nbsp;Wieser served as Director of
Technology at DataTimes Corporation. He received a B.S. in
Computer Science from the University of Oklahoma.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>S. Randy Lampert </I>has served as our Chief Financial Officer
 since September 1999. Prior to joining YellowBrix,
Mr.&nbsp;Lampert ran Ponderosa Capital Management, the investment
 advisor to an affiliated hedge fund and provider of corporate
financial advice to corporations from October&nbsp;1997 to
August&nbsp;1999. From March&nbsp;1993 to September 1997,
Mr.&nbsp;Lampert was the Managing Director

<P align="center">40
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<DIV align="left">
of the Leveraged Finance Group at Nomura Securities. From January
 1990 to April 1992, he was a partner in Patricof Capital
Corporation responsible for a wide variety of technology-based
investments and acquisitions. He received an M.B.A. from the
University of Chicago and B.A. from the University of Rochester.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>David Lynch </I>has served as our Chief Business Officer since
 June&nbsp;2000. Prior to joining YellowBrix, from
January&nbsp;1998 to June&nbsp;2000, Mr.&nbsp;Lynch was Vice
President of NET-Tel. From July&nbsp;1997 to December&nbsp;1997,
he served as Vice President of LDMI. From June&nbsp;1996 to
July&nbsp;1997, he served as Vice President of Midcom. From
January&nbsp;1989 to June&nbsp;1996, Mr.&nbsp;Lynch served as
Vice President for Allnet/Frontier. Mr.&nbsp;Lynch received a
B.S. in Business Administration from the School of Business and
Economics at West Virginia University.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Kevin S. Lapidus </I>has served as our Vice President, General
 Counsel and Corporate Secretary since September&nbsp;2000. Prior
 to joining YellowBrix, Mr.&nbsp;Lapidus served as Senior Vice
President, General Counsel and Corporate Secretary of OneMain.com
 Inc., a publicly traded Internet service provider, from
October&nbsp;1999 to September&nbsp;2000. From August&nbsp;1998
to October&nbsp;1999, Mr.&nbsp;Lapidus was an attorney with Hogan
 &#38; Hartson L.L.P. and from October&nbsp;1997 to
August&nbsp;1998, he was an attorney with Hale and Dorr LLP. Mr.
Lapidus received a J.D. from Harvard Law School and an A.B. in
Economics from Washington University in St. Louis.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Michael McCrory </I>has served as a Director since
April&nbsp;2000. Since May&nbsp;1996, Mr.&nbsp;McCrory has served
 as Chairman and CEO of I-Bankers Securities, Inc., an
international investment banking firm and registered NASD member
that operates in the United States and Europe. From
June&nbsp;1984 to December&nbsp;1993, Mr.&nbsp;McCrory was
President of Alliance Marketing, a multi-state insurance agency.
Mr.&nbsp;McCrory is also a director of several private companies
in addition to YellowBrix, including Synxis. Mr.&nbsp;McCrory
received an M.B.A. from the Owen Graduate School of Management at
 Vanderbilt University and a B.S. in Business Administration from
 the University of Phoenix.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Stewart J. Paperin </I>has served as a Director since
December&nbsp;1997. Since July&nbsp;1996, Mr.&nbsp;Paperin has
served as Executive Vice President of the Soros Foundations Open
Society Institute which encompasses the charitable operations of
forty foundations in Central and Eastern Europe, the United
States, Africa, and Latin America. From January&nbsp;1994 to
July&nbsp;1996, Mr.&nbsp;Paperin was President of Capital
Resources East Ltd., a diversified consulting and investment firm
 in New York. He served as president of Brooke Group
International, a U.S.-based leveraged buy-out firm operating in
the former Soviet Union, a corporation controlled by Brooke
Group. From 1989 to 1990, he served as chief financial officer of
 the Western Union Corporation. He is a member of the Boards of
Directors of Penn Octane Corp. and Global TeleSystems Group, Inc.
 and Golden Telecom Inc. Mr.&nbsp;Paperin received an M.S. and a
B.A. from the State University of New York at Binghamton.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Keith Walz </I>has served as a Director since May&nbsp;2000.
Mr.&nbsp;Walz serves as a Managing Director of ABN AMRO.
Mr.&nbsp;Walz joined ABN AMRO in April&nbsp;1996 and focuses on
information technology and communications investments. From March
 1991 to March 1996, Mr.&nbsp;Walz spent five years in AAI&#146;s
 finance division managing financial reporting, analysis and
accounting systems. Prior to joining AAI, Mr.&nbsp;Walz spent two
 years as a finance associate with Tyson Foods, Inc. Mr. Walz
currently serves on the boards of Visual Insights, Inc. Oasis
Technology, Inc., Integrated Information Systems, Inc.,
Worldweb.net, Inc., and Real World Technology, Inc. Mr.&nbsp;Walz
 received an M.B.A. from DePaul University and a B.S. in Finance
from the University of Arkansas.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Douglas M. Reid </I>has served as a Director since
December&nbsp;1997. Since March&nbsp;1996, Mr.&nbsp;Reid has
served as Director of Banking and Finance for Soros Fund
Management, LLC, the fund manager for QIP. From September 1986 to
 March 1996, Mr.&nbsp;Reid was employed by Kleinwort Benson
Limited in various roles, and since March&nbsp;1994 as Vice
President in its Financing and Advisory Division. Mr. Reid joined
 KB London in 1986 and moved to the bank&#146;s New York office
in 1989. Mr.&nbsp;Reid is also a director of several private
companies in addition to YellowBrix, including TSCentral, Inc.
and Rila Software Corporation.

<P align="center">41
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There are no family relationships among any of the directors or
executive officers of YellowBrix.

<P align="left"><B>Board of Directors</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Immediately prior to the completion of this offering, our amended
 and restated certificate of incorporation will take effect and
provide for a classified board of directors consisting of three
classes of directors, each serving staggered three-year terms. As
 a result, a portion of our board of directors will be elected
each year. To implement the classified structure, Messrs.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have
been designated Class&nbsp;I directors, whose terms will expire
at the annual meeting of stockholders to be held in 2001, Messrs.
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have
 been designated Class&nbsp;II directors, whose terms will expire
 at the annual meeting of stockholders to be held in 2002 and
Messrs.
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have
been designated Class&nbsp;III directors, whose terms will expire
 at the annual meeting of stockholders to be held in 2003. In
addition, our board of directors will include two non-voting
observers who will be appointed by each of CNNfn and Infoseek
Corporation.

<P align="left"><B>Board Committees</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors has an audit committee and a compensation
committee.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Audit Committee.</I> The audit committee recommends the
selection and retention of our independent auditors, reviews the
scope and results of audits and submits appropriate
recommendations regarding audits, reviews our internal controls
and reviews procedures to ensure compliance with applicable
financial reporting requirements. The current members of the
audit committee are Stewart Paperin and Keith Walz.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Compensation Committee.</I> The compensation committee&#146;s
duties include establishing, reviewing and making recommendations
 to the board regarding compensation of our officers, considering
 compensation plans for our employees, and carrying out other
duties under our stock incentive compensation and other plans
approved by us as may be assigned to the committee by the board.
The current members of the compensation committee are David
Hoppmann, Keith Walz and Douglas Reid.

<P align="left"><B>Director Compensation</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our directors are reimbursed for certain expenses in connection
with attendance at board and committee meetings. In
August&nbsp;2000, we granted to each of Messrs.&nbsp;McCrory,
Paperin, Walz and Reid options to purchase 10,000 shares of our
common stock, at an exercise price of $3.72&nbsp;per share. These
 grants were immediately fully vested on the date of the grant.
In the future, we will grant each director 10,000&nbsp;vested
stock options to purchase shares of our common stock upon the
completion of our annual meeting. We will also pay each director
$1,000 for each board of director meeting they attend.

<P align="left"><B>Compensation Committee Interlocks and Insider Participation
</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No member of the compensation committee has been an employee of
ours, except for David Hoppmann. None of our executive officers
serves as a member of the board of directors or compensation
committee, or other committee serving an equivalent function, of
any other entity, any of whose executive officers serves as a
director of or member of the compensation committee of our board
of directors.

<P align="left"><B>Executive Compensation</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table provides information concerning total
compensation awarded to, earned by or accrued for services
rendered to us in all capacities during the year ended
December&nbsp;31, 1999 by our chief executive officer, our chief
financial officer and our two other most highly compensated

<P align="center">42

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
executive officers whose salary and bonus totaled at least
$100,000 for the fiscal year. We refer to these four executive
officers as our Named Executive Officers. There are no other
executive officers whose salary and bonus exceed $100,000 for the
 fiscal year.
</DIV>

<P align="center"><B>Summary Compensation Table</B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="38%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="9%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="8%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Long-Term</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="11"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Compensation</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><FONT size="2"><B>Annual Compensation</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="11"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Securities</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Other Annual</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Underlying</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="2"><FONT size="2"><B>Name and Principal Position</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Salary</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Bonus</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Compensation</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Options</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="2"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	David C. Hoppmann</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">165,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Executive Officer, President and Chairman of the Board</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Jeffrey P. Massa</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Senior Vice President, Technology, Chief Technology Officer and
	Director</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Jace D. Wieser</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">136,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,800</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Senior Vice President, Technology/ Engineering</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	S. Randy Lampert</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">36,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2"><SUP>(1)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">104,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2"><SUP>(2)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">530,609</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2"><SUP>(3)</SUP></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Financial Officer</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><SUP><FONT size="2">(1)</FONT></SUP><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Mr.&nbsp;Lampert became an executive officer in
	September&nbsp;1999. His compensation reflects base salary
	calculated on a monthly basis of $9,000 per month from the period
	 September&nbsp; 1999 to December&nbsp;1999.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><SUP><FONT size="2">(2)</FONT></SUP><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represents $52,262 paid to Mr. Lampert and a
	$52,262 promissory note issued to Mr.&nbsp;Lampert as incentive
	compensation in connection with our Fall 1999 financing.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><SUP><FONT size="2">(3)</FONT></SUP><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Reflects common stock issuable upon the exercise
	of the warrants issued to Mr.&nbsp; Lampert as part of his
	compensation for the months of September (119,391&nbsp;shares),
	October (123,300&nbsp;shares), November (130,812&nbsp;shares) and
	 December (130,975&nbsp;shares) of 1999, and a warrant for 26,131
	 shares, issued as incentive compensation for our Fall&nbsp;1999
	financing.</FONT></TD>
</TR>

</TABLE>

<P align="left"><B>Employment Contracts and Arrangements</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Employment Agreements and Stock Option Agreements with David
C. Hoppmann and Jeffrey&nbsp;P. Massa.</I> On December&nbsp;11,
1997, we entered into employment agreements with David Hoppmann
and Jeffrey Massa. Their terms expire the later of the third
anniversary of the agreements, or the second anniversary of an
initial public offering, or IPO. Under the agreements,
Mr.&nbsp;Hoppmann is entitled to receive a base salary of
$165,000 per year and Mr.&nbsp;Massa is entitled to receive a
base salary of $150,000 per year. Their total cash compensation
is limited to no more than $200,000 each year until we have
generated cumulative revenues of not less than $4.3 million and
are no longer experiencing a net operating loss on a monthly
basis.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If we terminate Mr.&nbsp;Hoppmann&#146;s or Mr.&nbsp;Massa&#146;s
 employment other than for cause or if they terminate their
employment for good reason, their outstanding options vest and we
 must pay a severance payment calculated over a severance period
equal to the longer of two years or the remainder of their terms
of employment.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Contractor Agreement with S. Randy Lampert through Mayflower
Resources, Inc.</I> On August&nbsp;30, 1999, we entered into a
contractor agreement with Mayflower Resources, Inc., whose sole
shareholder is S.&nbsp;Randy Lampert. To date, Mr.&nbsp;Lampert
serves as our Chief Financial Officer under an independent
contractor relationship. The scheduled termination date of the
agreement, as

<P align="center">43

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
amended, was February&nbsp;28, 2000 and was extended to
August&nbsp;31, 2000, but he has continued in his former
capacity. Until the earlier of the termination of this agreement,
 the termination of his services or his death or disability,
Mr.&nbsp;Lampert receives a base pay of $9,000 per month and a
warrant for each completed month of service equal to 0.5% of the
then outstanding shares of common stock on a fully diluted basis
exercisable on a per share basis at 150% of the fair market value
 of the average per share price we received as of our most recent
 private placement equity offering.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The agreement provided that Mr.&nbsp;Lampert is entitled to
incentive compensation in amount equal to (1)&nbsp;3% of gross
proceeds we raise in a private placement offering of our equity
securities, provided up to 1.5% of that amount will be paid in
cash and at least 1.5% of that amount will be paid in the form of
 a promissory note with warrants for the number of shares equal
to the face value of the promissory note divided by the per share
 price of our common stock of the company at that time,
(2)&nbsp;1.5% of the gross proceeds raised by us in an IPO of our
 debt or equity securities payable in cash, and (3)&nbsp;1.5% of
the aggregate consideration paid to us in a transaction involving
 a merger or sale of all or substantially all of our stock and/
or assets payable in cash. Negotiations are under way to extend
and revise certain economic provisions of the contractor
agreement.

<P align="left"><B>Stock Option Grants</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The table below provides information regarding stock options
granted to Named Executive Officers during the year ended
December&nbsp;31, 1999. The potential realizable value is
calculated by assuming that the price of our common stock
increases from an assumed fair market value of $3.18&nbsp;per
share, at assumed rates of stock appreciation of 5% and 10%,
compounded annually over the 10&nbsp;year term of the option, and
 subtracting from that result the total option exercise price.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The 5% and 10% assumed annual rates of compound stock price
appreciation are prescribed by the rules and regulations of the
Securities and Exchange Commission and do not represent our
estimate or projection of the future trading prices of our common
 stock. There can be no assurance that the actual stock price
appreciation over the ten-year option term will be the assumed 5%
 or 10% levels or any other defined level. Actual gains, if any,
on stock option exercises are dependent on numerous factors,
including our future performance, overall market conditions and
the option holder&#146;s continued employment with us throughout
the entire vesting period and option term, none of which are
reflected in this table.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="33%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="15"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="15"><FONT size="2"><B>Individual Grants</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="15"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Potential Realizable</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Percentage</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Value at Assumed</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>of Total</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Annual</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>of</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Options</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Rates of Stock</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Securities</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Granted to</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Price Appreciation</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Underlying</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Employees</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>for the Option Term</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Options</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>in Fiscal</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price Per</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Expiration</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Name</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Granted</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Year</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Share</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Date</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>5%</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>10%</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	David C. Hoppmann</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">166,250</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.3</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11/30/09</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">332,481</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">842,572</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Jeffrey P. Massa</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">166,250</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11/30/09</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">332,481</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">842,572</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Jace D. Wieser</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	S. Randy Lampert</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">119,391</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9/30/04</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">225,253</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">570,836</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">123,300</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.7</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10/31/04</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">232,638</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">589,525</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130,812</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11/30/04</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">246,801</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">625,442</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,131</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11/30/04</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,867</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">83,292</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130,975</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12/31/04</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">247,108</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">626,221</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">44

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left"><B>Aggregate Option Exercises in Last Fiscal Year and Year End
Option Values</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table provides information about stock options held
 as of December&nbsp;31, 1999 by the Named Executive Officers
assuming a fair market value of our common stock of $3.18 per
share on December&nbsp;31, 1999. None of these options have been
exercised.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="28%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Number of Securities</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Underlying</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Value of Unexercised</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Unexercised Options</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>In-the-Money Options</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>at Fiscal Year-End</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>at Fiscal Year-End</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Acquired</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Value</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Name</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>on Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Realized</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercisable</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Unexercisable</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercisable</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Unexercisable</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	David C. Hoppmann<SUP>(1)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">508,250</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,087,218</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Jeffrey P. Massa<SUP>(2)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">432,250</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">845,614</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Jace D. Wieser</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">81,400</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">258,771</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	S. Randy Lampert<SUP>(3)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">530,609</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">121,641</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">This amount excludes 2,599,782 options granted on
	January&nbsp;8, 2000.</FONT></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">This amount excludes 2,149,638 options granted on
	January&nbsp;8, 2000.</FONT></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">This amount includes monthly warrants and
	incentive based warrants pursuant to his contractor agreement.
	This amount excludes 1,282,718 warrants granted between
	January&nbsp;1, 2000 and August&nbsp;1, 2000.</FONT></TD>
</TR>

</TABLE>

<P align="left"><B>Stock Option Plans</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>Amended 1998 Stock Option Plan</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Amended 1998 Stock Option Plan provides for the grant of
stock options to our employees, directors and consultants. A
total of 7,000,000 shares of common stock have been reserved for
issuance under the plan. As of August&nbsp;31, 2000, options to
purchase an aggregate of 2,584,600&nbsp;shares were outstanding,
6,675&nbsp;shares of common stock had been purchased through
exercises of stock options and 4,408,725&nbsp;shares were
available for future grant.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The plan is administered by the board of directors, or a
committee appointed by the board of directors, which determines
the terms of options granted, including the exercise price,
option period and the number of shares subject to each option.
The board of directors also determines whether an option is to be
 treated as an incentive stock option, within the meaning of
Section&nbsp;422 of the Internal Revenue Code of 1986, as
amended. The board of directors may also, subject to the approval
 of the compensation committee of the board, reprice the exercise
 price of options previously granted under the plan in order to
reflect current market value of the options and adjust the
exercise prices of such options to reflect market value at the
time of the grant. The term of options granted under the plan
cannot exceed ten years (five years in the case of incentive
stock options granted to a holder of 10% of our common stock).
The exercise price of:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	nonstatutory stock options must be at least equal to the par
	value per share of our common stock; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	incentive stock options must be at least equal to 100% of the
	fair market value of our common stock on the date of grant (110%
	in the case of an optionee who, at the time of the grant, is a
	10% stockholder under the Code).</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as otherwise permitted by the board of directors, options
are not assignable or transferable by the optionee (except upon
the optionee&#146;s death to a designated beneficiary), and each
option is exercisable during the lifetime of the optionee only by
 the optionee or the optionee&#146;s guardian or legal
representative. Except as otherwise permitted by the board of
directors, vested options must be exercised within three months
after the termination of an optionee&#146;s status as an
employee, director or consultant of YellowBrix (unless terminated
 for cause), or within one year after his or her termination by
disability or death, but in no event later than the expiration of
 the

<P align="center">45

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
option&#146;s term. If an optionee&#146;s employment or service
is terminated for cause, then each outstanding option will
terminate as of such date.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The plan generally provides that in the event of a merger with or
 into another corporation, sale of all or substantially all of
our assets, or if we enter into any other similar transaction,
each outstanding option shall be assumed, or an equivalent option
 substituted by the successor corporation or, if not assumed or
substituted, vesting shall be accelerated immediately prior to
such transaction and the option there upon terminated.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors may amend or terminate the plan at any
time, without the consent of the stockholders, except as required
 by law. However, no amendment or termination shall adversely
affect rights and obligations with respect to outstanding
options. Unless sooner terminated by the board of directors, the
plan will terminate ten years after the date of its adoption.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For options granted under the plan, each option agreement
provides that before November&nbsp;1, 1999, 1/4 of options vests
on the first anniversary of the grant date, then 1/4 annually
thereafter. After November&nbsp;1, 1999, 1/4 of the options
granted vest on the first anniversary of grant date, then 1/12 of
 the balance vest every three months thereafter.

<P align="left"><B>&nbsp;&nbsp;&nbsp;</B><I>2000 Stock Option Plan</I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our 2000 Stock Option Plan provides for the grant of options to
our employees, directors and consultants. A total of 6,800,000
shares of common stock have been reserved for issuance under the
plan. As of August&nbsp;31, 2000, options to purchase an
aggregate of 5,444,338&nbsp;shares were outstanding, no shares of
 common stock had been purchased through exercises of stock
options and 1,355,662&nbsp;shares were available for future
grant.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The plan is administered by the board of directors, which
determines the terms of options granted, including the exercise
price, option period and the number of shares subject to each
option. The board of directors also determines whether an option
granted is to be treated as an incentive stock option, within the
 meaning of Section&nbsp;422 of the Internal Revenue Code of
1986, as amended. The board of directors may also, subject to the
 approval of the compensation committee of the board, reprice the
 exercise price of options previously granted under the plan in
order to reflect current market value of the options and adjust
the exercise prices of such options to reflect market value at
the time of the grant. The term of options granted under the plan
 cannot exceed ten years (five years in the case of incentive
stock options granted to a holder of 10% of our common stock).
The exercise price of:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	nonstatutory stock options must be at least equal to the par
	value per share of our common stock; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	incentive stock options must be at least equal to 100% of the
	fair market value of our common stock on the date of grant (110%
	in the case of an optionee who, at the time of the grant, is a
	10% stockholder under the Code).</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as otherwise permitted by the board of directors, options
are not assignable or transferable by the optionee (except upon
the optionee&#146;s death to a designated beneficiary) and each
option is exercisable during the lifetime of the optionee only by
 the optionee or the optionee&#146;s guardian or legal
representative. Except as otherwise permitted by the board of
directors, vested options must be exercised within
three&nbsp;months after the termination of an optionee&#146;s
status as an employee, director or consultant of YellowBrix
(unless terminated for cause), or within one year after his or
her termination by disability or death, but in no event later
than the expiration of the option&#146;s term. If an
optionee&#146;s employment or service is terminated for cause,
then each outstanding option will terminate as of such date.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The plan generally provides that in the event of a merger with or
 into another corporation, sale of all or substantially all of
our assets, or if we enter into any other similar transaction,
each

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<DIV align="left">
outstanding option shall be assumed or an equivalent option
substituted by the successor corporation or, if not assumed or
substituted, vesting shall be accelerated immediately prior to
such transaction and the option thereunder terminated.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors may amend or terminate the plan at any
time, without the consent of the stockholders, except as required
 by law. However, no amendment or termination shall adversely
affect rights and obligations with respect to outstanding
options. Unless sooner terminated by the board of directors, the
plan will terminate ten years after the date of its adoption.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the 2000 Plan, 1/36 of the options vest every month over a
one year period beginning one month after the grant date, the
remaining options vest 1/96 every month thereafter over
8&nbsp;years, except in the event of an IPO whereby 1/3 of the
total, less any that had vested in the interim, vest immediately
after the closing of the IPO or a specified change of control
transaction and the remaining 1/3, less any that had vested in
the interim, vest at a rate of 1/72 per month over 24 months.

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<!-- link1 "RELATED PARTY TRANSACTIONS" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center"><B>RELATED PARTY TRANSACTIONS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were incorporated as a Delaware corporation in
October&nbsp;1997 and began doing business under the name of
BizWatch, Inc. In February&nbsp;1998, we changed our name to
NewsReal, Inc. and then to our current name YellowBrix, Inc. in
February&nbsp;2000. We entered into numerous transactions under
such names. We believe that the terms of each of the transactions
 described below were no less favorable to us than could have
been obtained from unaffiliated third party parties. The
counterparties in many of these transactions only became
affiliated with us as a result of the successful closing of these
 highly negotiated transactions. Unless otherwise noted below,
when we refer to &#147;YellowBrix,&#148; &#147;we,&#148;
&#147;our,&#148; and &#147;us,&#148; we mean YellowBrix, Inc., a
Delaware corporation, and YellowBrix under its two predecessor
names.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Infoseek</I>. On December&nbsp;11, 1997, we acquired
intellectual property and other assets of Infoseek Corporation
pursuant to an asset acquisition agreement for $1.0&nbsp;million
in cash, 850,000 shares of our common stock and a ten year
warrant to purchase 1,077,500 shares of our common stock. The
warrant vests upon our achievement of certain performance goals
and expires on December&nbsp;11, 2007 or becomes exercisable
automatically under certain conditions or upon fulfillment of
certain conditions after the closing of our IPO.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>CNN</I>. On January&nbsp;1, 1998, we executed a co-branding
agreement with CNNfn, a division of Cable News Network LP, LLP,
to feature and advertise our service on their site. We agreed to
pay an aggregate of $4.5&nbsp;million and $1.75&nbsp;million for
two years worth of branding and advertising fees, respectively.
As of April 1999, we paid $1.0&nbsp;million in branding fees and
$108,180 in advertising fees for the first year. CNNfn provided
us with additional on-air advertisements worth in excess of
$1&nbsp;million. On April&nbsp;21, 1999, we amended the
co-branding agreement and pursuant to such amendment, which
reduced our outstanding obligation to $4.5&nbsp;million, executed
 a promissory note payable on demand to CNNfn for
$3.5&nbsp;million as payment for the additional on-air
advertisement and an accelerated payment for the two years of
branding fees. Simultaneously, we sold 470,638 shares of common
stock in a private placement to CNNfn, in consideration of
cancellation of the $3.5&nbsp;million promissory note.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>QIP.</I> On December&nbsp;11, 1997, we executed a securities
purchase agreement with QIP whereby it purchased 3,250,000 shares
 of our common stock for $3.0&nbsp;million. In 1998 and 1999, we
borrowed $1.2&nbsp;million and $2.65&nbsp;million, respectively,
from QIP pursuant to demand promissory notes and security
agreements. The promissory notes bear interest at an annual rate
of 8% and principal and accrued interest are payable on demand.
Under the security agreements, QIP received a senior security
interest in our assets, subject to prior purchase money security
interests in favor of a third party that holds security interests
 in our leased computer hardware and peripheral equipment, and a
bank with respect to a $200,000 letter of credit posted as a
security deposit on our leased facilities.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1997 and 1998, we borrowed $1.0&nbsp;million under a term loan
 agreement and $3.0&nbsp;million under an amendment to the term
loan agreement providing for a revolving line of credit,
respectively, from Bayerishe Vereinsbank AG. These loans were all
 guaranteed by QIP. QIP agreed to repay the loans under certain
conditions and made additional loans to us in 1998 and 1999. In
connection with the assumption of our debt to Bayerishe
Vereinsbank we granted QIP the option to convert the aggregate
amount under the B.V. loan and certain of the QIP loans into
shares of our common stock at a price of $2.47 per share if QIP
repaid all or a portion of the outstanding principal and accrued
interest at the time our Term Loan became due and up to
$1.0&nbsp;million of principal plus accrued interest on our line
of credit due after May&nbsp;28, 1999 and before
December&nbsp;31, 1999. However, the conversion price would be
reduced to $1.00 per share if QIP repaid up to $2.0&nbsp;million
of principal plus accrued interest on our line of credit after
March&nbsp;31, 1999 and before the earlier of December&nbsp;31,
1999 or our payment in full of the line of credit.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We executed a bridge note on March&nbsp;6, 2000 in favor of QIP
in consideration for repaying our loans to B.V. Simultaneously,
we amended the conversion agreement to extend the right to

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<DIV align="left">
conversion from December&nbsp;31, 2000 to December&nbsp;31, 2002.
 The amendment also extended conversion rights to QIP for
additional loans it made to us in 1999. To date, our aggregate
outstanding principal indebtedness to QIP is $7,850,000. On
October&nbsp;18, 2000, QIP agreed to automatically convert the
aggregate outstanding principal amount of our indebtedness into
6,659,717 shares of our common stock upon closing of the
offering. As of August&nbsp;31, 2000, the accumulated interest on
 the QIP debt was $782,000 and will be payable in cash upon the
closing of our IPO.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Fall 1999 Financing.</I> In November 1999, we sold 592,544
shares of our common stock for an aggregate purchase price of
$3.48&nbsp;million through I-Bankers Securities, Inc. (the
company formerly known as Millennium Financial Group, Inc.), as
placement agent, to certain investors. In connection with the
private placement, the investors were allowed to elect Michael
McCrory, an employee of I-Bankers, to our board of directors. In
connection with such financing, we issued a five-year warrant, as
 a placement fee, to I-Bankers for the purchase of 30,612 shares
of our common stock at an exercise price of $8.82 per share.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These investors and I-Bankers received anti-dilution rights
pursuant to the Shareholders Rights Agreement and placement
agreement, respectively. Specifically, in the event that 1)
Infoseek exercises its warrant and 2) QIP converts our
indebtedness, these investors will receive, for no further
consideration additional shares to maintain their ownership in
YellowBrix at the time of their investment on a fully diluted
basis. Since I-Bankers placement fee was a warrant based on the
number of shares of common stock placed with these investors, the
 number of shares it receives under the warrant increases
proportionately.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Spring 2000 Financing.</I> In Spring 2000, we sold 4,840,893
shares of our common stock for an aggregate purchase price of
$18.0&nbsp;million through I-Banker Securities, as placement
agent, to certain investors. In connection with such financing,
we issued a five year warrant, as a placement fee, to I-Bankers
to purchase 134,409 shares of our common stock at an exercise
price of $5.88 per share.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On May&nbsp;12, 2000 and May&nbsp;31, 2000, we sold 100,000
shares of our series A convertible preferred stock at a price of
$10.00 per share to each of ABN AMRO Private Equity and Holland
Ventures III B.V. The series A convertible preferred stock is
convertible into the number of common stock at the option of the
holder simultaneously with a qualified IPO into an aggregate of
537,634 shares of common stock. ABN AMRO and Holland agreed to
convert their series&nbsp;A convertible preferred stock to common
 stock upon the closing of an IPO occurring no later than
March&nbsp;31, 2001.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Triad/Icon.</I> On June&nbsp;29, 2000, we sold
268,817&nbsp;shares of our common stock to Icon International,
Inc. for an aggregate purchase price of $1.0&nbsp;million
tendered in media credits. We will purchase various advertising
time and/or space made available by Icon and half of the purchase
 price will be applied against these media credits and the other
half will be paid in cash. Icon simultaneously assigned all of
its rights, but none of its obligations to Triad Media Ventures
LLC.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with this transaction, we also executed a put
option agreement with Icon whereby we have an option to sell an
additional 134,409 shares of common stock at $3.72&nbsp;per share
 also to be tendered in media credits. This put right expires
18&nbsp;months from the date of the agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the put option agreement, Icon also has the right to
buy up to the value of unexpended purchase price of the put
option in the subsequent private placement of not less than
$10.0&nbsp;million if we have not exercised all or part of any
portion of our put option as of the first anniversary of date of
the agreement.

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<P align="left"><B>Shareholder Rights Agreements and Rights Agreement</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In the table set forth below is our various shareholders
agreements which provide for certain registration rights:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="20%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="17%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="57%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Agreement</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Parties</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Rights</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Shareholders&#146; Agreement, dated as of 12/11/97 as<BR>
	amended 10/&nbsp;&nbsp;/00</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Infoseek, QIP Investors, Managing Founders and YellowBrix</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	After the closing of our IPO, QIP has three demand registration
	rights to cause us to register its shares of common stock, or if
	the holders representing 50% or more of our outstanding
	securities request the registration of their shares, such other
	investors have the right to request to be the included in such
	registration; provided, that, the anticipated aggregate public
	offering price for the shares to be registered is not less than
	$5&nbsp;million. However, QIP has unlimited incidental
	registrations.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Once we have qualified for registration on Form&nbsp;S-3 for
	secondary offerings, the investors are entitled to four demand
	registration rights on Form&nbsp;S-3 provided that the aggregate
	offering price for those shares to be registered is not less than
	 $2.5 million, unless the most recent registration statement was
	effected within 180&nbsp;days of such demand registration.</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Rights Agreement, dated as of 4/21/99<BR>
	as amended<BR>
	10/&nbsp;&nbsp;/00</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	CNNfn, QIP Investors, Managing Founders and YellowBrix</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	After the closing of our initial public offering, CNNfn has one
	demand registration right to cause us to register its shares of
	common stock, or if the holders representing 50% or more of our
	outstanding securities request the registration of their shares,
	CNNfn has the right to request to be included in such
	registration provided that, the anticipated aggregate public
	offering price for the shares to be registered is not less than
	$3.5&nbsp;million. CNNfn also has unlimited incidental
	registration rights.</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Shareholder Rights Agreement, dated as of 10/28/99, as amended
	10/19/00</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Investors listed therein and YellowBrix</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Investors have unlimited incidental registration rights.</FONT></TD>
</TR>

</TABLE>
</CENTER>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="21%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="17%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="56%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Agreement</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Parties</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Rights</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Shareholder Rights Agreement, dated<BR>
	as of 3/9/00<BR>
	as amended<BR>
	10/19/00 <SUP>(2)(3)</SUP></FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Investors listed therein,<SUP>(1) </SUP>ABN AMRO, Triad and
	YellowBrix</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Investors, ABN AMRO and Icon/ Triad have unlimited incidental
	registration rights.</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Rights Agreement, dated as of 10/20/00</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	ABN AMRO,<BR>
	Holland Ventures and YellowBrix</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	After the closing of our IPO, ABN AMRO and Holland Ventures have
	one demand registration right to cause us to register their
	shares of common stock provided that the anticipated aggregate
	offering price for the shares to be registered is not less than
	$3.5&nbsp; million.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Holland Ventures III N.V. and Prime Technologies
	Ventures N.V., each a 5% beneficial stockholder, are parties to
	this agreement.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">ABN AMRO Private Equity signed Joinder in
	Shareholder Rights Agreement, dated 5/12/00, which makes it a
	party to the Shareholder Rights Agreement dated 3/9/00.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Triad signed Joinder in Shareholder Rights
	Agreement, dated 6/9/00 which makes it a party to the Shareholder
	 Rights Agreement dated 3/9/00.</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to our letter to ABN AMRO, dated as of May&nbsp;12,
2000, ABN AMRO can designate one representative to our board of
directors before we complete a public offering with total gross
proceeds to us of not less than $30.0&nbsp;million. ABN AMRO
waived this right unconditionally.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain of our warrant holders also have unlimited incidental
registration rights pursuant to their warrants which have been
waived with respect to this offering. In addition, CNNfn,
I-Bankers Financial Group and the I-Bankers Fall investors have
anti-dilution rights. Upon exercise of the Infoseek warrant,
I-Bankers and I-Bankers Fall investors receive additional
warrants or shares in proportion to their ownership of the
company at the time of their investment or service. Upon
conversion of our debt by QIP, CNNfn, I-Bankers and the I-Bankers
 Fall investors all receive additional shares or warrants in
proportion to their ownership of the company at the time of their
 investment or service. The additional shares which shall be
issued to CNNfn and the I-Bankers Fall investors are 1,067,936
and the additional number of warrants which shall be issued to
I-Bankers shall be 30,347.

<P align="left"><B>Severance Agreements</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We entered into a Settlement Agreement and General Release with
Catherine Michela in February&nbsp;2000. Under the agreement, all
 options granted to her were terminated or have expired. She
still holds 199,199 shares of our common stock. As part of her
severance package, she receives $10,000 per month beginning
March&nbsp;1, 2000 and for 20&nbsp;months thereafter, as well as
health, dental and vision insurance through December&nbsp;10,
2000. Ms.&nbsp;Michela has waived all claims and liability
against us. She is still bound by the Shareholders Agreements,
dated as of December&nbsp;11, 1997, and April&nbsp;21, 1999 and
certain sections of the Employment Agreement and Subscription
Agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also entered into a Settlement Agreement with Peter McKee on
July&nbsp;31, 1999, which has an effective date of
January&nbsp;1, 2000. He holds 199,100 shares of our common stock
 and has vested options to purchase 199,500 additional shares, of
 which he may exercise up to January&nbsp;31, 2001. All other
options granted to Mr.&nbsp;McKee were terminated or have
expired. Mr.&nbsp;McKee is still bound by the Shareholders
Agreement, dated as of December&nbsp;11, 1997 and the Rights
Agreement, dated as of April&nbsp;21, 1999. We waived our right
to repurchase Mr.&nbsp;McKee&#146;s shares of common stock so
long as he does not violate non-competition/solicitation and
confidentiality provisions of the Employment Agreement. In
addition, we repaid Mr.&nbsp;McKee a loan of $5,625.

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<P align="left"><B>Transactions with S. Randy Lampert</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On August&nbsp;30, 1999, we entered into a contractor agreement
with Mayflower Resources, Inc., whose sole shareholder is
S.&nbsp;Randy Lampert. To date, Mr.&nbsp;Lampert serves as our
Chief Financial Officer under an independent contractor
relationship. The scheduled termination date of the agreement, as
 amended was February&nbsp;28, 2000 and was extended to
August&nbsp;31, 2000, but he has continued in his former
capacity. Until the earlier of the termination of this agreement,
 the termination of his services or his death or disability,
Mr.&nbsp;Lampert receives a base pay of $9,000 per month and a
warrant for each completed month of service equal to 0.5% of the
then outstanding shares of common stock on a fully diluted basis
exercisable on a per share basis at 150% of the fair market value
 of the average per share price we received as of our most recent
 private placement equity offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The agreement provided that Mr.&nbsp;Lampert is entitled to
incentive compensation in amount equal to (1)&nbsp;3% of gross
proceeds we raise in a private placement offering of our equity
securities, provided up to 1.5% of that amount will be paid in
cash and at least 1.5% of that amount will be paid in the form of
 a promissory note with warrants for the number of shares equal
to the face value of the promissory note divided by the per share
 price of our common stock of the company at that time,
(2)&nbsp;1.5% of the gross proceeds raised by us in an IPO of our
 debt or equity securities payable in cash, and (3)&nbsp;1.5% of
the aggregate consideration paid to us in a transaction involving
 a merger or sale of all or substantially all of our stock and/
or assets payable in cash. Negotiations are under way to extend
and reset certain of the economic provisions of the contractor
agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1999, we entered into a promissory note with Mr. Lampert in
the amount of $52,262. During the first six months of 2000, we
entered into four additional promissory notes with Mr. Lampert.
The notes were for $186,000, $99,121, $15,000 and $22,500 and
were issued on April&nbsp;15, 2000, May&nbsp;15, 2000,
June&nbsp;15, 2000 and June&nbsp;29, 2000, respectively. All of
the notes have a term of three years and bear interest at 9% per
year.

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<!-- link1 "PRINCIPAL STOCKHOLDERS" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center"><B>PRINCIPAL STOCKHOLDERS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth information regarding the
beneficial ownership of our capital stock as of August&nbsp;31,
2000, as adjusted to reflect the sale of the common stock offered
 by us pursuant to this prospectus for:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	each person or entity who is known by us to beneficially own 5%
	or more of our capital stock,</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	each of our directors and director nominees;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	each of our Named Executive Officers; and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	all of our executive officers, directors, and director nominees
	as a group.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The percent of beneficial ownership for each stockholder prior to
 the offering is based on 11,179,567 shares of common stock
outstanding and the sale of shares as part of this offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table includes all shares of common stock
beneficially owned by the indicated stockholder as of
August&nbsp;31, 2000. Beneficial ownership is determined in
accordance with the rules and regulations of the Securities and
Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage of ownership of
 that person, shares of common stock subject to options held by
that person that are currently exercisable or exercisable within
60&nbsp;days of September&nbsp;1, 2000, are deemed outstanding.
Such shares, however, are not deemed outstanding for the purposes
 of computing the percentage of ownership of any other person.
Except as otherwise noted, the address of each person listed in
the table is c/o YellowBrix, Inc., 66 Canal Center Plaza,
Alexandria, Virginia 22314. Except as otherwise noted, the
persons named in the table have sole voting and dispositive power
 with respect to all shares of common stock shown as beneficially
 owned by them, subject to community property laws where
applicable.

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Percentage of</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Shares</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Number of Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Beneficially</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Beneficially Owned</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Owned</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Prior to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>After</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Prior to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>After</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Holders</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Quantum Industrial Partners, LDC<SUP>(1)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,606,733</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,606,733</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42.3%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	c/o Soros Fund Management, LLC</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	888 Seventh Avenue</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	33rd Floor</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	New York, N.Y. 10106</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Geosor Corporation<SUP>(2)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,543,749</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,543,749</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19.7%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	888 Seventh Avenue</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	New York, N.Y. 10106</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	ABN AMRO Private Equity<SUP>(3)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,612,903</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,612,903</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.1%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	208 S. LaSalle Street</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Suite&nbsp;1000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Chicago, IL 60604</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Holland Venture III B.V.<SUP>(4)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,612,703</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,612,703</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.1%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	55 Haaksbergweg</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	1101 BR Amsterdam, Z.O</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Netherlands</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">53
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="48%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Percentage of</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Shares</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Number of Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Beneficially</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Beneficially Owned</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Owned</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Prior to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>After</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Prior to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>After</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="2"><FONT size="2"><B>Holders</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Offering</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="2"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Prime Technology Ventures N.V.</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,344,086</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,344,086</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12.0%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Entrada 102</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	1096 EA, Amsterdam</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	The Netherlands</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Infoseek Corporation<SUP>(5)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">850,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,927,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.6%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	1399 Moffett Park Drive</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Sunnyvale, CA 94089</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	David C. Hoppmann<SUP>(6)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,414,396</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,280,990</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11.5%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Jeffrey P. Massa<SUP>(7)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,168,760</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,885,306</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.6%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	S. Randy Lampert<SUP>(8)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,813,328</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,813,328</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">14.0%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Gary Gladstein<SUP>(9)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">660,137</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">660,137</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.7%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Jace D. Wieser<SUP>(10)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167,054</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">308,392</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.5%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Keith Walz<SUP>(11)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Michael McCrory<SUP>(12)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Stewart J. Paperin<SUP>(13)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,320</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,320</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Douglas M. Reid<SUP>(14)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,777</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">42,777</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	All executive officers, directors, director</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">19,962,946</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,764,924</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85.8%</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	nominees and 5% beneficial stockholders as a group (17 persons)
	<SUP>(15)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&nbsp;&nbsp;*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Represent beneficial ownership of less than 1%.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 2,166,700&nbsp;shares of common stock
	currently issued and 4,440,033&nbsp; shares common stock which
	are issuable upon conversion of convertible debt held by QIP.
	Mr.&nbsp;George Soros is the sole shareholder of QIH Management,
	Inc., the sole general partner of the investment advisory firm
	that manages QIP and has investment discretion over the shares
	held by QIP. Mr.&nbsp;Soros is also the Chairman of Soros Fund
	Management LLC, and has agreed to use his best efforts to cause
	QIH Management, Inc. to act at the discretion of Soros Fund
	Management LLC. Mr.&nbsp; Soros may be deemed a beneficial owner
	of the shares held by QIP; however, he expressly disclaims
	beneficial ownership of the shares held by QIP except to the
	extent of his pecuniary interest therein.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 834,200 currently issued and
	1,709,549&nbsp;shares of common stock which are issuable upon
	conversion of convertible debt held by Geosor Corporation, of
	which Mr.&nbsp;Soros is the sole shareholder and the president of
	 which is Gary Gladstein. Gary Gladstein holds 216,00 shares in
	his personal account and 443,537 shares of common stock issuable
	upon conversion of convertible debt. Mr.&nbsp;Soros and Gary
	Gladstein may be deemed the beneficial owners of the shares held
	by Geosor; however they expressly disclaim beneficial ownership
	of the shares held by Geosor except to the extent of their
	pecuniary interest therein.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 1,344,086 shares of common stock
	currently issued, and 268,817 shares of common stock issuable
	upon proposed conversion of series A preferred stock held by ABN
	AMRO Private Equity.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 1,344,086 shares of common stock
	currently issued, and 268,817 shares of common stock issuable
	upon proposed conversion of series A preferred stock held by
	Holland Venture III B.V.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 1,077,500 warrants that become
	exercisable upon a qualified IPO.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(6)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 1,158,196 shares subject to stock
	options. The after offering total includes 866,594 shares granted
	 pursuant to certain option agreements that accelerate upon the
	closing of this offering.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(7)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 969,660 shares subject to stock options.
	The after offering total includes 1,686,206 shares granted
	pursuant to certain option agreements that accelerate upon the
	closing of this offering.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(8)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes (a)&nbsp;warrants to purchase
	1,756,027&nbsp;shares of common stock issued as part of
	Mr.&nbsp;Lampert&#146;s monthly compensation and
	(b)&nbsp;warrants to purchase 57,301&nbsp;shares of common stock
	issued as part of Mr.&nbsp; Lampert&#146;s incentive compensation
	 related to the Fall 1999 and Spring 2000 financings.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(9)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 216,600&nbsp;shares of common stock
	currently issued to Mr.&nbsp;Gladstein and 443,537 shares of
	common stock issuable upon conversion of convertible debt held by
	 Mr.&nbsp; Gladstein.</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(10)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 167,054 shares subject to options. The
	after offering total includes 141,338 shares subject to options
	that accelerate upon the closing of this offering.</FONT></TD>
</TR>

</TABLE>

<P align="center">54
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(11)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 10,000 shares subject to vested options.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(12)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 10,000 shares subject to vested options.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(13)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 21,700 shares of common stock currently
	issued to Mr.&nbsp;Paperin, 44,620 shares of common stock
	issuable upon conversion of convertible debt held by Mr.&nbsp;
	Paperin and 10,000 shares subject to vested options.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(14)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes 10,800 shares of common stock currently
	issued to Mr.&nbsp;Reid, 21,977 shares of common stock issuable
	upon conversion of convertible debt held by Mr.&nbsp; Reid and
	10,000 shares subject to vested options.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(15)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes options to purchase 30,000 shares of our
	common stock held by two of our other executive officers.</FONT></TD>
</TR>

</TABLE>

<P align="center">55

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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DESCRIPTION OF CAPITAL STOCK" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center"><B>DESCRIPTION OF CAPITAL STOCK</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our authorized capital stock as of the close of this offering
consists of:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	100,000,000 shares of common stock, $.001 par value per share,
	and</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	10,000,000 shares of preferred stock, $.001 par value per share.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of June&nbsp;30, 2000, there were 11,179,567 shares of common
stock and 200,000 shares of preferred stock outstanding, held of
record by approximately 40 stockholders.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following description of our certificate of incorporation,
by-laws and agreement which provide for certain registration
rights is only a summary, and does not purport to be complete.
For a full understanding of these documents and the terms of our
capital stock, you should read the original documents, which are
included as exhibits to the registration statement of which this
prospectus is a part.

<P align="left"><B>Common Stock</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the
stockholders. Holders of common stock are not entitled to
cumulative voting rights. Holders of common stock are entitled to
 receive ratably such dividends as may be declared by the board
of directors out of funds legally available therefor. In the
event of a liquidation, dissolution or winding up of YellowBrix,
holders of common stock are entitled to share ratably in all
assets remaining after payment of liabilities. Holders of common
stock have no preemptive rights and no right to convert their
common stock into any other securities. There are no redemption
or sinking fund provisions applicable to the common stock. All
the outstanding shares of common stock are, and the shares to be
sold in this offering will be, validly issued, fully paid and
nonassessable.

<P align="left"><B>Preferred Stock</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The board of directors is authorized to issue the shares of
preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including
dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or
the designation of such series, without further vote or action by
 the stockholders. The issuance of such preferred stock may have
the effect of delaying, deferring or preventing a change in
control of us without further action by the stockholders and may
adversely affect the voting and other rights of the holders of
common stock, including the loss of voting control to others.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Series&nbsp;A Convertible Preferred Stock.</I> In
May&nbsp;2000, we sold an aggregate of 200,000 shares of series A
 convertible preferred stock at $10.00 per share to ABN AMRO
Private Equity and Holland Ventures III B.V. The series A
convertible preferred stock will convert before the closing of
the IPO into 537,634 shares of common stock. We have no current
plans to issue any shares of preferred stock following this
offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Walz, a member of our board of directors, was designated
 by ABN AMRO Private Equity, an entity that owns our convertible
stock, and may have an indirect material interest in the
transactions between us and ABN AMRO.

<P align="left"><B>Warrants</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2000, we had 11 outstanding warrants to
purchase an aggregate of 4,454,856 shares of our common stock.
The warrants are exercisable at a weighted average price of
$3.21&nbsp;per share. The warrants are exercisable under certain
conditions and up to their expiration date and expire variously
from May&nbsp;2002 through April&nbsp;2010.

<P align="center">56

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Set forth is a table of all warrants outstanding, their holders
and certain registration rights granted thereunder:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="34%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="8%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="30%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Warrant Holder</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number of Shares of</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Registration Rights</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Date of Issuance</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Common Stock</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>(if applicable)</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Infoseek Corporation</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1,077,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	12/11/97</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Insight Investments Corp.</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4,285</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Unlimited incidental registration</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	8/27/99</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	rights except pursuant to an initial public offering.</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	3665, Inc.</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">54,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	8/29/99</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Mayflower Resources, Inc.<SUP>(1)</SUP></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1,813,327</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" valign="top"><FONT size="2">$2.00&nbsp;&#150;&nbsp;$4.77</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	9/99 to 8/00 (issued monthly)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	I-Bankers Securities, Inc.<SUP>(2)<BR>
	</SUP>(A)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">30,612</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$8.82</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Unlimited incidental registration rights except pursuant to an
	initial public offering.</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	(B) 3/21/00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">134,409</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$5.88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Mike Azzara</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	(A) 1/11/00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	(B) 1/19/00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2,551</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$5.88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Park &#38; Vaughan LLP</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2,122</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$5.88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	1/22/00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	America Online, Inc.</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">Up to 832,691</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$3.72</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	4/4/00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Stephen Canton</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">500,359</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">$4.77</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	N/ A</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2/00 to 5/00 (issued monthly)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">S. Randy Lampert, our Chief Financial Officer, is
	the sole shareholder of Mayflower Resources, Inc.</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">I-Bankers has anti-dilution protection to maintain
	 their percentage ownership in us in the event of exercise of
	warrants by Infoseek, and conversion rights pursuant to QIP
	indebtedness.</FONT></TD>
</TR>

</TABLE>

<P align="left"><B>Registration Rights</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain holders of our common stock and preferred stock are
entitled to registration rights under the terms of a shareholders
 agreement, a rights agreement and several shareholders rights
agreements. Subject to the limitations specified in these
agreements, the registration rights include the following:

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Piggyback Registration Rights.</I> The holders of
10,272,892&nbsp;shares of common stock and common stock issuable
upon conversion or exercise of other securities (the
&#147;registrable securities&#148;) have rights to have their
shares registered for resale under the Securities Act if we
register any of our securities, either for our own account or for
 the account of other security holders except with respect to an
IPO, subject to the right of underwriters to limit the number of
shares included in an underwritten offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Demand Registration Rights.</I> The holders of 3,720,638
registrable securities have rights, at their request, to have
their shares registered for resale under the Securities Act.
After an IPO, QIP has three demand registration rights if the
aggregate offering price is at least $5.0&nbsp;million. In
addition, QIP has four demand registration rights on
Form&nbsp;S-3 except if the aggregate offering price is less than
 $25.0&nbsp;million or if the most recent registration statement
was effected within 180&nbsp;days. CNNfn has one demand post-IPO
registration right provided it holds, together with other
demanding stockholders, more than 50% of the then outstanding
registrable securities and the aggregate offering price will at
least $3.5&nbsp;million.

<P align="center">57

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All holders with registrable securities have agreed not to
exercise their demand registration rights until 180&nbsp;days
following the date of this prospectus without the consent of
Chase Securities Inc.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will bear all registrations expenses incurred in connection
with any of the above registrations. Each of registrable
securities participating in any registration will pay their own
underwriting discounts, selling commission and stock transfer
taxes applicable to the sale of its securities.

<P align="left"><B>Stockholders&#146; Agreement</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have entered into five stockholders&#146; agreement with our
current stockholders. Certain of the provisions in those
agreements will not terminate upon the closing of this offering.
See &#147;Related Party Transaction&nbsp;&#151; Shareholder
Rights Agreement and Rights Agreements.&#148;

<P align="left"><B>Delaware Anti-Takeover Law and Certain Charter and Bylaw
Provisions</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under Section&nbsp;203 of the Delaware General Corporation Law,
certain &#147;business combinations&#148; between a Delaware
corporation with shares that generally are publicly traded or
held of record by more than 2,000 stockholders, and an
&#147;interested stockholder&#148; are prohibited for a
three-year period following the date that such stockholder became
 an interested stockholder, unless:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="2%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the corporation has elected in its certificate of incorporation
	or by-laws not to be governed by the Delaware anti-takeover law;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the business combination was approved by the board of directors
	of the corporation before the other party to the business
	combination became an interested stockholder;</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	upon consummation of the transaction that made it an interested
	stockholder, the interested stockholder owned at least 85% of the
	 voting stock of the corporation outstanding at the commencement
	of the transaction, excluding voting stock owned by directors who
	 are also officers or held in employee stock plans in which the
	employees do not have a right to determine confidentially whether
	 to tender or vote stock held by the plan; or</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&#149;</TD>
	<TD align="left">
	the business combination was approved by the board of directors
	of the corporation and ratified by 66&nbsp;2/3% of the voting
	stock which the interested stockholder did not own. The
	three-year prohibition does not apply to certain business
	combinations proposed by an interested stockholder following the
	announcement or notification of certain extraordinary
	transactions involving the corporation and a person who had not
	been an interested stockholder during the previous three years or
	 who became an interested stockholder with the approval of a
	majority of the corporation&#146;s directors. The term
	&#147;business combination&#148; is defined generally to include
	mergers or consolidations between a Delaware corporation and an
	interested stockholder, transactions with an interested
	stockholder involving the assets or stock of the corporation or
	its majority-owned subsidiaries and transactions which increase
	an interested stockholder&#146;s percentage ownership of stock.
	The term &#147;interested stockholder&#148; is defined generally
	as a stockholder who becomes beneficial owner of 15% or more of a
	 Delaware corporation&#146;s voting stock.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not elected in our certificate of incorporation or
by-laws not to be governed by the Delaware anti-takeover law.
Section&nbsp;203 could have the effect of delaying, deferring or
preventing a change in control of YellowBrix.

<P align="center">58

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<P align="left"><B>Limitation of liability and indemnification matters</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our certificate of incorporation and bylaws limit the liability
of our directors and executive officers. See
&#147;Management&nbsp;&#151; Indemnification Agreements.&#148; We
 also intend to enter into indemnification agreements with our
current directors and executive officers. These agreements may
have the practical effect in some cases of eliminating our
stockholders&#146; ability to collect monetary damages from our
directors. We believe that these contractual agreements and the
provisions in our certificate of incorporation and by-laws are
necessary to attract and retain qualified persons as directors
and officers.

<P align="left"><B>Transfer Agent and Registrar</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
American Stock Trust and Transfer Company is the transfer agent
and registrar for our common stock.

<P align="center">59

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<!-- link1 "SHARES ELIGIBLE FOR FUTURE SALE" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center"><B>SHARES ELIGIBLE FOR FUTURE SALE</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the offering, there has been no public market for our
common stock, and we cannot predict the effect, if any, that
market sales of shares or the availability of any shares for sale
 will have on the market price of the common stock prevailing
from time to time. Sales of substantial amounts of common stock,
or the perception that such sales could occur, could adversely
affect the market price of our common stock and our ability to
raise capital through a sale of our securities.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, we will have &nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
common stock outstanding (or
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 if the underwriters over-allotment option is exercised in full)
of which
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;will
be &#147;restricted shares.&#148; This leaves
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 eligible for sale in the public market as follows:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="66%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="31%">&nbsp;</TD>
</TR>

<TR>
        <TD></TD>
        <TD></TD>
        <TD align="center" nowrap><FONT size="2"><B>Number of</B></FONT></TD>
</TR>

<TR>
        <TD align="center" nowrap><FONT size="2"><B>Date</B></FONT></TD>
        <TD></TD>
        <TD align="center" nowrap><FONT size="2"><B>Shares</B></FONT></TD>
</TR>

<TR>
        <TD align="center" nowrap><HR size="1"></TD>
        <TD></TD>
        <TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
        <TD align="left" valign="top"><FONT size="2">
        At effective date</FONT></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD align="left" valign="top"><FONT size="2">
        180&nbsp;days from the effective date of the prospectus</FONT></TD>
        <TD></TD>
        <TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 (or up to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 if the underwriters&#146; over-allotment option is exercised in
full) of common stock sold in this offering will be freely
tradable without further restriction or further registration
under the Securities Act, except for shares purchased by an
affiliate (as this term is defined in the Securities Act) of
ours, which will be subject to the limitations of Rule&nbsp;144
under the Securities Act. Subject to certain contractual
limitations, holders of restricted shares generally will be
entitled to sell these shares in the public securities market
without registration either pursuant to Rule&nbsp;144 or any
other applicable exemption under the Securities Act.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Rule&nbsp;144.</I> In general, under Rule&nbsp;144 under the
Securities Act, a person (or persons whose shares are aggregated)
 who has beneficially owned restricted securities within the
meaning of Rule&nbsp;144 for at least one year, and including the
 holding period of any prior owner except an affiliate, would be
entitled to sell within any three-month period a number of shares
 that does not exceed the greater of:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="4%"></TD>
        <TD width="2%"></TD>
        <TD width="94%"></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        1% of the then outstanding shares of our common stock, which will
         equal
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
         immediately after this offering; or</TD>
</TR>

<TR>
        <TD>&nbsp;</TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD>&#149;</TD>
        <TD align="left">
        the average weekly trading volume of our common stock on the
        Nasdaq National Market during the four calendar weeks preceding
        the filing of a notice on Form&nbsp;144 with respect to such
        sale.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales under Rule&nbsp;144 are also subject to certain manner of
sale provisions, notice requirements and the availability of
current public information about us.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Rule&nbsp;144(k).</I> Under Rule&nbsp;144(k), any person, or
persons whose shares are aggregated, who is not deemed to have
been our affiliate at any time during the 90&nbsp;days preceding
a sale, and who has beneficially owned shares for at least two
years, including any period of ownership of preceding
non-affiliated holders, would be entitled to sell such shares
under Rule&nbsp;144(k) without regard to the volume limitations,
manner of sale provisions, public information requirements or
notice requirements of Rule&nbsp;144. An &#147;affiliate&#148; is
 a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or under common
control with, an issuer.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Lock-Up Agreements.</I> Our executive officers, directors and
5% or greater stockholders have entered into lock-up agreements
under which they have agreed that they will not transfer or
dispose of, directly or indirectly, any shares of common stock or
 any securities convertible into or exercisable or exchangeable
for shares of common stock, for a period of 180 days from the
date of this prospectus, subject to certain exceptions. Transfers
 or dispositions can be made sooner with the written consent of
Chase Securities Inc.

<P align="center">60

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms of an agreement between us and the holders of
shares of our preferred stock, the preferred stockholders are
entitled to certain rights with respect to the registration of
their shares under the Securities Act commencing 180&nbsp;days
after the consummation of this offering. If we receive from the
holders of at least 40% of any class of preferred stock a written
 request to effect a registration with respect to all or a part
of their shares, we must use our best efforts to effect such a
registration, provided the shares owned by the requesting
stockholders cover at least 33% of the then outstanding class of
security of the offering price in the aggregate is at least
$5,000,000. We are only obligated to effect two of these
registrations. When we are eligible to utilize a registration
statement on Form&nbsp;S-3 to register an offering of our
securities, may request that we file a registration statement on
Form&nbsp;S-3 covering all or a portion of their shares, provided
 that the aggregate public offering price is at least $500,000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition, our preferred stockholders have certain
&#147;piggyback&#148; registration rights, certain of which are
being waived with respect to this offering. If we propose to
register any common stock under the Securities Act, other than
pursuant to the registration rights above, these stockholders may
 require us to include all or a portion of their securities in
such registration. We are obligated to use our best efforts to
effect this registration.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Within approximately 180&nbsp;days after the date of this
prospectus, we intend to file one or more registration statements
 on Form&nbsp;S-8 under the Securities Act to register
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 of common stock subject to outstanding stock options or reserved
 for issuance under our equity compensation plans. Upon
completion of this offering, options to purchase approximately
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
 will be outstanding under our equity compensation plans.

<P align="center">61

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<DIV align="left"><A NAME="015"></A></DIV>

<P align="center"><B>UNDERWRITING</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Chase Securities Inc., Dain Rauscher Incorporated and Wit
SoundView Corporation are the representatives of the
underwriters. Subject to the terms and conditions of the
underwriting agreement dated
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2000, the underwriters named below, through their
representatives, have severally agreed to purchase from us the
following respective numbers of shares of common stock.

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="80%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number of</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Name</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Chase Securities Inc.</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Dain Rauscher Incorporated</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Wit SoundView Corporation</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Total</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriting agreement provides that the obligations of the
underwriters are subject to conditions precedent, including the
absence of any material adverse change in our business and the
receipt of various certificates, opinions and letters from us,
our counsel and the independent auditors. The underwriters are
obligated to purchase all of the shares offered by us (other than
 those covered by the over-allotment option described below) if
they purchase any shares.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows the per share and total underwriting
discounts and commissions we will pay to the underwriters. Such
amounts are shown assuming both no exercise and full exercise of
the underwriters&#146; over-allotment option to purchase
additional shares.

<P align="center"><B>Underwriting Discounts and Commissions</B>

<CENTER>
<TABLE width="50%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="41%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="13%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="11%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="11%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>With</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Without</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Over-Allotment</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Over-Allotment</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Per Share</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Total</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate that the total expenses of this offering, excluding
underwriting discounts and commissions, will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriters propose to offer the shares directly to the
public at the initial public offering price set forth on the
cover page of this prospectus and to various dealers at that
price less a concession not in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. The underwriters may allow and such dealers may re-allow a
 concession not in excess of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to various other dealers. After the initial public offering
 of the shares, the offering price and other selling terms may be
 changed by the underwriters. The representatives have advised us
 that the underwriters do not intend to confirm discretionary
sales in excess of 5% of the shares of common stock offered
hereby.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have granted to the underwriters an option, exercisable no
later than 30&nbsp;days after the date of this prospectus, to
purchase up to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
 shares of common stock at the initial public offering price,
less the underwriting discount set forth on the cover page of the
 prospectus. To the extent that the underwriters exercise this
option, each of the underwriters will have a firm commitment to
purchase approximately the same percentage of these option shares
 which the number of shares of common stock to be purchased by it
 shown in the above table bears to the total number of shares of
common stock offered by this prospectus. We will be obligated,
pursuant to this option, to sell shares to the underwriters to
the extent the option is exercised. The underwriters may exercise
 this option only to cover over allotments made in connection
with the sale of shares of common stock in this offering. The
offering of the shares is made for delivery when, as and if
accepted by the underwriters and subject to prior sale and to
withdrawal, cancellation or modifica-

<P align="center">62

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
tion of the offering without notice. The underwriters reserve the
 right to reject an order for the purchase of shares in whole or
in part.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, and
to contribute to payments the underwriters may be required to
make in respect of these liabilities.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our officers and directors and stockholders have agreed that they
 will not, without the prior written consent of Chase Securities
Inc., directly or indirectly, sell, offer, contract to sell,
transfer the economic risk of ownership in, make any short sale,
pledge or otherwise dispose of any shares of our common stock,
options or warrants to acquire shares of our common stock or
securities exchangeable for or convertible into shares of our
common stock owned by them or any other rights to purchase or
acquire our common stock for a period of 180&nbsp;days following
the effective date of the registration statement that includes
this prospectus. We have agreed that we will not, without the
prior written consent of Chase Securities Inc., directly or
indirectly, offer, sell, contract to sell, make any short sale,
pledge, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
 purchase or otherwise transfer or dispose of any shares of our
capital stock, or any securities exchangeable or exercisable for
or convertible into or any rights to purchase or acquire shares
of our capital stock for a period of 180&nbsp;days following the
date of this prospectus, except that we may issue shares in
connection with acquisitions, may issue shares upon the exercise
of options granted prior to the date of this prospectus and may
grant additional options or sell additional shares under our
stock option or stock purchase plans. Without the prior written
consent of Chase Securities Inc., any additional options granted
shall not be exercisable during this 180-day period unless the
holders shall have executed an agreement substantially to the
effect of the agreement described in the first sentence of this
paragraph.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have applied to list our common stock on the Nasdaq National
Market under the symbol YBRX.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with this offering, the underwriters may effect
transactions that could have the effect of raising or
maintaining, or preventing or retarding a decline in, the market
price of our shares. As a result, the price of our shares may be
higher than the price that might otherwise exist in the open
market. These transactions may be effected on the Nasdaq National
 Market, in the over-the-counter market or otherwise.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In particular, the underwriters may make short sales of our
shares and may purchase our shares on the open market to cover
positions created by short sales. Short sales involve the sale by
 the underwriters of a greater number of shares than they are
required to purchase in the offering. Covered short sales are
sales made in an amount not greater than the over-allotment
option. The underwriters may close out any covered short position
 by either exercising their over-allotment option or purchasing
shares in the open market. In determining the source of shares to
 close out the covered short position, the underwriters will
consider, among other things, the price of shares available for
purchase in the open market as compared to the price at which
they may purchase shares through the over-allotment option. Naked
 short sales are sales in excess of the over-allotment option.
The underwriters must close out any naked short position by
purchasing shares in the open market. A naked short position is
more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the shares in the
open market after pricing that could adversely affect investors
who purchase in this offering.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At our request, the underwriters have reserved up to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our common stock
for sale at the initial public offering price to our directors,
officers, employees, business associates and related persons. The
 number of shares of common stock available for sale to the
general public will be reduced if such persons purchase the
reserved shares. Any reserved shares which are not so purchased
will be offered by the underwriters to the general public on the
same basis as the other shares offered hereby.

<P align="center">63

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A prospectus in electronic format will be made available on the
Internet Web sites maintained by Wit SoundView Corporation&#146;s
 strategic partner, E*Trade Securities, Inc.

<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="center"><B>LEGAL MATTERS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fulbright &#38; Jaworski L.L.P., New York, New York, will pass on
 the validity of the common stock offered by this prospectus for
us. Cooley Godward LLP, Reston, Virginia, will pass upon certain
legal matters in connection with this offering for the
underwriters.

<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="017"></A></DIV>

<P align="center"><B>EXPERTS</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Ernst&nbsp;&#38;&nbsp;Young LLP, independent auditors, have
audited our financial statements and schedule at
December&nbsp;31, 1998 and 1999 and for the period from
October&nbsp;1, 1997 (inception) through December&nbsp;31, 1997
and for the years ended December&nbsp;31, 1998 and 1999, as set
forth in their report (which contains an explanatory paragraph
describing conditions that raise substantial doubt about our
ability to continue as a going concern as described in
Note&nbsp;2 to the financial statements). We&#146;ve included our
 financial statements and schedule in the prospectus and
elsewhere in the registration statement in reliance on
Ernst&nbsp;&#38;&nbsp;Young LLP&#146;s report, given on their
authority as experts in accounting and auditing.

<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="018"></A></DIV>

<P align="center"><B>WHERE YOU CAN FIND MORE INFORMATION</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have filed a registration statement on Form&nbsp;S-1 with the
Securities and Exchange Commission for the common stock we are
offering by this prospectus. This prospectus does not include all
 of the information contained in the registration statement. You
should refer to the registration statement and its exhibits for
additional information. Whenever we make reference in this
prospectus to any of our contracts, agreements or other
documents, the references are not necessarily complete and you
should refer to the exhibits attached to the registration
statement for copies of the actual contract, agreement or other
document. When we complete this offering, we will also be
required to file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange
 Commission.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to furnish our stockholders with annual reports
containing financial statements audited by our independent
auditors, and to make available quarterly reports containing
unaudited financial information for the first three quarters for
of each fiscal year.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You can read our Securities and Exchange Commission filings,
including the registration statement, over the Internet at the
Securities and Exchange Commission&#146;s Web site at
http://www.sec.gov. You may also read and copy any document we
file with the Securities and Exchange Commission at its public
reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549; Seven World Trade Center, Suite&nbsp;1300, New York, New
York 10048; and Citicorp Center, 500 West Madison Street,
Suite&nbsp;1400, Chicago, Illinois 60661-2511. You may also
obtain copies of these documents at prescribed rates by calling
the Public Reference Section of the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the
operation of the public reference facilities.

<P align="center">64

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>YellowBrix, Inc.</B>

<!-- link1 "Index to Financial Statements" -->
<DIV align="left"><A NAME="019"></A></DIV>

<P align="center"><B>Index to Financial Statements</B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Page</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Independent Auditors&#146; Report</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-2</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Balance Sheets</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-3</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Statements of Operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-4</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Statement of Stockholders&#146; Equity (Deficit)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-5</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Statement of Cash Flows</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-6</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Notes to Financial Statements</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">F-8</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">F-1

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>Report of Ernst &#38; Young LLP, Independent Auditors</B>

<P align="left">
The Board of Directors and Stockholders

<DIV align="left">
YellowBrix, Inc. (formerly NewsReal, Inc.)
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying balance sheets of YellowBrix,
Inc. (formerly NewsReal, Inc.) as of December&nbsp;31, 1998 and
1999, and the related statements of operations,
stockholders&#146; equity (deficit), and cash flows for the
period from October&nbsp;1, 1997 (inception)&nbsp;to
December&nbsp;31, 1997 and for the years ended December&nbsp;31,
1998 and 1999. These financial statements are the responsibility
of the Company&#146;s management. Our responsibility is to
express an opinion on these financial statements based on our
audits.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
 about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of YellowBrix, Inc. (formerly NewsReal, Inc.) at
December&nbsp;31, 1998 and 1999, and the results of its
operations and its cash flows for the period from October&nbsp;1,
 1997 (inception) to December&nbsp;31, 1997 and for the years
ended December&nbsp;31, 1998 and 1999, in conformity with
accounting principles generally accepted in the United States.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying financial statements have been prepared assuming
 that YellowBrix, Inc. will continue as a going concern. As more
fully described in Note 2, the Company has incurred operating
losses since inception. This condition raises substantial doubt
about the Company&#146;s ability to continue as a going concern.
Management&#146;s plans in regard to this matter are also
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
        <TD width="38%"></TD>
        <TD width="62%"></TD>
</TR>

<TR valign="top">
        <TD>&nbsp;</TD>
        <TD align="left">
        /s/ Ernst &#38; Young LLP</TD>
</TR>
</TABLE>

<P align="left">
        McLean, Virginia<BR>
        April&nbsp;13, 2000, except Note 14,<BR>
        &nbsp;&nbsp;as to which the date is May&nbsp;23, 2000<BR>
        &nbsp;&nbsp;and except Note&nbsp;2,<BR>
        &nbsp;&nbsp;as to which the date is<BR>
        &nbsp;&nbsp;October&nbsp;16, 2000<BR>
<P>


<P align="center">F-2

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>YellowBrix, Inc.</B>

<P align="center"><B>(formerly NewsReal, Inc.)</B>

<P align="center"><B>Balance Sheets</B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
        <TD width="3%">&nbsp;</TD>
        <TD width="52%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
        <TD width="3%">&nbsp;</TD>
        <TD width="6%">&nbsp;</TD>
        <TD width="1%">&nbsp;</TD>
        <TD width="5%">&nbsp;</TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD colspan="7"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
        <TD></TD>
        <TD colspan="3"></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="7"><HR size="1"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><HR size="1"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD colspan="3"></TD>
        <TD></TD>
        <TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        <B>Assets</B></FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Current assets:</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Cash and cash equivalents</FONT></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">223,040</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,767,190</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">9,574,168</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Accounts receivable, net of allowance for doubtful accounts of
        $0, $75,000, and $113,121 respectively</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">33,998</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">452,177</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,437,164</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Deferred costs</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">625,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Prepaid marketing fees</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">94,180</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,473,361</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Prepaid content fees</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">646,812</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Other current assets</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">144,398</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">114,742</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">570,960</FONT></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Total current assets</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">401,436</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,053,289</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">15,702,465</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Property and equipment, net</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">282,967</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">610,892</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,625,075</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Deposits and other assets</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">65,255</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">26,190</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">98,744</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Intangible assets, net</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">137,789</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">54,672</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">10,876</FONT></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Total assets</FONT></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">887,447</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,745,043</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">17,437,160</FONT></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        <B>Liabilities and stockholders&#146; deficit</B></FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Current liabilities:</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Accounts payable</FONT></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,338,009</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">2,097,680</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">996,711</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Accrued liabilities</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">664,607</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">807,786</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,569,060</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Deferred revenue</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">521,667</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,661,618</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Line of credit</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,000,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Stockholder notes payable</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,200,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,850,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,850,000</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Current portion of capital lease obligation</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">39,342</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">42,532</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Current portion of long-term debt</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Total current liabilities</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">7,217,616</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">11,316,475</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">12,119,921</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Other liabilities</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">96,813</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">266,131</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">334,902</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Long-term capital lease obligation</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">64,272</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">42,178</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Officer loan</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">52,262</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">374,883</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Stockholders&#146; deficit:</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Preferred stock&nbsp;&#151; $0.001 par value&nbsp;&#151;
        5,000,000 shares authorized; 200,000 shares issued and
        outstanding at June&nbsp;30, 2000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">200</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Common stock&nbsp;&#151; $0.001 par value&nbsp;&#151; 50,000,000
        shares authorized; 5,000,000, 6,063,182 and 11,179,567 shares
        issued and outstanding at December&nbsp;31, 1998 and 1999 and
        June&nbsp;30, 2000, respectively</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">6,063</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">11,180</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Additional paid-in capital</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,808,337</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">20,114,991</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">43,747,909</FONT></TD>
        <TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Deferred stock compensation</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(29,911</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(262,985</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(18,580</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
        <TD></TD>
        <TD align="left" valign="top"><FONT size="2">
        Accumulated deficit</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(10,210,408</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(27,812,166</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(39,175,433</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Total stockholders&#146; (deficit)&nbsp;equity</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(6,426,982</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">(7,954,097</FONT></TD>
        <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">4,565,276</FONT></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="1"></TD>
        <TD></TD>

</TR>

<TR>
        <TD colspan="2" align="left" valign="top"><FONT size="2">
        Total liabilities and stockholders&#146; (deficit)&nbsp; equity</FONT></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">887,447</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">3,745,043</FONT></TD>
        <TD></TD>
        <TD></TD>
        <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
        <TD align="right" valign="bottom" nowrap><FONT size="2">17,437,160</FONT></TD>
        <TD></TD>
</TR>

<TR>
        <TD colspan="2"></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>
        <TD></TD>
        <TD></TD>
        <TD align="left"><HR size="4" noshade></TD>
        <TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I>See accompanying notes.</I>

<P align="center">F-3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>YellowBrix, Inc.</B>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center"><B>Statements of Operations</B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="25%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Years Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception) to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Ended June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Revenues:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Service</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">32,400</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">91,167</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,345,388</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">655,705</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,924,872</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Advertising</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,323</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">76,357</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">499,431</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">170,876</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">82,172</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Total revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">33,723</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">167,524</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,844,819</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">826,581</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,007,044</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Cost of revenues</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">99,077</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">426,252</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">545,288</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">261,820</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,061,862</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Gross profit (loss)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(65,354</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(258,728</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,299,531</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">564,761</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,945,182</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Operating expenses:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Sales and marketing (excluding stock and warrant based non-cash
	expenses of $&nbsp;&#151;&nbsp;, $&nbsp;&#151;&nbsp;, and $49,639
	 in 1997, 1998 and 1999 and $&nbsp;&#151;&nbsp;and $45,447 for
	the six months ended June&nbsp;30, 1999 and 2000, respectively,
	shown below)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">150,091</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,159,611</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,474,095</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,330,012</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,534,520</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Research and development (excluding stock and warrant based
	non-cash expenses of $&nbsp;&#151;&nbsp;, $&nbsp;&#151;&nbsp;,
	and $11,050 in 1997, 1998 and 1999 and $&nbsp;&#151;&nbsp;and
	$&nbsp;&#151;&nbsp;for the six months ended June&nbsp;30, 1999
	and 2000, respectively, shown below)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">273,656</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,757,733</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,142,075</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">814,152</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,790,181</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	General and administrative (excluding stock and warrant based
	non-cash expenses of $&nbsp;&#151;&nbsp;, $48,791, and $1,629,260
	 in 1997, 1998 and 1999 and $26,200 and $4,323,676 for the six
	months ended June&nbsp;30, 1999 and 2000, respectively, shown
	below)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">309,507</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,527,327</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,033,524</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,502,648</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,216,159</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,342</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,414,333</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">173,522</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87,455</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185,333</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Stock and warrant based non-cash expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,791</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,689,949</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,200</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,369,123</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Total operating expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">791,596</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,907,795</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,513,165</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,760,467</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,095,316</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Loss from operations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(856,950</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,166,523</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,213,634</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,195,706</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,150,134</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Interest income (expense):</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Interest income</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,046</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">37,623</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,208</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,536</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">139,699</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Interest expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,519</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(220,085</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,408,332</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,369,706</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(352,832</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Total interest income (expense)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,473</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(182,462</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,388,124</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,368,170</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(213,133</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861,423</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,348,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,601,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,563,876</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Basic and diluted net loss per common share</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.36</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Weighted average shares outstanding</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,811,111</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,420,047</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,182,015</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,328,570</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I>See accompanying notes.</I>

<P align="center">F-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>YellowBrix, Inc.</B>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center"><B>Statements of Stockholders&#146; Equity (Deficit)</B>

<TABLE width="100%" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="15%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="2%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Preferred</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Common</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Stock</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Common Stock</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Additional</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Deferred</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Stock</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Paid-In</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Stock</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Subscription</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Accumulated</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Amount</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Capital</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Compensation</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Receivable</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Deficit</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at October&nbsp; 1, 1997</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Initial issuance of common stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">900,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">900</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,100,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,100</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,729,635</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,500,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss for period</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861,423</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at December&nbsp; 31, 1997</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,729,635</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,500,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861,423</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Payment of stock subscription</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,500,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">78,702</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(78,702</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Compensatory stock options earned</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,791</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,348,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at December&nbsp; 31, 1998</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,808,337</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(29,911</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,210,408</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,063,182</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,063</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,533,631</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">323,674</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(323,674</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Compensatory stock options earned</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,600</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of warrants and options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,599,349</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Beneficial conversion expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,850,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,601,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at December&nbsp; 31, 1999</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,063,182</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,063</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,114,991</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(262,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,812,166</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock, net of expenses (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,847,568</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,848</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,886,972</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of preferred stock (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,999,800</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock for services (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">268,817</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">269</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">999,731</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of warrants and options (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,043,064</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Cancellation of stock options (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(296,649</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">241,027</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Compensatory stock options earned (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,378</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at June&nbsp;30, 2000 (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,179,567</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,180</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">43,747,909</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,580</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(39,175,433</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>

<P align="right">[Additional columns below]

<P>[Continued from above table, first column(s) repeated]

<TABLE width="40%" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="60%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="17%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="16%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Total</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at October&nbsp; 1, 1997</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Initial issuance of common stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">900</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,233,735</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss for period</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861,423</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at December&nbsp; 31, 1997</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,373,212</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Payment of stock subscription</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,500,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Compensatory stock options earned</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,791</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,348,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at December&nbsp; 31, 1998</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,426,982</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,534,694</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Compensatory stock options earned</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,600</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of warrants and options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,599,349</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Beneficial conversion expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,850,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,601,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at December&nbsp; 31, 1999</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,954,097</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock, net of expenses (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,891,820</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of preferred stock (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,000,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock for services (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of warrants and options (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,043,064</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Cancellation of stock options (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(55,622</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Compensatory stock options earned (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,378</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss (unaudited)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Balance at June&nbsp;30, 2000 (unaudited)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,565,276</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>

<P align="left">
<I>See accompanying notes.</I>

<P align="center">F-5

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>YellowBrix, Inc.</B>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Statements of Cash Flows</B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="21%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1, 1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Years Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception) to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Ended June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	<B>Operating activities</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861,423</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,348,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,601,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,563,876</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Adjustments to reconcile net loss to net cash used in operating
	activities:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">58,342</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,414,333</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">173,522</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87,455</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">185,333</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Common stock options issued for consulting services</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">48,791</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,599,349</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26,200</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,421,367</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Compensatory options earned</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">90,600</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,378</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Stock issued in exchange for services</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,875,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,625,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Cancellation of compensatory stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(55,622</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Beneficial conversion expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,850,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,369,130</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Changes in operating assets and liabilities:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Accounts receivable</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(20,881</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(13,117</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(418,179</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(366,287</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,021,070</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Prepaid expenses and other current assets</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,458</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(79,106</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(64,524</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(10,568</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(2,235,516</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Deposits and other assets</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(27,831</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(37,424</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">39,065</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,315</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(72,553</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Accounts payable and accrued liabilities</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">491,058</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,608,371</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,072,168</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">779,062</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(270,922</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Deferred revenue</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">506,667</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">473,750</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,176,033</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Net cash used in operating activities</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(362,193</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,392,137</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,878,090</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,574,819</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,232,839</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	<B>Investing activities</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Purchases of property and equipment</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(33,387</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(114,842</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(279,395</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(232,500</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,155,720</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Adjustment to purchase price of Infoseek assets</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">106,226</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Purchase of assets from Infoseek</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,090,627</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Purchase of license rights</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(40,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	Net cash used in investing activities</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,164,014</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,616</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(279,395</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(232,500</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1,155,720</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">F-6

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Statements of Cash Flows&nbsp;&#151; (continued)</B>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="23%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1, 1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Years Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception) to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Ended June 30,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	<B>Financing activities</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Proceeds from line of credit</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Proceeds from stockholder notes payable</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,200,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,650,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,750,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Proceeds from stock subscription receivable</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,500,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Officer loans</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">52,262</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">27,844</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">322,621</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Payments of capital lease obligation</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(35,321</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(18,904</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Proceeds from long-term debt</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Proceeds from issuance of stock, net of related costs</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,450,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,034,694</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">17,891,820</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Net cash provided by financing activities</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,450,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,700,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,701,635</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,777,844</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,195,537</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Net increase (decrease)&nbsp;in cash and cash equivalents</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">923,793</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(700,753</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,544,150</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(29,475</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,806,978</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Cash and cash equivalents at beginning of period</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">923,793</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">223,040</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">223,040</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,767,190</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Cash and cash equivalents at end of period</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">923,793</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">223,040</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,767,190</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">193,565</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,574,168</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	<B>Supplemental disclosure of non-cash investing and financing
	activities and cash flow information</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock for prepaid marketing</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,500,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,500,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Assets purchased under capital leases</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">138,935</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Interest paid</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,519</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">203,182</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">181,063</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of common stock for Infoseek asset acquisition</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">784,635</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Issuance of warrant for prepaid marketing</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">741,096</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<I>See accompanying notes.</I>

<P align="center">F-7

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>YellowBrix, Inc.</B>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center"><B>Notes to Financial Statements</B>

<P align="center"><B>Period from October&nbsp;1, 1997 (inception)&nbsp;through
December&nbsp;31, 1997,</B>

<DIV align="center">
<B>Years ended December&nbsp;31, 1998 and 1999 and</B>
</DIV>

<DIV align="center">
<B>Six months ended June&nbsp;30, 1999 (unaudited)&nbsp;and 2000
(unaudited)</B>
</DIV>

<P align="left"><B>1.&nbsp;&nbsp;Description of Business</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
YellowBrix, Inc. (formerly NewsReal, Inc.)(&#147;YellowBrix&#148;
 or the &#147;Company&#148;) delivers commerce, content and
personalization services to Web sites throughout the United
States. The Company electronically creates customized channels of
 content for each site from a daily feed of purchased content and
 delivers salient, relevant content to sites&#146; users.
Customer-provided content can be seamlessly integrated into the
pages served by YellowBrix. During 2000, YellowBrix began
marketing its contextual matching products. These products
identify and serve product purchase opportunities and online
advertisements congruent to content simultaneously served to
users at websites using this capability.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company was incorporated in October&nbsp;1997 in the State of
 Delaware and began principal operations in January&nbsp;1998.
The Company acquired certain assets, and assumed no liabilities
from Infoseek Corporation (see Note 4). This division, which had
no revenue, had been closed for four months prior to our asset
purchase. In February&nbsp;1998, the Company amended its
certificate of incorporation to change its name from Bizwatch to
NewsReal, Inc. The certificate of incorporation was amended again
 in December&nbsp;1998 to reflect a 100:1 stock split. All
references in the accompanying financial statements to the number
 of common stock shares and per-share amounts have been restated
to reflect the 100:1 stock split. In April&nbsp;2000, the Company
 again amended its certificate of incorporation to change its
name from NewsReal, Inc. to YellowBrix, Inc.

<P align="left"><B>2.&nbsp;&nbsp;Management&#146;s Plans</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying financial statements have been prepared assuming
 the Company will continue as a going concern. The Company
reported a net loss of $9,348,985 and $17,601,758 for the years
ended December&nbsp;31, 1998 and 1999, respectively. In addition
the Company expects to continue to incur losses during 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Management&#146;s plans include the continued and increased
marketing, promotion and implementation of its services.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There is no assurance that the existing or proposed distribution
agreements or product research and development efforts will
generate any significant revenue for the Company to cover its
cost of operations. Management continues to pursue raising
additional capital through private placements, an initial public
offering, or from other equity or debt sources.

<P align="left"><B>3.&nbsp;&nbsp;Summary of Significant Accounting Policies</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Use of Estimates</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Cash and Cash Equivalents</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All highly liquid investments with a maturity of three months or
less when purchased are considered to be cash equivalents. The
Company must maintain a $200,000 certificate of deposit

<P align="center">F-8

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>3.&nbsp;&nbsp;Summary of Significant Accounting Policies
(continued)</B>
</DIV>

<P align="left">
with a lending institution as collateral for a letter of credit.
The certificate of deposit is included in cash and cash
equivalents on the balance sheet.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Property and Equipment</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment, including leasehold improvements, are
stated at cost. Capital leases are recorded at their net present
value at the inception of the lease. Depreciation is computed
using the straight-line method over the shorter of the
asset&#146;s estimated useful life or the lease term ranging from
 3 to 10&nbsp;years. Maintenance and repairs are charged to
expense as incurred.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Intangible Assets</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets include assets resulting from certain
distribution agreements for which the Company is required to pay
for access and placement on strategic partners&#146; sites and
certain purchased technology and license rights, a portion of
which was incorporated into <I>IndustryWatch </I>and other
Company products and services (see Note 4). Intangible assets
also include the excess of the cost of certain assets acquired
from Infoseek over the fair value of the assets acquired.
Intangible assets are amortized on a straight-line basis over
periods ranging from 1 to 3&nbsp;years.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company evaluates its long-lived assets and certain
identifiable intangibles for impairment whenever events of
changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. Recoverabilitiy of assets to
be held and used is measured by a comparison of the carrying
amount of any asset to future net undiscounted cash flows
expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is
measured by the future discounted cash flows compared to the
carrying amount of the assets.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Software Obtained for Internal Use</I>
</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In accordance with SOP 98-1, <I>&#147;Accounting for the Costs of
 Computer Software Developed or Obtained for Internal Use&#148;
</I> (&#147;SOP 98-1&#148;), the Company capitalizes software
obtained for internal use. These amounts are amortized over the
software&#146;s estimated useful life, which is three years.
Web-site development costs are expensed as incurred as the costs
relate to enhancements to the site, which do not change the
functionality.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Revenue Recognition</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company derives revenue by providing services to web sites,
including corporate intranets and extranets. Service revenues are
 recognized over the period in which services are provided.
Service revenues include fees for the set-up of co-branded sites
and the customization of the Company&#146;s products and services
 to meet specific customer needs and requirements. Cash received
in advance for set-up fees is classified as deferred revenue and
is recognized ratably over the life of those customer agreements
and contracts. Revenue recognition begins after acceptance and
upon implementation of the services.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Revenue from the sale of online advertising is recognized over
the period advertising is displayed, provided that no significant
 Company obligations remain and collection of the resulting
receivable is probable. Online advertising revenue is shown net
of advertising sales commissions and advertising fees payable to
third parties in connection with the sale and serving of
advertisements on the Company&#146;s co-branded sites and
destination site. Cash received in advance for online

<P align="center">F-9

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>3.&nbsp;&nbsp;Summary of Significant Accounting Policies
(continued)</B>
</DIV>

<P align="left">
advertising or sponsorships is classified as deferred revenue and
 is recognized as revenue over the time advertisements are
displayed.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Significant Customers</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the years ended December&nbsp;31, 1998 and 1999, three and
two customers represented approximately 83% and 62% of the
Company&#146;s revenues, respectively. For the six months ended
June&nbsp;30, 1999 and 2000 (unaudited), one customer and three
customers represented approximately 58% and 42% of the
Company&#146;s revenues, respectively.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Advertising Costs</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Advertising costs are expensed as incurred and are including in
sales and marketing expense on the statement of operations.
Advertising costs were approximately $22,000, $562,500,
$2,407,000, $0 (unaudited), and $583,777 (unaudited)&nbsp;for the
 period from October&nbsp;1, 1997 (inception)&nbsp;to
December&nbsp;31, 1997, for the years ended December&nbsp;31,
1998 and 1999, and for the six months ended June&nbsp;30, 1999
and 2000, respectively.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Product Development Costs</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Product development costs and enhancements to existing products
have been charged to operations as incurred. Software development
 costs are required to be capitalized when a product&#146;s
technological feasibility has been established by completion of a
 working model of the product and ending when a product is
available for general release to customers. To date, completion
of a working model of the Company&#146;s products and general
release have substantially coincided. As a result, the Company
has not capitalized any software development costs since such
costs requiring capitalization have not been material.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Income Taxes</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company uses the liability method to account for income
taxes. Under this method, deferred tax assets and liabilities are
 determined based on differences between the financial reporting
and tax basis of assets and liabilities and are re-measured using
 the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Stock-Based Compensation</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Statement of Financial Accounting Standards No.&nbsp;123, <I>
Accounting for Stock-Based Compensation </I>(&#147;SFAS
No.&nbsp;123&#148;) allows companies to account for stock-based
compensation either under the provisions of SFAS No.&nbsp;123 or
under the provisions of Accounting Principles Bulletin
No.&nbsp;25, <I>Accounting for Stock Issued to Employees </I>
(&#147;APB No.&nbsp;25&#148;), but requires pro forma disclosures
 in the footnotes to the financial statements as if the
measurement provisions of SFAS No.&nbsp;123 had been adopted. The
 Company accounts for its stock-based compensation in accordance
with the provisions of APB No.&nbsp;25.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Fair Value of Financial Instruments</I>
</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fair value of the Company&#146;s cash and cash equivalents,
accounts receivable, accounts payable, and accrued liabilities
approximated their carrying amounts due to the relatively short

<P align="center">F-10

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>3.&nbsp;&nbsp;Summary of Significant Accounting Policies
(continued)</B>
</DIV>

<P align="left">
maturity of these items. The fair value of debt approximated its
carrying amount as of December&nbsp;31, 1998 and 1999 and
June&nbsp;30, 2000 based on rates currently available to the
Company for debt with similar terms and remaining maturities.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Net Loss Per Share</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Basic net loss per share was determined by dividing net loss by
the weighted average number of common shares outstanding during
each period. Diluted net loss per share excludes common
equivalent shares, unexercised stock options and warrants as the
computation would be anti-dilutive. A reconciliation of the net
loss available for common shareholders and the number of shares
used in computing basic and diluted net loss per share is in
Note&nbsp;12.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Unaudited Interim Financial Statements
</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The accompanying unaudited interim financial statements have been
 prepared in accordance with generally accepted accounting
principles for interim financial information. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have
been included. Operating results for the six-month period ended
June&nbsp;30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December&nbsp;31, 2000.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Reclassifications</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Certain prior year amounts have been reclassified to conform to
the 2000 presentation. These changes had no impact on previously
reported results of operations.

<P align="left"><B>4.&nbsp;&nbsp;Asset Acquisition</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into an asset acquisition agreement (the
&#147;Acquisition Agreement&#148;) with Infoseek in
December&nbsp;1997 pursuant to which the Company acquired assets
belonging to the former Corporate Information Division
(&#147;CID&#148;) of Infoseek. The CID division, which had no
revenue, had been closed for five months, from July 1997 to
December 1997. The Company paid $1&nbsp;million cash, issued
850,000 shares of the Company&#146;s common stock valued at a
price of $0.923 per share (based on independent sales of common
stock by the Company at $0.923 per share) and granted a warrant
to purchase 1,077,500 shares of the Company&#146;s common stock
at an exercise price of $0.001 per share, subject to various
performance conditions and vesting restrictions (see Note 8).

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The assets acquired included computer equipment and certain
intangibles. The intangibles included a distribution agreement
with Infoseek, the <I>IndustryWatch</I> name and logo, certain
intellectual property rights relating to the <I>IndustryWatch
</I>service, rights to license the Infoseek trademark, trade name
 and logo, license rights to Infoseek&#146;s <I>Ultraseek </I>
search engine, and intellectual property rights in the CID
proprietary software.

<P align="center">F-11

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>4.&nbsp;&nbsp;Asset Acquisition (continued)</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The allocation of the purchase price is as follows:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="84%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Distribution agreement</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">900,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Trademarks and license agreement</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">190,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Intellectual property rights</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">285,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Excess of cost over fair value of assets acquired</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">409,500</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,784,500</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Infoseek Distribution Agreement</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into a non-exclusive distribution agreement
(the &#147;Distribution Agreement&#148;) with Infoseek in
December&nbsp;1997. The agreement provides the Company with
distribution for its <I>IndustryWatch </I>service as a featured
offering on Infoseek&#146;s business home page. The Company is
responsible for hosting the content on its servers and also for
selling, managing and serving any advertisements on its website.
The agreement had an initial term ending on December&nbsp;31,
1998, with an option to renew for additional 12&nbsp;month
periods. In exchange for distribution rights, the Company was
required to pay 30% of its net advertising revenues generated
from the co-branded <I>IndustryWatch </I>site during the initial
term of the agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into an amendment to the Distribution
Agreement and a settlement agreement and general release in
October&nbsp;1998 pursuant to which (1) the Company was
reimbursed $81,226 for certain computer equipment that was
damaged or not received in the acquisition, (2)&nbsp;Infoseek
forgave the Company&#146;s debt to Infoseek in the amount of
$25,000 for legal fees incurred in connection with the
Acquisition Agreement, (3)&nbsp;Infoseek provided the Company
with eight million banner advertisements on or before
December&nbsp;31, 1998, (4)&nbsp;the parties terminated the
Distribution Agreement on December&nbsp;31, 1998 with Infoseek
maintaining a hyperlink to a URL to be designated by the Company
until April 15, 1999 and (5)&nbsp;the parties released each other
 from any further claims, obligations or liabilities in
connection with the Distribution Agreement. The reimbursement
received was reflected as an adjustment to the purchase price of
the assets acquired.

<P align="center">F-12

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<P align="left"><B>5.&nbsp;&nbsp;Property and Equipment</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Property and equipment consist of the following:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="59%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Computer equipment</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">254,567</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">350,859</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,173,067</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Computer equipment held under capital lease</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">138,935</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">146,559</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Software</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29,318</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">187,085</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">432,162</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Furniture and fixtures</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">62,625</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">87,961</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">187,333</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">346,510</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">764,840</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,939,121</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Less: accumulated depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(63,543</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(153,948</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(314,046</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">282,967</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">610,892</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,625,075</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><B>6.&nbsp;&nbsp;Intangible Assets</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Intangible assets consist of the following:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="54%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June 30,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Trademarks and license agreements</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,750</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,750</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;&nbsp;&nbsp;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Intellectual property rights</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;&nbsp;&nbsp;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Excess of cost over fair value of assets acquired</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">226,921</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">226,921</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">226,921</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">250,671</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">250,671</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">226,921</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Less: accumulated amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(112,882</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(195,999</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(216,045</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">137,789</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">54,672</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,876</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
Amortization expense was $58,342, $1,350,790, $83,117, $44,836
(unaudited), and $37,443 (unaudited)&nbsp;during the period from
October&nbsp;31, 1997 (inception)&nbsp;to December&nbsp;31, 1997,
 the years ended December&nbsp;31, 1998 and 1999, and the six
months ended June&nbsp;30, 1999 and 2000, respectively.

<P align="left"><B>7.&nbsp;&nbsp;Debt</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Stockholder Notes Payable</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1998 and 1999, the Company borrowed $1.2&nbsp;million and
$2.65&nbsp;million, respectively, from Quantum Industrial
Partners, LDC (&#147;QIP&#148;) and affiliated stockholders of
the Company (collectively, the &#147;QIP Investors&#148;),
pursuant to demand promissory notes and security agreements. The
QIP investors collectively own a majority of the outstanding
shares of common stock of the Company. The promissory notes bear
interest at an annual rate of 8%. Interest and principal are
payable on demand. Effective March&nbsp;31, 1999, the QIP
Investors were granted the right to convert the promissory notes
into the Company&#146;s common stock at a conversion price of
$1.00 per share. The conversion rights expire on
December&nbsp;31, 2002.

<P align="center">F-13

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>7.&nbsp;&nbsp;Debt (continued)</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the security agreements, the QIP Investors received a
senior security interest in the Company&#146;s assets, subject to
 prior purchase money security interests in favor of a third
party that holds security interests in the Company&#146;s leased
computer hardware and peripheral equipment, and a $200,000 letter
 of credit posted with a bank as a security deposit under the
Company&#146;s new lease (see Note 9).

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into a $3&nbsp;million revolving loan
agreement (the &#147;Line of Credit&#148;) with a commercial
lending institution in February&nbsp;1998 that bore interest at a
 rate of 7.27%. At December&nbsp;31, 1998, $3&nbsp;million was
outstanding on the Line of Credit. The Line of Credit was
guaranteed by the QIP Investors and was paid in full by the QIP
Investors on the Company&#146;s behalf in 1999.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December&nbsp;1997, the Company entered into a $1&nbsp;million
 term loan agreement (the &#147;Term Loan&#148;) with the same
lending institution. Borrowings bore interest at LIBOR plus 2%
(7.17% at December&nbsp;31, 1998) with a maturity date of
December 12, 1999. The Term Loan was guaranteed by the QIP
Investors and was paid in full by the QIP Investors on the
Company&#146;s behalf upon maturation of the note.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On September&nbsp;1, 1999 and December&nbsp;12, 1999,
respectively, the QIP Investors paid the $3&nbsp;million Line of
Credit and the $1&nbsp;million Term Note owed by the Company. The
 Company signed a bridge note with the QIP Investors for $4
million that is due on demand. The bridge note bears interest at
LIBOR plus 2% (8.51% at December&nbsp;31, 1999). The QIP
Investors have the right to convert the bridge note into the
Company&#146;s common stock at a conversion price of $2.47 per
share for the first $2&nbsp;million. The balance of the principal
 and accrued interest are convertible at $1.00 per share. If the
QIP Investors demand payment of all or a portion of the
outstanding indebtedness on the bridge note, the Company has the
right to issue its common stock to the QIP Investors as if such
indebtedness were converted in the manner set forth above. All of
 the conversion privileges described above are subject to
adjustment for stock splits, stock dividends, reorganizations,
recapitalizations, and other similar transactions.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate fair value of the beneficial conversion features on
 the demand promissory notes and the bridge note with the QIP
Investors referred to in the paragraphs above is approximately
$16,716,000. Because these debt instruments are convertible upon
issuance, the Company recorded interest expense in 1999 of
$7,850,000, the amount of the total proceeds, related to the
beneficial conversion features.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Officer Loan</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 1999, the Company entered into a promissory note with one of
its executive officers in the amount of $52,262. The note bears
interest at 9% and is due on October&nbsp;28, 2002.

<P align="left"><B>8.&nbsp;&nbsp;Stockholders&#146; Equity (Deficit)</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Common Stock</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company issued 900,000 shares of common stock to its founders
 and other initial investors at $0.001 per share on
October&nbsp;2, 1997 (date of inception). On December&nbsp;11,
1997, the Company issued 850,000 shares of common stock to
Infoseek under the asset acquisition agreement (see Note 4). On
December&nbsp;11, 1997, the Company also issued 3,250,000 shares
of common stock to the QIP Investors at $0.9231 per share for net
 proceeds of $3&nbsp;million. At

<P align="center">F-14

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>8.&nbsp;&nbsp;Stockholders&#146; Equity (Deficit) (continued)
</B>
</DIV>

<P align="left">
December 31, 1997, $1.5&nbsp;million was outstanding from the QIP
 Investors, and was subsequently received by the Company in
January&nbsp;1998. In connection with the shareholders&#146;
agreement for these stock issuances the holders received demand
registration rights.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April&nbsp;1999 and pursuant to a stock purchase agreement,
the Company issued 470,638 shares of common stock in exchange for
 the relief of a $3.5&nbsp;million promissory note issued to
CNNfn (see Note 9). Under this stock purchase agreement, upon the
 conversion of the QIP promissory notes and bridge note, the
Company is required to issue additional shares of common stock to
 CNN pursuant to anti-dilution provisions in the stock purchase
agreement. Under the stock purchase agreement and a rights
agreement, CNNfn received demand registration rights,
participation rights and other special shareholder rights that
are substantially similar to the rights of Infoseek.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November&nbsp;1999, the Company issued 592,544 shares of
common stock in a private placement at a price of $5.88 per
share. Under this stock purchase agreement, upon the conversion
of the QIP promissory notes and bridge note, the Company is
required to issue additional shares of common stock pursuant to
anti-dilution provisions in the stock purchase agreement. Under
the stock purchase agreement the investors received registration
rights and the right to appoint a member to the Company&#146;s
Board of Directors.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Common Stock Options</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October&nbsp;1997, the Company entered into stock option
agreements with the founders under which it granted time-based
vesting options to purchase 1,140,000 shares of common stock and
performance-based vesting options to purchase 2,469,500 shares of
 common stock at an exercise price of $0.001 per share. The
founders&#146; options expire ten years from the date of the
grant. The time-based vesting options were fully vested as of
December&nbsp;31, 1999.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The vesting of the performance-based options was dependent upon
the Company attaining predefined revenue and operating income
targets prior to December&nbsp;31, 1999, which the Company did
not meet. However, if the QIP Investors sell a portion of their
shares at a profit over and above a predetermined rate of return,
 or if an initial public offering of the Company&#146;s common
stock occurs and certain returns on investment are achieved by
the QIP Investors, the performance-based options will vest
automatically. Although these stock options fall within the rules
 of variable accounting, the Company has not recorded any expense
 related to these options as the performance criteria have never
been met and have not been deemed probable by management. During
2000, the Company cancelled all of the performance-based vesting
options issued to the founders and issued new time-based vesting
options.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May&nbsp;1998, the Company established the 1998 Stock Option
Plan (the &#147;Plan&#148;) and reserved 1.5&nbsp;million shares
of common stock for issuance, which was subsequently increased to
 3.5&nbsp;million shares. The Plan provides qualified incentive
stock options and non-qualified stock options for the
Company&#146;s employees, officers, directors and consultants.
Options expire ten years from the date of grant.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 1998, the Company granted 1,325,670 options of which
775,300 options were time-based vesting options under the Plan
and 550,370 options were performance-based vesting options.
During 1999, the Company granted 9,561,899 options of which
1,080,500 options were time-based vesting options under the Plan
and 8,481,399 options were performance-based vesting

<P align="center">F-15

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>8.&nbsp;&nbsp;Stockholders&#146; Equity (Deficit) (continued)
</B>
</DIV>

<P align="left">
options. The time-based options vest from one month to four years
 from the date of grant. The vesting of performance-based options
 was generally the same as the founders&#146; performance-based
vesting options. During 2000, the Company cancelled all of the
performance-based vesting options and issued new time-based
vesting options to the option holders.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A summary of all of the stock option activity is as follows:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="44%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="15"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="15"><FONT size="2"><B>Year Ended December 31,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="15"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>1999</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Outstanding at beginning of year</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,609,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,691,170</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.13</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Granted</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,325,670</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.56</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,561,899</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.26</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Exercised</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Cancelled</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(244,000</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.59</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,396,229</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.79</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Outstanding at end of year</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,691,170</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.13</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,856,840</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.37</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Exercisable at end of year</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">683,525</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.06</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,386,300</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.88</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="69%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months Ended</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>June 30, 2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Outstanding at beginning of year</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,856,840</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.37</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Granted</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,033,837</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.30</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Exercised</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(6,675</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.00</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Cancelled</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,956,865</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.38</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Outstanding at end of year</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,927,137</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.90</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following information is as of December&nbsp;31, 1999:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Range of</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Remaining</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Outstanding</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Contractual</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercisable</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Prices</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(in shares)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Life</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(in shares)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,461,200</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.55</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">888,900</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.0023</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">518,794</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.69</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0023</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">164,900</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0023</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,222,346</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.92</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">332,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">654,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.68</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">F-16

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>8.&nbsp;&nbsp;Stockholders&#146; Equity (Deficit) (continued)
</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following information is as of June&nbsp;30, 2000
(unaudited):

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="7%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Weighted</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Range of</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Remaining</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Number</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Average</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Outstanding</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Contractual</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercisable</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Prices</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(in shares)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Life</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(in shares)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">967,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6.72</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">967,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.0023</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">181,300</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7.67</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0023</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">80,675</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1.0023</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,731,602</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.52</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,232,350</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">718,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.31</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,708</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.72</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,328,235</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9.87</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.72</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">40,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.72</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company applies APB No.&nbsp;25 in accounting for its stock
option plan and, accordingly, recognizes compensation expense for
 the difference between the fair value of the underlying common
stock and the grant price of the option at the date of grant. The
 effect of applying SFAS No.&nbsp;123&#146;s fair value method to
 the Company&#146;s stock-based awards results in net losses of
$9,360,559, $17,776,967 for the years ended December&nbsp;31,
1998 and 1999, respectively with a net loss per share of $1.87
and $3.28, respectively. The weighted average fair value of the
options granted in 1998 and 1999, used as a basis for the above
pro forma disclosures, was estimated as $0.25 per share and $1.62
 per share, respectively, as of the date of grant using the
Black-Scholes option pricing model with the following
assumptions: dividend yield 0%, volatility of 1, risk-free
interest rate of 6% and expected lives of 5 or 10 years. The
effect of applying SFAS No.&nbsp;123 on the pro forma net loss is
 not necessarily representative of the effects on net income for
future years due to, among other things, the vesting period of
the stock options and the fair value of additional stock options
in future years.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Deferred Stock Compensation</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 1999, the Company granted 153,500 options to purchase
common stock whose grant prices range from $1.0023 to $3.50 which
 were issued below fair market value on the date of grant. The
Company recorded deferred compensation as a separate component of
 stockholders&#146; equity (deficit)&nbsp;of $323,674 for the
difference between the option exercise price and the deemed fair
value on the date of grant of stock options. The Company is
amortizing the amount ratably over the vesting period of the
options, which is generally four years.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Warrants</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company issued a warrant to Infoseek to purchase 1,077,500
shares of common stock at an exercise price of $0.001 per share
as part of the consideration for the assets acquired from
Infoseek (see Note&nbsp;4). The warrant expires ten years from
the date of issue, and is subject to a vesting schedule that was
dependent upon the Company attaining predefined revenue and
operating income targets prior to December&nbsp;31, 1999, which
the Company did not meet. However, if the QIP Investors sell a
portion of their shares at a profit over and above a
predetermined rate of return or an IPO occurs and certain returns
 on investment are achieved by the QIP Investors, the warrant
will vest automatically. In the event that the warrant vests, the
 Company will value the warrants and record the appropriate
expense in accordance Emerging Issues Task Force
(&#147;EITF&#148;) Issue&nbsp;96-18

<P align="center">F-17

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>8.&nbsp;&nbsp;Stockholders&#146; Equity (Deficit) (continued)
</B>
</DIV>

<P align="left">
<I>Accounting for Equity Instruments that are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services (&#147;EITF 96-18&#148;)</I>. As of
December&nbsp;31, 1999, the Company did not believe the Company
would reach the vesting targets.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 1999, the Company issued warrants to various vendors and
contractors to purchase a total of 567,436 shares of common stock
 with exercise prices ranging from $2.00 per share to $5.88 per
share. The Company valued these warrants using the Black-Scholes
option pricing model and recorded compensation expense of
approximately $1.4&nbsp;million. The weighted average fair value
of the warrants granted during 1999 was estimated as $2.58 as of
the date of grant using the Black-Scholes option pricing model
with the following assumptions: dividend yield 0%, volatility
100%, risk-free interest rate of 6%, and expected lives ranging
from 5 to 10&nbsp;years. The Company also issued warrants to
purchase 56,743 shares of common stock in connection with the
private placement in November&nbsp;1999 and recorded the warrants
 as part of the issuance costs.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A summary of all of the warrants outstanding as of
December&nbsp;31, 1999 is as follows:

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="26%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="13%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="13%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="20%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="20%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Expiration Date</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	1,077,500</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">December&nbsp;2007</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	26,131</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">November&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	504,478</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">November&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	4,285</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">May&nbsp;2002</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	54,000</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">August&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	4,673</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">January&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	30,612</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.82</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">October&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	1,701,679</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><B>9.&nbsp;&nbsp;Commitments</B>

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Distribution Agreement with CNNfn</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January&nbsp;1998, the Company signed an agreement with CNNfn,
 a division of Cable News Network, Inc., to develop and host a
co-branded <I>IndustryWatch</I> service on the CNNfn website.
Under the terms of the agreement, the Company was required to pay
 CNNfn an annual advertising fee in year one of $750,000 and in
year two of $1,000,000 and an annual branding fee in the amount
of $2,000,000 in year one and $2,500,000 in year two. The Company
 has capitalized the amounts upon payment and is amortizing the
expense ratably over the life of the contract. The Company also
agreed to spend a minimum of $250,000 on promotional activities
related to the co-branded service. CNNfn is solely responsible
for the sale of all advertising and sponsorships on the
co-branded service, and the Company has rights to 40% of net
advertising revenues. In 1998 and 1999 and for the six months
ended June&nbsp;30, 2000 (unaudited), respectively, the Company
recognized approximately $65,500, $1.42&nbsp;million, and
$387,000 in revenue related to this contract.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April&nbsp;1999, the Company entered into an amendment to the
CNNfn agreement. The amendment provides for the Company to pay
CNNfn $1&nbsp;million in outstanding branding fees under the
initial year one obligation on the earlier of September&nbsp;30,
1999 or immediately following the closing of the issue and sale
of equity and/or debt securities by the Company (to any party
other

<P align="center">F-18

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>9.&nbsp;&nbsp;Commitments (continued)</B>
</DIV>

<P align="left">
than CNNfn or any of its affiliates), having an aggregate gross
sales price of at least $6&nbsp;million. The Company has accrued
$1&nbsp;million in accounts payable to CNNfn for these fees at
December&nbsp;31, 1999.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the amendment, the Company also accelerated the
remaining $2.5 million branding and exclusivity fee for the
second year of the Distribution Agreement (the &#147;Year 2
Branding Fee&#148;) and agreed to pay an additional $1 million
for certain promotions previously provided by CNNfn (the
&#147;Promotion Fee&#148;). As part of the transaction underlying
 the restructuring of the distribution agreement, CNNfn
completely released the Company from any obligation to pay the
Year 2 Branding Fee and the Promotional Fee, in exchange for a
promissory note for $3.5&nbsp;million, which was immediately
converted to 470,638 shares of the Company&#146;s common stock.
CNNfn is also entitled to receive additional shares of common
stock upon the conversion of the QIP promissory notes and bridge
note pursuant to anti-dilution provisions in the stock purchase
agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Moreover, CNNfn assigned the Company its rights to receive an
incremental $1 million in revenue from the co-branded site (i.e.,
 beyond the revenue to which the Company already is entitled).
Finally, CNNfn released the Company from any outstanding and all
future obligations to purchase advertising from CNNfn, and the
Company released CNNfn from its obligation to provide such
advertising.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Operating Leases</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company leases facilities and equipment under various
operating leases. The Company also subleases certain of its
facilities. Rental expense was approximately $36,000, $318,000,
$809,000, $388,281 (unaudited), and $428,939 (unaudited)&nbsp;for
 the period from October&nbsp;1, 1997 (inception)&nbsp;to
December&nbsp;31, 1997, the years ended December&nbsp;31, 1998
and 1999, and the six months ended June 30, 1999 and 2000,
respectively. Future minimum payments and sublease income under
noncancelable operating leases with initial terms of one year or
more as of December&nbsp;31, 1999 consist of the following:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="70%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Sublease</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Payments</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2000</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">127,992</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">535,136</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">130,779</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">541,243</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2002</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">110,939</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">595,258</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2003</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">512,720</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2004</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">528,101</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Thereafter</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,974,077</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">369,710</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,686,535</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company entered into a $200,000 irrevocable letter of credit
agreement with a lending institution in June&nbsp;1998 to serve
as a security deposit on leased facilities. No amounts have been
drawn down on the letter of credit.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Capital Lease</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In November&nbsp;1999, the Company entered into a capital lease
agreement for computer equipment totaling $138,935, which expires
 in 2002. Depreciation on this asset is included in

<P align="center">F-19

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>9.&nbsp;&nbsp;Commitments (continued)</B>
</DIV>

<P align="left">
depreciation expense in the accompanying financial statements. At
 December&nbsp;31, 1999 future minimum payments due under the
capital lease are as follows:

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="85%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Year ended December 31,</B></FONT></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2000</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	$53,340</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2001</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	53,340</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	2002</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	22,225</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	128,905</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Less amounts representing interest</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	(25,291)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Present value of future minimum lease payments</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	103,614</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Less current portion</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	(39,342)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>

</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">
	$64,272</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Employment Agreements</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into employment agreements with certain
members of management and other key employees. These agreements
specify minimum annual salaries as well as bonus amounts to be
paid over the next two years.

<P align="left"><B>&nbsp;&nbsp;&nbsp;<I>Other</I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has entered into agreements ranging from 1 to
2&nbsp;years with various content providers that require the
Company to pay a monthly flat fee or the greater of a flat fee or
 a royalty based on the number of users or page views generated
from accessing the Company&#146;s or a partner&#146;s website.
The Company&#146;s current monthly obligation to content
providers is approximately $42,000.

<P align="left"><B>10.&nbsp;&nbsp;Income Taxes</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Following is a summary of the components of deferred taxes:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="49%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June&nbsp;30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Deferred tax assets:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Net operating loss carryforward</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,521,671</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">6,319,099</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,781,601</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Warrant expense</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">532,560</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,970,089</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Stock compensation</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">97,590</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">318,580</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Reserves</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28,470</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">45,806</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Depreciation and amortization</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">68,466</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,170</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">188,947</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net deferred tax asset</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,590,137</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,177,889</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,305,023</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Valuation allowance</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,590,137</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(7,177,889</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,305,023</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Net deferred tax asset, after valuation allowance</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">F-20

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>10.&nbsp;&nbsp;Income Taxes (continued)</B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has approximately $23.1&nbsp;million in net operating
 loss carryforwards that expire beginning principally in 2018 and
 through 2020. The timing and manner in which the operating loss
carryforwards may be utilized in any year will be limited to the
Company&#146;s ability to generate future earnings and by
limitations imposed due to changes in ownership. The Company has
established a valuation allowance for the full amount of the net
deferred tax asset due to the uncertainty regarding its ability
to realize the benefits of such asset. The change in the
valuation allowance was $4,127,135. There was no current or
deferred provision for income taxes for the years ended
December&nbsp;31, 1998 or 1999 nor for the six months ended
June&nbsp;30, 2000.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A reconciliation of tax benefit from the expected amount to the
actual follows:

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="54%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>June</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Expected federal benefit at 34%</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,178,655</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(5,984,598</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,863,512</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	State income tax</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(370,220</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(697,030</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(449,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Nondeductible beneficial conversion feature</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2,979,860</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Permanent and other</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,281</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">114,016</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">186,362</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Change in valuation allowance</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,526,594</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3,587,752</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(4,127,135</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Tax benefit</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left"><B>11.&nbsp;&nbsp;401(k) Profit Sharing Plan</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In October&nbsp;1998, the Company established a qualified 401(k)
profit sharing plan available to all employees meeting certain
eligibility requirements. Employees may elect to contribute up to
 15% of their earnings each month. The Company may, at its
discretion, match up to 5% of the employees&#146; compensation,
with amounts vesting ratably over six years. The Company may also
 make additional non-matching contributions at its discretion of
up to 3% of the employees&#146; compensation, subject to the same
 six-year vesting schedule. The Company did not make any
contributions in 1998, 1999 or for the six months ended
June&nbsp;30, 2000.

<P align="center">F-21

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<P align="left"><B>12.&nbsp;&nbsp;Net Loss Per Share</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the computation of basic and
diluted net loss per share:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="32%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1,</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Ended June 30,</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Numerator:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Net loss</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(861,423</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(9,348,985</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(17,601,758</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(8,563,876</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(11,363,267</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Denominator:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Denominator for basic net loss per
	share&nbsp;&#151;&nbsp;weighted average shares</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,811,111</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,420,047</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,182,015</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,328,570</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Effect of dilutive securities:</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Preferred stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrants</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Dilutive potential common shares</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,811,111</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,420,047</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,182,015</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,328,570</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Denominator for diluted net loss per
	share&nbsp;&#151;&nbsp;adjusted weighted average shares</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,811,111</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,000,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,420,047</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5,182,015</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,328,570</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Basic net loss per share</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.36</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Diluted net loss per share</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(0.48</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.87</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(3.25</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.65</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">(1.36</FONT></TD>
	<TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following equity instruments were not included in the diluted
 net loss per share calculation because their effect would be
anti-dilutive:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="36%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Period from</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>October 1,</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD colspan="7"></TD>
	<TD></TD>
	<TD colspan="7"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(inception)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Six Months</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>to</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><FONT size="2"><B>Ended June 30,</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>December 31,</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="7"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1997</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1998</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>1999</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>2000</B></FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(unaudited)</B></FONT></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Series&nbsp;A preferred stock</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">537,634</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Stock options</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,609,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,691,170</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,856,840</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">9,253,360</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8,927,137</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	Warrants</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,077,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,077,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,701,679</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1,077,500</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,117,689</FONT></TD>
	<TD></TD>
</TR>

</TABLE>
</CENTER>

<P align="left"><B>13.&nbsp;&nbsp;Non-monetary Transactions (unaudited)</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On December&nbsp;31, 1999, the Company entered into a
non-monetary transaction. Effective December&nbsp;31, 1999, the
Company entered into a one year License Agreement with InfoUSA.
The agreement requires the Company to pay InfoUSA a nonrefundable
 license fee of $1,050,000. As of

<P align="center">F-22

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>13.&nbsp;&nbsp;Non-monetary Transactions (unaudited)
(continued)</B>
</DIV>

<P align="left">
June&nbsp;30, 2000, the Company had paid the fee and included the
 amount in prepaid content fees. The Company is recording the
expense ratably over the term of the agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Additionally, on December&nbsp;31, 1999, the Company amended
their Distribution Agreement with InfoUSA. The amendment required
 the Company to provide additional products to InfoUSA and to
perform custom development work. As of June&nbsp;30, 2000,
InfoUSA had paid the Company the value of the contract,
$1,225,050, and recorded the amount as deferred revenue. The
Company is recording the revenue for the custom development work
as the service is provided and is recording the remainder of the
revenue ratably over the term of the contract, one year.

<P align="left"><B>14.&nbsp;&nbsp;Subsequent Events</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In 2000 the Company issued 4,840,893 shares of common stock at a
price of $3.72 per share to various investors in a private
placement. The Company also issued 200,000 shares of
Series&nbsp;A Convertible Preferred Stock (the
&#147;Series&nbsp;A stock&#148;) at a price of $10.00 per share
to two of the new investors. The Company raised approximately
$20&nbsp;million in this private placement. In connection with
the financing, the Company issued warrants to purchase 235,974
shares of common stock.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Series&nbsp;A stock is convertible into common stock at the
option of the holder by multiplying the number of shares of
common stock held by $10 and dividing the result by a conversion
price of $3.72&nbsp;per share and is automatically convertible in
 the event the public offering closes by March&nbsp;31, 2001. In
the event the public offering does not close, the Series&nbsp;A
stock automatically converts at a conversion price of $1.78 on
the first anniversary. The Series&nbsp;A stock does not
accumulate dividends and each holder of Series&nbsp;A stock is
entitled to vote on all matters as if their shares of preferred
stock were converted to voting common stock.

<P align="left"><B>15.&nbsp;&nbsp;Events (unaudited) Subsequent to Date of
Independent Auditors&#146; Report</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On April&nbsp;7, 2000, the Company entered into an Interactive
Services Agreement (the &#147;Agreement&#148;) with AOL, Inc.
(&#147;AOL&#148;). The agreement requires the Company to pay AOL
$3,000,000 as follows: $1,500,000 on April&nbsp;7, 2000, and
$300,000 on each of the following dates: July&nbsp;1, 2000,
October&nbsp;1, 2000, January 1, 2001, April&nbsp;1, 2001, and
July&nbsp;1, 2001 in exchange for promotion services and
impression commitments. As of June&nbsp;30, 2000, the Company had
 made payments of $1,800,000, which was recorded as prepaid
marketing fees. The Company is recording the expense ratably over
 the 18-month term of the agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Agreement also provides for the Company to share in
advertising and transaction revenues through the customized site
should revenues ever be earned under the agreement. Through
June&nbsp;30, 2000 and October&nbsp;16, 2000, no revenues have
been earned by the Company under this agreement, and furthermore,
 the Company is unsure if they will ever generate revenues under
the agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Additionally on April&nbsp;7, 2000, the Company issued AOL a
warrant to purchase up to 832,691 shares of common stock at an
exercise price of $3.72 per share. The warrant vests as follows:
one-third of the shares vest upon the issuance of the warrant,
one-third vests upon the Company earning gross revenue under the
Agreement of $1,750,000, but in no event will vest prior to one
year from the issuance date, and one-third vests upon the Company
 earning gross revenue under the Agreement of $3,500,000, but in
no event will vest prior to one year from the issuance date. The

<P align="center">F-23

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>15.&nbsp;&nbsp;Events (unaudited) Subsequent to Date of
Independent Auditors&#146; Report (continued)</B>
</DIV>

<P align="left">
Company has valued the vested portion of the warrant using the
Black-Scholes option pricing model and has recorded prepaid
marketing fees in the amount of $741,096. The Company is
recording the expense related to this warrant ratably over the
18-month term of the agreement. In accordance with the guidance
under EITF&nbsp;96-18, the Company will record the fair value of
the remaining two-thirds of the warrant when it becomes probable
that the revenue thresholds that trigger vesting will be met. The
 Company intends to evaluate quarterly the probability that these
 revenue thresholds will be met and will record the fair value of
 the two-thirds of the warrants as contra revenues (to the extent
 revenues have been recorded) over the remaining term of the
agreement.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During 2000, the Company issued warrants to various vendors and
contractors to purchase a total of 2,180,036 shares of common
stock with exercise prices ranging from $3.72 per share to $4.77
per share. The Company valued these warrants using the
Black-Scholes option pricing model and recorded compensation
expense of approximately $3.8&nbsp;million. The weighted average
fair value of the warrants granted during 2000 was estimated as
$2.67 as of the date of grant using the Black-Scholes option
pricing model with the following assumptions: dividend yield 0%,
volatility 100%, risk-free interest rate of 6%, and expected
lives ranging from 5 to 10&nbsp;years. The Company also issued
warrants to purchase 235,974 shares of common stock in connection
 with the private placement in March&nbsp;2000 and recorded the
warrants as part of the issuance costs.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A summary of all of the warrants outstanding as of June&nbsp;30,
2000 is as follows (unaudited):

<CENTER>
<TABLE width="40%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="26%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="13%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="13%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="20%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="20%">&nbsp;</TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Exercise</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Shares</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Price</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Expiration Date</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	1,077,500</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">0.001</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">December&nbsp;2007</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	26,131</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">2.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">November&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	504,478</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.00</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">November&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	11,904</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.15</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">July&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	89,661</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">May&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	4,285</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">May&nbsp;2002</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	54,000</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">August&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	3,000</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.50</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">January&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	832,691</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3.72</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">April&nbsp;2010</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	166,202</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.73</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">July&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	677,784</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.77</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">April&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	500,359</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4.77</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">April&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	4,673</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">January&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	134,409</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">5.88</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">March&nbsp;2005</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	30,612</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">8.82</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">October&nbsp;2004</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

<TR>
	<TD align="right" valign="top"><FONT size="2">
	4,117,689</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2000, the Company extended the exercise period for
stock options granted to a former employee. Upon the modification
 of the options the Company recorded an expense of $634,410.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In January 2000, the Company established the 2000 Stock Option
Plan (the &#147;Plan&#148;) and reserved 6.8 million shares of
common stock for issuance. The plan provides for the grant of
options

<P align="center">F-24

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<DIV align="center">
<B>YellowBrix, Inc.</B>
</DIV>

<DIV align="center">
<B>(formerly NewsReal, Inc.)</B>
</DIV>

<P align="center">
<B>Notes to Financial Statements&nbsp;&#151;&nbsp;(continued)</B>

<DIV>&nbsp;</DIV>

<DIV align="left">
<B>15.&nbsp;&nbsp;Events (unaudited) Subsequent to Date of
Independent Auditors&#146; Report (continued)</B>
</DIV>

<P align="left">
to employees, directors, and consultants. As of June&nbsp;30,
2000 options to purchase an aggregate 5,449,101&nbsp;shares were
outstanding.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During the six months ended June&nbsp;30, 2000, the Company
entered into four additional promissory notes with the same
executive officer. The notes were for $186,000, $99,121, $15,000
and $22,500 and were issued on April&nbsp;15, 2000, May&nbsp;15,
2000, June&nbsp;15, 2000 and June&nbsp;29, 2000, respectively.
All of the notes have a term of three years and bear interest at
9%.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On June&nbsp;29, 2000, the Company entered into a stock purchase
agreement with a media corporation whereby the Company issued
268,817 shares of its common stock at $3.72 per share in exchange
 for $1,000,000 worth of media credits. The Company recorded
$1,000,000 in prepaid marketing upon the issuance of the
stock.The Company will purchase various advertising space and
half of the purchase price will be applied against these media
credits and the other half will be paid in cash. In addition, the
 Company issued the media corporation an option to purchase
$500,000 worth of common stock at a purchase price of $3.72 at
any time during the next 18&nbsp;months at the option of the
Company. If the Company does not exercise its right to put the
shares to the media corporation, the media corporation will have
the right to participate in a subsequent private placement by the
 Company, which may occur prior to or contemporaneous with an
initial public offering.

<P align="center">F-25

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<P align="center"><B>[Artwork description of graphics on inside back cover to
follow]</B>

<DIV>&nbsp;</DIV>

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<DIV align="left">
<HR size="1" width="100%" align="left">
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left">
</DIV>

<P align="center"><B><FONT size="4">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
</FONT></B>

<P align="center">
<IMG src="w41224yelbril2.gif">

<P align="center"><B><FONT size="4">Common Stock</FONT></B>

<P align="center"><B><FONT size="4">CHASE H&#38;Q</FONT></B>

<P align="center"><B><FONT size="4">DAIN RAUSCHER WESSELS</FONT></B>

<P align="center"><B><FONT size="4">WIT SOUNDVIEW</FONT></B>

<P align="center"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2000</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>You should rely only on information contained in this
prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. We
are offering to sell, and seeking offers to buy, shares of common
 stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of our
common stock.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>We have not taken any action in any jurisdiction outside the
United States to permit a public offering of the common stock or
possession or distribution of this prospectus in any such
jurisdiction. Persons who come into possession of this prospectus
 in jurisdictions outside the United States are required to
inform themselves about and to observe any restrictions as to
this offering and the distribution of this prospectus applicable
to that jurisdiction.</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Until
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2000, all dealers that buy, sell or trade our common stock,
whether or not participating in this offering, may be required to
 deliver a prospectus. This is in addition to the dealers&#146;
obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.</B>

<DIV align="left">
<HR size="1" width="100%" align="left">
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left">
</DIV>

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<P align="center"><B>PART II</B>

<P align="center"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B>

<P align="left"><B>Item&nbsp;13. Other Expenses of Issuance and Distribution</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered
(other than underwriting accounts and commissions) are estimated
to be as follows:

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="81%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="6%">&nbsp;</TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Securities and Exchange Commission registration fee</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">18,216.00</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	National Association of Securities Dealers filing fee</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,400.00</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Nasdaq National Market Listing Fee</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">22,505.00</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Legal fees and expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Blue Sky fees and expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000.00</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Accounting fees and expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Transfer agent&#146;s fees and expenses</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Printing and engraving fees</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	Miscellaneous</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Total</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="2"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD>*&nbsp;</TD>
	<TD align="left">
	To be filed by amendment.</TD>
</TR>

</TABLE>

<P align="left"><B>Item&nbsp;14. Indemnification of Directors and Officers</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;145(a) of the General Corporation Law of the State
of Delaware provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director,
 officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
 employee or agent of another corporation or enterprise, against
expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
 interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;145(b) provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be
 made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that such person acted in any
of the capacities set forth above, against expenses actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under standards
similar to those discussed above, except that no indemnification
may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which
 such action or suit was brought shall determine that despite the
 adjudication of liability, such person is fairly and reasonably
entitled to be indemnified for such expenses which the Court
shall deem proper.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;145 further provides that to the extent a director
or officer of a corporation has been successful in the defense of
 any action, suit or proceeding referred to in subsections
(a)&nbsp;and (b)&nbsp;or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses actually
 and reasonably incurred by him in connection therewith; that
indemnification provided for by Section&nbsp;145 shall not be
deemed exclusive of any other rights to

<P align="center">II-1

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<DIV align="left">
which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability
asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation
would have the power to indemnify him against such liabilities
under such Section&nbsp;145. The Company&#146;s directors and
officers are insured against losses arising from any claim
against them as such for wrongful acts or omissions, subject to
certain limitations.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Section&nbsp;102(b)(7) of the DGCL provides that a certificate of
 incorporation may contain a provision eliminating or limiting
the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
 a director provided that such provision shall not eliminate or
limit the liability of a director: (i)&nbsp;for any breach of the
 director&#146;s duty of loyalty to the corporation or its
stockholders; (ii)&nbsp;for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
 law; (iii)&nbsp;under Section&nbsp;174 of the DGCL; or
(iv)&nbsp;for any transaction from which the director derived an
improper personal benefit.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s Certificate of Incorporation and Bylaws
provide that the Company shall indemnify certain persons,
including officers, directors and controlling persons, to the
fullest extent permitted by the General Corporation Law of the
State of Delaware.

<P align="left"><B>Item&nbsp;15. Recent Sales of Unregistered Securities</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of our transactions since
September&nbsp;1997, involving sales of our securities that were
not registered under the Securities Act of 1933, as amended:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="6%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (1)&nbsp;</TD>
	<TD align="left">
	In October 1997, we issued 853,500 shares (as adjusted) to our
	founders, David&nbsp; C. Hoppmann (256,200&nbsp;shares),
	Jeffrey&nbsp;P. Massa (199,100&nbsp;shares), Peter McKee
	(199,100&nbsp;shares) and Catherine Michela (199,100), in
	connection with our founding and in consideration for services
	rendered for an aggregate fair market value of $853.50, or the
	par value of the shares. The offer and sale were determined to be
	 exempt from registration pursuant to Section&nbsp;4(2) of the
	Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (2)&nbsp;</TD>
	<TD align="left">
	In December 1997, we issued 850,000 shares (as adjusted) of
	common stock and warrants to purchase 1,077,500&nbsp;shares of
	our common stock with an exercise price of $.001&nbsp;per share
	to Infoseek Corporation, in connection with the registrant&#146;s
	 acquisition of certain assets of Infoseek, an accredited
	investor. An additional cash consideration of $1&nbsp;million was
	 paid to Infoseek. The offer and sale were determined to be
	exempt from registration pursuant to Section&nbsp;4(2) of the
	Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (3)&nbsp;</TD>
	<TD align="left">
	In December 1997, we sold 3,250,000 shares (as adjusted) of
	common stock for $3&nbsp; million to Quantum Industrial Partners,
	 LDC, Geosor Corporation, Gary Gladstein, Stewart Paperin and
	Douglas Reid, each an accredited investor, the QIP Investors. The
	 offer and sale were determined to be exempt from registration
	pursuant to Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (4)&nbsp;</TD>
	<TD align="left">
	In April 1999, we issued 470,638 shares of common stock to CNNfn,
	 a division of Cable News Network&nbsp;LP, LLLP, in connection
	with the cancellation of our $3.5&nbsp;million promissory note to
	 CNNfn, an accredited investor. The offer and sale were
	determined to be exempt from registration pursuant to
	Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (5)&nbsp;</TD>
	<TD align="left">
	In August 1999, we issued warrants to purchase 4,285 shares of
	our common stock with an exercise price of $3.50&nbsp;per share
	to Insight Investments Corp., an accredited investor, in
	connection with a lease to acquire equipment. The offer and sale
	were determined to be exempt from registration pursuant to
	Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

</TABLE>

<P align="center">II-2

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="6%"></TD>
	<TD width="90%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (6)&nbsp;</TD>
	<TD align="left">
	In August 1999, we issued warrants to purchase 54,000 shares of
	our common stock with an exercise price of $3.50&nbsp;per share
	to 3665,&nbsp;Inc., an accredited investor, in connection with
	management consulting service rendered to the registrant. The
	offer and sale were determined to be exempt from registration
	pursuant to Section&nbsp; 4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (7)&nbsp;</TD>
	<TD align="left">
	From September 1999 to August 2000, we issued warrants to
	purchase 1,685,631&nbsp; shares of common stock with an exercise
	price ranging from $2.00 to $4.77&nbsp;per share to Mayflower
	Resources,&nbsp;Inc., an accredited investor, in consideration of
	 services rendered by S.&nbsp;Randy Lampert, in his capacity as
	our Chief Financial Officer. Mr.&nbsp;Lampert is the sole
	shareholder of Mayflower. The issuances were determined to be
	exempt from registration pursuant to Section&nbsp;4(2) of the
	Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (8)&nbsp;</TD>
	<TD align="left">
	In November 1999, we issued a warrant to purchase 26,131 shares
	of common stock with an exercise price of $2.00&nbsp;per share,
	as a financing fee, to Mayflower Resources,&nbsp;Inc., an
	accredited investor, in connection with the registrant&#146;s
	private placement of its common stock. The offer and sale were
	determined to be exempt from registration pursuant to
	Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>&nbsp; (9)&nbsp;</TD>
	<TD align="left">
	In November 1999, we issued warrants to purchase 30,612 shares of
	 our common stock with an exercise price of $8.82&nbsp;per share,
	 as a placement fee, to Millenium Financial Group,&nbsp; Inc., an
	 accredited investor, as placement agent for the registrant in
	connection with a private placement of the registrant&#146;s
	securities. The offer and sale were determined to be exempt from
	registration pursuant to Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="5%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(10)&nbsp;</TD>
	<TD align="left">
	In November 1999, we sold 592,544 shares of our common stock for
	$3.48&nbsp;million to certain individual investors and investment
	 entities. The offer and sale were determined to be exempt from
	registration pursuant to Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(11)&nbsp;</TD>
	<TD align="left">
	In January 2000, we issued warrants to purchase 2,122 shares of
	our common stock with an exercise price of $5.88&nbsp;per share
	to the law firm Park&nbsp;&#38; Vaughan&nbsp;LLP in consideration
	 for legal services rendered. The offer and sale were determined
	to be exempt from registration pursuant to Section&nbsp;4(2) of
	the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(12)&nbsp;</TD>
	<TD align="left">
	In January 2000, we issued warrants to purchase 3,000 shares of
	our common stock with an exercise price of $3.50&nbsp;per share
	to Mike Azzara, in connection with consulting services rendered
	to the registrant. The offer and sale were determined to be
	exempt from registration pursuant to Section&nbsp;4(2) of the
	Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(13)&nbsp;</TD>
	<TD align="left">
	In January 2000, we issued warrants to purchase 2,551 shares of
	our common stock with an exercise price of $5.88&nbsp;per share
	to Mike Azzara, in connection with consulting services rendered
	to the registrant. The offer and sale were determined to be
	exempt from registration pursuant to Section&nbsp;4(2) of the
	Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(14)&nbsp;</TD>
	<TD align="left">
	In January 2000, we issued warrants to purchase 500,359 shares of
	 our common stock with an exercise price of $4.77&nbsp;per share
	to Stephen Canton, in connection with consulting services
	rendered to the registrant. The consultant represented to us that
	 he was a sophisticated investor. The offer and sale were
	determined to be exempt from registration pursuant to
	Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(15)&nbsp;</TD>
	<TD align="left">
	In March, April and May 2000, we sold 4,840,893 shares of our
	common stock for an aggregate purchase price of $18,008,122.20 to
	 individuals, venture funds and other investment entities. The
	offer and sale were determined to be exempt from registration
	pursuant to Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

</TABLE>

<P align="center">II-3

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="5%"></TD>
	<TD width="91%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(16)&nbsp;</TD>
	<TD align="left">
	In April 2000, May 2000 and June 2000, we issued warrants to
	purchase 58,491, 31,170 and 11,904 shares, respectively, of
	common stock with exercise prices of $3.18, $3.18 and $3.15 per
	share, respectively, as a financing fee, to Mayflower Resources,
	Inc., an accredited investor, in connection with our private
	placement of common stock. The offer and sale was determined to
	be exempt from registration pursuant to Section&nbsp;4(2) of the
	Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(17)&nbsp;</TD>
	<TD align="left">
	In March 2000, we issued warrants to purchase 134,409 shares of
	our common stock with an exercise price of $5.88&nbsp;per share,
	as a placement fee, to I-Bankers Securities,&nbsp;Inc., an
	accredited investor, as placement agent, in connection with a
	private placement of common stock. The offer and sale were
	determined to be exempt from registration pursuant to
	Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(18)&nbsp;</TD>
	<TD align="left">
	In April 2000, we issued warrants to purchase up to 832,691
	shares of our common stock with an exercise price of
	$3.72&nbsp;per share to America Online,&nbsp;Inc. The offer and
	sale were determined to be exempt from registration pursuant to
	Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(19)&nbsp;</TD>
	<TD align="left">
	In May 2000, we sold 200,000 shares of our Series&nbsp;A
	Convertible Preferred Stock for an aggregate purchase price of
	$2&nbsp;million to ABN&nbsp; AMRO Private Equity and Holland
	Ventures&nbsp;III B.V., each an accredited investor. The offer
	and sale were determined to be exempt from registration pursuant
	to Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(20)&nbsp;</TD>
	<TD align="left">
	In June 2000, we issued 268,817 shares of common stock and
	entered into a put option agreement to sell 134,409 additional
	shares of our common stock to Icon International,&nbsp;Inc., all
	rights to the shares and put were immediately assigned to its
	affiliate, Triad Media Ventures&nbsp;LLC, for $999,999.24 of
	media credits. The offer and sale were determined to be exempt
	from registration pursuant to Section&nbsp;4(2) of the Securities
	 Act.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>(21)&nbsp;</TD>
	<TD align="left">
	From September 1997 to August 2000, we granted options to
	purchase an aggregate of 2,584,600&nbsp;shares of common stock
	under our Amended and Restated 1998 Stock Option Plan and
	5,444,388&nbsp; shares of common stock under our 2000 Stock
	Option Plan to employees, consultants and directors with exercise
	 prices ranging from $0.001 to $3.72&nbsp;per share in
	consideration for services. All options were granted under
	Rule&nbsp;701 promulgated under the Securities Act or, for those
	employees who are our officers or directors or that are
	accredited investors, under Section&nbsp;4(2) of the Securities
	Act.</TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There were no underwritten offerings employed in connection with
any of the transactions set forth above. Appropriate legends are
affixed to the stock certificates issued in such transactions.
Similar legends were imposed in connection with any subsequent
sales of any such securities. Each of the purchasers that are our
 employees or directors had access to information through their
employment by us. Each purchaser was given the opportunity to ask
 questions of and request information from YellowBrix. Each
investor represented and acknowledged to YellowBrix in writing
that it had this opportunity. Some of the purchasers asked
questions and requested information. YellowBrix complied with all
 requests that it deemed reasonable.

<P align="left"><B>Item&nbsp;16. Exhibits and Financial Statement Schedules</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp;Exhibits.

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="70%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>No.</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Description</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Underwriting Agreement.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Asset Acquisition Agreement by and between Infoseek Corporation
	and BizWatch, Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">II-4

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="13%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="71%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>No.</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Description</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Securities Purchase Agreement by and among the Investors listed
	therein, the Managing Founders (as defined therein) and BizWatch,
	 Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Common Stock Purchase Agreement by and between CNNfn, a division
	of Cable News Network LP, LLLP and NewsReal Inc., dated as of
	April&nbsp;4, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Amended and Restated Certificate of Incorporation of
	YellowBrix, Inc., as amended to date.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Amended Bylaws of YellowBrix, Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Specimen Stock Certificate.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Shareholders&#146; Agreement by and among Infoseek Corporation,
	QIP Investors (as defined therein), Managing Founders (as defined
	 therein) and BizWatch, Inc., dated as of December&nbsp; 11,
	1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Rights Agreement by and among CNNfn, a division of Cable News
	Network LP, LLLP and NewsReal, Inc., dated as of April&nbsp; 21,
	1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Shareholder Rights Agreement by and among the Investors listed
	therein and YellowBrix, Inc., dated as of October&nbsp; 28, 1999,
	 as amended.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.5</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Shareholder Rights Agreement by and among Investors listed
	therein and YellowBrix, Inc., dated as of March&nbsp;9, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Joinder in Shareholder Rights Agreement of March&nbsp;9, 2000 by
	and between ABN AMRO Private Equity, and YellowBrix, Inc., dated
	as of May&nbsp;12, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.7</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Joinder in Shareholder Rights Agreement of March&nbsp;9, 2000 by
	and between Triad Media Ventures LLC, and YellowBrix, Inc., dated
	 as of June&nbsp;29, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.8</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Letter to ABN AMRO Private Equity dated May&nbsp;12, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.9</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Rights Agreement by and among ABN AMRO Private Equity, Holland
	Ventures III B.V. and YellowBrix, Inc. dated as of
	October&nbsp;20, 2000.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Opinion of Fulbright &#38; Jaworski L.L.P. regarding legality of
	shares.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Amended 1998 Stock Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	2000 Stock Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Current News License by and between Press Association (The AP
	Newswire) and NewsReal, Inc., dated as of March&nbsp;20,
	1998.&#134;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Agreement by and between Intell-X and BizWatch, Inc., dated as of
	 August&nbsp;8, 1997, as amended.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Distribution Agreement by and between InfoUSA and NewsReal, Inc.,
	 dated as of May&nbsp;10, 1999, as amended December&nbsp;31,
	1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Custom Distribution and Service Agreement by and between Network
	Solutions, Inc., and NewsReal, Inc., dated as of July&nbsp;15,
	1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.7</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Distribution Agreement by and between ChamberBiz Inc., L.L.C and
	NewsReal, Inc. dated as of October&nbsp;26, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.8</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Interactive Services Agreement by and between America Online,
	Inc. and YellowBrix, Inc., dated as of April&nbsp;4, 2000.&#134;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.9</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Employment Agreement by and between David C. Hoppmann and
	BizWatch Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.10</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Employment Agreement by and between Jeffrey P. Massa and
	BizWatch, Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.11</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Contractor Agreement by and between Mayflower Resources, Inc. and
	 YellowBrix, Inc., dated as of August&nbsp;30, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.12</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Settlement Agreement and General Release by and between Catherine
	 Michela and YellowBrix, Inc., dated as of February&nbsp;1, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.13</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Settlement Agreement by and between Peter McKee and YellowBrix,
	Inc., dated as of July&nbsp;31, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.14</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Conversion Agreement by and among NewsReal, Inc. and each of the
	investors listed on Schedule&nbsp;I thereto, dated as of
	March&nbsp;31, 1999.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">II-5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="13%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="71%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>No.</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Description</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.15</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Amendment to Conversion Agreement by and among NewsReal, Inc. and
	 QIP Investors as defined therein, dated as of March&nbsp;6,
	2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.16</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Bridge Note by NewsReal Inc. in favor of persons listed on
	Schedule&nbsp;A thereto, dated as of March&nbsp;6, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.17</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Infoseek Corporation, dated as of
	December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Insight Investments Corp., dated as of
	August&nbsp;27, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.19</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to 3665, Inc., dated as of August&nbsp;29, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.20</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Millennium Financial Group, Inc., dated as of
	November&nbsp;5, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.21</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to I-Bankers Securities, Inc., dated as of
	March&nbsp;21, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.22</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Warrant issued to Mayflower Resources Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.23</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrants issued to Mike Azzara, dated as of January&nbsp;11, 2000
	 and January&nbsp;19, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.24</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Park &#38; Vaughan LLP, dated as of
	January&nbsp; 22, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.25</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to America Online, Inc., dated as of April&nbsp;
	4, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.26</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Warrant issued to Stephen Canton.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.27</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Lease Agreement by and between Bryce Mountain, Inc. and BizWatch,
	 Inc., dated October&nbsp;23, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.28</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Office Lease by and between Waterfront II Corporation and
	NewsReal, Inc., dated as of June&nbsp;1, 1998.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.29</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Sublease Agreement by and between Challenger Center for Space
	Science Education, a Texas non-profit corporation and NewsReal,
	Inc., dated as of April&nbsp;6, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.30</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Sublease Agreement by and between Attorney&#146;s Diversified
	Services and BizWatch, Inc., dated as of April&nbsp;19, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.31</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Agreement of Lease by and between Twin Towers&nbsp;II
	Associates and YellowBrix, Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">21.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Subsidiaries of YellowBrix, Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Consent of Fulbright &#38; Jaworski L.L.P. (included in
	Exhibit&nbsp; 5.1)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Consent of Ernst &#38; Young LLP, Independent Auditors</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Power of Attorney (on signature page)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">27.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Financial Data Schedule for year ended December&nbsp;31, 1999.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment.</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&#134;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Confidential treatment has been requested for
	portions of this exhibit. These portions have been omitted from
	the filing and have been filed separately with the Securities and
	 Exchange Commission.</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;Financial Statement Schedules.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All other schedules are omitted because they are not required or
are not applicable or the information is included in the
financial statements or notes thereto.

<P align="left"><B>Item&nbsp;17. Undertakings</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A.&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers, and controlling persons of the Registrant
pursuant to the provisions described above in Item&nbsp;14, or
otherwise, the Registrant has been advised that in the opinion of
 the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
 defense of any action, suit or proceeding) is asserted against
the Registrant by such director, officer or controlling person in
 connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such

<P align="center">II-6
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<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
B.&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby undertakes
to provide to the Underwriters at the closing specified in the
Underwriting Agreement, certificates in such denominations and
registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
C.&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby undertakes
that:
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	(1)&nbsp; For purposes of determining any liability under the
	Securities Act of 1933, the information omitted from the form of
	prospectus filed as part of this Registration Statement in
	reliance upon Rule&nbsp;430A and contained in a form of
	prospectus filed by the registrant pursuant to
	Rule&nbsp;424(b)(1) or (4)&nbsp;under the Securities Act of 1933
	shall be deemed to be part of this registration statement as of
	the time it was declared effective.</TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	(2)&nbsp; For the purpose of determining any liability under the
	Securities Act of 1933, each post-effective amendment that
	contains a form of prospectus shall be deemed to be a new
	registration statement relating to the securities offered
	therein, and the offering of such securities at that time shall
	be deemed to be the initial <I>bona fide </I>offering thereof.</TD>
</TR>

</TABLE>

<P align="center">II-7

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>SIGNATURES</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on
October&nbsp;20, 2000.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="4%"></TD>
	<TD width="58%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>By:&nbsp;</TD>
	<TD align="left">
	/s/ DAVID C. HOPPMANN <BR>
	 <HR size="1" align="left"></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	Name:&nbsp; David C. Hoppmann</TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="9%"></TD>
	<TD width="53%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD>Title:&nbsp;</TD>
	<TD align="left">
	President, Chief Executive <BR>
	 Officer and Chairman of the Board</TD>
</TR>

</TABLE>

<P align="center"><B>POWER OF ATTORNEY</B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>KNOW ALL MEN BY THESE PRESENTS </B>that each individual whose
signature appears below constitutes and appoints David C.
Hoppmann, S. Randy Lampert and Kevin S. Lapidus, or any one of
them acting alone, his true and lawful attorney-in-fact and agent
 with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign
(i)&nbsp;any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same,
 with all exhibits thereto, and all documents in connection
therewith, and (ii)&nbsp;a Registration Statement, and any and
all amendments thereto, relating to the offering covered hereby
filed pursuant to Rule&nbsp;462(b) under the Securities Act of
1933, with the Securities and Exchange Commission, granting unto
each said attorney-in-fact and agents full power and authority to
 do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that any said attorneys-in-fact and
agents, or any substitute or substitutes of any of them, may
lawfully do or cause to be done by virtue hereof.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
in the capacities and on the dates indicated:

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="40%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="39%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="15%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap><FONT size="2"><B>Signature</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Title</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Date</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ DAVID C. HOPPMANN<BR>
	<HR size="1">David C. Hoppmann</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Executive Officer, President and Chairman of the Board</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ JEFFREY P. MASSA<BR>
	<HR size="1">Jeffrey P. Massa</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Technology Officer and Director</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ S. RANDY LAMPERT<BR>
	<HR size="1">S. Randy Lampert</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Chief Financial Officer</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ MICHAEL MCCRORY<BR>
	<HR size="1">Michael McCrory</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ STEWART J. PAPERIN<BR>
	<HR size="1">Stewart J. Paperin</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ KEITH WALZ<BR>
	<HR size="1">Keith Walz</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top"><FONT size="2">
	/s/ DOUGLAS M. REID<BR>
	<HR size="1">Douglas M. Reid</FONT></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Director</FONT></TD>
	<TD></TD>
	<TD align="right" valign="top"><FONT size="2">
	October&nbsp;20, 2000</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">II-8

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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>REPORT OF ERNST &#38; YOUNG LLP, INDEPENDENT AUDITORS</B>

<P align="left">The Board of Directors and Stockholders

<DIV align="left">
YellowBrix, Inc. (formerly NewsReal, Inc.)
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the financial statements of YellowBrix, Inc.
(formerly NewsReal, Inc.) as of December&nbsp;31, 1998 and 1999,
and the related statements of operations, stockholders&#146;
equity (deficit), and cash flows for the period from
October&nbsp;1, 1997 (inception) to December&nbsp;31, 1997 and
for the years ended December&nbsp;31, 1998 and 1999 and have
issued our report thereon dated April&nbsp;13, 2000 (included
elsewhere in this report). Our audits also included the financial
 statement schedule listed in Item&nbsp;14(a) of this report. The
 schedule is the responsibility of the Company&#146;s management.
 Our responsibility is to express an opinion based on our audits.

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material
respects the information set forth therein.
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="38%"></TD>
	<TD width="62%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	/s/ Ernst &#38; Young LLP</TD>
</TR>

</TABLE>

<P align="left">
McLean, VA <BR>
 April&nbsp;13, 2000

<P align="center">II-9
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<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="right"><B>SCHEDULE VIII</B>

<P align="center"><B>YELLOWBRIX, INC.</B>

<P align="center">
<B>VALUATION AND QUALIFYING ACCOUNTS</B>

<DIV align="center">
<B>For Years Ended December&nbsp;31, 1999 and 1998</B>
</DIV>

<DIV align="center">
<B>(unaudited)</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="3%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="29%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="5%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="4%">&nbsp;</TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Other</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Balance</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>At</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Changes</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>at</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Beginning</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Additions</B></FONT></TD>
	<TD></TD>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Additions</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>End of</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>of Year</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>At Cost</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Retirements</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>(Deductions)</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>Year</B></FONT></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	<B>Six Months Ended</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>June 30, 2000 (unaudited)</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Allowances for doubtful accounts receivable</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">38,121</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">113,121</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Allowances for income tax valuations</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,177,889</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4,127,135</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">11,305,023</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	<B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>December&nbsp;31, 1999</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Allowances for doubtful accounts receivable</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">85,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">75,000</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Allowances for income tax valuations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,590,137</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,587,752</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,177,889</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,590,137</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,672,752</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">10,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">7,252,889</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3" align="left" valign="top"><FONT size="2">
	<B>Year Ended</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD colspan="2" align="left" valign="top"><FONT size="2">
	<B>December&nbsp;31, 1998</B></FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Allowances for doubtful accounts receivable</FONT></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
</TR>

<TR><TD><TR><TD><TR><TD><TR><TD>

<TR>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Allowances for income tax valuations</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,543</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,526,594</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,590,137</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="1"></TD>
	<TD></TD>

</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">63,543</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,546,594</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">20,000</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">3,590,137</FONT></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3"></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">II-10

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><B>INDEX TO EXHIBITS</B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="13%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="71%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>No.</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Description</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Underwriting Agreement.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Asset Acquisition Agreement by and between Infoseek Corporation
	and BizWatch, Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Securities Purchase Agreement by and among the Investors listed
	therein, the Managing Founders (as defined therein) and BizWatch,
	 Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">2.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Common Stock Purchase Agreement by and between CNNfn, a division
	of Cable News Network LP, LLLP and NewsReal Inc., dated as of
	April&nbsp;4, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Amended and Restated Certificate of Incorporation of
	YellowBrix, Inc., as amended to date.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Amended Bylaws of YellowBrix, Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Specimen Stock Certificate.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Shareholders&#146; Agreement by and among Infoseek Corporation,
	QIP Investors (as defined therein), Managing Founders (as defined
	 therein) and BizWatch, Inc., dated as of December&nbsp; 11,
	1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Rights Agreement by and among CNNfn, a division of Cable News
	Network LP, LLLP and NewsReal, Inc., dated as of April&nbsp; 21,
	1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Shareholder Rights Agreement by and among the Investors listed
	therein and YellowBrix, Inc., dated as of October&nbsp; 28, 1999,
	 as amended.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.5</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Shareholder Rights Agreement by and among Investors listed
	therein and YellowBrix, Inc., dated as of March&nbsp;9, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Joinder in Shareholder Rights Agreement of March&nbsp;9, 2000 by
	and between ABN AMRO Private Equity, and YellowBrix, Inc., dated
	as of May&nbsp;12, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.7</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Joinder in Shareholder Rights Agreement of March&nbsp;9, 2000 by
	and between Triad Media Ventures LLC, and YellowBrix, Inc., dated
	 as of June&nbsp;29, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.8</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Letter to ABN AMRO Private Equity dated May&nbsp;12, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.9</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Rights Agreement by and among ABN AMRO Private Equity, Holland
	Ventures III B.V. and YellowBrix, Inc. dated as of
	October&nbsp;20, 2000.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Opinion of Fulbright &#38; Jaworski L.L.P. regarding legality of
	shares.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Amended 1998 Stock Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	2000 Stock Option Plan.*</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.3</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Current News License by and between Press Association (The AP
	Newswire) and NewsReal, Inc., dated as of March&nbsp;20,
	1998.&#134;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.4</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Agreement by and between Intell-X and BizWatch, Inc., dated as of
	 August&nbsp;8, 1997, as amended.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.5</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Distribution Agreement by and between InfoUSA and NewsReal, Inc.,
	 dated as of May&nbsp;10, 1999, as amended December&nbsp;31,
	1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.6</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Custom Distribution and Service Agreement by and between Network
	Solutions, Inc., and NewsReal, Inc., dated as of July&nbsp;15,
	1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.7</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Distribution Agreement by and between ChamberBiz Inc., L.L.C and
	NewsReal, Inc. dated as of October&nbsp;26, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.8</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Interactive Services Agreement by and between America Online,
	Inc. and YellowBrix, Inc., dated as of April&nbsp;4, 2000.&#134;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.9</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Employment Agreement by and between David C. Hoppmann and
	BizWatch Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.10</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Employment Agreement by and between Jeffrey P. Massa and
	BizWatch, Inc., dated as of December&nbsp;11, 1997.</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="52%" align="left">
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="2%"></TD>
	<TD width="98%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">*&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment.</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="1%"></TD>
	<TD width="99%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&#134;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Confidential treatment has been requested for
	portions of this exhibit. These portions have been omitted from
	the filing and have been filed separately with the Securities and
	 Exchange Commission.</FONT></TD>
</TR>

</TABLE>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="13%">&nbsp;</TD>
	<TD width="1%">&nbsp;</TD>
	<TD width="12%">&nbsp;</TD>
	<TD width="3%">&nbsp;</TD>
	<TD width="71%">&nbsp;</TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><FONT size="2"><B>No.</B></FONT></TD>
	<TD></TD>
	<TD align="center" nowrap><FONT size="2"><B>Description</B></FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap colspan="3"><HR size="1"></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1"></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.11</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Contractor Agreement by and between Mayflower Resources, Inc. and
	 YellowBrix, Inc., dated as of August&nbsp;30, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.12</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Settlement Agreement and General Release by and between Catherine
	 Michela and YellowBrix, Inc., dated as of February&nbsp;1, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.13</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Settlement Agreement by and between Peter McKee and YellowBrix,
	Inc., dated as of July&nbsp;31, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.14</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Conversion Agreement by and among NewsReal, Inc. and each of the
	investors listed on Schedule&nbsp;I thereto, dated as of
	March&nbsp;31, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.15</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Amendment to Conversion Agreement by and among NewsReal, Inc. and
	 QIP Investors as defined therein, dated as of March&nbsp;6,
	2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.16</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Bridge Note by NewsReal Inc. in favor of persons listed on
	Schedule&nbsp;A thereto, dated as of March&nbsp;6, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.17</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Infoseek Corporation, dated as of
	December&nbsp;11, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.18</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Insight Investments Corp., dated as of
	August&nbsp;27, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.19</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to 3665, Inc., dated as of August&nbsp;29, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.20</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Millennium Financial Group, Inc., dated as of
	November&nbsp;5, 1999.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.21</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to I-Bankers Securities, Inc., dated as of
	March&nbsp;21, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.22</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Warrant issued to Mayflower Resources Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.23</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrants issued to Mike Azzara, dated as of January&nbsp;11, 2000
	 and January&nbsp;19, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.24</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to Park &#38; Vaughan LLP, dated as of
	January&nbsp; 22, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.25</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Warrant issued to America Online, Inc., dated as of April&nbsp;
	4, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.26</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Warrant issued to Stephen Canton.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.27</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Lease Agreement by and between Bryce Mountain, Inc. and BizWatch,
	 Inc., dated October&nbsp;23, 1997.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.28</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Office Lease by and between Waterfront II Corporation and
	NewsReal, Inc., dated as of June&nbsp;1, 1998.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.29</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Sublease Agreement by and between Challenger Center for Space
	Science Education, a Texas non-profit corporation and NewsReal,
	Inc., dated as of April&nbsp;6, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.30</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Sublease Agreement by and between Attorney&#146;s Diversified
	Services and BizWatch, Inc., dated as of April&nbsp;19, 2000.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">10.31</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Form of Agreement of Lease by and between Twin Towers&nbsp;II
	Associates and YellowBrix, Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">21.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Subsidiaries of YellowBrix, Inc.</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Consent of Fulbright &#38; Jaworski L.L.P. (included in
	Exhibit&nbsp; 5.1)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Consent of Ernst &#38; Young LLP, Independent Auditors</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Power of Attorney (on signature page)</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">27.1</FONT></TD>
	<TD></TD>
	<TD></TD>
	<TD align="left" valign="top"><FONT size="2">
	Financial Data Schedule for year ended December&nbsp;31, 1999.</FONT></TD>
</TR>

</TABLE>
</CENTER>
</BODY>
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s-1
Table of Contents
As filed with the Securities and Exchange Commission on
October 20, 2000
Registration
No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
YELLOWBRIX, INC.
(Exact name of Registrant as specified in its
charter)
Delaware
7389
54-1869419
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
66 Canal Center Plaza, Suite 700
Alexandria, Virginia 22314
(703) 548-3300
(Address, including zip code, and telephone
number, including area code, of Registrant's Principal
Executive Offices)
David C. Hoppmann
Chief Executive Officer and President
YellowBrix, Inc.
66 Canal Center Plaza, Suite 700
Alexandria, Virginia 22314
(703) 548-3300
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Stephen M. Feldhaus, Esq.
Gregg J. Berman, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
Facsimile: (212) 318-3400
Brian J. Lynch, Esq.
Sidney R. Smith, Esq.
John W. Jones, Esq.
Cooley Godward LLP
One Freedom Square
Reston, Virginia 20190
(703) 456-8000
Facsimile: (703) 456-8100
Approximate date of commencement of proposed
sale to the public:
As soon as
practicable after the effective date of this Registration
Statement.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act, check the following
box: [   ]
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the
 Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective
registration statement for the same
offering. [   ]
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. [   ]
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same offering. [   ]
If delivery of the prospectus is expected to be
made pursuant to Rule 434, please check the following
box: [   ]
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Title of Each Class of
Aggregate Offering
Amount of
Securities to be Registered
Price(1)
Registration Fee
Common Stock, $.001 par value
$69,000,000
$18,216.00
(1)
Estimated solely for purposes of calculating the
	registration fee in accordance with Rule 457(o) of the
	Securities Act of 1933, as amended.
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment specifically stating that this Registration Statement
shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or
until this Registration Statement shall become effective on such
date as the Commission, acting pursuant to said
Section 8(a), may determine.
Table of Contents
The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting an
 offer to buy these securities in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION, DATED OCTOBER 20, 2000
PROSPECTUS
Shares
Common Stock
This is the initial public offering of common stock by
YellowBrix, Inc. We are selling
          shares
 of common stock. The estimated initial public offering price is
between
$          and
$     per share.
Prior to this offering, there has been no public market for our
common stock. We have applied to include the shares of our common
 stock for quotation on the Nasdaq National Market under the
symbol YBRX.
Per Share
Total
Initial public offering price
$
$
Underwriting discounts and commissions
$
$
Proceeds to YellowBrix, before expenses
$
$
YellowBrix has granted the underwriters an option for a period of
 30 days to purchase up to
          additional
 shares of common stock at the offering price, less the
underwriting discount.
Investing in our common stock involves a high degree of risk.
See "Risk Factors" beginning on page 6.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
CHASE H&Q
DAIN RAUSCHER WESSELS
WIT SOUNDVIEW
,
2000
Table of Contents
[Artwork description of graphics on inside front cover and
gatefold to follow]
TABLE OF CONTENTS
PROSPECTUS SUMMARY
RISK FACTORS
FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
RELATED PARTY TRANSACTIONS
PRINCIPAL STOCKHOLDERS
DESCRIPTION OF CAPITAL STOCK
SHARES ELIGIBLE FOR FUTURE SALE
UNDERWRITING
LEGAL MATTERS
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
Index to Financial Statements
Asset Acquisition Agreemwnt
Securities Purchase Agreement
Common Stock Purchase Agreement
Amended And Restated Certificate Of Incorp.
Amended And Restated Bylaws Of Yellowbrix
Shareholders Agreement
Rights Agreement
Shareholder Rights Agreement
Shareholder Rights Agreement
Joinder In Shareholders Rights Agreement
Joinder In Shareholders Rights Agreement
Letter To Abn Amro Capital Inc.
Current News License Agreement
Agreement
Distribution Agreement
Custom Distro And Technology Services Agreement
Distribution Agreement
Confidential Interactive Services Agreement
Employment Agreement
Employment Agreement
Contractor Agreement
Settlement Agreement And General Release
Settlement And Release Agreement
Conversion Agreement
Amendment to Conversion Agreement
Bridge Note
Warrant Issued to Infoseek Corporation
Warrant Issued to Insight Investments Corp
Warrant Issued to 3665,Inc
Warrant Issued to Millennium Financial Group
Warrant Issued to I-Bankers Securities
Form of Warrant Issued to Mayflower Resources
Warrants Issued to Mike Azzara
Warrant Issued to Park & Vaughn
Warrant Issued to AOL, Inc
Warrant Issued to Stephen Canton
LEASE AGRMNT BETWEEN BRYCE MOUNTAIN INC & BIZWATCH
OFFICE LEASE
Sublease Agmt -Challenger Center
Sublease Agmt - Att. Div. Serv./Bizwatch
Form of Agreement of Lease
Subsidiaries of YellowBrix, Inc.
Consent Of Independent Auditors
FINANCIAL DATA SCHEDULE DATED 12/31/99
TABLE OF CONTENTS
Page
Prospectus Summary
1
Risk Factors
5
Forward-Looking Statements
13
Use of Proceeds
15
Dividend Policy
15
Capitalization
16
Dilution
17
Selected Financial Data
18
Management's Discussion and Analysis of
Financial Condition and Results of Operations
19
Business
27
Management
40
Related Party Transactions
48
Principal Stockholders
53
Description of Capital Stock
56
Shares Eligible for Future Sale
60
Underwriting
62
Legal Matters
64
Experts
64
Where You Can Find More Information
64
Index to Financial Statements
F-1
We have applied for trademark and service mark protection for our
 "YellowBrix," "IntelliClix,"
"IndustryWatch," "NewsReal,"
"MultiLinks," "Contextual Merchandising,"
"Contextual eMerchandising" and YellowBrix logo marks.
Other trademarks, tradenames and service marks referred to in
this prospectus are the property of their respective owners.
Table of Contents
(This page intentionally left blank)
Table of Contents
PROSPECTUS SUMMARY
This summary highlights selected information contained
elsewhere in this prospectus. This summary does not contain all
of the information you should consider before investing in our
common stock. You should read the entire prospectus carefully,
especially the risks of investing in our common stock discussed
under "Risk Factors" beginning on page 6 and the
financial statements and notes to those financial statements
beginning on page F-1 before making an investment decision.
YellowBrix
YellowBrix is a leading provider of Internet infrastructure
services in the contextual commerce and personalized content
services markets. Our customers consist of consumer and
commercial Web sites and corporate intranets and extranets,
collectively, Web sites. Our proprietary technology solution
integrates content, commerce and advertising and delivers
personalized information to our customers' users through Web
 pages, e-mails and wireless devices. Our system uses artificial
intelligence, text parsing and linguistic pattern analysis tools
to analyze documents and understand their meaning, focus and
ultimate relevancy to Web site users. Our technology enhances Web
 site user experiences through the automated distribution of more
 personalized content selected from a broader range of choices
and may increase our customers' revenue by providing
targeted commerce opportunities. Our services can be provided
either individually or as an integrated solution.
We believe our services will facilitate the growth in electronic
commerce and address the fundamental needs of Web sites to
improve user experiences and increase revenue streams. Many
companies have built vertical Web sites in order to attract users
 who have common interests and who, therefore, will be attractive
 to potential advertisers and merchants. Many Web sites, however,
 have discovered that undifferentiated non-targeted content alone
 is not a sufficient driver to attract, retain and motivate user
interest and that traditional online advertising does not
generate sufficient revenues. In addition, corporations are
building intranets and extranets in order to communicate and
interact more effectively and efficiently with their employees,
customers and partners. As a result, Web sites and corporations
are searching for a solution that will integrate personalized
content and commerce opportunities in an effective manner.
We believe our services offer our Web site customers the ability
to deliver a more personalized, enhanced user experience and to
increase revenue streams. Our services provide our customers with
 an outsourced information infrastructure that features a low
cost, flexible and customized solution with a quick
implementation process. Our services include:
•
Contextual commerce.
Our contextual commerce services
	match and distribute highly targeted commerce and advertising
	opportunities to our customers' users from a catalogue of
	over 2.1 million products.
•
Targeted content.
Our targeted content services enable our
	 customers to use our artificial intelligence capability to
	electronically define and create, almost instantaneously, highly
	specialized categories of information such as news headlines,
	articles and press releases for automatic distribution to their
	end users.
•
Personalization.
Our personalization services facilitate
	the development of custom start pages for each user and create
	personalized e-mail newsletters.
We intend to become the leading provider of customized commerce,
content and personalization infrastructure services. To achieve
this goal, we plan to:
•
leverage the online convergence of commerce, content and
	personalization;
•
provide additional value added services such as advanced
	personalization;
•
develop and expand our strategic alliances and agency
	relationships;
1
Table of Contents
•
further penetrate existing markets and expand into new markets;
•
maintain and extend our technology and service leadership; and
•
pursue global expansion using by applying our analysis tools to
	foreign languages.
As of August 31, 2000, we had entered into contracts with
156 customers and implemented our services on 97 Web
sites, including InfoUSA, Business 2.0 Online/Imagine Media,
Monster.com and Network Solutions. Our sales strategy is to
pursue opportunities with major accounts through our direct sales
 force of 58 personnel. In addition, we will penetrate other
targeted market segments through multiple indirect distribution
channels such as affilliate and agency relationships.
We were incorporated as a Delaware corporation in
October 1997. Our principal executive offices are located at
 66 Canal Center Plaza, Suite 700, Alexandria, Virginia
22314. Our telephone number at that address is
(703) 548-3300 and our Web address is
www.yellowbrix.com
. Information contained on our Web site does not constitute
part of this prospectus, and you should rely only on the
information contained in this prospectus when deciding whether to
 invest in our common stock.
This prospectus refers to market research reports prepared by
various organizations, which typically do not disclose their
underlying limitations or assumptions. You should not rely on
these market reports as being necessarily indicative of future
developments.
2
Table of Contents
The Offering
Common stock offered by YellowBrix
shares
Common stock outstanding after the offering
shares
Use of proceeds
We expect to use the net proceeds from this offering for working
	capital, capital expenditures and purchase of software, sales and
	 marketing expenses, product development and other general
	corporate expenses.
Our proposed Nasdaq National Market symbol
YBRX
The above information is as of June 30, 2000 and excludes:
•
8,927,137 shares of our common stock issuable upon exercise
	of outstanding options at a weighted average exercise price of
	$2.90;
•
1,157,200 shares reserved for future grants under our
	Amended 1998 Stock Option Plan;
•
1,355,662 shares reserved for future grants under our 2000 Stock
	Option Plan; and
•
3,040,189 shares of our common stock reserved for issuance upon
	the exercise of outstanding warrants at a weighted average
	exercise price of $3.08 per share.
Except as otherwise indicated, all pro forma information in this
prospectus:
•
reflects the conversion of our outstanding shares of series A
	preferred stock into 537,634 shares of our common stock upon the
	closing of this offering;
•
assumes the issuance of up to 6,659,717 shares of common stock
	upon conversion of our outstanding convertible debt upon the
	closing of this offering;
•
assumes the issuance of 986,130 shares of our common stock
	pursuant to anti-dilution rights of certain of our stockholders
	and warrant holders for no additional cash as a result of the
	conversion of our outstanding convertible debt upon the closing
	of this offering;
•
assumes the issuance of 81,806 shares of our common stock
	pursuant to anti-dilution rights of certain of our stockholders
	and warrant holders for no additional cash as a result of the
	exercise of a warrant issued to Infoseek Corporation;
•
reflects the amendment and restatement of our certificate of
	incorporation which increases the number of our authorized common
	 stock to 100,000,000 and the number of our preferred stock to
	10,000,000, which will occur before the closing of this offering;
	 and
•
assumes no exercise of the underwriters' over-allotment
	option.
3
Table of Contents
Summary Financial Data
The following table is a summary of the financial data for our
business. You should read the following summary financial data in
 conjunction with our financial statements and accompanying notes
 and with the information under "Selected Financial
Data" and "Management's Discussion and Analysis of
 Financial Condition and Results of Operations" included
elsewhere in this prospectus.
The pro forma consolidated balance sheet data summarized below
gives effect to the conversion of our outstanding shares of
series A preferred stock into 537,634 shares of common
stock, the issuance of 6,659,717 shares of our common stock upon
conversion of our outstanding convertible debt, the issuance of
1,067,936 shares of our common stock pursuant to
anti-dilution rights of certain of our stockholders and the
exercise of a warrant for the purchase of 1,077,500 shares of
common stock valued at $8,620,000. The pro forma as adjusted
consolidated balance sheet data summarized below reflects the
sale of the common stock offered by us at an assumed initial
offering price of
$           per
 share, after deducting underwriting discounts and estimated
offering expenses payable by us, and our receipt and application
of the net proceeds from the offering.
Period from
October 1, 1997
Year Ended
Six Months Ended
(inception) to
December 31,
June 30,
December 31,
1997
1998
1999
1999
2000
(in thousands, except per share data)
(unaudited)
Statement of Operations Data:
Total revenues
$
34
$
168
$
2,845
$
827
$
3,007
Gross profit (loss)
(65
)
(259
)
2,300
565
1,945
Loss from operations excluding stock and warrant based non-cash
	expenses
(857
)
(9,118
)
(7,524
)
(4,170
)
(6,781
)
Net loss
$
(861
)
$
(9,349
)
$
(17,602
)
$
(8,564
)
$
(11,363
)
Basic and diluted net loss per share
$
(0.48
)
$
(1.87
)
$
(3.25
)
$
(1.65
)
$
(1.36
)
Weighted average shares used in calculating basic and diluted net
	 loss per common share (unaudited)
1,811
5,000
5,420
5,182
8,329
Pro forma basic and diluted net loss per common share (unaudited)
$
(2.87
)
$
(1.23
)
Weighted average shares used in calculating pro forma basic and
	diluted common share amounts (unaudited)
9,134
16,201
June 30, 2000
Pro Forma
Actual
Pro Forma
As Adjusted
(in thousands)
(unaudited)
Balance Sheet Data:
Cash and cash equivalents
$
9,574
$
9,575
$
Working capital
3,583
11,434
Total assets
17,437
17,438
Total stockholders' equity
4,565
12,416
4
Table of Contents
RISK FACTORS
You should carefully consider the risks and uncertainties
described below and all other information contained in this
prospectus before making an investment decision. Our business,
financial condition and results of operations could be severely
harmed by any of the following risks. The trading price of our
common stock could decline if any of these risks or uncertainties
 develop into actual events. You may lose all or part of the
money you paid to buy our common stock.
Risks Related to Our Business
We have a history of significant operating losses and expect
to incur significant losses for the foreseeable future.
We expect to incur operating losses and negative cash flow for
the foreseeable future. We have incurred significant losses since
 we began our business in 1997. As of June 30, 2000, we had
an accumulated deficit of $39.2 million. We incurred net
losses of $17.6 million and $11.4 million for the year ended
 December 31, 1999 and the six months ended June 30,
2000, respectively. We anticipate our losses will continue as we
incur additional costs and expenses related to:
•
sales and marketing activities;
•
employing additional personnel;
•
software and service development;
•
establishing strategic alliances;
•
stock based arrangements with employees, independent contractors,
	 vendors and strategic alliances;
•
funding our international expansion; and
•
increasing the number of our content providers.
In particular, our operating results will be impacted by the
extent we incur non-cash charges associated with stock-based
arrangements. Our warrants held by America Online, Inc. and
Infoseek Corporation have resulted, and are expected to result
in, charges and such charges will fluctuate based upon the
trading price of our common stock at the end of each quarter and
at the date certain milestones are achieved.
Our ability to achieve profitability will depend on our ability
to generate and sustain substantially higher net sales while
maintaining reasonable expense levels. We cannot be certain that
if we were to achieve profitability, we would be able to sustain
or increase profitability.
Because we have a limited operating history, it will be
difficult for you to evaluate our business.
It is difficult to value our business and evaluate our prospects
because of our limited operating history. We were organized in
1997. Accordingly, we have limited financial and operating data
that is relevant to our current business. Our business model is
unproven, which creates a risk that our performance will not meet
 the expectations of investors and that the value of our common
stock will decline.
The length of our sales and implementation cycle may make our
operating results more unpredictable.
Our average sales and implementation cycle from the time a
potential customer is first contacted to the time the customer
accepts the services currently ranges from four to eight weeks.
Consequently, we may make considerable expenditures before any
revenues are realized with respect to a potential customer. In
addition, we may experience longer sales and implementation
5
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cycles in the future. Such a lengthening in sales and
implementation cycles could make our operating results more
unpredictable. Unsuccessful sales or marketing efforts or a
material lengthening of our sales and implementation cycle could
adversely affect our operating and financial results. Our
quarterly results also could fluctuate with great volatility
based upon variable stock-based expense recognition and other
quarterly expense variations, such as quarterly increases in
marketing, co-branding, product development and bad debt
expenses.
Failure to effectively manage our growth and expansion could
adversely affect our business and operating results.
We have grown quickly in the recent past and we anticipate that
we will continue to expand. For example, our number of full-time
employees increased from 31 on January 1, 2000 to 158 on
August 31, 2000. Any failure to manage our growth
effectively will result in less efficient operations, which may
adversely affect our operating and financial results.
To effectively manage our growth, we must, among other things:
•
accurately estimate the number of employees we will require and
	the areas in which they will be required;
•
upgrade and expand our office infrastructure so that it is
	appropriate for our level of activity;
•
manage expansion into additional geographic areas; and
•
improve and refine our operating and financial systems.
We expect to devote considerable resources and management time to
 improving our operating and financial systems to manage our
growth.
We will need to hire additional qualified personnel, which may
 become difficult, as our business grows.
Our future success depends on our ability to identify, attract,
hire, train, retain and motivate highly skilled technical,
managerial, sales and marketing and business development
personnel. We intend to hire a significant number of technical,
sales and marketing, business development and administrative
personnel during the next year. Our services and the industries
to which we provide our services are relatively new. As a result,
 qualified technical personnel with relevant experience to our
business are scarce and therefore difficult to recruit. If we do
not attract, assimilate and retain a sufficient number of
qualified technical, managerial, sales and marketing, business
development and administrative personnel, our business could
suffer.
Losing major content providers may leave us with insufficient
breadth of content to retain and attract customers.
We do not generate original content and are therefore highly
dependent upon third-party content providers. We have
arrangements with a limited number of content providers and from
September 10, 2000 to October 10, 2000, 71% of our
articles were received from two content providers. No other
content provider provided more than 10% of our articles during
this time period. If we were to lose one of our major content
providers and were not able to obtain similar content from
another source, our services would be less attractive to
customers. In addition, we cannot be certain that we will be able
 to license content from our current or new providers on
favorable terms in the future, if at all. If we are unable to add
 content providers to our network, we may not be able to attract
new customers in sufficient numbers to expand our business.
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We depend on key personnel to manage our business effectively.
Our future success depends on the continued services of our
executive officers and other key personnel such as David
Hoppmann, our Chief Executive Officer and President, Jeffrey
Massa, our Senior Vice President, Technology and Chief Technology
 Officer and Jace Wieser, our Senior Vice President, Technology/
Engineering. We do not have any key person life insurance
policies covering any of our employees. The loss of the services
of any of our executive officers or other key employees could
negatively impact our business, financial condition and results
of operations.
We rely on Internet-related companies to purchase many of our
services.
A majority of the customers who purchase our services consist of
Internet-related companies. Many Internet-related companies have
faced or are currently facing problems achieving profitability or
 attracting financing at commercially reasonable terms, or at
all, to enable them to continue in business. If a significant
portion of our customers were to face such difficulties, our
business would be adversely affected.
If we fail to keep up with rapid technology and competitive
changes that affect our business, we will be at a competitive
disadvantage.
Rapidly changing technology, evolving industry standards and
customer demands, and frequent new service introductions
characterize our market. Our future success depends in
significant part on our ability to develop and introduce
compelling services on a timely and competitive basis and to
improve the performance, content and reliability of our services
in response to both the evolving demands of the market and
competitive service offerings. Additionally, new Internet or
telecommunications technologies may require us to alter our
information analysis and distribution technology and/or services
so that they do not become obsolete. If our efforts in these
areas are not successful or sufficient, we will be at a
competitive disadvantage.
We face intense competition that could impair our ability to
grow and achieve profitability.
Our competition varies by service offerings. Currently, while we
believe no one company competes with us in all of our service
categories, many companies compete with us in individual service
categories of contextual commerce, targeted content and
personalization markets. Many of our competitors or future
competitors have longer operating histories than we do and
significantly greater financial, technical and marketing
resources.
If the content we distribute is unlawful or causes injury, we
may have to pay fines or damages and our reputation may suffer.
We obtain content and commerce information from third parties.
When we integrate and distribute this information over the
Internet, we may be liable for the data that is contained in that
 content based on claims such as defamation, negligence, breach
of copyright, patent, trade secret or trademark infringement. Our
 content provider indemnification rights may be insufficient to
satisfy any claims against us.
In addition, we could be exposed to liability arising from the
activities of our customers or their users with respect to the
unauthorized duplication of, or insertion of inappropriate
material into, the content we supply. Although we carry general
liability insurance, our insurance may not cover claims of these
types or may be inadequate to protect us for all liability that
may be imposed on us.
In the event we carry incorrect or misleading information, our
reputation as a provider of commerce and content could also be
harmed, hurting our prospects for future business.
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Changes in laws relating to data collection and use practice
and the privacy of Internet users and other individuals could
harm our business.
The U.S. federal and various state governments have recently
proposed limitations on the collection and use of information
regarding Internet users. In October 1998, the European
Union adopted a directive that may limit our collection and use
of information regarding Internet users in Europe. In the future,
 our technology will create user characteristic information
partly through the use of "cookies." Government
regulations and the Federal Trade Commission's privacy
initiatives may affect our further refinement of enhanced
personalization features. If we are unable to offer distinctive
personalization features, our business may not grow as fast as
expected.
We may be unable to expand our computer systems quickly enough
 to support demand for our services.
Our future success will depend in part on our ability to expand
our computer systems rapidly in order to accommodate significant
increases in information processing volume. We may be unable to
expand the capacity of our existing linguistic data analysis,
vector categorization and information distribution systems or
develop new systems to enable us to process a larger amount of
commerce and content, or to provide our services to a larger
number of customers. If we are unable to expand our systems, we
may suffer service interruptions that could make our services
less attractive to customers.
We may require additional servers to support our systems
infrastructure. Any failure in our system that is not backed up
by redundant servers could cause significant delays in our
business operations. Due to the time sensitive nature of our
distribution service, an interruption of service could be harmful
 to our business and reputation and could be very damaging to our
 relationship with that customer.
Protection of our intellectual property is limited and efforts
 to protect our intellectual property may be inadequate,
time-consuming and expensive.
We regard our intellectual property as critical to our success.
The unauthorized use or misappropriation of our patent pending
processes, trademarks or other intellectual property could
diminish the value of our market position, proprietary rights or
reputation. If this were to occur, our business could be
materially and adversely affected.
We rely upon a combination of trademark and copyright law, patent
 law, trade secret protection and confidentiality and license
agreements with our employees, customers and others to protect
our proprietary rights. We have received and have filed a number
of trademarks and service marks, and have filed a patent
application with the United States Patent and Trademark Office.
However, registrations and patents may only be granted in
selected cases, and there can be no assurance that we will be
able to secure these or additional registrations or patents or
that these rights will not be challenged. Furthermore, policing
and enforcement against the unauthorized use of our intellectual
property rights could entail significant expenses and could prove
 difficult or impossible.
Third parties may claim that we have breached their
intellectual property rights, which could divert
management's attention and result in expenses to defend or
settle claims.
Third parties may bring claims of copyright or trademark
infringement, patent violation or misappropriation of creative
ideas or formats against us with respect to content that we
distribute or technology or marketing techniques and terminology
that we use. These claims, with or without merit, could be time
consuming to defend, result in costly litigation, divert
management attention, require us to enter into costly royalty or
licensing arrangements or limit our ability to distribute content
 or prevent us from utilizing important technologies, ideas or
formats.
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In addition, we license some material technology from a limited
number of vendors. If we are unable to license technology from
these vendors on commercially reasonable terms, or at all, or if
their technology infringes on the intellectual property rights of
 others, our business will suffer.
Our international expansion involves considerable risks and we
 may face difficulties expanding our operations into
international markets.
As part of our business strategy, we have begun to seek
additional opportunities to expand our services into
international markets. We believe that such expansion is
important to our ability to continue to grow and to market our
services. In marketing our services internationally, however, we
face new competitors. If our revenues from international
operations do not exceed the expense of establishing and
maintaining international operations, our business may suffer. To
 date, we have limited experience in marketing and distributing
our services internationally.
In addition, there are certain difficulties and risks inherent in
 doing business internationally, such as compliance with
regulatory requirements, increased privacy concerns, tariffs and
other trade barriers, protection of intellectual property rights,
 difficulties in staffing and managing international operations,
longer payment cycles, problems in collecting accounts
receivable, political instability, fluctuations in currency
exchange rates and potentially adverse tax consequences. One or
more of such factors could have a material adverse effect on any
international operations that we establish and, consequently, on
our business, results of operations and financial condition.
We rely on a small number of customers for a significant
portion of our revenues.
We derive a substantial portion of our revenues from a small
number of customers. Two companies represented approximately 62%
of our revenues for the year ended December 31, 1999 and
three companies represented approximately 43% of our revenues for
 the six months ended June 30, 2000. No other customer was
responsible for in excess of 10% of our revenues during these
periods. We expect that this will continue in the foreseeable
future. If we lose any of these customers, or if any of these
customers are unable or unwilling to pay us amounts that they owe
 us, our financial results will suffer. A customer contract
recently expired for CNNfn, which accounted for 50%, and 13% of
our total revenues for the year ended December 31, 1999 and
for the six months ended June 30, 2000, respectively, and we
 cannot assure you that a new contract will be signed or that we
will continue to provide future services to this customer.
Potential acquisitions and strategic investments may result in
 increased expenses, difficulties in integrating target companies
 and diversion of management's attention.
Although we are not currently in discussions with any party, we
may undertake one or more acquisitions or strategic investments
in the near future to expand our range of technology and services
 and to gain access to new markets. Growth through acquisitions
entails many risks, including the following:
•
our management's attention may be diverted during the
	acquisition and integration process;
•
costs, delays and difficulties of integrating the acquired
	company's operations, technologies and personnel into our
	existing operations, organization and culture;
•
the adverse impact on earnings of amortizing the acquired
	company's intangible assets may be significant, particularly
	 in light of the high valuations of many Internet and other
	information technology services companies;
•
new equity securities to pay for acquisitions, which would dilute
	 the holdings of existing stockholders;
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•
the timing of an acquisition or our failure to meet operating
	expectations for acquired businesses may impact adversely on our
	financial condition; and
•
any undisclosed or potential legal liabilities, or related
	expenses of an acquired company, including intellectual property,
	 employment and warranty and service liability-related problems.
If realized, any of these risks could have a material adverse
effect on our business, financial condition and operating
results.
We may require additional funding for our existing and future
operations.
Although we believe that our cash reserves, including the net
proceeds from this offering, and cash flows from operations will
be adequate to fund our operations for at least the next
12 months, such sources may be inadequate. Consequently, we
may require additional funds during or after such period.
Additional financing may not be available on favorable terms or
at all. If we raise additional funds by selling stock, the
percentage ownership of our then current stockholders will be
reduced. If we cannot raise adequate funds to satisfy our capital
 requirements, we may have to limit our operations significantly.
 Our future capital requirements depend upon many factors,
including, but not limited to:
•
the rate at which we expand our sales and marketing operations;
•
the extent to which we develop and upgrade our technology and
	data network infrastructure;
•
the occurrence, timing, size and success of acquisitions;
•
the cash requirements of entities we may acquire;
•
the rate at which we may expand internationally; and
•
the response of competitors to our service offerings.
Risks Related to the Internet Industry
If the Internet does not continue to grow in acceptance, we
may not be able to meet our business plan.
Because a majority of our present and anticipated customers are
operators of Web sites, demand for our services will depend in
large part on continued growth in use of the Internet. There are
critical issues concerning the commercial use of the Internet
that remain unresolved, such as security and profitability
concerns. If the Internet develops more slowly than we expect as
a commercial or business medium, demand for our services will be
lower than we expect and our business may suffer.
We rely on the Internet system infrastructure.
Our success depends, in large part, on other companies
maintaining the Internet system infrastructure. In particular, we
 rely on other companies to maintain a reliable network backbone
that provides adequate speed, data capacity and security and to
develop services that enable reliable Internet access and
services. If the Internet continues to experience significant
growth in the number of users, frequency of use and amount of
data transmitted, the Internet system infrastructure may be
unable to support the demands placed on it, and the
Internet's performance or reliability may suffer as a result
 of this continued growth. In addition, the Internet could lose
its commercial viability as a form of media due to delays in the
development or adoption of new standards and protocols to process
 increased levels of Internet activity. Any such degradation of
Internet performance or reliability could cause advertisers to
reduce their Internet expenditures. If
10
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other companies do not develop the infrastructure or
complementary services necessary to establish and maintain the
Internet as a viable commercial medium, or if the Internet does
not become a viable commercial medium or platform for
advertising, promotions and electronic commerce, our business
could suffer.
Legal uncertainties and government regulation of the Internet
could inhibit growth of the Internet and e-commerce.
Many legal questions relating to the Internet remain unclear and
these areas of uncertainty may be resolved in ways that damage
our business. It may take years to determine whether and how
existing laws governing matters such as intellectual property,
trade secrets, personal privacy, libel and taxation apply to the
Internet.
New laws and regulations that apply directly to Internet
communications, commerce and advertising are becoming more
prevalent. For example, the U.S. Congress has recently passed
Internet-related legislation concerning copyrights, taxation, and
 the online privacy of children. As the use of the Internet and
the prevalence of e-commerce grow, there may be calls for further
 regulation by the Federal Trade Commission or others on issues
such as user privacy, pricing, content, taxation, copyrights,
distribution and service and services quality. Finally, our
distribution arrangements and customer contracts could subject us
 to the laws of foreign jurisdictions in unpredictable ways.
These possibilities could affect us adversely in a number of
ways. New regulations could make the Internet less attractive to
users, resulting in slower growth in its use and acceptance than
we expect. Complying with new regulations could result in
additional cost to us, which could reduce our margins, or it
could leave us at risk of potentially costly legal action. We may
 be affected indirectly by legislation that fundamentally alters
the practicality or cost-effectiveness of utilizing the Internet,
 including the cost of transmitting over various forms of network
 architecture, such as telephone networks or cable systems, or
the imposition of various forms of taxation on Internet-related
activities. Regulators continue to evaluate the best
telecommunications policy regarding the transmission of Internet
traffic.
Risks Related to this Offering
Our stock price may decline after this offering and may be
volatile in the future.
The market for shares in newly public technology companies is
subject to extreme price and volume fluctuations. Our shares will
 be exposed to these fluctuations. You may not be able to resell
any shares you buy from us at or above the initial public
offering price due to a number of factors, including:
•
fluctuations in our operating results due to deviations between
	actual and expected sales;
•
announcements of technological innovations, new systems or
	services, or service enhancements by us or our competitors;
•
announcement of new or lost customers;
•
changes in investors' and securities analysts'
	perception or expectations as to our future financial performance
	 or changes in financial estimates of securities analysts; and
•
the operating and stock price performance of comparable
	companies.
In addition, although our common stock will be quoted on the
Nasdaq National Market, an active trading market may not develop
or sustain itself after this offering.
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We are at risk of securities class action litigation if our
stock price becomes volatile.
In the past, holders of securities have often instituted class
action litigation against companies following periods of
volatility in the market price of the securities. If we become
involved in this type of litigation, regardless of the outcome,
we could incur substantial legal costs defending such litigation
and our management's attention and resources could be
diverted from our business.
Management will have broad discretion in the way we use the
net proceeds from this offering.
Our business plan is subject to change based upon changing
conditions and opportunities. Our management has significant
flexibility in applying the net proceeds we receive from this
offering. Because the net proceeds are not required to be
allocated to any specific investment or transaction, you cannot
determine at this time the value or propriety of our application
of the proceeds and you and other stockholders may not agree with
 our decisions. See "Use of Proceeds" for a more
detailed description of how management intends to apply the
proceeds of this offering.
You will experience immediate and significant dilution as a
result of this offering and may experience further dilution as a
result of future equity issuances.
The initial public offering price of our common stock will be
substantially higher than the pro forma net tangible book value
per share of our outstanding common stock. Pro forma net tangible
 book value per share represents the pro forma amount of total
tangible assets less total liabilities, divided by the pro forma
number of shares of our common stock outstanding immediately
after the offering. If you purchase our common stock in this
offering, you will incur immediate dilution of approximately
$          in
the pro forma net tangible book value per share of common stock
from the price you pay for our common stock in this offering. We
also have outstanding a large number of stock options and
warrants with exercise prices significantly below the initial
public offering price of the shares. To the extent these options
are exercised, there will be further dilution. We intend to
continue to grant stock options to our employees as part of our
general compensation practices.
Future sales of a substantial amount of our common stock after
 this offering may cause our stock price to decline.
Future sales of substantial amounts of our common stock in the
public market following this offering or the perception that
substantial sales could occur may cause the market price of our
common stock to decline. Of the
          shares
 that will be outstanding upon the closing of this offering:
•
all of the shares offered under this prospectus will be freely
	tradable in the public market, except as to affiliates;
•
approximately
	          additional
	 shares may be sold after the expiration of 180-day lock-up
	agreements entered into by our officers, directors and certain
	existing stockholders; and
•
approximately
	          additional
	 shares may be sold upon the exercise of stock options and
	warrants after the expiration of 180-day lock-up agreements.
You should read "Shares Eligible for Future Sale" for a
 more detailed discussion of when and how many shares of our
common stock may be sold after this offering.
We will continue to be effectively controlled by our executive
 officers and directors after this offering, and the interests of
 these stockholders could conflict with your interests.
Immediately upon completion of this offering, our executive
officers and directors and institutions affiliated with them, in
the aggregate, will beneficially own approximately
     % of our
12
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outstanding common stock. As a result, these stockholders, if
acting together, would be able to exert considerable influence on
 any matters requiring approval by our stockholders, including
the election of directors, amendments to our charter and bylaws
and the approval of mergers or other business combination
transactions. The ownership position of these stockholders could
delay, deter or prevent a change in control of YellowBrix and
could adversely affect the price that investors might be willing
to pay in the future for shares of our common stock.
Provisions of our governing documents and Delaware law may
make it difficult for a third party to acquire us and may delay a
 change in our control.
Our certificate of incorporation and bylaws contain anti-takeover
 provisions, including those listed below, that could make it
more difficult for a third party to acquire control of us, even
if that change in control would be beneficial to stockholders:
•
our board of directors has the authority to issue common stock
	and preferred stock and to determine the price, rights and
	preferences of any new series of preferred stock without
	stockholder approval;
•
our board of directors is divided into three classes, each
	serving three-year terms;
•
there are limitations on who can call special meetings of
	stockholders;
•
stockholders may only take action without a meeting on the
	written consent of the holders of shares representing
	66 2/3% of our capital stock; and
•
advance notice is required for nominations of directors and for
	stockholder proposals.
In addition, provisions of Delaware law and our stock option
plans may also discourage, delay or prevent a change of control
of our company or unsolicited acquisition proposals.
The absence of an active public market for our common stock
may make it difficult for you to resell your shares at or above
the offering price.
Prior to this offering, there has been no public market for our
common stock, and an active market for common stock may not
develop. The initial public offering for our common stock was
determined by negotiations between us and the representative of
the underwriters. This price does not necessarily relate to our
book value, assets, past operating results, financial condition
or other established criteria of value. Therefore, you may be
unable to resell your shares of common stock at or above the
initial public offering price.
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have
based these forward-looking statements largely on our current
expectations and projections about future events and financial
trends affecting the financial condition of our business. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions about YellowBrix including, among
other things:
•
the rapid technological change in our industry;
•
the intense competition in our industry;
•
our need to continually develop new or improved services;
•
our estimates regarding our capital requirements and our needs
	for additional financing;
•
anticipated trends in our business;
•
existing and future regulations affecting our business; and
•
the risk factors set forth under "Risk Factors" in this
	 prospectus.
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In addition, in this prospectus, the words "believe,"
"may," "will," "estimate,"
"continue," "anticipate," "intend,"
 "expect" and similar expressions, as they related to
YellowBrix, our business or our management, are intended to
identify forward-looking statements.
In light of these risks and uncertainties, the forward-looking
events and circumstances discussed in this prospectus may not
occur and actual results could differ materially from those
anticipated or implied in the forward-looking statements.
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USE OF PROCEEDS
Assuming an initial public offering price of
$     per share, we will receive net
proceeds of approximately
$        million, or
approximately
$        million if the
underwriters exercise their over-allotment option in full. This
estimate is after deducting underwriting commissions and
discounts of approximately
$          million,
 or approximately
$        million if the
underwriters exercise their over-allotment option in full, and
estimated expenses of
$        million.
While we currently do not have any specific plans or proposals
for the allocation of the net proceeds of this offering, we
currently anticipate using proceeds for working capital of
approximately $      million,
capital expenditures and purchase of software of approximately
$      million, sales and marketing
 expenses of approximately
$      million, product development
 expenses of approximately
$      million and other general
corporate expenses of approximately
$      million.
In addition, we may also use a portion of the net proceeds to
acquire businesses, assets, technologies or service lines that
complement our existing business if these transactions could be
effected on terms which we deem to be favorable. We do not have
any commitments to make any acquisition and have not allocated a
specific amount of the net proceeds for this purpose. Our
management will have significant flexibility in applying the net
proceeds of the offering.
Pending any use as described above, we intend to invest the net
proceeds in short-term, interest-bearing investment-grade
instruments.
DIVIDEND POLICY
We have never declared nor paid any cash dividends on our capital
 stock. Our board of directors will determine future declaration
and payment of dividends, if any, in light of the then-current
conditions, including our earnings, operations, capital
requirements, financial condition, restrictions in financing
agreements and other relevant factors. It is the current policy
of our board of directors to retain any future earnings to
finance the development and expansion of the operations of our
business. Accordingly, we do not anticipate paying cash dividends
 on our capital stock in the foreseeable future.
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CAPITALIZATION
The following table sets forth our capitalization as of
June 30, 2000 on a pro forma as adjusted basis to reflect
the sale of     shares of common stock in this offering at an
assumed initial public offering price of
$     per share, after deducting
commissions and other estimated offering expenses and the
application of the estimated net proceeds, on an actual basis and
 on a pro forma basis after giving effect to the:
•
automatic conversion of all outstanding shares of our series A
        preferred stock into 537,634 shares of our common stock upon the
        closing of this offering;
•
issuance of up to 6,659,717 shares of common stock upon
        conversion of our outstanding convertible debt upon the closing
        of this offering;
•
issuance of 986,130 shares of our common stock pursuant to
        anti-dilution rights of certain of our stockholders and warrant
        holders for no additional cash consideration as a result of the
        conversion of our outstanding convertible debt upon the closing
        of this offering;
•
issuance of 81,806 shares of our common stock pursuant to
        antidilution rights of certain of our stockholders and warrant
        holders for no additional consideration as a result of the
        exercise of a warrant issued to Infoseek Corporation; and
•
exercise of a warrant issued to Infoseek for the purchase of
        1,077,500 shares of common stock with an exercise price of $0.001
         per share with an assumed value of $8,620,000 as of the date the
         warrant vests.
The table should be read in conjunction with our financial
statements and the related notes, which are included elsewhere in
 this prospectus.
June 30, 2000
Pro Forma
Actual
Pro Forma
As Adjusted
(unaudited)
Cash and cash equivalents
$
9,574,168
$
9,575,246
$
Stockholder notes payable
7,850,000
—
—
Capital lease obligation
84,710
84,710
Officer loan
374,883
374,883
Stockholders' equity:
Preferred stock, par value $0.001 per share, 5,000,000 shares
        authorized, 200,000 shares issued and outstanding, actual;
        10,000,000 shares authorized, no shares issued and outstanding
        pro forma or
pro forma as adjusted
200
—
Common stock, par value $0.001 per share, 50,000,000 shares
        authorized,11,179,567 shares issued and outstanding, actual;
        100,000,000 shares authorized, 20,522,354 shares issued and
        outstanding, pro forma;     shares authorized,
        shares issued and outstanding, pro forma as adjusted
11,180
20,524
Additional paid-in capital
43,747,909
60,209,843
Deferred stock compensation
(18,580
)
(18,580
)
Accumulated deficit
(39,175,433
)
(47,795,433
)
Total stockholders' equity
4,565,276
12,416,354
Total capitalization
$
12,874,869
$
12,875,947
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DILUTION
Our pro forma net tangible book value on June 30, 2000 was
approximately $12,405,478 or $0.60 per share. Pro forma net
tangible book value is total assets minus liabilities minus
intangible assets. Pro forma net tangible book value per share is
 pro forma net tangible book value divided by the total pro forma
 number of shares outstanding before the offering.
The adjustments to net tangible book value made to determine pro
forma net tangible book value per share are the following:
•
the automatic conversion of all outstanding shares of our series
	A preferred stock into 537,634 shares of our common stock upon
	the closing of this offering;
•
the issuance of up to 6,659,717 shares of common stock upon the
	conversion of our outstanding convertible debt upon the closing
	of this offering;
•
the issuance of 986,130 shares of our common stock pursuant
	to anti-dilution rights of certain of our stockholders and
	warrant holders for no additional consideration as a result of
	the conversion of the outstanding convertible debt;
•
the issuance of 81,806 shares of our common stock pursuant
	to anti-dilution rights of certain of our stockholders and
	warrant holders for no additional consideration as a result of
	the exercise of a warrant issued to Infoseek Corporation;
•
the exercise of a warrant issued to Infoseek for the purchase of
	1,077,500 shares of common stock with an exercise price of $0.001
	 per share with an assumed value of $8,620,000 as of the date the
	 warrant vests;
The adjustments to as adjusted pro forma net tangible book value
reflect the sale and issuance of
      shares of common stock in the
 offering at an assumed initial public offering price of
$     per share, after deducting
commissions and other estimated offering expenses and the
application of the estimated net proceeds.
The following table sets forth on a pro forma as adjusted basis
as of June 30, 2000, the increase in pro forma net tangible
book value of $     per share and the
dilution (the difference between the offering price per share and
 net tangible book value per share) to new investors:
Assumed initial public offering price per share
$
Pro forma net tangible book value per share as of June  30,
	2000
$
0.60
Increase in pro forma net tangible book value per share
	attributable to the offering
Pro forma as adjusted net tangible book value per share as of
	June 30, 2000 after giving effect to the offering
Pro forma dilution per share to new investors in the offering
$
The following table sets forth, as of June 30, 2000, on the
pro forma basis described above, the number of shares of capital
stock purchased from us, the total consideration paid to us and
the average price per share paid by existing stockholders and by
new investors who purchase shares of common stock in this
offering, before deducting the estimates underwriting discounts
and commissions and offering expenses.
Shares Purchased
Total Consideration
Average
Price Per
Number
Percent
Amount
Percent
Share
Existing stockholders
20,522,354
%
$
37,012,000
%
$
1.80
New stockholders
Total
100.0
%
100.0
%
If the underwriters exercise their over-allotment option in full,
 the number of shares held by new investors will be increased to
          or
     % of the total number of shares of
common stock outstanding after the offering. In that case, the
shares held by      would represent
     % of the total number of shares of
common stock to be outstanding after the offering.
17
Table of Contents
SELECTED FINANCIAL DATA
The following selected financial data as of and for the period
from October 1, 1997 (inception) to December 31, 1997
and for years ended December 31, 1998 and 1999 are derived
from our financial statements, which have been audited by Ernst
& Young LLP, independent auditors. The following selected
financial data as of and for the six months ended June 30,
1999 and June 30, 2000 are derived from our unaudited
financial statements which, in our opinion, include all
adjustments, consisting only of normal recurring adjustments,
that we consider necessary for fair presentation of our financial
 position and results of operations for those periods. The data
should be read in conjunction with the financial statements,
related notes and other financial information included elsewhere
in this prospectus. Our historical results are not necessarily
indicative of future results. The results of operations for the
six months ended June 30, 2000 are not necessarily
indicative of the results to be realized for the year ending
December 31, 2000.
Period from
October 1,
1997
Year Ended
Six Months Ended
(inception) to
December 31,
June 30,
December 31,
1997
1998
1999
1999
2000
(in thousands, except per share data)
(unaudited)
Statement of Operations Data:
Total revenues
$
34
$
168
$
2,845
$
827
$
3,007
Cost of revenues
99
426
545
262
1,062
Gross profit (loss)
(65
)
(258
)
2,300
565
1,945
Operating expenses:
Sales and marketing
150
2,160
4,474
2,330
4,535
Research and development
274
1,758
2,142
814
1,790
General and administrative
310
3,527
3,034
1,503
2,216
Depreciation and amortization
58
1,414
174
87
185
Stock and warrant non-cash based compensation
—
49
1,690
26
4,369
Total operating expenses
792
8,908
11,514
4,760
13,095
Loss from operations
(857
)
(9,166
)
(9,214
)
(4,195
)
(11,150
)
Other income (expense):
Interest income
2
38
20
2
140
Interest expense
(7
)
(220
)
(558
)
(255
)
(353
)
Beneficial interest expense
—
—
(7,850
)
(4,114
)
—
Total other income (expense)
(5
)
(182
)
(8,388
)
(4,367
)
(213
)
Net loss
$
(862
)
$
(9,348
)
$
(17,602
)
$
(8,562
)
$
(11,363
)
Basic and diluted net loss per share
$
(0.48
)
$
(1.87
)
$
(3.25
)
$
(1.65
)
$
(1.36
)
Weighted average shares used in calculating basic and diluted net
	 loss per common share (unaudited)
1,811
5,000
5,420
5,182
8,328
Pro forma basic and diluted net loss per common share (unaudited)
$
(2.87
)
$
(1.23
)
Weighted average shares used in calculating pro forma basic and
	diluted common share amounts (unaudited)
9,134
16,201
December 31,
June 30,
1997
1998
1999
2000
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
924
$
223
$
1,767
$
9,574
Working capital
455
(6,816
)
(8,263
)
3,583
Total assets
2,864
887
3,745
17,437
Total stockholders' equity (deficit)
1,373
(6,427
)
(7,954
)
4,565
18
Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
"Selected Financial Data" and our financial statements
and the notes to those financial statements included elsewhere in
 this prospectus. Our discussion contains forward-looking
statements based upon current expectations that involve risks and
 uncertainties, such as our plans, objectives, expectations and
intentions. Our actual results and the timing of events could
differ materially from those anticipated in these forward-looking
 statements as a result of various factors, including those set
forth under "Risk Factors," "Forward Looking
Statements," "Business" and elsewhere in this
prospectus.
Overview
YellowBrix is a leading provider of Internet infrastructure
services in the contextual commerce and personalized content
services markets. Our customers consist of consumer and
commercial Web sites and corporate intranets and extranets,
collectively, Web sites. Our proprietary technology solution
integrates commerce and content and delivers personalized
information to our customers' users through Web pages,
e-mails and wireless devices. During the six months ended
June 30, 2000, we increased the number of customers that had
 implemented our services from 18 to 73, an increase of 306%.
We commenced operations in the fourth quarter of 1997. On
December 11, 1997, we acquired intellectual property and
other assets of Infoseek Corporation pursuant to an asset
acquisition agreement for $1.0 million in cash,
850,000 shares of our common stock and a warrant to purchase
 1,077,500 shares of our common stock. In the first quarter
of 1998, we began to generate revenue from our IndustryWatch
service. IndustryWatch analyzes, categorizes and distributes news
 and information. Revenues from IndustryWatch remained
insignificant until the fourth quarter of 1998, when we altered
our business model from a primarily ad-share model to a new model
 based on implementation fees and monthly service charges. During
 the second quarter of 2000, we introduced IntelliClix, an
automated contextual commerce service, for which we charge
customers an implementation fee in addition to a per transaction
fee. We anticipate that our revenue model will continue to evolve
 in the future as we introduce additional new services. For
example, we recently introduced our e-mail and newsletter
services for which we charge customers on a monthly per person
basis.
As part of the consideration for the assets acquired from
Infoseek, we issued a warrant to Infoseek to purchase 1,077,500
shares of our common stock at an exercise price of $0.001 per
share. The warrant expires ten years from the date of issue, and
is subject to a vesting schedule that was dependent upon our
attaining predefined revenue and operating income targets prior
to December 31, 1999, which we did not meet. However, if the
 QIP Investors sell a portion of their shares at a profit over
and above a predetermined rate of return or if an IPO occurs and
certain returns on investment are achieved by the QIP Investors,
the warrant will vest automatically. In the event that the
warrant vests, we anticipate that we may record an estimated
expense of $8.6 million.
On April 7, 2000, we entered into an interactive services
agreement whereby we provide America Online, Inc., or AOL, with
customized contextual commerce and content services for their
small business Web site. Under this agreement, we design, create,
 edit, manage, review, update and maintain a customized site for
AOL, and AOL provides us with at least one hundred million page
impressions on its network. The agreement provides for YellowBrix
 and AOL to share advertising revenue and IntelliClix transaction
 revenue from AOL's small business Web site. This agreement
terminates on October 4, 2001. Upon fulfillment of certain
of AOL commitments, AOL has the right to extend this agreement
for an additional one year period on the later of the termination
 or the date when AOL has fulfilled certain of its commitments.
19
Table of Contents
We have agreed to pay AOL an aggregate of $3.0 million in an
 initial up front payment of $1.5 million and 5 quarterly
installments of $300,000 each, $1.8 million of which has
been paid as of August 31, 2000. We have also granted AOL a
warrant to purchase up to 832,691 shares of our common stock at
an exercise price of $3.72 per share, of which 277,563 shares
have vested as of September 30, 2000. The remainder will
vest upon achievement of two additional revenue payment
milestones from AOL to us resulting from site activity. The value
 of the shares underlying the second and third milestones will be
 measured when it becomes probable that the vesting targets will
be met. At each subsequent reporting date, until the achievement
of the AOL warrant revenue milestone, YellowBrix will revalue the
 warrant using the Black-Scholes option pricing model and will
record any increases or decreases in the value of the warrant.
The value of the warrant will be amortized ratably over the term
of the agreement. In addition to amortization of the initial fair
 value of this warrant, which totaled $741,000, we expect that
future changes in the trading price of our common stock at the
end of each quarter and at the date certain milestones are
achieved, will cause additional substantial changes in the
ultimate amount of such amortization.
A customer contract recently expired for CNNfn, which accounted
for 13% and 50% of our total revenues for the six months ended
June 30, 2000 and for the year ended December 31, 1999,
 respectively. There is a possibility that this contract will not
 be renewed.
Revenues
We generate revenues primarily from monthly service fees and
implementation fees charged to customers for our services. The
amount of the service and implementation fees is calculated based
 on the type and breadth of the services provided. Other revenues
 are generated from contextual commerce revenue share agreements,
 per person monthly charges for e-mail and newsletter services,
custom consulting projects, and ad-share agreements. Revenues
from service fees and implementation fees are deferred and
recognized in the periods our services are implemented and
accepted by the customer. Throughout 1998, the majority of our
customers were converted from a primarily ad-share model to a
monthly service model. However, certain customers continued under
 the ad-share model, in which revenues are recognized in the
month they are received. We share such advertising and
sponsorship revenues with our customers, based upon individually
negotiated agreements. We record advertising revenues net of
agency commissions and fees.
Expenses
Cost of Revenues
Our cost of revenues consists of flat monthly fees to content
providers for access to their content and fees to merchandise
suppliers for access to their product inventory. Cost of revenues
 also includes fees related to the management of our data centers
 and certain commissions paid as a result of our strategic
alliances and agency agreements.
Sales and Marketing
Our sales and marketing expenses include salaries, benefits,
commissions, advertising, sponsorship, and other marketing
communication costs.
Research and Development
Research and development expenses include salaries, benefits,
bonuses, and other employee related costs for all development and
 engineering employees. Also included in research and development
 are the costs of independent contractors and consultants and
software licenses. Currently, all research and development costs
are expensed as incurred.
20
Table of Contents
General and Administrative
General and administrative expenses consist of personnel and
related costs of the corporate development, finance and
administrative departments. General and administrative expenses
also include production related facility and telecommunication
costs, professional fees and other general office costs.
Depreciation and Amortization
Depreciation and amortization expenses consist of the costs
associated with depreciation of our fixed assets and amortization
 of our intangible assets.
Stock and Warrant Based Non-Cash
Expenses
Stock and warrant based non-cash expenses include all non-cash
charges related to the issuance of equity, including stock
options, warrants, and other securities. Most of the expenses in
this category are related to warrants issued to vendors and
consultants valued using the Black-Scholes option pricing model.
Results of Operations
The table below shows operating data, as a percentage of
revenues, for the periods indicated:
Six Months
Year Ended
Ended
December 31,
June 30,
1998
1999
1999
2000
Statement of Operations Data:
Total revenues
100
%
100
%
100
%
100
%
Cost of revenues
254
19
32
35
Gross profit (loss)
(154
)
81
68
65
Operating expenses:
Sales and marketing
1289
157
282
151
Research and development
1049
75
99
60
General and administrative
2106
107
182
74
Depreciation and amortization
844
6
11
6
Stock and warrant based non-cash expenses
29
59
3
145
Total operating expenses
5,317
404
577
436
Loss from operations
(5,471
)
(323
)
(509
)
(371
)
Other income and expenses:
Interest income
22
—
—
5
Interest expense
(131
)
(19
)
(31
)
(11
)
Beneficial interest expense
—
(276
)
(498
)
—
Net loss
(5,580
)%
(618
)%
(1,038
)%
(377
)%
21
Table of Contents
Six Months Ended June 30, 2000 Compared to Six Months
Ended June 30, 1999
Revenues.
Total revenues, for the six months ended
June 30, 2000, were $3.0 million as compared to
$827,000 for the same period in 1999. This reflects an increase
of 264% between the two periods due to an increase of the number
of our customers from 12 to 73 as well as a greater proportion of
 customers paying a monthly recurring fee for our targeted
content services. Three of our customers accounted for
approximately 43% of total revenues for the six months ended
June 30, 2000 and one customer accounted for approximately
58% of total revenues for the six months ended June 30,
1999. Revenues from enhanced services such as personalization and
 contextual commerce were insignificant during the first half of
2000.
Cost of Revenues.
Cost of revenues, for the six months
ended June 30, 2000, was $1.1 million, as compared to
$262,000 for the same period in 1999. This reflects an increase
of 306% between the two periods. As a percentage of revenues,
cost of revenues increased to 35% for the six months ended
June 30, 2000 from 32% for the six months ended
June 30, 1999. This increase was due primarily to costs for
additional content sources and fees related to the addition of
our West Coast data center.
Sales and Marketing.
Sales and marketing expenses, for the
 six months ended June 30, 2000, were $4.5 million, as
compared to $2.3 million for the same period in 1999. This
reflects an increase of 95% between the two periods due to growth
 in our sales force from 8 salespeople to 32 salespeople.
Research and Development.
Research and development
expenses, for the six months ended June 30, 2000, were
$1.8 million, as compared to $814,000 for the same period in
 1999. This reflects an increase of 120% between the two periods
due to an increase in the number of research and development
personnel, the cost of independent contractors and the
amortization of certain software maintenance agreements.
General and Administrative.
General and administrative
expenses, for the six months ended June 30, 2000, were
$2.2 million, as compared to $1.5 million for the same
period in 1999. This reflects an increase of 48% between the two
periods due to increased rent, utilities, professional and
telecommunications expenses incurred to support our growth.
Depreciation and Amortization.
Depreciation and
amortization expenses, for the six months ended June 30,
2000, were $185,000, as compared with $87,000 for the same period
 in 1999. This reflects an increase of 112% between the two
periods due to additional software license and server costs and
investments in our internal business information systems.
Stock and Warrant Based Non-Cash Expenses.
Stock and
warrant based non-cash expenses, for the six months ended
June 30, 2000, were $4.4 million, as compared to $26,000 for
 the same period in 1999. This increase was due to warrants
issued to vendors and contractors in lieu of, or in addition to,
cash payments and to the modification of certain provisions of a
stock option agreement issued to a former employee. The majority
of these expenses are related to warrants issued pursuant to
certain contractor agreements for the six months ended
June 30, 2000.
Other Income and Expenses.
Total other income and
expenses, including interest income, interest expense and
beneficial interest expense, for the six months ended
June 30, 2000 were $213,000 as compared to $4.4 million for
the same period in 1999. Interest income for the six months ended
 June 30, 2000 was $140,000 as compared to $2,000 for the
same period in 1999. This increase reflects a higher average
balance of interest-bearing cash and cash equivalents for the
period ended June 30, 2000 as compared to the same period
1999. Interest expense for the six months ended June 30,
2000 was $353,000 as compared to $255,000 for the same period in
1999. This increase was due to an increase in indebtedness.
Beneficial interest expense is a non-cash expense related to the
conversion feature of the QIP loan. See "Liquidity and
Capital Resources." No beneficial interest expense was
recorded for the six months ended June 30, 2000, as compared
 to $4.1 million for the same period in 1999 due to the fact that
 convertible indebtedness was
22
Table of Contents
incurred in the 1999 period only. We had losses, for tax
purposes, for the six months ended June 30, 2000.
Accordingly, no provision for income taxes has been included in
the financial statements. It is uncertain whether we will be able
 to utilize the tax benefit derived from such losses.
Year Ended December 31, 1998 Compared with Year Ended
December 31, 1999
Revenues.
Total revenues, for the year ended
December 31, 1999, were $2.8 million as compared to
$168,000 for the same period in 1998. This increase was due to an
 increase in the number of customers as well as a fundamental
shift in our business model, from a primarily ad-share model, to
a new model, based on implementation fees and monthly service
charges. Revenues from enhanced services such as personalization
and contextual commerce, were insignificant during 1998 and 1999.
Cost of Revenues.
Cost of revenues, for the year ended
December 31, 1999, was $545,000, as compared to $426,000 for
 the same period in 1998. This reflects an increase of 28%
between the two periods due primarily to price increases from
existing content suppliers and costs incurred from adding new
content.
Sales and Marketing.
Sales and marketing expenses, for the
 year ended December 31, 1999, were $4.5 million, as
compared to $2.2 million for the same period in 1998. This
reflects an increase of 107% between the two periods primarily
due to a co-branding agreement with CNNfn entered into during
1999.
Research and Development.
Research and development
expenses, for the year ended December 31, 1999, were
$2.1 million, as compared to $1.8 million for the same
period in 1998. This reflects an increase of 22% between the two
periods due to an increase in the number of research and
development personnel.
General and Administrative.
General and administrative
expenses, for the year ended December 31, 1999, were
$3.0 million, as compared to $3.5 million for the same
period in 1998. This reflects a decrease of 14% between the two
periods due to increased efficiencies in the administrative
areas.
Depreciation and Amortization.
Depreciation and
amortization expenses, for the year ended December 31, 1999,
 were $174,000, as compared to $1.4 million for the same period
in 1998. This reflects a decrease of approximately 88% between
the two periods due to the completion in 1998 of the one year
amortization period of a substantial portion of the intangible
assets acquired from Infoseek.
Stock and Warrant Based Non-Cash Expenses.
Stock and
warrant based non-cash expenses, for the twelve months ended
December 31, 1999 were $1.7 million as compared to $49,000
for the same period in 1998. The majority of these expenses were
due to a warrant issued to an independent contractor employed by
us.
Other Income and Expenses.
Total other income and
expenses, including interest income, interest expense and
beneficial interest expense, for the year ended December 31,
 1999, were $8.4 million as compared to $182,000 for the same
period in 1998. Interest income, for the year ended
December 31, 1999, was $20,000 as compared to $38,000 for
the same period in 1998. This decrease reflects a lower average
balance of interest-bearing cash and cash equivalents for the
year ended December 31, 1999 as compared to the same period
in 1998. Interest expense, for the year ended December 31,
1999, was $558,000 as compared to $220,000 for the same period in
 1998. This increase was due to an increase in indebtedness.
Total beneficial interest expense was $7.9 million for the year
ended December 31, 1999. No beneficial interest expense was
recorded for the year ended December 31, 1998. The
beneficial interest expense recorded in 1999 was a non-cash
expense related to the conversion feature of the QIP
indebtedness. See "Liquidity and Capital Resources."
23
Table of Contents
October 10, 1997 (Inception) to December 31, 1997
We commenced operations on October 10, 1997. Revenues for
the three months ended December 31, 1997 amounted to less
than $35,000. Expenses for the period amounted to less than
$900,000. We do not believe this period is meaningful for
purposes of comparing to other financial periods. We have
therefore excluded financial information for this period from our
 discussion above.
Quarterly Results of Operations
The following tables present unaudited quarterly operating
results in dollars and as a percentage of revenues. We believe
this information reflects all adjustments, consisting only of
normal recurring adjustments, that we consider necessary for a
fair presentation of this information in accordance with
generally accepted accounting principles. The results for any
quarter are not necessarily indicative of results for any future
period.
Three Months Ended
March 31,
June 30,
Sept. 30,
Dec. 31,
March 31,
June 30,
1999
1999
1999
1999
2000
2000
(in thousands)
Total revenues
$
195
$
632
$
1,050
$
968
$
1,398
$
1,609
Cost of revenues
126
136
135
148
468
594
Gross profit
69
496
915
820
930
1,015
Operating expenses:
Sales and marketing
376
1,954
895
1,249
1,854
2,681
Research and development
342
472
598
730
783
1,007
General and administrative
822
681
683
848
732
1,484
Depreciation and amortization
49
38
43
43
57
128
Stock and warrant based non-cash expenses
19
7
413
1,251
1,835
1,922
Total operating expenses
1,608
3,152
2,632
4,121
5,261
7,222
Loss from operations
(1,539
)
(2,656
)
(1,717
)
(3,340
)
(4,331
)
(6,207
)
Other income (expense), net
(3,744
)
(624
)
(3,332
)
(688
)
(144
)
(69
)
Net loss
$
(5,283
)
$
(3,280
)
$
(5,049
)
$
(3,989
)
$
(4,475
)
$
(6,276
)
Three Months Ended
March 31,
June 30,
Sept. 30,
Dec. 31,
March 31,
June 30,
1999
1999
1999
1999
2000
2000
Total revenues
100
%
100
%
100
%
100
%
100
%
100
%
Cost of revenues
65
22
13
15
33
37
Gross profit
35
78
87
85
67
63
Operating expenses:
Sales and marketing
193
309
85
129
133
167
Research and development
175
75
57
75
56
63
General and administrative
421
108
65
88
52
92
Depreciation and amortization
25
6
4
4
4
8
Stock and warrant based non-cash expenses
10
1
39
129
131
119
Total operating expenses
824
499
250
425
376
449
Loss from operations
(789
)
(421
)
(163
)
(340
)
(309
)
(386
)
Other income (expense), net
(1,920
)
(99
)
(317
)
(71
)
(10
)
(4
)
Net loss
(2,709
)%
(520
)%
(480
)%
(411
)%
(319
)%
(390
)%
24
Table of Contents
Analysis of 1999 Quarterly Results
Revenues increased from $195,000 in the first quarter to $968,000
 in the fourth quarter due to an increase in the number of
customers who implemented our services. Revenues decreased by
$82,000 from the third quarter to the fourth quarter due to a
substantial decrease in advertising revenue generated from CNNfn.
 Cost of revenues increased from $126,000 in the first quarter to
 $148,000 in the fourth quarter due to an increase in costs for
additional content sources. Sales and marketing expenses
increased from $376,000 in the first quarter to $1.2 million
 in the fourth quarter due to the increase in our direct sales
force, as well as a marketing campaign in the fourth quarter.
Sales and marketing expenses in the second quarter were
$2.0 million primarily due to an expense relating to a
co-branding agreement with CNNfn. Research and development
expenses increased from $342,000 in the first quarter to $730,000
 in the fourth quarter due to an increase in the number of
research and development personnel, the cost of independent
contractors, and the amortization of certain software
maintenance. General and administrative expenses decreased from
$822,000 in the first quarter to $681,000 in the second quarter
due to increased operational efficiencies across most
administrative areas. These expenses increased from $683,000 in
the third quarter to $848,000 in the fourth quarter due to bad
debt expenses and professional fees related to audit and legal
fees. Stock and warrant based non-cash expenses increased from
$7,000 in the second quarter to $1.3 million in the fourth
quarter due to warrants issued to vendors and contractors in lieu
 of, or in addition to, cash payments and to the modification of
certain provisions of stock option agreements issued to
employees.
Liquidity and Capital Resources
Since our inception in 1997, we have financed our operations and
capital expenditures through the sale of equity and debt
securities and leases for capital equipment, which totaled
approximately $37.0 million in aggregate net proceeds
through June 30, 2000. In October 1997, we sold 3,250,000
shares of common stock for $3.0 million to the QIP
investors. In November 1999, we sold 593,000 shares of our common
 stock for $3.5 million to certain investors. In the spring of
2000, we sold 4,841,000 shares of our common stock for an
aggregate purchase price of $18.0 million. In May 2000, we
sold 200,000 shares of our series A convertible preferred stock
for an aggregate purchase price of $2.0 million. In 1998 and
1999, we borrowed $1.2 million and $2.65 million respectively
from the QIP Investors pursuant to demand promissory notes and
security agreements. In March 2000, we executed a bridge note in
favor of QIP to repay a term loan and line of credit in the
amount of $4.0 million. We have granted QIP conversion
rights on all of our outstanding debt to them. Upon the closing
of this offering, the QIP investors will convert the principal
amount of these notes in shares of our common stock and all
accrued interest thereon will be paid in cash. As of
June 30, 2000, we had cash and cash equivalents of $9.6
million.
Net cash used in operating activities, for the six months ended
June 30, 2000, was $9.2 million, as compared to
$1.6 million for the same period in 1999. The net cash used
in operating activities for the six months ended June 30,
2000 resulted primarily from net losses of $11.4 million, an
 increase in trade accounts receivable of $1.0 million, a
decrease of accounts payable of $1.1 million, and an
increase of $2.2 million in other current assets. The
decrease in accounts payable was primarily due to a payment to
CNNfn under our original distribution agreement. The increase in
prepaid expenses was due to an initial payment to AOL under our
interactive services agreement, and a one-year advance payment to
 InfoUSA in connection with our content agreement. This was
offset by substantial non-cash expenses related to warrants
issued to certain vendors and contractors, an increase in
deferred revenue, and an increase in accrued expenses.
Net cash used in investing activities, for the six months ended
June 30, 2000, was $1.2 million, as compared to
$233,000 for the same period in 1999. The net cash used in
investing activities for the six months ended June 30, 2000
was primarily due to the purchase of computers, software,
networking equipment and office equipment and furniture.
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Net cash provided by financing activities, for the six months
ended June 30, 2000, was $18.2 million, as compared to
$1.8 million for the same period in 1999. Net cash provided
by financing activities in the six months ended June 30,
2000 was provided substantially by net proceeds generated from
our offerings of capital stock, which together totaled
$17.9 million, net of $2.1 million in expenses, and to
a lesser extent by officer loans.
As of June 30, 2000, our principal commitments consisted of
obligations outstanding under a series of capital leases of
computer and networking equipment and our facility leases. We
operate from leased premises in Alexandria, VA, San Francisco,
CA, and Newport Beach, CA. Our current aggregate annual rental
obligations under these leases are approximately
$1.1 million for 2000 and $2.1 million for 2001. We
have leased capital equipment under certain lease lines entered
into during 1998 and 1999. Borrowings under these lines of credit
 are secured by the assets purchased, and bear interest at
various rates.
We anticipate that the net proceeds of this offering, together
with our current cash and cash equivalents, will be sufficient to
 meet our working capital and capital expenditure requirements
for at least the next 12 months. However, our future capital
 requirements will depend upon many factors, including the sale
of our services, the timing of research and development and the
expansion of our sales and marketing efforts. We may need to
raise additional funds in order to support our growth, to expand
our operations, to develop new and enhance existing services, to
respond to competitive pressures or to acquire complementary
products, businesses or technologies. If we need to raise
additional funds, we will likely do so through the issuance and
sale of equity securities. If this were to occur, the percentage
ownership of our stockholders could be reduced, our stockholders
may experience additional dilution and such securities may have
rights, preferences or privileges senior to those of our
stockholders. We cannot assure you that additional financing will
 be available on terms favorable to us, or at all. If adequate
funds are not available or are not available on acceptable terms,
 our ability to fund our expansion, take advantage of
unanticipated opportunities, develop or enhance services or
products or otherwise respond to competitive pressures would be
significantly limited. Our business, results of operations and
financial condition could be materially adversely affected by
such limitations.
Market Risk
Our investments are exposed to changes in interest rates
primarily on our investments in certain held-to-maturity
securities. Under our current policies, we do not use interest
rate derivative instruments to manage exposure to interest rate
derivative instruments to manage exposure to interest rate
change. A hypothetical 100 basis point adverse move in interest
rates along the entire interest rate yield curve would not
materially affect the fair market value of interest sensitive
financial instruments we held at June 30, 2000.
Recent SEC Interpretations
In December 1999, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101,
"Revenue
Recognition in Financial Statements"
("SAB
No. 101"). Effective October 1, 2000, SAB
No. 101 summarizes certain areas of the Staff's views
in applying generally accepted accounting principles to revenue
recognition in financial statements. We believe that our current
revenue recognition principles comply with SAB No. 101.
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BUSINESS
Overview
YellowBrix is a leading provider of Internet infrastructure
services in the contextual commerce and personalized content
services markets. Our customers consist of consumer and
commercial Web sites and corporate intranets and extranets,
collectively, Web sites. Our proprietary technology solution
integrates content, commerce and advertising and delivers
personalized information to our customers' users through Web
 pages, e-mails and wireless devices. Our outsourced hosted
Internet services provide an easy to implement, cost-effective
solution that allows Web sites to focus on their core
competencies. Our technology enhances Web site user experiences
through the automated distribution of more personalized content
selected from a broader range of choices and may increase their
revenue generation by providing targeted commerce opportunities.
Our services can be provided either individually or as an
integrated solution.
Our services include:
•
Contextual commerce.
Our contextual commerce services
	match and distribute highly targeted commerce and advertising
	opportunities to our customers' users from a catalogue of
	over 2.1 million products.
•
Targeted content.
Our targeted content services enable our
	 customers to use our artificial intelligence capability to
	electronically define and create, almost instantaneously, highly
	specialized categories of information such as news headlines,
	articles and press releases for automatic distribution to their
	end users.
•
Personalization.
Our personalization services facilitate
	the development of custom start pages for each user and create
	personalized e-mail newsletters.
Our core technology uses artificial intelligence, text parsing
and linguistic pattern analysis tools to analyze documents and to
 understand their meaning, focus and ultimate relevancy to Web
site users. This knowledge enables us to more efficiently and
effectively create content channels and automatically distribute
news and information through Web sites, e-mails and wireless
devices. In addition, we are able to discern user preferences
through their interactions with our customers' Web sites and
 disseminate, almost instantaneously, personalized commerce
opportunities. We plan to implement advanced personalization
features and leverage customer utility data from our network of
Web sites.
As of August 31, 2000, we had entered into contracts with
156 customers and implemented our solutions on 97 Web sites,
including Business 2.0 Online/Imagine Media, InfoUSA,
Monster.com, and Network Solutions. We typically enter into one
year contracts with our customers and receive an implementation
fee, a fixed monthly service fee, and with our contextual
commerce service, transaction-based fees. We have created an
expansive network of relationships that allows us to access over
2.1 million commerce products and 2,500 publications
providing access to approximately 60,000 news stories and press
releases each day.
Industry Background
Rapid Growth of the Internet
The Internet has emerged as a global medium encompassing
communication and commerce, and has grown to include multiple
platforms including broadband and wireless devices. International
 Data Corporation, or IDC, estimates the number of Web users
worldwide will increase from approximately 245 million in
1999 to more than 640 million by the end of 2003. IDC also
estimates that the number of Web pages available for viewing will
 grow from 2.2 billion in 1999 to 4.3 billion in 2000,
and will exceed 16.5 billion in 2003. As the number of users
 has increased, the Internet has become an effective means to
market services, helping to fuel its growth as a commercial
medium.
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According to IDC, worldwide e-commerce revenues, including
business-to-business and business-to-consumer, are expected to
increase from approximately $131 billion in 1999 to more
than $1.6 trillion in 2003. In addition, IDC estimates that
Internet advertising will grow from $3.4 billion in 1999 to
$10.8 billion in 2003.
Proliferation of Vertical Web Sites
Individual Web sites have recognized the need to differentiate
themselves in order to attract Web users amid the growing number
of online offerings. In response to this more competitive
environment, a new category of Web sites has developed as
vertical communities, which are designed to target specific
interest groups more directly. These vertical Web sites aim to
become the respective single access point for content and
commerce within an industry or affinity group. By narrowing their
 focus on groups with a common interest, these vertical Web sites
 seek to attract an audience that is desirable to merchants and
advertisers. Vertical Web sites represent one of the fastest
growing segments of the Internet and are projected to attract a
greater portion of commerce and advertising dollars than general
portal sites. According to Forrester Research, the share of
Internet advertising revenue generated by vertical and niche Web
sites will grow from 35% in 1999 to 57% in 2004.
Proliferation of Corporate Online
Presence
In an increasingly competitive environment, corporations are
recognizing the need to communicate and interact effectively and
efficiently with their customers, partners and employees. The
benefits and related cost savings of online communications, via
corporate intranets and extranets, are potentially significant
for corporations. As a result, corporations are focusing
significant time, capital and resources on developing their
online capabilities. IDC estimates that corporate intranet and
extranet spending will exceed $45.8 billion in 2000.
Additionally, small businesses are seeking an online presence to
leverage their sales and marketing capabilities. IDC expects that
 the number of U.S. small businesses with home pages will reach
4.5 million by 2003.
Convergence of Commerce and Content
Many Web sites have found over time that online advertising and
content alone are not sufficient to attract, retain and motivate
users in a way that translates into increased revenue
opportunities. According to Nielsen/ NetRatings, during the month
 of September 2000, the average home Internet user spent 50
seconds on a Web site and click through rates for the top banner
advertisements averaged just under 0.44%. As a result, Web sites
are recognizing the need to move toward the integration of
commerce and content in order to enhance the utility and
desirability of their Web sites.
Growth of Personalization
Personalization represents the opportunity for Web sites to
deliver customized relevant content, commerce and advertising
opportunities to individual users in an automated manner. The
foundation for such delivery can be derived from a user-specified
 profile or a profile based on contextual analysis of currently
viewed content, known demographics, experience expressed through
the past activity of the user and other data. In addition, the
criteria for presenting the information may be either user or Web
 site defined. According to the Appian Personalization Report,
the Web personalization market is expected to grow from
approximately $1.4 billion by the end of 2000 to
$5.3 billion in 2003. This trend towards personalization
will improve user experiences through more customized
presentations of relevant information and Web site performance
through increased frequency and duration of site visits, click
through rates and sales conversions.
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Remaining Challenges to Web sites
Despite the advantages to be gained through improved
personalization and tightly integrated content and commerce
offerings, to date many Web sites and corporations have been
unable to successfully implement solutions that effectively
enhance user experiences and increase revenues. Web sites are
faced with building the solutions internally or finding a
desirable third party provider. Developing and maintaining a
solution internally is difficult because:
•
the time and expense associated with updating, maintaining and
	managing the infrastructure is significant and delays the
	delivery of services to the target market;
•
contracting with multiple content providers is difficult and
	inefficient;
•
the technology is very complex; and
•
additional internal technical personnel is costly.
While Web sites can meet some of their needs by utilizing
multiple vendors, this may be more costly, increase delivery
times and present technology integration issues. To date, we
believe no other company provides a comprehensive, flexible and
customized Internet infrastructure solution integrating
contextual commerce, content and personalization services.
The YellowBrix Solution
We provide our customers with a comprehensive Internet
infrastructure solution that integrates commerce, content and
personalization, and provides users with a highly personal
experience. Our services can be deployed individually or in an
integrated package that is specifically designed to complement
the Web sites, intranets or extranets of our customers. Our core
patent pending technology can, with limited human intervention,
determine the context, meaning and relevancy of information which
 can then be used to integrate and link elements from disparate
sources such as news feeds, commerce catalogues or advertising
inventories. Through our proprietary technology, we generate a
hosted Web page service that combines the look and feel of each
customer's Web site. Our service offerings can be
distributed through Web pages, e-mails and wireless devices.
Our solution offers the following benefits to our customers:
•
Enhanced user experience.
We believe our solution enhances
	 user experiences by tailoring and integrating the presentation
	of commerce and content on Web sites. Web sites can select from
	our inventory of 525 unique channels or use our artificial
	intelligence capability to create and define their own customized
	 channels. By providing continuously updated information specific
	 to a Web site's focus, we enable our customers to meet the
	information needs of their targeted audiences, thereby enhancing
	their users' experiences on those sites. Our personalization
	 service enables our customers to offer their users the ability
	to create customized home pages that are designed to increase the
	 frequency and duration of Web site visits. We can also offer our
	 customers personalized e-mail services enabling them to
	distribute daily newsletters and notifications of news, articles
	and stories, in conjunction with relevant commerce opportunities,
	 that are targeted to their own user base.
•
Increased revenue streams.
We believe we can increase our
	customers' revenue streams not only by providing
	contextually relevant content which drives more page views with
	longer durations, but also by presenting users with buying
	opportunities that match the users' interests. By analyzing
	the content being reviewed by Web site users and, in the future,
	utilizing our individual profiles and network database of
	effective presentation metrics, we are able to present relevant
	real-time commerce and advertising information to the users. As a
	 result, we believe click through rates and conversion rates for
	Web sites will increase significantly beyond existing averages.
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•
Outsourced information infrastructure.
We provide
	customers with an automated, outsourced and fully managed
	solution that requires limited human intervention on the part of
	our customers. We manage the provisioning, hosting and support of
	 our services 24 hours per day, seven days a week. We assign an
	account manager to oversee the implementation and ongoing use of
	our services on the customer's Web site throughout the full
	life cycle of our relationship with the customer.
•
Flexible and customized solution.
Our technology solution
	can be easily adapted to the needs of individual Web sites. We
	utilize our artificial intelligence capability to analyze the
	information, enabling us to create new, customized and highly
	focused content channels to meet the needs of Web sites. We are
	then able to automatically provide targeted content through these
	 channels. In addition, certain of our services allow customers
	to continually customize our commerce and content solution,
	including the ability to insert their own products into our
	catalogue.
•
Decreased infrastructure costs and quick implementation.
Our single-sourced solution allows our customers to avoid the
	time and expense associated with maintaining additional internal
	technical staff, editorial staff, or contracting with multiple
	content providers, enabling them to focus on their core business.
	 Due to our template-based solution and our dedicated
	implementation team, our services are easy to implement and easy
	to use with limited ongoing effort required by the customer. In
	addition, our solution is reliable and fully scalable so that it
	can grow with the needs of our customers. Our fixed price model
	allows our customers to accurately predict the monthly costs for
	our services.
Our Strategy
Our objective is to become the leading provider of customized
commerce, content and personalization infrastructure services.
The following are the key elements of our strategy to achieve
this objective:
•
Leverage the convergence of commerce, content and
	personalization.
Our ability to integrate commerce, content
	and personalization services provides us with a significant
	competitive advantage. Web sites benefit from an integrated
	solution that not only provides a comprehensive information
	package, but also works in concert with the sites to increase
	their functionality. In addition, our future service enhancements
	 will gather data from our different services and leverage our
	personalization capability across our service line and customer
	base, enhancing the effectiveness of each service.
•
Provide additional value added services.
We seek to
	develop and actively market additional commerce and content
	services with broad appeal to our existing and new customers.
	These new services will allow us to leverage our existing
	deployment of services to customers and increase the value and
	functionality of our solution. For example, we have developed and
	 implemented new services that put more control in our
	customers' hands, allowing them to create and structure
	commerce and content delivery for their sites. In addition, we
	plan to enhance our personalization services through the
	development of individual-specific analysis and personalization
	functions, and the creation of a database of presentation
	analysis and information from our network of customer
	relationships.
•
Develop and expand strategic relationships.
We intend to
	continue to develop strategic relationships to improve our
	distribution capabilities, enhance our solutions and services and
	 augment our sales and marketing efforts. For added distribution
	channels, we have and will continue to partner with established
	industry organizations to help promote our services. We may also
	partner with Web design companies, online advertising companies,
	or outsourced e-mail distribution companies to increase the
	utilization of our services. During the past three months, we
	have signed affiliate and agency agreements with Exodus,
	Commission Junction and Camp6 to increase the utilization of
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our services. We have also entered into a strategic relationship
	to enhance the catalogue of commerce products we provide and have
	 signed an agreement whereby we are paid for including items in
	our commerce catalogue.
•
Further penetrate existing markets and expand into new
	markets.
We have developed expanded distribution mechanisms
	and new service offerings which enable us to target virtually all
	 segments of the Web site market. We will continue to target
	vertical Web sites, industry exchanges and corporate intranets
	and extranets. We believe these types of Web sites are
	particularly well suited to our service offerings due to their
	need to enhance their Web site by blending internal information
	with relevant industry-specific news and commerce opportunities.
•
Maintain and extend technology and service leadership.
We
	believe that we are currently a technology leader in providing
	contextual analysis based commerce, content and personalization
	services to our customers. We intend to introduce additional
	personalization services as well as enhance our ability to
	distribute audio and video information to our customers'
	users through Web pages, e-mails and wireless devices. By
	responding to changing customer needs and evolving technologies
	and standards, we intend to become the leading source for
	services that build and enhance our Web site customers'
	relationships with their users. For example, our learned behavior
	 service will work with our contextual analytical abilities to
	enable our customers to deliver information to users based on the
	 user's past viewing decisions.
•
Pursue global expansion opportunities.
We intend to
	capitalize on what we perceive to be a significant opportunity
	for our solution in international markets. We have adapted our
	core technology to contextually analyze content in foreign
	languages such as Spanish, Dutch, German, French, Italian,
	Finnish and Swedish, positioning us to deliver relevant news and
	information to a broader market. We also plan to expand
	internationally and may evaluate strategic alliances, joint
	ventures, acquisitions or other international opportunities.
Our Services
Our services address the information and presentation needs of
commercial and consumer Web sites, and corporate intranets and
extranets. As a result, we believe that we are well positioned to
 participate in the worldwide growth of the Web without regard to
 its composition, and in new emerging forms of commerce and
content distribution including video, audio and wireless.
Our core technology can, with limited human intervention,
determine the context, meaning and relevancy of information and
categorize it into existing or customer created categories. This
information is almost instantaneously distributed through Web
pages, e-mails and wireless devices. Our services are offered on
a hosted basis and reflect our customer's own look and feel.
Our services are primarily offered on a monthly subscription
basis. Our principal content information solutions and
personalization capabilities generate initial implementation fees
 and monthly recurring service fees that are based on the type of
 service provided. Our contextual commerce services generate
implementation fees as well as recurring transaction fees. We
offer additional value-added services such as newsletter and
industry brief e-mail services, which are priced depending on the
 number of enrolled Web site customers, and enriched targeted
content such as executive summaries and detailed corporate
profiles, which include an initial installation fee and monthly
recurring services fees. We also receive solution specific
implementation fees for the creation of custom categories and
other specialized services. The following is a description of our
 services.
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Contextual Commerce
IntelliClix™.
Our automated contextual commerce
service, IntelliClix, analyzes articles requested by Web site
users and presents the users with related commerce and
advertising opportunities almost instantaneously. Our customers
can take advantage of our outsourced merchandise relationships
which currently consist of a catalogue of over 2.1 million
products or can integrate their own inventory to display relevant
 commerce opportunities. Web sites can also utilize IntelliClix
in conjunction with our e-mail service to create new revenue
opportunities. We also plan to leverage our IntelliClix
technology across various other platforms including chat rooms,
wireless and other networked applications. We believe that our
IntelliClix information input and distribution process can also
be reversed to enable us to match and deliver content to products
 and services offered on commerce-focused Web sites. Our
IntelliClix service can be used individually or can be bundled
with our other targeted content services.
Commerce Dashboard.
We have created a commerce dashboard
to allow our customers more daily control over the management of
their commerce programs. Our commerce dashboard provides our
customers with the ability to tailor IntelliClix to meet the Web
site's individual needs. The commerce dashboard allows
merchants to submit product inventory, determine service
presentation and update promotional items. It also allows the Web
 site to:
•
establish certain business parameters for the display of
	merchandise;
•
select among closely matched services;
•
monitor and track click through and sales conversion activity;
	and
•
adjust these parameters based on revenue and profitability
	performance.
In the future, our customers will be able to compare their
commerce metrics against standards established through the
aggregation of information across our network of Web sites.
Targeted Content
Core Targeted Content.
Our core targeted content services
enable our customers to utilize our artificial intelligence
capability to define and create highly targeted categories of
information, on an almost instantaneous basis, that can be
integrated with our large and growing library of categories for
distribution to their end users. The following is a description
of each of our core targeted content services which can provide
our customers with text and pictorial information:
IndustryWatch™.
IndustryWatch is our primary service
	that consolidates news and information from thousands of
	published sources as well as company and financial information.
	This service also includes our Executive Summary and MultiLinks
	features. Customers can utilize up to 150 channels which are
	either customer created or selected from our existing 525 topic
	categories. IndustryWatch uses contextual analysis of community
	and category based content to categorize the information into
	industry-specific categories, and then presents the information
	to users on each Web site.
SmartNews™.
Our SmartNews combines our IndustryWatch
	and StartPage services with our newsletter and personalized
	e-mail features to create a fully integrated service offering.
NewsReal™.
Our NewsReal service is a scaled down
	version of our IndustryWatch service and enables our customers to
	 utilize up to 35 custom or existing topic categories.
NewsMaker™.
Our NewsMaker service was introduced in
	October 2000. NewsMaker represents a low-cost, entry-level
	content delivery system that distributes news, information and
	contextual advertisements to customers. This self-publishing
	service is designed to provide customers with a quick,
	inexpensive way to improve their Web sites using targeted content
	 on their sites.
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Enhanced Targeted Content Features.
We augment our core
targeted content services with a variety of features designed to
enhance the utility of our customers' Web sites and promote
higher frequency and longer duration of user visits to Web sites.
 The following is a summary of the enhanced features:
Executive Summary™.
Our Executive Summary technology
	provides users with the ability to easily scroll over a headline
	and review the top three relevant sentences within the story,
	providing the user with the relevant information quickly and
	efficiently. Executive Summary is bundled with our SmartNews and
	IndustryWatch services and offered as a premium addition to our
	NewsReal service.
MultiLinks™.
Our proprietary MultiLinks technology
	provides the user with greater detail on the information
	contained in the publication that the user is reading. MultiLinks
	 connects the user directly to current business intelligence
	about companies and people in the news, and includes vital
	information such as financial and competitor information, the
	latest stock quote or earnings announcement or other news
	releases. All of this information is contained on the site
	without sending the user to another page.
Content Dashboard.
For customers who want greater control
	over their Web sites, our content dashboard enables Web sites to
	track and monitor all activities, and improve information
	presentation. Our content dashboard provides customers with the
	ability to:
•
prioritize, rewrite and delete headlines;
•
add and publish stories to categories almost instantaneously;
•
utilize advanced search features to create new information
	categories on demand;
•
incorporate a feature to find similar information that allows
	customers to quickly isolate related stories from archives to add
	 to the customer's categories; and
•
publish images and photos on the Web site.
Personalization
E-mail Services.
Our suite of e-mail services allows our
customers to provide their users with the ability to select which
 categories of information to receive in their e-mail newsletters
 and daily e-mails as well as to provide links to additional or
related information on the Web site. These services also allow
our customers to deliver contextual-based news and commerce
opportunities through multiple delivery platforms including
wireless devices such as mobile phones, pagers and handheld
Internet access devices. Our customers can imbed our IntelliClix
service offerings directly into e-mails, enabling them to
generate additional revenue streams from their established user
base. We also offer customized, self-publishing e-mail newsletter
 services.
StartPage™.
StartPage allows Web site users to create
 customized home pages integrating our content which includes
headline and local news and information, weather, stock
portfolio, horoscopes, company and directory information,
delivered into an individualized user interface. We believe the
advantage of the StartPage service is that it allows our
customers to automatically customize the user's Web page by
integrating content and information into a comprehensive and
personalized page.
Learned Behavior.
We anticipate the release of our learned
 behavior service by the end of the second quarter of 2001. This
service will work in conjunction with our existing services to
help personalize the delivery of commerce and content to
individual users. Our learned behavior service will create a
profile that is continually updated based on the viewing history
of the Web site user, enabling Web sites to engage their users
with one-to-one marketing. Utilization of this service will
enable us to analyze user activity for our customers, building on
 our existing contextual matching technology. We believe that
this service will protect the privacy of Web site users by
creating
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profiles that indicate areas of interest while not keeping
records of the Web sites visited or specific actions taken on the
 site by the user.
Our Technology
Core Technology
Our core technology enables us to read and analyze the context
and meaning of articles and commerce descriptions in both text
and pictorial formats, categorize information, and distribute
information through Web sites, e-mails or wireless devices. Our
services are based on proprietary advanced artificial
intelligence capability and linguistic analysis, text
categorization, and information presentation software that
incorporates third-party analysis and management tools. The
utilization and integration of these technology techniques
provides us with an enhanced ability to derive an in-depth
understanding of the meaning, relevance and ultimate
classification of text. This knowledge enables us to more
efficiently and effectively create content channels and
automatically distribute news and information to Web sites and
present Web site users with relevant commerce opportunities
matched to currently viewed content or an analysis of content
they have demonstrated an interest in through prior activity.
Content Data Collection
Our proprietary content administration system enables us to
manage the acquisition and aggregation of electronic data. Our
system can be expanded by increasing the number of servers we
utilize. Currently, our system can receive data in the form of
text or pictures, and we anticipate expanding our service to also
 encompass video and audio data.
Commerce and Advertising Data
Collection
Our automated data processing system has also been adapted to
handle commerce and advertising information. This information is
stored either as plain text or XML tagged data. We have access to
 a catalogue of 2.1 million products. Our storage and
processing capability can be expanded to meet our business needs.
Data Analysis
Our proprietary system uses artificial intelligence, text parsing
 and linguistic pattern analysis tools to analyze documents to
determine their meaning, focus and relevancy to Web site users.
The artificial intelligence capability utilizes vectoring
techniques to create a mathematical value for content, commerce
products and advertisements. This mathematical value represents
the meaning and focus of the information and is utilized in
determining its relevance to established content channels or
customized content channels requested by our customers.
Data Utilization
We are able to compare, almost instantaneously, the
characteristics of an article against the characteristics of our
pre-defined or customer-defined content and commerce channels.
This allows us to more effectively and efficiently provide news
and information to Web sites. The storage and content
classification portion of our system works with Oracle's
database storage software to create a reliable and efficient
information provision solution. Our automated, flexible system
also enables us to create new content categories for our
customers using full-text analysis of sample articles. For
example, the artificial intelligence capability can use sample
articles provided by our customers to enable us to create the
appropriate vector characteristics of this new content channel.
As of August 31, 2000, we had created over 325 new custom
channels for our customers.
We have adapted our contextual content analysis and vector-based
categorization engine to match commerce opportunities and
advertising descriptions with relevant content. Our IntelliClix
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service automatically compares the mathematical characterization
of a commerce opportunity or advertising description to the
mathematical value of currently viewed content. Our service then
presents the user with the most relevant products or
advertisements.
Data Distribution
The modular structure of our technology system allows us to
provide our customers with information through different media.
We can either adapt parts of our technology system or attach new
software components to work with different architectures or
software versions to provide information to our customers.
Currently, we are providing data through Web based, wireless and
e-mail distribution systems. In the future, we anticipate the
ability to distribute audio and video content that more fully
utilize broadband capabilities.
Advantages of Our Technology System
Our technology provides numerous competitive advantages. Our
analysis, classification and distribution system is an automated,
 outsourced infrastructure solution. Our flexible technology
system is able to work with multiple distribution media and
platforms as well as software packages and Web hosting solutions.
 In addition, our services and systems are scalable and
load-balanced and, therefore, are capable of operating across
multiple servers and systems.
Customers
As of August 31, 2000, we had entered into contracts with
156 customers and implemented our services on 97 Web sites. Our
customers include Web-based businesses and corporate customers
whose business models encompass both offline and online
components. The following is a representative list of our August
2000 customers:
Corporate Customers
Web Site Customers
Brown & Williamson
Business 2.0 Online/ Imagine Media
Chase Manhattan Small Business
InfoUSA
National Association of Chain Drug Stores
CareerPath.com
Monster.com
Network Solutions
Onvia.com
PaperExchange.com
Our contracts with our customers typically have one-year terms.
CNNfn, InfoUSA and Network Solutions accounted for approximately
13%, 17% and 13%, respectively, of our revenues for the six
months ended June 30, 2000 and, CNNfn and Network Solutions
accounted for approximately 50% and 12%, respectively, of our
revenues for the fiscal year ended December 31, 1999.
Research and Development
Our Chief Technology Officer, Jeff Massa, worked with artificial
intelligence and contextual analysis technology while at the
Executive Office of the President of the National Security
Council, NSC. The intelligence community utilized artificial
intelligence and contextual analysis technology to implement
real-time analysis, filtering and categorization of information.
Upon leaving the NSC, Mr. Massa worked with third party
vendors to assist in the commercialization of a similar
technology. The YellowBrix technology capability developed from
this work.
Since our inception, we have continued to focus our efforts on
enhancing our contextual analysis, vector categorization and
artificial intelligence capability and applying these
technologies to our commerce, content and personalization
services. We believe that strong product development capabilities
 are essential to enhancing our core proprietary technologies,
developing new applications for our technology and maintaining
our competitive advantage. We have invested and intend to
continue to invest a significant amount of human and financial
resources in our research
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and development divisions. We are currently working on completing
 the development of our learned behavior advanced personalization
 service, audio and video analysis technology, and foreign
language analysis and categorization services.
We have hired and will continue to actively recruit key computer
scientists, engineers, PhDs, and software developers with
expertise and degrees in the areas of computer science,
electrical engineering, software engineering, information
sciences and applied mathematics, and have complemented these
individuals by hiring senior management with extensive
backgrounds in the real-time processing and information
distribution industries. Our research and development expenses
totaled $1.8 million for the six month period ended
June 30, 2000 and $2.1 for the year ended December 31,
1999.
Sales and Marketing
Our sales strategy is to pursue opportunities with major accounts
 through our direct sales force, and to penetrate various
targeted market segments through multiple indirect distribution
channels such as affiliate and agency agreements. We employ 58
direct sales personnel in three offices located in Alexandria,
Virginia, Newport Beach, California and San Francisco,
California. The direct sales force is organized into four
territorial groups each of which is managed by one director. We
generate leads from contacts made through seminars, conferences,
trade shows, customers and ongoing public relations and
advertising programs. We intend to increase the size of our
direct sales force and to establish additional sales offices
domestically and internationally.
We complement our direct sales force by actively pursuing two
types of business development relationships designed to establish
 multiple indirect distribution channels.
•
Affiliate Agreements.
In an effort to penetrate new market
	 segments, we seek to develop alliances with a wide variety of
	other Internet companies including consultants, Web design firms,
	 trade associations, hardware and software providers, and other
	firms dedicated to assisting companies in establishing and
	maintaining a presence on the Internet. These alliances work in
	conjunction with our direct sales force by generating qualified
	sales opportunities. These are intended to increase geographic
	sales coverage and to address specific industry segments and
	large corporate customers. As of August 31, 2000, we had
	entered into two affiliate agreements.
•
Agency agreements.
In order to leverage our internal
	direct sales force, we entered into agency agreements with
	broadband access providers. These companies utilize their sales
	force and customer relationships to find new market opportunities
	 for our services. We typically pay our agents a commission for
	new customers that they provide to us. As of August 31,
	2000, we had entered into five agency agreements.
We conduct a variety of programs to stimulate market demand for
our services, including public relations, advertising, trade
shows and collateral development. These programs are focused on
our target markets and are designed to create awareness and
generate sales leads.
As of August 31, 2000, we employed 89 persons dedicated to
sales and marketing. We intend to hire additional sales people as
 we expand.
Customer Service and Management
We believe that a high level of customer service and support is
critical to the successful sales and marketing of our services
and to customer retention. In August 2000, we established
the account manager program to provide our customers with a
single point of contact that will support the account through its
 full life cycle. The account manager is responsible for working
with the customer through the implementation process to ensure
customer expectation and satisfaction levels are met. Our service
 management team works with customers in customizing content
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channels to suit their Web site needs, and assists our customers
in developing templates that frame content delivery and ensuring
that technical interfaces facilitate the ongoing delivery of
information. The account manager also provides ongoing support
after the services are delivered to the customer. Our account
managers are compensated based on their ability to meet customer
retention goals, sell new services into their assigned customer
base and ensure customer satisfaction. We intend to continue to
refine and grow this program along with our customer base. In
conjunction with this personalized approach to customer support,
we also provide assistance 24 hours per day, seven days a week
for our services.
As of August 31, 2000, our service management team consisted
 of 11 employees managing three distinct areas: service
design/development, client services and content management. The
team is engaged in activities encompassing the complete service
lifecycle from the development and launch of new services to the
implementation, maintenance and subsequent management of customer
 Web sites.
Supplier Relationships
As of August 31, 2000, we were able to access over 2,500
publications and to receive up to 60,000 news stories daily
through our contractual relationships with 12 content providers.
Our content providers range from traditional news syndication
services to specialized media sources. They include APWire, Bell
& Howell, InfoUSA, Knight-Ridder, Media General, NewsBytes,
Reality Online and UPI. Our distribution contracts with content
providers typically provide for a monthly flat fee for certain
redistribution rights. Since the inception of our business, we
have not had any difficulty renewing such contracts on
commercially reasonable terms.
In addition, we have merchandise supplier relationships with
E-Commerce Solutions, iConomy and a variety of small merchants
that give us access and use of over 2.1 million products to
provide targeted commercial opportunities throughout our
IntelliClix service network.
We offer our network of suppliers the ability to increase their
brand exposure while generating revenue. The pricing on our
commerce relationships varies, but all revenues obtained for the
parties are based on a share of the transaction. We continue to
pursue and secure long-standing relationships with suppliers for
the benefit of our entire network.
Competition
Our competition varies by service offerings. Currently, while we
believe no one company competes with us in all of our service
categories, many companies compete with us in the individual
service categories of contextual commerce, targeted content and
personalization. Our main competitors in our targeted markets
include:
•
Contextual commerce:
Blue Martini Software, Escalate, Net
	Perceptions and Trapezo.
•
Targeted content:
Dow Jones, InfoSpace, iSyndicate,
	NewsEdge, Nexis and ScreamingMedia.
•
Personalization:
Art Technology Group, Blue Martini
	Software, BroadVision, Interwoven, Open Market and Vignette.
Many of our competitors or future competitors have longer
operating histories than we do and significantly greater
financial, technical and marketing resources than us. These
competitors can devote substantially more resources than we can
to business development and may adopt aggressive pricing
policies.
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We compete on the following factors:
•
effectiveness and timeliness of content classification;
•
automated content distribution capability;
•
ability to provide relevant commerce;
•
effectiveness of personalization;
•
ease of implementation;
•
breadth, depth and timeliness of content; and
•
effectiveness of pricing.
Notwithstanding our proprietary technology, it is possible for
competitors or potential competitors to develop competitive
proprietary technology that leverages third party licensed
technology to further provide competitive services. Therefore,
the barriers to entry in our markets are relatively low.
Intellectual Property
We regard the protection of our intellectual property rights to
be important to our success. We rely or expect to rely on a
combination of patent, trademark, copyright, service mark, trade
secret restrictions and contractual provisions to protect our
intellectual property rights. We require employees and
independent contractors to enter into proprietary information and
 confidentiality agreements. The contractual provisions and the
other steps that we have taken to protect our intellectual
property may not prevent misappropriation of our technology or
deter third parties from developing similar or competing
technologies.
We have filed a provisional U.S. Patent application for our
contextual matching systems and method. This application
describes a system and method that provide advertisements and
content services that are contextually related to a document
currently being read or displayed to a user, and that are also
likely to be of interest to the user. The system utilizes a
user's demographic information, such as buying habits and
Web browsing behavior in determining what contextually related
commerce products are likely to be purchased by the user.
We have applied for trademark and service mark protection for our
 YellowBrix, IntelliClix, IndustryWatch, NewsReal, MultiLinks,
Contextual Merchandising and Contextual eMerchandising and the
YellowBrix logo marks in the United States. We cannot assure you
that the steps we have taken to protect our intellectual property
 will be adequate or that third parties will not independently
develop similar proprietary information, infringe or
misappropriate our proprietary rights. Any independent
development, infringement or misappropriation could harm our
financial results in the future. Additionally, effective patent,
trademark, copyright and trade secret protection may not be
available in every country where we provide services. We may, at
times, have to incur significant legal costs and spend time
defending our intellectual property rights. Any defense efforts,
whether successful or not, would divert both time and resources
from the operation and growth of our business.
Government Regulation
Government regulation may present a risk to our business. See
"Risk Factors — Legal Uncertainties and Government
 Regulation of the Internet could Inhibit Growth of the Internet
and E-commerce."
Recent concerns regarding Internet user privacy has led to the
introduction of international federal and state legislation to
protect Internet user privacy. In October 1998, the European
 Union adopted a directive that may limit our collection and use
of information regarding Internet users in
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Europe. In addition, the Federal Trade Commission, or the FTC,
has initiated investigations and hearings regarding Internet user
 privacy that could result in rules or regulations that could
adversely affect our business. As a result, we could become
subject to new laws and regulations that could limit our ability
to conduct targeted advertising, or to distribute or collect user
 information. Because of the increasing use of the Internet, the
government may adopt laws and regulations relating to the
Internet, addressing issues such as user privacy, pricing,
content, taxation, copyrights, distribution and service quality.
We also may be regulated by recent consent decrees involving the
FTC and online advertisers regarding the collection and use of
personal information.
We may be subject to provisions of the Federal Trade Commission
Act that regulate advertising in all media, including the
Internet, and require advertisers to substantiate advertising
claims before disseminating advertising. The FTC has the power to
 enforce this Act. It has recently brought several actions
charging deceptive advertising via the Internet and is actively
seeking new cases involving advertising via the Internet.
Our Employees
As of August 31, 2000, we had 158 employees, including:
•
89 in sales and marketing;
•
11 in customer support;
•
43 in product development; and
•
15 in general and administration.
Our employees who successfully participate in our cross-selling
efforts are eligible for incentive-based compensation. None of
our employees is represented by a labor union. We believe that
our relations with our employees are good.
Our Facilities
We lease a 16,000 square foot facility in Alexandria, Virginia,
which serves as our principal executive offices. The current
lease for this facility expires in 2008. We also lease an
additional 5,000 square foot facility in Alexandria, Virginia.
This lease expires in February 2001. In addition, we lease
approximately 10,060 square feet for two regional sales offices
in Newport Beach and San Francisco, California. The leases for
these facilities expire in October 2002 and
December 2003, respectively. We recently signed a lease for
approximately 59,000 square feet in Roslyn, Virginia which
expires in December 2011. We are not scheduled to occupy
this facility until the beginning of 2002. We estimate that we
will need additional temporary space through 2002. We have not
yet identified suitable facilities. We believe that additional
space will be available on commercially reasonable terms as and
when needed.
Legal Proceedings
We are not currently a party to any material legal proceedings.
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MANAGEMENT
Executive Officers and Directors
The following table sets forth certain information regarding our
executive officers and directors:
Name
Age
Position(s)
David C. Hoppmann
(1)
45
Chief Executive Officer, President and
Chairman of the Board
Jeffrey P. Massa
41
Senior Vice President, Technology, Chief Technology Officer and
	Director
Jace D. Wieser
36
Senior Vice President, Technology/ Engineering
S. Randy Lampert
45
Chief Financial Officer
David Lynch
50
Chief Business Officer
Kevin S. Lapidus
30
Vice President, General Counsel and Corporate Secretary
Michael McCrory
39
Director
Stewart J. Paperin
(2)
52
Director
Keith Walz
(1)(2)
33
Director
Douglas M. Reid
(1)
32
Director
(1)
Member of Compensation Committee
(2)
Member of Audit Committee
David C. Hoppmann,
one of our founders, has served as our
Chief Executive Officer and President, as well as the Chairman of
 the Board of Directors, since our inception in
October 1997. Prior to YellowBrix, Mr. Hoppmann was the
 President of the Corporate Information Division of Infoseek
Corporation from January 1997 to July 1997. From
September 1994 to October 1996, Mr. Hoppmann
served as President and CEO of Intell-X, a division of DataTimes
Corporation dedicated to aggregating and distributing business
news and information. From May 1993 to September 1994,
Mr. Hoppmann served as President and CEO of COMTEX
Scientific Corporation, an aggregator and distributor of
information news, wires and other content. Mr. Hoppmann
received a B.A. degree in International Economics from George
Washington University.
Jeffrey P. Massa,
one of our founders, has served as our
Senior Vice President, Technology, Chief Technology Officer and
as a Director, since our inception in October 1997. Prior to
 YellowBrix, Mr. Massa was the Senior Vice President of
Technology of the Corporate Information Division of Infoseek
Corporation from January 1997 to July 1997. From
September 1994 to October 1996, Mr. Massa served as
Senior Vice President of Technology and Business Development of
Intell-X, a division of DataTimes Corporation, and from
October 1994 to October 1996, he was the Vice President
 of Technology of COMTEX Scientific Corporation. From
May 1987 to September 1993, Mr. Massa was the
Manager of Information Systems and Deputy Director of Systems at
the Executive Office of the President, National Security Council,
 The White House. Mr. Massa completed the Computer Science
Program at Texas Lutheran College.
Jace D. Wieser
has served as our Senior Vice President,
Technology/ Engineering, since our inception in
October 1997. Prior to joining YellowBrix, Mr. Wieser
was Senior Director of Service Development in the Corporate
Information Division of Infoseek Corporation from
February 1997 to July 1997. From December 1996 to
February 1997, Mr. Wieser served as Director of
Technology at DataTimes Corporation. He received a B.S. in
Computer Science from the University of Oklahoma.
S. Randy Lampert
has served as our Chief Financial Officer
 since September 1999. Prior to joining YellowBrix,
Mr. Lampert ran Ponderosa Capital Management, the investment
 advisor to an affiliated hedge fund and provider of corporate
financial advice to corporations from October 1997 to
August 1999. From March 1993 to September 1997,
Mr. Lampert was the Managing Director
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of the Leveraged Finance Group at Nomura Securities. From January
 1990 to April 1992, he was a partner in Patricof Capital
Corporation responsible for a wide variety of technology-based
investments and acquisitions. He received an M.B.A. from the
University of Chicago and B.A. from the University of Rochester.
David Lynch
has served as our Chief Business Officer since
 June 2000. Prior to joining YellowBrix, from
January 1998 to June 2000, Mr. Lynch was Vice
President of NET-Tel. From July 1997 to December 1997,
he served as Vice President of LDMI. From June 1996 to
July 1997, he served as Vice President of Midcom. From
January 1989 to June 1996, Mr. Lynch served as
Vice President for Allnet/Frontier. Mr. Lynch received a
B.S. in Business Administration from the School of Business and
Economics at West Virginia University.
Kevin S. Lapidus
has served as our Vice President, General
 Counsel and Corporate Secretary since September 2000. Prior
 to joining YellowBrix, Mr. Lapidus served as Senior Vice
President, General Counsel and Corporate Secretary of OneMain.com
 Inc., a publicly traded Internet service provider, from
October 1999 to September 2000. From August 1998
to October 1999, Mr. Lapidus was an attorney with Hogan
 & Hartson L.L.P. and from October 1997 to
August 1998, he was an attorney with Hale and Dorr LLP. Mr.
Lapidus received a J.D. from Harvard Law School and an A.B. in
Economics from Washington University in St. Louis.
Michael McCrory
has served as a Director since
April 2000. Since May 1996, Mr. McCrory has served
 as Chairman and CEO of I-Bankers Securities, Inc., an
international investment banking firm and registered NASD member
that operates in the United States and Europe. From
June 1984 to December 1993, Mr. McCrory was
President of Alliance Marketing, a multi-state insurance agency.
Mr. McCrory is also a director of several private companies
in addition to YellowBrix, including Synxis. Mr. McCrory
received an M.B.A. from the Owen Graduate School of Management at
 Vanderbilt University and a B.S. in Business Administration from
 the University of Phoenix.
Stewart J. Paperin
has served as a Director since
December 1997. Since July 1996, Mr. Paperin has
served as Executive Vice President of the Soros Foundations Open
Society Institute which encompasses the charitable operations of
forty foundations in Central and Eastern Europe, the United
States, Africa, and Latin America. From January 1994 to
July 1996, Mr. Paperin was President of Capital
Resources East Ltd., a diversified consulting and investment firm
 in New York. He served as president of Brooke Group
International, a U.S.-based leveraged buy-out firm operating in
the former Soviet Union, a corporation controlled by Brooke
Group. From 1989 to 1990, he served as chief financial officer of
 the Western Union Corporation. He is a member of the Boards of
Directors of Penn Octane Corp. and Global TeleSystems Group, Inc.
 and Golden Telecom Inc. Mr. Paperin received an M.S. and a
B.A. from the State University of New York at Binghamton.
Keith Walz
has served as a Director since May 2000.
Mr. Walz serves as a Managing Director of ABN AMRO.
Mr. Walz joined ABN AMRO in April 1996 and focuses on
information technology and communications investments. From March
 1991 to March 1996, Mr. Walz spent five years in AAI's
 finance division managing financial reporting, analysis and
accounting systems. Prior to joining AAI, Mr. Walz spent two
 years as a finance associate with Tyson Foods, Inc. Mr. Walz
currently serves on the boards of Visual Insights, Inc. Oasis
Technology, Inc., Integrated Information Systems, Inc.,
Worldweb.net, Inc., and Real World Technology, Inc. Mr. Walz
 received an M.B.A. from DePaul University and a B.S. in Finance
from the University of Arkansas.
Douglas M. Reid
has served as a Director since
December 1997. Since March 1996, Mr. Reid has
served as Director of Banking and Finance for Soros Fund
Management, LLC, the fund manager for QIP. From September 1986 to
 March 1996, Mr. Reid was employed by Kleinwort Benson
Limited in various roles, and since March 1994 as Vice
President in its Financing and Advisory Division. Mr. Reid joined
 KB London in 1986 and moved to the bank's New York office
in 1989. Mr. Reid is also a director of several private
companies in addition to YellowBrix, including TSCentral, Inc.
and Rila Software Corporation.
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There are no family relationships among any of the directors or
executive officers of YellowBrix.
Board of Directors
Immediately prior to the completion of this offering, our amended
 and restated certificate of incorporation will take effect and
provide for a classified board of directors consisting of three
classes of directors, each serving staggered three-year terms. As
 a result, a portion of our board of directors will be elected
each year. To implement the classified structure, Messrs.
          have
been designated Class I directors, whose terms will expire
at the annual meeting of stockholders to be held in 2001, Messrs.
           have
 been designated Class II directors, whose terms will expire
 at the annual meeting of stockholders to be held in 2002 and
Messrs.
          have
been designated Class III directors, whose terms will expire
 at the annual meeting of stockholders to be held in 2003. In
addition, our board of directors will include two non-voting
observers who will be appointed by each of CNNfn and Infoseek
Corporation.
Board Committees
The board of directors has an audit committee and a compensation
committee.
Audit Committee.
The audit committee recommends the
selection and retention of our independent auditors, reviews the
scope and results of audits and submits appropriate
recommendations regarding audits, reviews our internal controls
and reviews procedures to ensure compliance with applicable
financial reporting requirements. The current members of the
audit committee are Stewart Paperin and Keith Walz.
Compensation Committee.
The compensation committee's
duties include establishing, reviewing and making recommendations
 to the board regarding compensation of our officers, considering
 compensation plans for our employees, and carrying out other
duties under our stock incentive compensation and other plans
approved by us as may be assigned to the committee by the board.
The current members of the compensation committee are David
Hoppmann, Keith Walz and Douglas Reid.
Director Compensation
Our directors are reimbursed for certain expenses in connection
with attendance at board and committee meetings. In
August 2000, we granted to each of Messrs. McCrory,
Paperin, Walz and Reid options to purchase 10,000 shares of our
common stock, at an exercise price of $3.72 per share. These
 grants were immediately fully vested on the date of the grant.
In the future, we will grant each director 10,000 vested
stock options to purchase shares of our common stock upon the
completion of our annual meeting. We will also pay each director
$1,000 for each board of director meeting they attend.
Compensation Committee Interlocks and Insider Participation
No member of the compensation committee has been an employee of
ours, except for David Hoppmann. None of our executive officers
serves as a member of the board of directors or compensation
committee, or other committee serving an equivalent function, of
any other entity, any of whose executive officers serves as a
director of or member of the compensation committee of our board
of directors.
Executive Compensation
The following table provides information concerning total
compensation awarded to, earned by or accrued for services
rendered to us in all capacities during the year ended
December 31, 1999 by our chief executive officer, our chief
financial officer and our two other most highly compensated
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executive officers whose salary and bonus totaled at least
$100,000 for the fiscal year. We refer to these four executive
officers as our Named Executive Officers. There are no other
executive officers whose salary and bonus exceed $100,000 for the
 fiscal year.
Summary Compensation Table
Long-Term
Compensation
Annual Compensation
Securities
Other Annual
Underlying
Name and Principal Position
Salary
Bonus
Compensation
Options
David C. Hoppmann
$
165,000
$
—
$
—
—
Chief Executive Officer, President and Chairman of the Board
Jeffrey P. Massa
150,000
—
—
—
Senior Vice President, Technology, Chief Technology Officer and
	Director
Jace D. Wieser
136,500
13,800
—
—
Senior Vice President, Technology/ Engineering
S. Randy Lampert
36,000
(1)
104,524
(2)
—
530,609
(3)
Chief Financial Officer
(1)
Mr. Lampert became an executive officer in
	September 1999. His compensation reflects base salary
	calculated on a monthly basis of $9,000 per month from the period
	 September  1999 to December 1999.
(2)
Represents $52,262 paid to Mr. Lampert and a
	$52,262 promissory note issued to Mr. Lampert as incentive
	compensation in connection with our Fall 1999 financing.
(3)
Reflects common stock issuable upon the exercise
	of the warrants issued to Mr.  Lampert as part of his
	compensation for the months of September (119,391 shares),
	October (123,300 shares), November (130,812 shares) and
	 December (130,975 shares) of 1999, and a warrant for 26,131
	 shares, issued as incentive compensation for our Fall 1999
	financing.
Employment Contracts and Arrangements
Employment Agreements and Stock Option Agreements with David
C. Hoppmann and Jeffrey P. Massa.
On December 11,
1997, we entered into employment agreements with David Hoppmann
and Jeffrey Massa. Their terms expire the later of the third
anniversary of the agreements, or the second anniversary of an
initial public offering, or IPO. Under the agreements,
Mr. Hoppmann is entitled to receive a base salary of
$165,000 per year and Mr. Massa is entitled to receive a
base salary of $150,000 per year. Their total cash compensation
is limited to no more than $200,000 each year until we have
generated cumulative revenues of not less than $4.3 million and
are no longer experiencing a net operating loss on a monthly
basis.
If we terminate Mr. Hoppmann's or Mr. Massa's
 employment other than for cause or if they terminate their
employment for good reason, their outstanding options vest and we
 must pay a severance payment calculated over a severance period
equal to the longer of two years or the remainder of their terms
of employment.
Contractor Agreement with S. Randy Lampert through Mayflower
Resources, Inc.
On August 30, 1999, we entered into a
contractor agreement with Mayflower Resources, Inc., whose sole
shareholder is S. Randy Lampert. To date, Mr. Lampert
serves as our Chief Financial Officer under an independent
contractor relationship. The scheduled termination date of the
agreement, as
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amended, was February 28, 2000 and was extended to
August 31, 2000, but he has continued in his former
capacity. Until the earlier of the termination of this agreement,
 the termination of his services or his death or disability,
Mr. Lampert receives a base pay of $9,000 per month and a
warrant for each completed month of service equal to 0.5% of the
then outstanding shares of common stock on a fully diluted basis
exercisable on a per share basis at 150% of the fair market value
 of the average per share price we received as of our most recent
 private placement equity offering.
The agreement provided that Mr. Lampert is entitled to
incentive compensation in amount equal to (1) 3% of gross
proceeds we raise in a private placement offering of our equity
securities, provided up to 1.5% of that amount will be paid in
cash and at least 1.5% of that amount will be paid in the form of
 a promissory note with warrants for the number of shares equal
to the face value of the promissory note divided by the per share
 price of our common stock of the company at that time,
(2) 1.5% of the gross proceeds raised by us in an IPO of our
 debt or equity securities payable in cash, and (3) 1.5% of
the aggregate consideration paid to us in a transaction involving
 a merger or sale of all or substantially all of our stock and/
or assets payable in cash. Negotiations are under way to extend
and revise certain economic provisions of the contractor
agreement.
Stock Option Grants
The table below provides information regarding stock options
granted to Named Executive Officers during the year ended
December 31, 1999. The potential realizable value is
calculated by assuming that the price of our common stock
increases from an assumed fair market value of $3.18 per
share, at assumed rates of stock appreciation of 5% and 10%,
compounded annually over the 10 year term of the option, and
 subtracting from that result the total option exercise price.
The 5% and 10% assumed annual rates of compound stock price
appreciation are prescribed by the rules and regulations of the
Securities and Exchange Commission and do not represent our
estimate or projection of the future trading prices of our common
 stock. There can be no assurance that the actual stock price
appreciation over the ten-year option term will be the assumed 5%
 or 10% levels or any other defined level. Actual gains, if any,
on stock option exercises are dependent on numerous factors,
including our future performance, overall market conditions and
the option holder's continued employment with us throughout
the entire vesting period and option term, none of which are
reflected in this table.
Individual Grants
Potential Realizable
Percentage
Value at Assumed
Number
of Total
Annual
of
Options
Rates of Stock
Securities
Granted to
Price Appreciation
Underlying
Employees
Exercise
for the Option Term
Options
in Fiscal
Price Per
Expiration
Name
Granted
Year
Share
Date
5%
10%
David C. Hoppmann
166,250
10.3
%
$
3.18
11/30/09
$
332,481
$
842,572
Jeffrey P. Massa
166,250
10.3
3.18
11/30/09
332,481
842,572
Jace D. Wieser
—
—
—
—
—
—
S. Randy Lampert
119,391
7.4
3.00
9/30/04
225,253
570,836
123,300
7.7
3.00
10/31/04
232,638
589,525
130,812
8.1
3.00
11/30/04
246,801
625,442
26,131
1.6
2.00
11/30/04
32,867
83,292
130,975
8.1
3.00
12/31/04
247,108
626,221
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Aggregate Option Exercises in Last Fiscal Year and Year End
Option Values
The following table provides information about stock options held
 as of December 31, 1999 by the Named Executive Officers
assuming a fair market value of our common stock of $3.18 per
share on December 31, 1999. None of these options have been
exercised.
Number of Securities
Underlying
Value of Unexercised
Unexercised Options
In-the-Money Options
Shares
at Fiscal Year-End
at Fiscal Year-End
Acquired
Value
Name
on Exercise
Realized
Exercisable
Unexercisable
Exercisable
Unexercisable
David C. Hoppmann
(1)
—
—
508,250
—
$
1,087,218
$
—
Jeffrey P. Massa
(2)
—
—
432,250
—
845,614
—
Jace D. Wieser
—
—
81,400
—
258,771
—
S. Randy Lampert
(3)
—
—
530,609
—
121,641
—
(1)
This amount excludes 2,599,782 options granted on
	January 8, 2000.
(2)
This amount excludes 2,149,638 options granted on
	January 8, 2000.
(3)
This amount includes monthly warrants and
	incentive based warrants pursuant to his contractor agreement.
	This amount excludes 1,282,718 warrants granted between
	January 1, 2000 and August 1, 2000.
Stock Option Plans
Amended 1998 Stock Option Plan
Our Amended 1998 Stock Option Plan provides for the grant of
stock options to our employees, directors and consultants. A
total of 7,000,000 shares of common stock have been reserved for
issuance under the plan. As of August 31, 2000, options to
purchase an aggregate of 2,584,600 shares were outstanding,
6,675 shares of common stock had been purchased through
exercises of stock options and 4,408,725 shares were
available for future grant.
The plan is administered by the board of directors, or a
committee appointed by the board of directors, which determines
the terms of options granted, including the exercise price,
option period and the number of shares subject to each option.
The board of directors also determines whether an option is to be
 treated as an incentive stock option, within the meaning of
Section 422 of the Internal Revenue Code of 1986, as
amended. The board of directors may also, subject to the approval
 of the compensation committee of the board, reprice the exercise
 price of options previously granted under the plan in order to
reflect current market value of the options and adjust the
exercise prices of such options to reflect market value at the
time of the grant. The term of options granted under the plan
cannot exceed ten years (five years in the case of incentive
stock options granted to a holder of 10% of our common stock).
The exercise price of:
•
nonstatutory stock options must be at least equal to the par
	value per share of our common stock; and
•
incentive stock options must be at least equal to 100% of the
	fair market value of our common stock on the date of grant (110%
	in the case of an optionee who, at the time of the grant, is a
	10% stockholder under the Code).
Except as otherwise permitted by the board of directors, options
are not assignable or transferable by the optionee (except upon
the optionee's death to a designated beneficiary), and each
option is exercisable during the lifetime of the optionee only by
 the optionee or the optionee's guardian or legal
representative. Except as otherwise permitted by the board of
directors, vested options must be exercised within three months
after the termination of an optionee's status as an
employee, director or consultant of YellowBrix (unless terminated
 for cause), or within one year after his or her termination by
disability or death, but in no event later than the expiration of
 the
45
Table of Contents
option's term. If an optionee's employment or service
is terminated for cause, then each outstanding option will
terminate as of such date.
The plan generally provides that in the event of a merger with or
 into another corporation, sale of all or substantially all of
our assets, or if we enter into any other similar transaction,
each outstanding option shall be assumed, or an equivalent option
 substituted by the successor corporation or, if not assumed or
substituted, vesting shall be accelerated immediately prior to
such transaction and the option there upon terminated.
The board of directors may amend or terminate the plan at any
time, without the consent of the stockholders, except as required
 by law. However, no amendment or termination shall adversely
affect rights and obligations with respect to outstanding
options. Unless sooner terminated by the board of directors, the
plan will terminate ten years after the date of its adoption.
For options granted under the plan, each option agreement
provides that before November 1, 1999, 1/4 of options vests
on the first anniversary of the grant date, then 1/4 annually
thereafter. After November 1, 1999, 1/4 of the options
granted vest on the first anniversary of grant date, then 1/12 of
 the balance vest every three months thereafter.
2000 Stock Option Plan
Our 2000 Stock Option Plan provides for the grant of options to
our employees, directors and consultants. A total of 6,800,000
shares of common stock have been reserved for issuance under the
plan. As of August 31, 2000, options to purchase an
aggregate of 5,444,338 shares were outstanding, no shares of
 common stock had been purchased through exercises of stock
options and 1,355,662 shares were available for future
grant.
The plan is administered by the board of directors, which
determines the terms of options granted, including the exercise
price, option period and the number of shares subject to each
option. The board of directors also determines whether an option
granted is to be treated as an incentive stock option, within the
 meaning of Section 422 of the Internal Revenue Code of
1986, as amended. The board of directors may also, subject to the
 approval of the compensation committee of the board, reprice the
 exercise price of options previously granted under the plan in
order to reflect current market value of the options and adjust
the exercise prices of such options to reflect market value at
the time of the grant. The term of options granted under the plan
 cannot exceed ten years (five years in the case of incentive
stock options granted to a holder of 10% of our common stock).
The exercise price of:
•
nonstatutory stock options must be at least equal to the par
	value per share of our common stock; and
•
incentive stock options must be at least equal to 100% of the
	fair market value of our common stock on the date of grant (110%
	in the case of an optionee who, at the time of the grant, is a
	10% stockholder under the Code).
Except as otherwise permitted by the board of directors, options
are not assignable or transferable by the optionee (except upon
the optionee's death to a designated beneficiary) and each
option is exercisable during the lifetime of the optionee only by
 the optionee or the optionee's guardian or legal
representative. Except as otherwise permitted by the board of
directors, vested options must be exercised within
three months after the termination of an optionee's
status as an employee, director or consultant of YellowBrix
(unless terminated for cause), or within one year after his or
her termination by disability or death, but in no event later
than the expiration of the option's term. If an
optionee's employment or service is terminated for cause,
then each outstanding option will terminate as of such date.
The plan generally provides that in the event of a merger with or
 into another corporation, sale of all or substantially all of
our assets, or if we enter into any other similar transaction,
each
46
Table of Contents
outstanding option shall be assumed or an equivalent option
substituted by the successor corporation or, if not assumed or
substituted, vesting shall be accelerated immediately prior to
such transaction and the option thereunder terminated.
The board of directors may amend or terminate the plan at any
time, without the consent of the stockholders, except as required
 by law. However, no amendment or termination shall adversely
affect rights and obligations with respect to outstanding
options. Unless sooner terminated by the board of directors, the
plan will terminate ten years after the date of its adoption.
Under the 2000 Plan, 1/36 of the options vest every month over a
one year period beginning one month after the grant date, the
remaining options vest 1/96 every month thereafter over
8 years, except in the event of an IPO whereby 1/3 of the
total, less any that had vested in the interim, vest immediately
after the closing of the IPO or a specified change of control
transaction and the remaining 1/3, less any that had vested in
the interim, vest at a rate of 1/72 per month over 24 months.
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Table of Contents
RELATED PARTY TRANSACTIONS
We were incorporated as a Delaware corporation in
October 1997 and began doing business under the name of
BizWatch, Inc. In February 1998, we changed our name to
NewsReal, Inc. and then to our current name YellowBrix, Inc. in
February 2000. We entered into numerous transactions under
such names. We believe that the terms of each of the transactions
 described below were no less favorable to us than could have
been obtained from unaffiliated third party parties. The
counterparties in many of these transactions only became
affiliated with us as a result of the successful closing of these
 highly negotiated transactions. Unless otherwise noted below,
when we refer to "YellowBrix," "we,"
"our," and "us," we mean YellowBrix, Inc., a
Delaware corporation, and YellowBrix under its two predecessor
names.
Infoseek
. On December 11, 1997, we acquired
intellectual property and other assets of Infoseek Corporation
pursuant to an asset acquisition agreement for $1.0 million
in cash, 850,000 shares of our common stock and a ten year
warrant to purchase 1,077,500 shares of our common stock. The
warrant vests upon our achievement of certain performance goals
and expires on December 11, 2007 or becomes exercisable
automatically under certain conditions or upon fulfillment of
certain conditions after the closing of our IPO.
CNN
. On January 1, 1998, we executed a co-branding
agreement with CNNfn, a division of Cable News Network LP, LLP,
to feature and advertise our service on their site. We agreed to
pay an aggregate of $4.5 million and $1.75 million for
two years worth of branding and advertising fees, respectively.
As of April 1999, we paid $1.0 million in branding fees and
$108,180 in advertising fees for the first year. CNNfn provided
us with additional on-air advertisements worth in excess of
$1 million. On April 21, 1999, we amended the
co-branding agreement and pursuant to such amendment, which
reduced our outstanding obligation to $4.5 million, executed
 a promissory note payable on demand to CNNfn for
$3.5 million as payment for the additional on-air
advertisement and an accelerated payment for the two years of
branding fees. Simultaneously, we sold 470,638 shares of common
stock in a private placement to CNNfn, in consideration of
cancellation of the $3.5 million promissory note.
QIP.
On December 11, 1997, we executed a securities
purchase agreement with QIP whereby it purchased 3,250,000 shares
 of our common stock for $3.0 million. In 1998 and 1999, we
borrowed $1.2 million and $2.65 million, respectively,
from QIP pursuant to demand promissory notes and security
agreements. The promissory notes bear interest at an annual rate
of 8% and principal and accrued interest are payable on demand.
Under the security agreements, QIP received a senior security
interest in our assets, subject to prior purchase money security
interests in favor of a third party that holds security interests
 in our leased computer hardware and peripheral equipment, and a
bank with respect to a $200,000 letter of credit posted as a
security deposit on our leased facilities.
In 1997 and 1998, we borrowed $1.0 million under a term loan
 agreement and $3.0 million under an amendment to the term
loan agreement providing for a revolving line of credit,
respectively, from Bayerishe Vereinsbank AG. These loans were all
 guaranteed by QIP. QIP agreed to repay the loans under certain
conditions and made additional loans to us in 1998 and 1999. In
connection with the assumption of our debt to Bayerishe
Vereinsbank we granted QIP the option to convert the aggregate
amount under the B.V. loan and certain of the QIP loans into
shares of our common stock at a price of $2.47 per share if QIP
repaid all or a portion of the outstanding principal and accrued
interest at the time our Term Loan became due and up to
$1.0 million of principal plus accrued interest on our line
of credit due after May 28, 1999 and before
December 31, 1999. However, the conversion price would be
reduced to $1.00 per share if QIP repaid up to $2.0 million
of principal plus accrued interest on our line of credit after
March 31, 1999 and before the earlier of December 31,
1999 or our payment in full of the line of credit.
We executed a bridge note on March 6, 2000 in favor of QIP
in consideration for repaying our loans to B.V. Simultaneously,
we amended the conversion agreement to extend the right to
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Table of Contents
conversion from December 31, 2000 to December 31, 2002.
 The amendment also extended conversion rights to QIP for
additional loans it made to us in 1999. To date, our aggregate
outstanding principal indebtedness to QIP is $7,850,000. On
October 18, 2000, QIP agreed to automatically convert the
aggregate outstanding principal amount of our indebtedness into
6,659,717 shares of our common stock upon closing of the
offering. As of August 31, 2000, the accumulated interest on
 the QIP debt was $782,000 and will be payable in cash upon the
closing of our IPO.
Fall 1999 Financing.
In November 1999, we sold 592,544
shares of our common stock for an aggregate purchase price of
$3.48 million through I-Bankers Securities, Inc. (the
company formerly known as Millennium Financial Group, Inc.), as
placement agent, to certain investors. In connection with the
private placement, the investors were allowed to elect Michael
McCrory, an employee of I-Bankers, to our board of directors. In
connection with such financing, we issued a five-year warrant, as
 a placement fee, to I-Bankers for the purchase of 30,612 shares
of our common stock at an exercise price of $8.82 per share.
These investors and I-Bankers received anti-dilution rights
pursuant to the Shareholders Rights Agreement and placement
agreement, respectively. Specifically, in the event that 1)
Infoseek exercises its warrant and 2) QIP converts our
indebtedness, these investors will receive, for no further
consideration additional shares to maintain their ownership in
YellowBrix at the time of their investment on a fully diluted
basis. Since I-Bankers placement fee was a warrant based on the
number of shares of common stock placed with these investors, the
 number of shares it receives under the warrant increases
proportionately.
Spring 2000 Financing.
In Spring 2000, we sold 4,840,893
shares of our common stock for an aggregate purchase price of
$18.0 million through I-Banker Securities, as placement
agent, to certain investors. In connection with such financing,
we issued a five year warrant, as a placement fee, to I-Bankers
to purchase 134,409 shares of our common stock at an exercise
price of $5.88 per share.
On May 12, 2000 and May 31, 2000, we sold 100,000
shares of our series A convertible preferred stock at a price of
$10.00 per share to each of ABN AMRO Private Equity and Holland
Ventures III B.V. The series A convertible preferred stock is
convertible into the number of common stock at the option of the
holder simultaneously with a qualified IPO into an aggregate of
537,634 shares of common stock. ABN AMRO and Holland agreed to
convert their series A convertible preferred stock to common
 stock upon the closing of an IPO occurring no later than
March 31, 2001.
Triad/Icon.
On June 29, 2000, we sold
268,817 shares of our common stock to Icon International,
Inc. for an aggregate purchase price of $1.0 million
tendered in media credits. We will purchase various advertising
time and/or space made available by Icon and half of the purchase
 price will be applied against these media credits and the other
half will be paid in cash. Icon simultaneously assigned all of
its rights, but none of its obligations to Triad Media Ventures
LLC.
In connection with this transaction, we also executed a put
option agreement with Icon whereby we have an option to sell an
additional 134,409 shares of common stock at $3.72 per share
 also to be tendered in media credits. This put right expires
18 months from the date of the agreement.
Pursuant to the put option agreement, Icon also has the right to
buy up to the value of unexpended purchase price of the put
option in the subsequent private placement of not less than
$10.0 million if we have not exercised all or part of any
portion of our put option as of the first anniversary of date of
the agreement.
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Table of Contents
Shareholder Rights Agreements and Rights Agreement
In the table set forth below is our various shareholders
agreements which provide for certain registration rights:
Agreement
Parties
Rights
Shareholders' Agreement, dated as of 12/11/97 as
amended 10/  /00
Infoseek, QIP Investors, Managing Founders and YellowBrix
After the closing of our IPO, QIP has three demand registration
	rights to cause us to register its shares of common stock, or if
	the holders representing 50% or more of our outstanding
	securities request the registration of their shares, such other
	investors have the right to request to be the included in such
	registration; provided, that, the anticipated aggregate public
	offering price for the shares to be registered is not less than
	$5 million. However, QIP has unlimited incidental
	registrations.
Once we have qualified for registration on Form S-3 for
	secondary offerings, the investors are entitled to four demand
	registration rights on Form S-3 provided that the aggregate
	offering price for those shares to be registered is not less than
	 $2.5 million, unless the most recent registration statement was
	effected within 180 days of such demand registration.
Rights Agreement, dated as of 4/21/99
as amended
10/  /00
CNNfn, QIP Investors, Managing Founders and YellowBrix
After the closing of our initial public offering, CNNfn has one
	demand registration right to cause us to register its shares of
	common stock, or if the holders representing 50% or more of our
	outstanding securities request the registration of their shares,
	CNNfn has the right to request to be included in such
	registration provided that, the anticipated aggregate public
	offering price for the shares to be registered is not less than
	$3.5 million. CNNfn also has unlimited incidental
	registration rights.
Shareholder Rights Agreement, dated as of 10/28/99, as amended
	10/19/00
Investors listed therein and YellowBrix
Investors have unlimited incidental registration rights.
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Table of Contents
Agreement
Parties
Rights
Shareholder Rights Agreement, dated
as of 3/9/00
as amended
10/19/00
(2)(3)
Investors listed therein,
(1)
ABN AMRO, Triad and
	YellowBrix
Investors, ABN AMRO and Icon/ Triad have unlimited incidental
	registration rights.
Rights Agreement, dated as of 10/20/00
ABN AMRO,
Holland Ventures and YellowBrix
After the closing of our IPO, ABN AMRO and Holland Ventures have
	one demand registration right to cause us to register their
	shares of common stock provided that the anticipated aggregate
	offering price for the shares to be registered is not less than
	$3.5  million.
(1)
Holland Ventures III N.V. and Prime Technologies
	Ventures N.V., each a 5% beneficial stockholder, are parties to
	this agreement.
(2)
ABN AMRO Private Equity signed Joinder in
	Shareholder Rights Agreement, dated 5/12/00, which makes it a
	party to the Shareholder Rights Agreement dated 3/9/00.
(3)
Triad signed Joinder in Shareholder Rights
	Agreement, dated 6/9/00 which makes it a party to the Shareholder
	 Rights Agreement dated 3/9/00.
Pursuant to our letter to ABN AMRO, dated as of May 12,
2000, ABN AMRO can designate one representative to our board of
directors before we complete a public offering with total gross
proceeds to us of not less than $30.0 million. ABN AMRO
waived this right unconditionally.
Certain of our warrant holders also have unlimited incidental
registration rights pursuant to their warrants which have been
waived with respect to this offering. In addition, CNNfn,
I-Bankers Financial Group and the I-Bankers Fall investors have
anti-dilution rights. Upon exercise of the Infoseek warrant,
I-Bankers and I-Bankers Fall investors receive additional
warrants or shares in proportion to their ownership of the
company at the time of their investment or service. Upon
conversion of our debt by QIP, CNNfn, I-Bankers and the I-Bankers
 Fall investors all receive additional shares or warrants in
proportion to their ownership of the company at the time of their
 investment or service. The additional shares which shall be
issued to CNNfn and the I-Bankers Fall investors are 1,067,936
and the additional number of warrants which shall be issued to
I-Bankers shall be 30,347.
Severance Agreements
We entered into a Settlement Agreement and General Release with
Catherine Michela in February 2000. Under the agreement, all
 options granted to her were terminated or have expired. She
still holds 199,199 shares of our common stock. As part of her
severance package, she receives $10,000 per month beginning
March 1, 2000 and for 20 months thereafter, as well as
health, dental and vision insurance through December 10,
2000. Ms. Michela has waived all claims and liability
against us. She is still bound by the Shareholders Agreements,
dated as of December 11, 1997, and April 21, 1999 and
certain sections of the Employment Agreement and Subscription
Agreement.
We also entered into a Settlement Agreement with Peter McKee on
July 31, 1999, which has an effective date of
January 1, 2000. He holds 199,100 shares of our common stock
 and has vested options to purchase 199,500 additional shares, of
 which he may exercise up to January 31, 2001. All other
options granted to Mr. McKee were terminated or have
expired. Mr. McKee is still bound by the Shareholders
Agreement, dated as of December 11, 1997 and the Rights
Agreement, dated as of April 21, 1999. We waived our right
to repurchase Mr. McKee's shares of common stock so
long as he does not violate non-competition/solicitation and
confidentiality provisions of the Employment Agreement. In
addition, we repaid Mr. McKee a loan of $5,625.
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Table of Contents
Transactions with S. Randy Lampert
On August 30, 1999, we entered into a contractor agreement
with Mayflower Resources, Inc., whose sole shareholder is
S. Randy Lampert. To date, Mr. Lampert serves as our
Chief Financial Officer under an independent contractor
relationship. The scheduled termination date of the agreement, as
 amended was February 28, 2000 and was extended to
August 31, 2000, but he has continued in his former
capacity. Until the earlier of the termination of this agreement,
 the termination of his services or his death or disability,
Mr. Lampert receives a base pay of $9,000 per month and a
warrant for each completed month of service equal to 0.5% of the
then outstanding shares of common stock on a fully diluted basis
exercisable on a per share basis at 150% of the fair market value
 of the average per share price we received as of our most recent
 private placement equity offering.
The agreement provided that Mr. Lampert is entitled to
incentive compensation in amount equal to (1) 3% of gross
proceeds we raise in a private placement offering of our equity
securities, provided up to 1.5% of that amount will be paid in
cash and at least 1.5% of that amount will be paid in the form of
 a promissory note with warrants for the number of shares equal
to the face value of the promissory note divided by the per share
 price of our common stock of the company at that time,
(2) 1.5% of the gross proceeds raised by us in an IPO of our
 debt or equity securities payable in cash, and (3) 1.5% of
the aggregate consideration paid to us in a transaction involving
 a merger or sale of all or substantially all of our stock and/
or assets payable in cash. Negotiations are under way to extend
and reset certain of the economic provisions of the contractor
agreement.
In 1999, we entered into a promissory note with Mr. Lampert in
the amount of $52,262. During the first six months of 2000, we
entered into four additional promissory notes with Mr. Lampert.
The notes were for $186,000, $99,121, $15,000 and $22,500 and
were issued on April 15, 2000, May 15, 2000,
June 15, 2000 and June 29, 2000, respectively. All of
the notes have a term of three years and bear interest at 9% per
year.
52
Table of Contents
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the
beneficial ownership of our capital stock as of August 31,
2000, as adjusted to reflect the sale of the common stock offered
 by us pursuant to this prospectus for:
•
each person or entity who is known by us to beneficially own 5%
	or more of our capital stock,
•
each of our directors and director nominees;
•
each of our Named Executive Officers; and
•
all of our executive officers, directors, and director nominees
	as a group.
The percent of beneficial ownership for each stockholder prior to
 the offering is based on 11,179,567 shares of common stock
outstanding and the sale of shares as part of this offering.
The following table includes all shares of common stock
beneficially owned by the indicated stockholder as of
August 31, 2000. Beneficial ownership is determined in
accordance with the rules and regulations of the Securities and
Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage of ownership of
 that person, shares of common stock subject to options held by
that person that are currently exercisable or exercisable within
60 days of September 1, 2000, are deemed outstanding.
Such shares, however, are not deemed outstanding for the purposes
 of computing the percentage of ownership of any other person.
Except as otherwise noted, the address of each person listed in
the table is c/o YellowBrix, Inc., 66 Canal Center Plaza,
Alexandria, Virginia 22314. Except as otherwise noted, the
persons named in the table have sole voting and dispositive power
 with respect to all shares of common stock shown as beneficially
 owned by them, subject to community property laws where
applicable.
Percentage of
Shares
Number of Shares
Beneficially
Beneficially Owned
Owned
Prior to
After
Prior to
After
Holders
Offering
Offering
Offering
Offering
Quantum Industrial Partners, LDC
(1)
6,606,733
6,606,733
42.3%
c/o Soros Fund Management, LLC
888 Seventh Avenue
33rd Floor
New York, N.Y. 10106
Geosor Corporation
(2)
2,543,749
2,543,749
19.7%
888 Seventh Avenue
New York, N.Y. 10106
ABN AMRO Private Equity
(3)
1,612,903
1,612,903
14.1%
208 S. LaSalle Street
Suite 1000
Chicago, IL 60604
Holland Venture III B.V.
(4)
1,612,703
1,612,703
14.1%
55 Haaksbergweg
1101 BR Amsterdam, Z.O
Netherlands
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Table of Contents
Percentage of
Shares
Number of Shares
Beneficially
Beneficially Owned
Owned
Prior to
After
Prior to
After
Holders
Offering
Offering
Offering
Offering
Prime Technology Ventures N.V.
1,344,086
1,344,086
12.0%
Entrada 102
1096 EA, Amsterdam
The Netherlands
Infoseek Corporation
(5)
850,000
1,927,500
7.6%
1399 Moffett Park Drive
Sunnyvale, CA 94089
David C. Hoppmann
(6)
1,414,396
2,280,990
11.5%
Jeffrey P. Massa
(7)
1,168,760
1,885,306
9.6%
S. Randy Lampert
(8)
1,813,328
1,813,328
14.0%
Gary Gladstein
(9)
660,137
660,137
5.7%
Jace D. Wieser
(10)
167,054
308,392
1.5%
Keith Walz
(11)
10,000
10,000
*
Michael McCrory
(12)
10,000
10,000
*
Stewart J. Paperin
(13)
76,320
76,320
*
Douglas M. Reid
(14)
42,777
42,777
*
All executive officers, directors, director
19,962,946
22,764,924
85.8%
nominees and 5% beneficial stockholders as a group (17 persons)
(15)
*
Represent beneficial ownership of less than 1%.
(1)
Includes 2,166,700 shares of common stock
	currently issued and 4,440,033  shares common stock which
	are issuable upon conversion of convertible debt held by QIP.
	Mr. George Soros is the sole shareholder of QIH Management,
	Inc., the sole general partner of the investment advisory firm
	that manages QIP and has investment discretion over the shares
	held by QIP. Mr. Soros is also the Chairman of Soros Fund
	Management LLC, and has agreed to use his best efforts to cause
	QIH Management, Inc. to act at the discretion of Soros Fund
	Management LLC. Mr.  Soros may be deemed a beneficial owner
	of the shares held by QIP; however, he expressly disclaims
	beneficial ownership of the shares held by QIP except to the
	extent of his pecuniary interest therein.
(2)
Includes 834,200 currently issued and
	1,709,549 shares of common stock which are issuable upon
	conversion of convertible debt held by Geosor Corporation, of
	which Mr. Soros is the sole shareholder and the president of
	 which is Gary Gladstein. Gary Gladstein holds 216,00 shares in
	his personal account and 443,537 shares of common stock issuable
	upon conversion of convertible debt. Mr. Soros and Gary
	Gladstein may be deemed the beneficial owners of the shares held
	by Geosor; however they expressly disclaim beneficial ownership
	of the shares held by Geosor except to the extent of their
	pecuniary interest therein.
(3)
Includes 1,344,086 shares of common stock
	currently issued, and 268,817 shares of common stock issuable
	upon proposed conversion of series A preferred stock held by ABN
	AMRO Private Equity.
(4)
Includes 1,344,086 shares of common stock
	currently issued, and 268,817 shares of common stock issuable
	upon proposed conversion of series A preferred stock held by
	Holland Venture III B.V.
(5)
Includes 1,077,500 warrants that become
	exercisable upon a qualified IPO.
(6)
Includes 1,158,196 shares subject to stock
	options. The after offering total includes 866,594 shares granted
	 pursuant to certain option agreements that accelerate upon the
	closing of this offering.
(7)
Includes 969,660 shares subject to stock options.
	The after offering total includes 1,686,206 shares granted
	pursuant to certain option agreements that accelerate upon the
	closing of this offering.
(8)
Includes (a) warrants to purchase
	1,756,027 shares of common stock issued as part of
	Mr. Lampert's monthly compensation and
	(b) warrants to purchase 57,301 shares of common stock
	issued as part of Mr.  Lampert's incentive compensation
	 related to the Fall 1999 and Spring 2000 financings.
(9)
Includes 216,600 shares of common stock
	currently issued to Mr. Gladstein and 443,537 shares of
	common stock issuable upon conversion of convertible debt held by
	 Mr.  Gladstein.
(10)
Includes 167,054 shares subject to options. The
	after offering total includes 141,338 shares subject to options
	that accelerate upon the closing of this offering.
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(11)
Includes 10,000 shares subject to vested options.
(12)
Includes 10,000 shares subject to vested options.
(13)
Includes 21,700 shares of common stock currently
	issued to Mr. Paperin, 44,620 shares of common stock
	issuable upon conversion of convertible debt held by Mr. 
	Paperin and 10,000 shares subject to vested options.
(14)
Includes 10,800 shares of common stock currently
	issued to Mr. Reid, 21,977 shares of common stock issuable
	upon conversion of convertible debt held by Mr.  Reid and
	10,000 shares subject to vested options.
(15)
Includes options to purchase 30,000 shares of our
	common stock held by two of our other executive officers.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock as of the close of this offering
consists of:
•
100,000,000 shares of common stock, $.001 par value per share,
	and
•
10,000,000 shares of preferred stock, $.001 par value per share.
As of June 30, 2000, there were 11,179,567 shares of common
stock and 200,000 shares of preferred stock outstanding, held of
record by approximately 40 stockholders.
The following description of our certificate of incorporation,
by-laws and agreement which provide for certain registration
rights is only a summary, and does not purport to be complete.
For a full understanding of these documents and the terms of our
capital stock, you should read the original documents, which are
included as exhibits to the registration statement of which this
prospectus is a part.
Common Stock
Holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the
stockholders. Holders of common stock are not entitled to
cumulative voting rights. Holders of common stock are entitled to
 receive ratably such dividends as may be declared by the board
of directors out of funds legally available therefor. In the
event of a liquidation, dissolution or winding up of YellowBrix,
holders of common stock are entitled to share ratably in all
assets remaining after payment of liabilities. Holders of common
stock have no preemptive rights and no right to convert their
common stock into any other securities. There are no redemption
or sinking fund provisions applicable to the common stock. All
the outstanding shares of common stock are, and the shares to be
sold in this offering will be, validly issued, fully paid and
nonassessable.
Preferred Stock
The board of directors is authorized to issue the shares of
preferred stock in one or more series and to fix the rights,
preferences, privileges and restrictions thereof, including
dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or
the designation of such series, without further vote or action by
 the stockholders. The issuance of such preferred stock may have
the effect of delaying, deferring or preventing a change in
control of us without further action by the stockholders and may
adversely affect the voting and other rights of the holders of
common stock, including the loss of voting control to others.
Series A Convertible Preferred Stock.
In
May 2000, we sold an aggregate of 200,000 shares of series A
 convertible preferred stock at $10.00 per share to ABN AMRO
Private Equity and Holland Ventures III B.V. The series A
convertible preferred stock will convert before the closing of
the IPO into 537,634 shares of common stock. We have no current
plans to issue any shares of preferred stock following this
offering.
Mr. Walz, a member of our board of directors, was designated
 by ABN AMRO Private Equity, an entity that owns our convertible
stock, and may have an indirect material interest in the
transactions between us and ABN AMRO.
Warrants
As of August 31, 2000, we had 11 outstanding warrants to
purchase an aggregate of 4,454,856 shares of our common stock.
The warrants are exercisable at a weighted average price of
$3.21 per share. The warrants are exercisable under certain
conditions and up to their expiration date and expire variously
from May 2002 through April 2010.
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Set forth is a table of all warrants outstanding, their holders
and certain registration rights granted thereunder:
Warrant Holder
Number of Shares of
Exercise
Registration Rights
Date of Issuance
Common Stock
Price
(if applicable)
Infoseek Corporation
1,077,500
$.001
N/ A
12/11/97
Insight Investments Corp.
4,285
$3.50
Unlimited incidental registration
8/27/99
rights except pursuant to an initial public offering.
3665, Inc.
54,000
$3.50
N/ A
8/29/99
Mayflower Resources, Inc.
(1)
1,813,327
$2.00 – $4.77
N/ A
9/99 to 8/00 (issued monthly)
I-Bankers Securities, Inc.
(2)
(A)
30,612
$8.82
Unlimited incidental registration rights except pursuant to an
	initial public offering.
(B) 3/21/00
134,409
$5.88
N/ A
Mike Azzara
(A) 1/11/00
3,000
$3.50
N/ A
(B) 1/19/00
2,551
$5.88
Park & Vaughan LLP
2,122
$5.88
N/ A
1/22/00
America Online, Inc.
Up to 832,691
$3.72
N/ A
4/4/00
Stephen Canton
500,359
$4.77
N/ A
2/00 to 5/00 (issued monthly)
(1)
S. Randy Lampert, our Chief Financial Officer, is
	the sole shareholder of Mayflower Resources, Inc.
(2)
I-Bankers has anti-dilution protection to maintain
	 their percentage ownership in us in the event of exercise of
	warrants by Infoseek, and conversion rights pursuant to QIP
	indebtedness.
Registration Rights
Certain holders of our common stock and preferred stock are
entitled to registration rights under the terms of a shareholders
 agreement, a rights agreement and several shareholders rights
agreements. Subject to the limitations specified in these
agreements, the registration rights include the following:
Piggyback Registration Rights.
The holders of
10,272,892 shares of common stock and common stock issuable
upon conversion or exercise of other securities (the
"registrable securities") have rights to have their
shares registered for resale under the Securities Act if we
register any of our securities, either for our own account or for
 the account of other security holders except with respect to an
IPO, subject to the right of underwriters to limit the number of
shares included in an underwritten offering.
Demand Registration Rights.
The holders of 3,720,638
registrable securities have rights, at their request, to have
their shares registered for resale under the Securities Act.
After an IPO, QIP has three demand registration rights if the
aggregate offering price is at least $5.0 million. In
addition, QIP has four demand registration rights on
Form S-3 except if the aggregate offering price is less than
 $25.0 million or if the most recent registration statement
was effected within 180 days. CNNfn has one demand post-IPO
registration right provided it holds, together with other
demanding stockholders, more than 50% of the then outstanding
registrable securities and the aggregate offering price will at
least $3.5 million.
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All holders with registrable securities have agreed not to
exercise their demand registration rights until 180 days
following the date of this prospectus without the consent of
Chase Securities Inc.
We will bear all registrations expenses incurred in connection
with any of the above registrations. Each of registrable
securities participating in any registration will pay their own
underwriting discounts, selling commission and stock transfer
taxes applicable to the sale of its securities.
Stockholders' Agreement
We have entered into five stockholders' agreement with our
current stockholders. Certain of the provisions in those
agreements will not terminate upon the closing of this offering.
See "Related Party Transaction — Shareholder
Rights Agreement and Rights Agreements."
Delaware Anti-Takeover Law and Certain Charter and Bylaw
Provisions
Under Section 203 of the Delaware General Corporation Law,
certain "business combinations" between a Delaware
corporation with shares that generally are publicly traded or
held of record by more than 2,000 stockholders, and an
"interested stockholder" are prohibited for a
three-year period following the date that such stockholder became
 an interested stockholder, unless:
•
the corporation has elected in its certificate of incorporation
	or by-laws not to be governed by the Delaware anti-takeover law;
•
the business combination was approved by the board of directors
	of the corporation before the other party to the business
	combination became an interested stockholder;
•
upon consummation of the transaction that made it an interested
	stockholder, the interested stockholder owned at least 85% of the
	 voting stock of the corporation outstanding at the commencement
	of the transaction, excluding voting stock owned by directors who
	 are also officers or held in employee stock plans in which the
	employees do not have a right to determine confidentially whether
	 to tender or vote stock held by the plan; or
•
the business combination was approved by the board of directors
	of the corporation and ratified by 66 2/3% of the voting
	stock which the interested stockholder did not own. The
	three-year prohibition does not apply to certain business
	combinations proposed by an interested stockholder following the
	announcement or notification of certain extraordinary
	transactions involving the corporation and a person who had not
	been an interested stockholder during the previous three years or
	 who became an interested stockholder with the approval of a
	majority of the corporation's directors. The term
	"business combination" is defined generally to include
	mergers or consolidations between a Delaware corporation and an
	interested stockholder, transactions with an interested
	stockholder involving the assets or stock of the corporation or
	its majority-owned subsidiaries and transactions which increase
	an interested stockholder's percentage ownership of stock.
	The term "interested stockholder" is defined generally
	as a stockholder who becomes beneficial owner of 15% or more of a
	 Delaware corporation's voting stock.
We have not elected in our certificate of incorporation or
by-laws not to be governed by the Delaware anti-takeover law.
Section 203 could have the effect of delaying, deferring or
preventing a change in control of YellowBrix.
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Limitation of liability and indemnification matters
Our certificate of incorporation and bylaws limit the liability
of our directors and executive officers. See
"Management — Indemnification Agreements." We
 also intend to enter into indemnification agreements with our
current directors and executive officers. These agreements may
have the practical effect in some cases of eliminating our
stockholders' ability to collect monetary damages from our
directors. We believe that these contractual agreements and the
provisions in our certificate of incorporation and by-laws are
necessary to attract and retain qualified persons as directors
and officers.
Transfer Agent and Registrar
American Stock Trust and Transfer Company is the transfer agent
and registrar for our common stock.
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to the offering, there has been no public market for our
common stock, and we cannot predict the effect, if any, that
market sales of shares or the availability of any shares for sale
 will have on the market price of the common stock prevailing
from time to time. Sales of substantial amounts of common stock,
or the perception that such sales could occur, could adversely
affect the market price of our common stock and our ability to
raise capital through a sale of our securities.
Upon completion of this offering, we will have    
      shares of
common stock outstanding (or
          shares
 if the underwriters over-allotment option is exercised in full)
of which
          will
be "restricted shares." This leaves
          shares
 eligible for sale in the public market as follows:
Number of
Date
Shares
At effective date
180 days from the effective date of the prospectus
The
          shares
 (or up to
          shares
 if the underwriters' over-allotment option is exercised in
full) of common stock sold in this offering will be freely
tradable without further restriction or further registration
under the Securities Act, except for shares purchased by an
affiliate (as this term is defined in the Securities Act) of
ours, which will be subject to the limitations of Rule 144
under the Securities Act. Subject to certain contractual
limitations, holders of restricted shares generally will be
entitled to sell these shares in the public securities market
without registration either pursuant to Rule 144 or any
other applicable exemption under the Securities Act.
Rule 144.
In general, under Rule 144 under the
Securities Act, a person (or persons whose shares are aggregated)
 who has beneficially owned restricted securities within the
meaning of Rule 144 for at least one year, and including the
 holding period of any prior owner except an affiliate, would be
entitled to sell within any three-month period a number of shares
 that does not exceed the greater of:
•
1% of the then outstanding shares of our common stock, which will
         equal
                  shares
         immediately after this offering; or
•
the average weekly trading volume of our common stock on the
        Nasdaq National Market during the four calendar weeks preceding
        the filing of a notice on Form 144 with respect to such
        sale.
Sales under Rule 144 are also subject to certain manner of
sale provisions, notice requirements and the availability of
current public information about us.
Rule 144(k).
Under Rule 144(k), any person, or
persons whose shares are aggregated, who is not deemed to have
been our affiliate at any time during the 90 days preceding
a sale, and who has beneficially owned shares for at least two
years, including any period of ownership of preceding
non-affiliated holders, would be entitled to sell such shares
under Rule 144(k) without regard to the volume limitations,
manner of sale provisions, public information requirements or
notice requirements of Rule 144. An "affiliate" is
 a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or under common
control with, an issuer.
Lock-Up Agreements.
Our executive officers, directors and
5% or greater stockholders have entered into lock-up agreements
under which they have agreed that they will not transfer or
dispose of, directly or indirectly, any shares of common stock or
 any securities convertible into or exercisable or exchangeable
for shares of common stock, for a period of 180 days from the
date of this prospectus, subject to certain exceptions. Transfers
 or dispositions can be made sooner with the written consent of
Chase Securities Inc.
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Under the terms of an agreement between us and the holders of
shares of our preferred stock, the preferred stockholders are
entitled to certain rights with respect to the registration of
their shares under the Securities Act commencing 180 days
after the consummation of this offering. If we receive from the
holders of at least 40% of any class of preferred stock a written
 request to effect a registration with respect to all or a part
of their shares, we must use our best efforts to effect such a
registration, provided the shares owned by the requesting
stockholders cover at least 33% of the then outstanding class of
security of the offering price in the aggregate is at least
$5,000,000. We are only obligated to effect two of these
registrations. When we are eligible to utilize a registration
statement on Form S-3 to register an offering of our
securities, may request that we file a registration statement on
Form S-3 covering all or a portion of their shares, provided
 that the aggregate public offering price is at least $500,000.
In addition, our preferred stockholders have certain
"piggyback" registration rights, certain of which are
being waived with respect to this offering. If we propose to
register any common stock under the Securities Act, other than
pursuant to the registration rights above, these stockholders may
 require us to include all or a portion of their securities in
such registration. We are obligated to use our best efforts to
effect this registration.
Within approximately 180 days after the date of this
prospectus, we intend to file one or more registration statements
 on Form S-8 under the Securities Act to register
          shares
 of common stock subject to outstanding stock options or reserved
 for issuance under our equity compensation plans. Upon
completion of this offering, options to purchase approximately
          shares
 will be outstanding under our equity compensation plans.
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UNDERWRITING
Chase Securities Inc., Dain Rauscher Incorporated and Wit
SoundView Corporation are the representatives of the
underwriters. Subject to the terms and conditions of the
underwriting agreement dated
          ,
2000, the underwriters named below, through their
representatives, have severally agreed to purchase from us the
following respective numbers of shares of common stock.
Number of
Name
Shares
Chase Securities Inc.
Dain Rauscher Incorporated
Wit SoundView Corporation
Total
The underwriting agreement provides that the obligations of the
underwriters are subject to conditions precedent, including the
absence of any material adverse change in our business and the
receipt of various certificates, opinions and letters from us,
our counsel and the independent auditors. The underwriters are
obligated to purchase all of the shares offered by us (other than
 those covered by the over-allotment option described below) if
they purchase any shares.
The following table shows the per share and total underwriting
discounts and commissions we will pay to the underwriters. Such
amounts are shown assuming both no exercise and full exercise of
the underwriters' over-allotment option to purchase
additional shares.
Underwriting Discounts and Commissions
With
Without
Over-Allotment
Over-Allotment
Exercise
Exercise
Per Share
$
$
Total
We estimate that the total expenses of this offering, excluding
underwriting discounts and commissions, will be approximately
$           million.
The underwriters propose to offer the shares directly to the
public at the initial public offering price set forth on the
cover page of this prospectus and to various dealers at that
price less a concession not in excess of
$          per
share. The underwriters may allow and such dealers may re-allow a
 concession not in excess of $     per
share to various other dealers. After the initial public offering
 of the shares, the offering price and other selling terms may be
 changed by the underwriters. The representatives have advised us
 that the underwriters do not intend to confirm discretionary
sales in excess of 5% of the shares of common stock offered
hereby.
We have granted to the underwriters an option, exercisable no
later than 30 days after the date of this prospectus, to
purchase up to
          additional
 shares of common stock at the initial public offering price,
less the underwriting discount set forth on the cover page of the
 prospectus. To the extent that the underwriters exercise this
option, each of the underwriters will have a firm commitment to
purchase approximately the same percentage of these option shares
 which the number of shares of common stock to be purchased by it
 shown in the above table bears to the total number of shares of
common stock offered by this prospectus. We will be obligated,
pursuant to this option, to sell shares to the underwriters to
the extent the option is exercised. The underwriters may exercise
 this option only to cover over allotments made in connection
with the sale of shares of common stock in this offering. The
offering of the shares is made for delivery when, as and if
accepted by the underwriters and subject to prior sale and to
withdrawal, cancellation or modifica-
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tion of the offering without notice. The underwriters reserve the
 right to reject an order for the purchase of shares in whole or
in part.
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act, and
to contribute to payments the underwriters may be required to
make in respect of these liabilities.
Our officers and directors and stockholders have agreed that they
 will not, without the prior written consent of Chase Securities
Inc., directly or indirectly, sell, offer, contract to sell,
transfer the economic risk of ownership in, make any short sale,
pledge or otherwise dispose of any shares of our common stock,
options or warrants to acquire shares of our common stock or
securities exchangeable for or convertible into shares of our
common stock owned by them or any other rights to purchase or
acquire our common stock for a period of 180 days following
the effective date of the registration statement that includes
this prospectus. We have agreed that we will not, without the
prior written consent of Chase Securities Inc., directly or
indirectly, offer, sell, contract to sell, make any short sale,
pledge, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to
 purchase or otherwise transfer or dispose of any shares of our
capital stock, or any securities exchangeable or exercisable for
or convertible into or any rights to purchase or acquire shares
of our capital stock for a period of 180 days following the
date of this prospectus, except that we may issue shares in
connection with acquisitions, may issue shares upon the exercise
of options granted prior to the date of this prospectus and may
grant additional options or sell additional shares under our
stock option or stock purchase plans. Without the prior written
consent of Chase Securities Inc., any additional options granted
shall not be exercisable during this 180-day period unless the
holders shall have executed an agreement substantially to the
effect of the agreement described in the first sentence of this
paragraph.
We have applied to list our common stock on the Nasdaq National
Market under the symbol YBRX.
In connection with this offering, the underwriters may effect
transactions that could have the effect of raising or
maintaining, or preventing or retarding a decline in, the market
price of our shares. As a result, the price of our shares may be
higher than the price that might otherwise exist in the open
market. These transactions may be effected on the Nasdaq National
 Market, in the over-the-counter market or otherwise.
In particular, the underwriters may make short sales of our
shares and may purchase our shares on the open market to cover
positions created by short sales. Short sales involve the sale by
 the underwriters of a greater number of shares than they are
required to purchase in the offering. Covered short sales are
sales made in an amount not greater than the over-allotment
option. The underwriters may close out any covered short position
 by either exercising their over-allotment option or purchasing
shares in the open market. In determining the source of shares to
 close out the covered short position, the underwriters will
consider, among other things, the price of shares available for
purchase in the open market as compared to the price at which
they may purchase shares through the over-allotment option. Naked
 short sales are sales in excess of the over-allotment option.
The underwriters must close out any naked short position by
purchasing shares in the open market. A naked short position is
more likely to be created if the underwriters are concerned that
there may be downward pressure on the price of the shares in the
open market after pricing that could adversely affect investors
who purchase in this offering.
At our request, the underwriters have reserved up to
      shares of our common stock
for sale at the initial public offering price to our directors,
officers, employees, business associates and related persons. The
 number of shares of common stock available for sale to the
general public will be reduced if such persons purchase the
reserved shares. Any reserved shares which are not so purchased
will be offered by the underwriters to the general public on the
same basis as the other shares offered hereby.
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A prospectus in electronic format will be made available on the
Internet Web sites maintained by Wit SoundView Corporation's
 strategic partner, E*Trade Securities, Inc.
LEGAL MATTERS
Fulbright & Jaworski L.L.P., New York, New York, will pass on
 the validity of the common stock offered by this prospectus for
us. Cooley Godward LLP, Reston, Virginia, will pass upon certain
legal matters in connection with this offering for the
underwriters.
EXPERTS
Ernst & Young LLP, independent auditors, have
audited our financial statements and schedule at
December 31, 1998 and 1999 and for the period from
October 1, 1997 (inception) through December 31, 1997
and for the years ended December 31, 1998 and 1999, as set
forth in their report (which contains an explanatory paragraph
describing conditions that raise substantial doubt about our
ability to continue as a going concern as described in
Note 2 to the financial statements). We've included our
 financial statements and schedule in the prospectus and
elsewhere in the registration statement in reliance on
Ernst & Young LLP's report, given on their
authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 with the
Securities and Exchange Commission for the common stock we are
offering by this prospectus. This prospectus does not include all
 of the information contained in the registration statement. You
should refer to the registration statement and its exhibits for
additional information. Whenever we make reference in this
prospectus to any of our contracts, agreements or other
documents, the references are not necessarily complete and you
should refer to the exhibits attached to the registration
statement for copies of the actual contract, agreement or other
document. When we complete this offering, we will also be
required to file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange
 Commission.
We intend to furnish our stockholders with annual reports
containing financial statements audited by our independent
auditors, and to make available quarterly reports containing
unaudited financial information for the first three quarters for
of each fiscal year.
You can read our Securities and Exchange Commission filings,
including the registration statement, over the Internet at the
Securities and Exchange Commission's Web site at
http://www.sec.gov. You may also read and copy any document we
file with the Securities and Exchange Commission at its public
reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549; Seven World Trade Center, Suite 1300, New York, New
York 10048; and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. You may also
obtain copies of these documents at prescribed rates by calling
the Public Reference Section of the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the
operation of the public reference facilities.
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YellowBrix, Inc.
Index to Financial Statements
Page
Independent Auditors' Report
F-2
Balance Sheets
F-3
Statements of Operations
F-4
Statement of Stockholders' Equity (Deficit)
F-5
Statement of Cash Flows
F-6
Notes to Financial Statements
F-8
F-1
Table of Contents
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors and Stockholders
YellowBrix, Inc. (formerly NewsReal, Inc.)
We have audited the accompanying balance sheets of YellowBrix,
Inc. (formerly NewsReal, Inc.) as of December 31, 1998 and
1999, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the
period from October 1, 1997 (inception) to
December 31, 1997 and for the years ended December 31,
1998 and 1999. These financial statements are the responsibility
of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
 about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of YellowBrix, Inc. (formerly NewsReal, Inc.) at
December 31, 1998 and 1999, and the results of its
operations and its cash flows for the period from October 1,
 1997 (inception) to December 31, 1997 and for the years
ended December 31, 1998 and 1999, in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming
 that YellowBrix, Inc. will continue as a going concern. As more
fully described in Note 2, the Company has incurred operating
losses since inception. This condition raises substantial doubt
about the Company's ability to continue as a going concern.
Management's plans in regard to this matter are also
described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.
/s/ Ernst & Young LLP
McLean, Virginia
April 13, 2000, except Note 14,
as to which the date is May 23, 2000
and except Note 2,
as to which the date is
October 16, 2000
F-2
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Balance Sheets
December 31,
June 30,
1998
1999
2000
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
223,040
$
1,767,190
$
9,574,168
Accounts receivable, net of allowance for doubtful accounts of
        $0, $75,000, and $113,121 respectively
33,998
452,177
1,437,164
Deferred costs
—
625,000
—
Prepaid marketing fees
—
94,180
3,473,361
Prepaid content fees
—
—
646,812
Other current assets
144,398
114,742
570,960
Total current assets
401,436
3,053,289
15,702,465
Property and equipment, net
282,967
610,892
1,625,075
Deposits and other assets
65,255
26,190
98,744
Intangible assets, net
137,789
54,672
10,876
Total assets
$
887,447
$
3,745,043
$
17,437,160
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable
$
1,338,009
$
2,097,680
$
996,711
Accrued liabilities
664,607
807,786
1,569,060
Deferred revenue
15,000
521,667
1,661,618
Line of credit
3,000,000
—
—
Stockholder notes payable
1,200,000
7,850,000
7,850,000
Current portion of capital lease obligation
—
39,342
42,532
Current portion of long-term debt
1,000,000
—
—
Total current liabilities
7,217,616
11,316,475
12,119,921
Other liabilities
96,813
266,131
334,902
Long-term capital lease obligation
—
64,272
42,178
Officer loan
—
52,262
374,883
Stockholders' deficit:
Preferred stock — $0.001 par value —
        5,000,000 shares authorized; 200,000 shares issued and
        outstanding at June 30, 2000
—
—
200
Common stock — $0.001 par value — 50,000,000
        shares authorized; 5,000,000, 6,063,182 and 11,179,567 shares
        issued and outstanding at December 31, 1998 and 1999 and
        June 30, 2000, respectively
5,000
6,063
11,180
Additional paid-in capital
3,808,337
20,114,991
43,747,909
Deferred stock compensation
(29,911
)
(262,985
)
(18,580
)
Accumulated deficit
(10,210,408
)
(27,812,166
)
(39,175,433
)
Total stockholders' (deficit) equity
(6,426,982
)
(7,954,097
)
4,565,276
Total liabilities and stockholders' (deficit)  equity
$
887,447
$
3,745,043
$
17,437,160
See accompanying notes.
F-3
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Statements of Operations
Period from
October 1
Years Ended
Six Months
(inception) to
December 31,
Ended June 30,
December 31,
1997
1998
1999
1999
2000
(unaudited)
(unaudited)
Revenues:
Service
$
32,400
$
91,167
$
2,345,388
$
655,705
$
2,924,872
Advertising
1,323
76,357
499,431
170,876
82,172
Total revenues
33,723
167,524
2,844,819
826,581
3,007,044
Cost of revenues
99,077
426,252
545,288
261,820
1,061,862
Gross profit (loss)
(65,354
)
(258,728
)
2,299,531
564,761
1,945,182
Operating expenses:
Sales and marketing (excluding stock and warrant based non-cash
	expenses of $ — , $ — , and $49,639
	 in 1997, 1998 and 1999 and $ — and $45,447 for
	the six months ended June 30, 1999 and 2000, respectively,
	shown below)
150,091
2,159,611
4,474,095
2,330,012
4,534,520
Research and development (excluding stock and warrant based
	non-cash expenses of $ — , $ — ,
	and $11,050 in 1997, 1998 and 1999 and $ — and
	$ — for the six months ended June 30, 1999
	and 2000, respectively, shown below)
273,656
1,757,733
2,142,075
814,152
1,790,181
General and administrative (excluding stock and warrant based
	non-cash expenses of $ — , $48,791, and $1,629,260
	 in 1997, 1998 and 1999 and $26,200 and $4,323,676 for the six
	months ended June 30, 1999 and 2000, respectively, shown
	below)
309,507
3,527,327
3,033,524
1,502,648
2,216,159
Depreciation and amortization
58,342
1,414,333
173,522
87,455
185,333
Stock and warrant based non-cash expenses
—
48,791
1,689,949
26,200
4,369,123
Total operating expenses
791,596
8,907,795
11,513,165
4,760,467
13,095,316
Loss from operations
(856,950
)
(9,166,523
)
(9,213,634
)
(4,195,706
)
(11,150,134
)
Interest income (expense):
Interest income
2,046
37,623
20,208
1,536
139,699
Interest expense
(6,519
)
(220,085
)
(8,408,332
)
(4,369,706
)
(352,832
)
Total interest income (expense)
(4,473
)
(182,462
)
(8,388,124
)
(4,368,170
)
(213,133
)
Net loss
$
(861,423
)
$
(9,348,985
)
$
(17,601,758
)
$
(8,563,876
)
$
(11,363,267
)
Basic and diluted net loss per common share
$
(0.48
)
$
(1.87
)
$
(3.25
)
$
(1.65
)
$
(1.36
)
Weighted average shares outstanding
1,811,111
5,000,000
5,420,047
5,182,015
8,328,570
See accompanying notes.
F-4
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Statements of Stockholders' Equity (Deficit)
Preferred
Common
Stock
Common Stock
Additional
Deferred
Stock
Paid-In
Stock
Subscription
Accumulated
Shares
Amount
Shares
Amount
Capital
Compensation
Receivable
Deficit
Balance at October  1, 1997
—
$
—
—
$
—
$
—
$
—
$
—
$
—
Initial issuance of common stock
—
—
900,000
900
—
—
—
—
Issuance of common stock
—
—
4,100,000
4,100
3,729,635
—
(1,500,000
)
—
Net loss for period
—
—
—
—
—
—
(861,423
)
Balance at December  31, 1997
—
—
5,000,000
5,000
3,729,635
—
(1,500,000
)
(861,423
)
Payment of stock subscription
—
—
—
—
—
—
1,500,000
—
Issuance of common stock options
—
—
—
—
78,702
(78,702
)
—
—
Compensatory stock options earned
—
—
—
—
—
48,791
—
—
Net loss
—
—
—
—
—
—
—
(9,348,985
)
Balance at December  31, 1998
—
—
5,000,000
5,000
3,808,337
(29,911
)
—
(10,210,408
)
Issuance of common stock
—
1,063,182
1,063
6,533,631
—
—
—
Issuance of common stock options
—
—
—
—
323,674
(323,674
)
—
—
Compensatory stock options earned
—
—
—
—
—
90,600
—
—
Issuance of warrants and options
—
—
—
—
1,599,349
—
—
—
Beneficial conversion expense
—
—
—
—
7,850,000
—
—
—
Net loss
—
—
—
—
—
—
—
(17,601,758
)
Balance at December  31, 1999
—
—
6,063,182
6,063
20,114,991
(262,985
)
—
(27,812,166
)
Issuance of common stock, net of expenses (unaudited)
—
—
4,847,568
4,848
15,886,972
—
—
—
Issuance of preferred stock (unaudited)
200,000
200
—
—
1,999,800
—
—
—
Issuance of common stock for services (unaudited)
—
—
268,817
269
999,731
—
—
—
Issuance of warrants and options (unaudited)
—
—
—
—
5,043,064
—
—
—
Cancellation of stock options (unaudited)
—
—
—
—
(296,649
)
241,027
—
—
Compensatory stock options earned (unaudited)
—
—
—
—
—
3,378
—
—
Net loss (unaudited)
—
—
—
—
—
—
—
(11,363,267
)
Balance at June 30, 2000 (unaudited)
200,000
$
200
11,179,567
$
11,180
$
43,747,909
$
(18,580
)
$
—
$
(39,175,433
)
[Additional columns below]
[Continued from above table, first column(s) repeated]
Total
Balance at October  1, 1997
$
—
Initial issuance of common stock
900
Issuance of common stock
2,233,735
Net loss for period
(861,423
)
Balance at December  31, 1997
1,373,212
Payment of stock subscription
1,500,000
Issuance of common stock options
—
Compensatory stock options earned
48,791
Net loss
(9,348,985
)
Balance at December  31, 1998
(6,426,982
)
Issuance of common stock
6,534,694
Issuance of common stock options
—
Compensatory stock options earned
90,600
Issuance of warrants and options
1,599,349
Beneficial conversion expense
7,850,000
Net loss
(17,601,758
)
Balance at December  31, 1999
(7,954,097
)
Issuance of common stock, net of expenses (unaudited)
15,891,820
Issuance of preferred stock (unaudited)
2,000,000
Issuance of common stock for services (unaudited)
1,000,000
Issuance of warrants and options (unaudited)
5,043,064
Cancellation of stock options (unaudited)
(55,622
)
Compensatory stock options earned (unaudited)
3,378
Net loss (unaudited)
(11,363,267
)
Balance at June 30, 2000 (unaudited)
$
4,565,276
See accompanying notes.
F-5
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Statements of Cash Flows
Period from
October 1, 1997
Years Ended
Six Months
(inception) to
December 31,
Ended June 30,
December 31,
1997
1998
1999
1999
2000
(unaudited)
(unaudited)
Operating activities
Net loss
$
(861,423
)
$
(9,348,985
)
$
(17,601,758
)
$
(8,563,876
)
$
(11,363,267
)
Adjustments to reconcile net loss to net cash used in operating
	activities:
Depreciation and amortization
58,342
1,414,333
173,522
87,455
185,333
Common stock options issued for consulting services
—
48,791
1,599,349
26,200
4,421,367
Compensatory options earned
—
—
90,600
3,378
Stock issued in exchange for services
2,875,000
1,625,000
Cancellation of compensatory stock options
—
—
—
—
(55,622
)
Beneficial conversion expense
—
—
7,850,000
4,369,130
—
Changes in operating assets and liabilities:
Accounts receivable
(20,881
)
(13,117
)
(418,179
)
(366,287
)
(1,021,070
)
Prepaid expenses and other current assets
(1,458
)
(79,106
)
(64,524
)
(10,568
)
(2,235,516
)
Deposits and other assets
(27,831
)
(37,424
)
39,065
5,315
(72,553
)
Accounts payable and accrued liabilities
491,058
1,608,371
1,072,168
779,062
(270,922
)
Deferred revenue
—
15,000
506,667
473,750
1,176,033
Net cash used in operating activities
(362,193
)
(6,392,137
)
(3,878,090
)
(1,574,819
)
(9,232,839
)
Investing activities
Purchases of property and equipment
(33,387
)
(114,842
)
(279,395
)
(232,500
)
(1,155,720
)
Adjustment to purchase price of Infoseek assets
—
106,226
—
—
—
Purchase of assets from Infoseek
(1,090,627
)
—
—
—
—
Purchase of license rights
(40,000
)
—
—
—
—
Net cash used in investing activities
(1,164,014
)
(8,616
)
(279,395
)
(232,500
)
(1,155,720
)
F-6
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Statements of Cash Flows — (continued)
Period from
October 1, 1997
Years Ended
Six Months
(inception) to
December 31,
Ended June 30,
December 31,
1997
1998
1999
1999
2000
(unaudited)
(unaudited)
Financing activities
Proceeds from line of credit
—
3,000,000
—
—
—
Proceeds from stockholder notes payable
—
1,200,000
2,650,000
1,750,000
—
Proceeds from stock subscription receivable
—
1,500,000
—
—
—
Officer loans
—
—
52,262
27,844
322,621
Payments of capital lease obligation
—
(35,321
)
—
(18,904
)
Proceeds from long-term debt
1,000,000
—
—
—
—
Proceeds from issuance of stock, net of related costs
1,450,000
—
3,034,694
—
17,891,820
Net cash provided by financing activities
2,450,000
5,700,000
5,701,635
1,777,844
18,195,537
Net increase (decrease) in cash and cash equivalents
923,793
(700,753
)
1,544,150
(29,475
)
7,806,978
Cash and cash equivalents at beginning of period
—
923,793
223,040
223,040
1,767,190
Cash and cash equivalents at end of period
$
923,793
$
223,040
$
1,767,190
$
193,565
$
9,574,168
Supplemental disclosure of non-cash investing and financing
	activities and cash flow information
Issuance of common stock for prepaid marketing
$
—
$
—
$
3,500,000
$
3,500,000
$
1,000,000
Assets purchased under capital leases
$
—
$
—
$
138,935
$
—
$
—
Interest paid
$
6,519
$
203,182
$
181,063
$
—
$
—
Issuance of common stock for Infoseek asset acquisition
$
784,635
$
—
$
—
$
—
$
—
Issuance of warrant for prepaid marketing
$
—
$
—
$
—
—
$
741,096
See accompanying notes.
F-7
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements
Period from October 1, 1997 (inception) through
December 31, 1997,
Years ended December 31, 1998 and 1999 and
Six months ended June 30, 1999 (unaudited) and 2000
(unaudited)
1.  Description of Business
YellowBrix, Inc. (formerly NewsReal, Inc.)("YellowBrix"
 or the "Company") delivers commerce, content and
personalization services to Web sites throughout the United
States. The Company electronically creates customized channels of
 content for each site from a daily feed of purchased content and
 delivers salient, relevant content to sites' users.
Customer-provided content can be seamlessly integrated into the
pages served by YellowBrix. During 2000, YellowBrix began
marketing its contextual matching products. These products
identify and serve product purchase opportunities and online
advertisements congruent to content simultaneously served to
users at websites using this capability.
The Company was incorporated in October 1997 in the State of
 Delaware and began principal operations in January 1998.
The Company acquired certain assets, and assumed no liabilities
from Infoseek Corporation (see Note 4). This division, which had
no revenue, had been closed for four months prior to our asset
purchase. In February 1998, the Company amended its
certificate of incorporation to change its name from Bizwatch to
NewsReal, Inc. The certificate of incorporation was amended again
 in December 1998 to reflect a 100:1 stock split. All
references in the accompanying financial statements to the number
 of common stock shares and per-share amounts have been restated
to reflect the 100:1 stock split. In April 2000, the Company
 again amended its certificate of incorporation to change its
name from NewsReal, Inc. to YellowBrix, Inc.
2.  Management's Plans
The accompanying financial statements have been prepared assuming
 the Company will continue as a going concern. The Company
reported a net loss of $9,348,985 and $17,601,758 for the years
ended December 31, 1998 and 1999, respectively. In addition
the Company expects to continue to incur losses during 2000.
Management's plans include the continued and increased
marketing, promotion and implementation of its services.
There is no assurance that the existing or proposed distribution
agreements or product research and development efforts will
generate any significant revenue for the Company to cover its
cost of operations. Management continues to pursue raising
additional capital through private placements, an initial public
offering, or from other equity or debt sources.
3.  Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Cash and Cash Equivalents
All highly liquid investments with a maturity of three months or
less when purchased are considered to be cash equivalents. The
Company must maintain a $200,000 certificate of deposit
F-8
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
3.  Summary of Significant Accounting Policies
(continued)
with a lending institution as collateral for a letter of credit.
The certificate of deposit is included in cash and cash
equivalents on the balance sheet.
Property and Equipment
Property and equipment, including leasehold improvements, are
stated at cost. Capital leases are recorded at their net present
value at the inception of the lease. Depreciation is computed
using the straight-line method over the shorter of the
asset's estimated useful life or the lease term ranging from
 3 to 10 years. Maintenance and repairs are charged to
expense as incurred.
Intangible Assets
Intangible assets include assets resulting from certain
distribution agreements for which the Company is required to pay
for access and placement on strategic partners' sites and
certain purchased technology and license rights, a portion of
which was incorporated into
IndustryWatch
and other
Company products and services (see Note 4). Intangible assets
also include the excess of the cost of certain assets acquired
from Infoseek over the fair value of the assets acquired.
Intangible assets are amortized on a straight-line basis over
periods ranging from 1 to 3 years.
The Company evaluates its long-lived assets and certain
identifiable intangibles for impairment whenever events of
changes in circumstances indicate that the carrying amount of
such assets may not be recoverable. Recoverabilitiy of assets to
be held and used is measured by a comparison of the carrying
amount of any asset to future net undiscounted cash flows
expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is
measured by the future discounted cash flows compared to the
carrying amount of the assets.
Software Obtained for Internal Use
In accordance with SOP 98-1,
"Accounting for the Costs of
 Computer Software Developed or Obtained for Internal Use"
("SOP 98-1"), the Company capitalizes software
obtained for internal use. These amounts are amortized over the
software's estimated useful life, which is three years.
Web-site development costs are expensed as incurred as the costs
relate to enhancements to the site, which do not change the
functionality.
Revenue Recognition
The Company derives revenue by providing services to web sites,
including corporate intranets and extranets. Service revenues are
 recognized over the period in which services are provided.
Service revenues include fees for the set-up of co-branded sites
and the customization of the Company's products and services
 to meet specific customer needs and requirements. Cash received
in advance for set-up fees is classified as deferred revenue and
is recognized ratably over the life of those customer agreements
and contracts. Revenue recognition begins after acceptance and
upon implementation of the services.
Revenue from the sale of online advertising is recognized over
the period advertising is displayed, provided that no significant
 Company obligations remain and collection of the resulting
receivable is probable. Online advertising revenue is shown net
of advertising sales commissions and advertising fees payable to
third parties in connection with the sale and serving of
advertisements on the Company's co-branded sites and
destination site. Cash received in advance for online
F-9
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
3.  Summary of Significant Accounting Policies
(continued)
advertising or sponsorships is classified as deferred revenue and
 is recognized as revenue over the time advertisements are
displayed.
Significant Customers
For the years ended December 31, 1998 and 1999, three and
two customers represented approximately 83% and 62% of the
Company's revenues, respectively. For the six months ended
June 30, 1999 and 2000 (unaudited), one customer and three
customers represented approximately 58% and 42% of the
Company's revenues, respectively.
Advertising Costs
Advertising costs are expensed as incurred and are including in
sales and marketing expense on the statement of operations.
Advertising costs were approximately $22,000, $562,500,
$2,407,000, $0 (unaudited), and $583,777 (unaudited) for the
 period from October 1, 1997 (inception) to
December 31, 1997, for the years ended December 31,
1998 and 1999, and for the six months ended June 30, 1999
and 2000, respectively.
Product Development Costs
Product development costs and enhancements to existing products
have been charged to operations as incurred. Software development
 costs are required to be capitalized when a product's
technological feasibility has been established by completion of a
 working model of the product and ending when a product is
available for general release to customers. To date, completion
of a working model of the Company's products and general
release have substantially coincided. As a result, the Company
has not capitalized any software development costs since such
costs requiring capitalization have not been material.
Income Taxes
The Company uses the liability method to account for income
taxes. Under this method, deferred tax assets and liabilities are
 determined based on differences between the financial reporting
and tax basis of assets and liabilities and are re-measured using
 the enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
Stock-Based Compensation
Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation
("SFAS
No. 123") allows companies to account for stock-based
compensation either under the provisions of SFAS No. 123 or
under the provisions of Accounting Principles Bulletin
No. 25,
Accounting for Stock Issued to Employees
("APB No. 25"), but requires pro forma disclosures
 in the footnotes to the financial statements as if the
measurement provisions of SFAS No. 123 had been adopted. The
 Company accounts for its stock-based compensation in accordance
with the provisions of APB No. 25.
Fair Value of Financial Instruments
The fair value of the Company's cash and cash equivalents,
accounts receivable, accounts payable, and accrued liabilities
approximated their carrying amounts due to the relatively short
F-10
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
3.  Summary of Significant Accounting Policies
(continued)
maturity of these items. The fair value of debt approximated its
carrying amount as of December 31, 1998 and 1999 and
June 30, 2000 based on rates currently available to the
Company for debt with similar terms and remaining maturities.
Net Loss Per Share
Basic net loss per share was determined by dividing net loss by
the weighted average number of common shares outstanding during
each period. Diluted net loss per share excludes common
equivalent shares, unexercised stock options and warrants as the
computation would be anti-dilutive. A reconciliation of the net
loss available for common shareholders and the number of shares
used in computing basic and diluted net loss per share is in
Note 12.
Unaudited Interim Financial Statements
The accompanying unaudited interim financial statements have been
 prepared in accordance with generally accepted accounting
principles for interim financial information. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have
been included. Operating results for the six-month period ended
June 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000.
Reclassifications
Certain prior year amounts have been reclassified to conform to
the 2000 presentation. These changes had no impact on previously
reported results of operations.
4.  Asset Acquisition
The Company entered into an asset acquisition agreement (the
"Acquisition Agreement") with Infoseek in
December 1997 pursuant to which the Company acquired assets
belonging to the former Corporate Information Division
("CID") of Infoseek. The CID division, which had no
revenue, had been closed for five months, from July 1997 to
December 1997. The Company paid $1 million cash, issued
850,000 shares of the Company's common stock valued at a
price of $0.923 per share (based on independent sales of common
stock by the Company at $0.923 per share) and granted a warrant
to purchase 1,077,500 shares of the Company's common stock
at an exercise price of $0.001 per share, subject to various
performance conditions and vesting restrictions (see Note 8).
The assets acquired included computer equipment and certain
intangibles. The intangibles included a distribution agreement
with Infoseek, the
IndustryWatch
name and logo, certain
intellectual property rights relating to the
IndustryWatch
service, rights to license the Infoseek trademark, trade name
 and logo, license rights to Infoseek's
Ultraseek
search engine, and intellectual property rights in the CID
proprietary software.
F-11
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
4.  Asset Acquisition (continued)
The allocation of the purchase price is as follows:
Distribution agreement
$
900,000
Trademarks and license agreement
190,000
Intellectual property rights
285,000
Excess of cost over fair value of assets acquired
409,500
$
1,784,500
Infoseek Distribution Agreement
The Company entered into a non-exclusive distribution agreement
(the "Distribution Agreement") with Infoseek in
December 1997. The agreement provides the Company with
distribution for its
IndustryWatch
service as a featured
offering on Infoseek's business home page. The Company is
responsible for hosting the content on its servers and also for
selling, managing and serving any advertisements on its website.
The agreement had an initial term ending on December 31,
1998, with an option to renew for additional 12 month
periods. In exchange for distribution rights, the Company was
required to pay 30% of its net advertising revenues generated
from the co-branded
IndustryWatch
site during the initial
term of the agreement.
The Company entered into an amendment to the Distribution
Agreement and a settlement agreement and general release in
October 1998 pursuant to which (1) the Company was
reimbursed $81,226 for certain computer equipment that was
damaged or not received in the acquisition, (2) Infoseek
forgave the Company's debt to Infoseek in the amount of
$25,000 for legal fees incurred in connection with the
Acquisition Agreement, (3) Infoseek provided the Company
with eight million banner advertisements on or before
December 31, 1998, (4) the parties terminated the
Distribution Agreement on December 31, 1998 with Infoseek
maintaining a hyperlink to a URL to be designated by the Company
until April 15, 1999 and (5) the parties released each other
 from any further claims, obligations or liabilities in
connection with the Distribution Agreement. The reimbursement
received was reflected as an adjustment to the purchase price of
the assets acquired.
F-12
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
5.  Property and Equipment
Property and equipment consist of the following:
December 31,
June 30,
1998
1999
2000
(unaudited)
Computer equipment
$
254,567
$
350,859
$
1,173,067
Computer equipment held under capital lease
—
138,935
146,559
Software
29,318
187,085
432,162
Furniture and fixtures
62,625
87,961
187,333
346,510
764,840
1,939,121
Less: accumulated depreciation and amortization
(63,543
)
(153,948
)
(314,046
)
$
282,967
$
610,892
$
1,625,075
6.  Intangible Assets
Intangible assets consist of the following:
December 31,
June 30,
1998
1999
2000
(unaudited)
Trademarks and license agreements
$
18,750
$
18,750
$
—
Intellectual property rights
5,000
5,000
—
Excess of cost over fair value of assets acquired
226,921
226,921
226,921
250,671
250,671
226,921
Less: accumulated amortization
(112,882
)
(195,999
)
(216,045
)
$
137,789
$
54,672
$
10,876
Amortization expense was $58,342, $1,350,790, $83,117, $44,836
(unaudited), and $37,443 (unaudited) during the period from
October 31, 1997 (inception) to December 31, 1997,
 the years ended December 31, 1998 and 1999, and the six
months ended June 30, 1999 and 2000, respectively.
7.  Debt
Stockholder Notes Payable
In 1998 and 1999, the Company borrowed $1.2 million and
$2.65 million, respectively, from Quantum Industrial
Partners, LDC ("QIP") and affiliated stockholders of
the Company (collectively, the "QIP Investors"),
pursuant to demand promissory notes and security agreements. The
QIP investors collectively own a majority of the outstanding
shares of common stock of the Company. The promissory notes bear
interest at an annual rate of 8%. Interest and principal are
payable on demand. Effective March 31, 1999, the QIP
Investors were granted the right to convert the promissory notes
into the Company's common stock at a conversion price of
$1.00 per share. The conversion rights expire on
December 31, 2002.
F-13
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
7.  Debt (continued)
Under the security agreements, the QIP Investors received a
senior security interest in the Company's assets, subject to
 prior purchase money security interests in favor of a third
party that holds security interests in the Company's leased
computer hardware and peripheral equipment, and a $200,000 letter
 of credit posted with a bank as a security deposit under the
Company's new lease (see Note 9).
The Company entered into a $3 million revolving loan
agreement (the "Line of Credit") with a commercial
lending institution in February 1998 that bore interest at a
 rate of 7.27%. At December 31, 1998, $3 million was
outstanding on the Line of Credit. The Line of Credit was
guaranteed by the QIP Investors and was paid in full by the QIP
Investors on the Company's behalf in 1999.
In December 1997, the Company entered into a $1 million
 term loan agreement (the "Term Loan") with the same
lending institution. Borrowings bore interest at LIBOR plus 2%
(7.17% at December 31, 1998) with a maturity date of
December 12, 1999. The Term Loan was guaranteed by the QIP
Investors and was paid in full by the QIP Investors on the
Company's behalf upon maturation of the note.
On September 1, 1999 and December 12, 1999,
respectively, the QIP Investors paid the $3 million Line of
Credit and the $1 million Term Note owed by the Company. The
 Company signed a bridge note with the QIP Investors for $4
million that is due on demand. The bridge note bears interest at
LIBOR plus 2% (8.51% at December 31, 1999). The QIP
Investors have the right to convert the bridge note into the
Company's common stock at a conversion price of $2.47 per
share for the first $2 million. The balance of the principal
 and accrued interest are convertible at $1.00 per share. If the
QIP Investors demand payment of all or a portion of the
outstanding indebtedness on the bridge note, the Company has the
right to issue its common stock to the QIP Investors as if such
indebtedness were converted in the manner set forth above. All of
 the conversion privileges described above are subject to
adjustment for stock splits, stock dividends, reorganizations,
recapitalizations, and other similar transactions.
The aggregate fair value of the beneficial conversion features on
 the demand promissory notes and the bridge note with the QIP
Investors referred to in the paragraphs above is approximately
$16,716,000. Because these debt instruments are convertible upon
issuance, the Company recorded interest expense in 1999 of
$7,850,000, the amount of the total proceeds, related to the
beneficial conversion features.
Officer Loan
In 1999, the Company entered into a promissory note with one of
its executive officers in the amount of $52,262. The note bears
interest at 9% and is due on October 28, 2002.
8.  Stockholders' Equity (Deficit)
Common Stock
The Company issued 900,000 shares of common stock to its founders
 and other initial investors at $0.001 per share on
October 2, 1997 (date of inception). On December 11,
1997, the Company issued 850,000 shares of common stock to
Infoseek under the asset acquisition agreement (see Note 4). On
December 11, 1997, the Company also issued 3,250,000 shares
of common stock to the QIP Investors at $0.9231 per share for net
 proceeds of $3 million. At
F-14
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
8.  Stockholders' Equity (Deficit) (continued)
December 31, 1997, $1.5 million was outstanding from the QIP
 Investors, and was subsequently received by the Company in
January 1998. In connection with the shareholders'
agreement for these stock issuances the holders received demand
registration rights.
In April 1999 and pursuant to a stock purchase agreement,
the Company issued 470,638 shares of common stock in exchange for
 the relief of a $3.5 million promissory note issued to
CNNfn (see Note 9). Under this stock purchase agreement, upon the
 conversion of the QIP promissory notes and bridge note, the
Company is required to issue additional shares of common stock to
 CNN pursuant to anti-dilution provisions in the stock purchase
agreement. Under the stock purchase agreement and a rights
agreement, CNNfn received demand registration rights,
participation rights and other special shareholder rights that
are substantially similar to the rights of Infoseek.
In November 1999, the Company issued 592,544 shares of
common stock in a private placement at a price of $5.88 per
share. Under this stock purchase agreement, upon the conversion
of the QIP promissory notes and bridge note, the Company is
required to issue additional shares of common stock pursuant to
anti-dilution provisions in the stock purchase agreement. Under
the stock purchase agreement the investors received registration
rights and the right to appoint a member to the Company's
Board of Directors.
Common Stock Options
In October 1997, the Company entered into stock option
agreements with the founders under which it granted time-based
vesting options to purchase 1,140,000 shares of common stock and
performance-based vesting options to purchase 2,469,500 shares of
 common stock at an exercise price of $0.001 per share. The
founders' options expire ten years from the date of the
grant. The time-based vesting options were fully vested as of
December 31, 1999.
The vesting of the performance-based options was dependent upon
the Company attaining predefined revenue and operating income
targets prior to December 31, 1999, which the Company did
not meet. However, if the QIP Investors sell a portion of their
shares at a profit over and above a predetermined rate of return,
 or if an initial public offering of the Company's common
stock occurs and certain returns on investment are achieved by
the QIP Investors, the performance-based options will vest
automatically. Although these stock options fall within the rules
 of variable accounting, the Company has not recorded any expense
 related to these options as the performance criteria have never
been met and have not been deemed probable by management. During
2000, the Company cancelled all of the performance-based vesting
options issued to the founders and issued new time-based vesting
options.
In May 1998, the Company established the 1998 Stock Option
Plan (the "Plan") and reserved 1.5 million shares
of common stock for issuance, which was subsequently increased to
 3.5 million shares. The Plan provides qualified incentive
stock options and non-qualified stock options for the
Company's employees, officers, directors and consultants.
Options expire ten years from the date of grant.
During 1998, the Company granted 1,325,670 options of which
775,300 options were time-based vesting options under the Plan
and 550,370 options were performance-based vesting options.
During 1999, the Company granted 9,561,899 options of which
1,080,500 options were time-based vesting options under the Plan
and 8,481,399 options were performance-based vesting
F-15
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
8.  Stockholders' Equity (Deficit) (continued)
options. The time-based options vest from one month to four years
 from the date of grant. The vesting of performance-based options
 was generally the same as the founders' performance-based
vesting options. During 2000, the Company cancelled all of the
performance-based vesting options and issued new time-based
vesting options to the option holders.
A summary of all of the stock option activity is as follows:
Year Ended December 31,
1998
1999
Weighted
Weighted
Average
Average
Exercise
Exercise
Shares
Price
Shares
Price
Outstanding at beginning of year
3,609,500
$
0.001
4,691,170
$
0.13
Granted
1,325,670
$
0.56
9,561,899
$
2.26
Exercised
—
—
—
—
Cancelled
(244,000
)
$
0.59
(4,396,229
)
$
1.79
Outstanding at end of year
4,691,170
$
0.13
9,856,840
$
2.37
Exercisable at end of year
683,525
$
0.06
1,386,300
$
0.88
Six Months Ended
June 30, 2000
(unaudited)
Weighted
Average
Exercise
Shares
Price
Outstanding at beginning of year
9,856,840
$
2.37
Granted
7,033,837
3.30
Exercised
(6,675
)
1.00
Cancelled
(7,956,865
)
2.38
Outstanding at end of year
8,927,137
2.90
The following information is as of December 31, 1999:
Weighted
Average
Weighted
Weighted
Range of
Number
Remaining
Average
Number
Average
Exercise
Outstanding
Contractual
Exercise
Exercisable
Exercise
Prices
(in shares)
Life
Price
(in shares)
Price
$
0.001
2,461,200
7.55
$
0.001
888,900
$
0.001
$
1.0023
518,794
8.69
$
1.0023
164,900
$
1.0023
$
3.18
6,222,346
9.92
$
3.18
332,500
$
3.18
$
3.50
654,500
9.68
$
3.50
—
$
3.50
F-16
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
8.  Stockholders' Equity (Deficit) (continued)
The following information is as of June 30, 2000
(unaudited):
Weighted
Average
Weighted
Weighted
Range of
Number
Remaining
Average
Number
Average
Exercise
Outstanding
Contractual
Exercise
Exercisable
Exercise
Prices
(in shares)
Life
Price
(in shares)
Price
$
0.001
967,500
6.72
$
0.001
967,500
$
0.001
$
1.0023
181,300
7.67
$
1.0023
80,675
$
1.0023
$
3.18
5,731,602
9.52
$
3.18
1,232,350
$
3.18
$
3.50
718,500
9.31
$
3.50
22,708
$
3.50
$
3.72
1,328,235
9.87
$
3.72
40,000
$
3.72
The Company applies APB No. 25 in accounting for its stock
option plan and, accordingly, recognizes compensation expense for
 the difference between the fair value of the underlying common
stock and the grant price of the option at the date of grant. The
 effect of applying SFAS No. 123's fair value method to
 the Company's stock-based awards results in net losses of
$9,360,559, $17,776,967 for the years ended December 31,
1998 and 1999, respectively with a net loss per share of $1.87
and $3.28, respectively. The weighted average fair value of the
options granted in 1998 and 1999, used as a basis for the above
pro forma disclosures, was estimated as $0.25 per share and $1.62
 per share, respectively, as of the date of grant using the
Black-Scholes option pricing model with the following
assumptions: dividend yield 0%, volatility of 1, risk-free
interest rate of 6% and expected lives of 5 or 10 years. The
effect of applying SFAS No. 123 on the pro forma net loss is
 not necessarily representative of the effects on net income for
future years due to, among other things, the vesting period of
the stock options and the fair value of additional stock options
in future years.
Deferred Stock Compensation
During 1999, the Company granted 153,500 options to purchase
common stock whose grant prices range from $1.0023 to $3.50 which
 were issued below fair market value on the date of grant. The
Company recorded deferred compensation as a separate component of
 stockholders' equity (deficit) of $323,674 for the
difference between the option exercise price and the deemed fair
value on the date of grant of stock options. The Company is
amortizing the amount ratably over the vesting period of the
options, which is generally four years.
Warrants
The Company issued a warrant to Infoseek to purchase 1,077,500
shares of common stock at an exercise price of $0.001 per share
as part of the consideration for the assets acquired from
Infoseek (see Note 4). The warrant expires ten years from
the date of issue, and is subject to a vesting schedule that was
dependent upon the Company attaining predefined revenue and
operating income targets prior to December 31, 1999, which
the Company did not meet. However, if the QIP Investors sell a
portion of their shares at a profit over and above a
predetermined rate of return or an IPO occurs and certain returns
 on investment are achieved by the QIP Investors, the warrant
will vest automatically. In the event that the warrant vests, the
 Company will value the warrants and record the appropriate
expense in accordance Emerging Issues Task Force
("EITF") Issue 96-18
F-17
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
8.  Stockholders' Equity (Deficit) (continued)
Accounting for Equity Instruments that are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services ("EITF 96-18")
. As of
December 31, 1999, the Company did not believe the Company
would reach the vesting targets.
During 1999, the Company issued warrants to various vendors and
contractors to purchase a total of 567,436 shares of common stock
 with exercise prices ranging from $2.00 per share to $5.88 per
share. The Company valued these warrants using the Black-Scholes
option pricing model and recorded compensation expense of
approximately $1.4 million. The weighted average fair value
of the warrants granted during 1999 was estimated as $2.58 as of
the date of grant using the Black-Scholes option pricing model
with the following assumptions: dividend yield 0%, volatility
100%, risk-free interest rate of 6%, and expected lives ranging
from 5 to 10 years. The Company also issued warrants to
purchase 56,743 shares of common stock in connection with the
private placement in November 1999 and recorded the warrants
 as part of the issuance costs.
A summary of all of the warrants outstanding as of
December 31, 1999 is as follows:
Exercise
Shares
Price
Expiration Date
1,077,500
$
0.001
December 2007
26,131
$
2.00
November 2004
504,478
$
3.00
November 2004
4,285
$
3.50
May 2002
54,000
$
3.50
August 2004
4,673
$
5.88
January 2005
30,612
$
8.82
October 2004
1,701,679
9.  Commitments
Distribution Agreement with CNNfn
In January 1998, the Company signed an agreement with CNNfn,
 a division of Cable News Network, Inc., to develop and host a
co-branded
IndustryWatch
service on the CNNfn website.
Under the terms of the agreement, the Company was required to pay
 CNNfn an annual advertising fee in year one of $750,000 and in
year two of $1,000,000 and an annual branding fee in the amount
of $2,000,000 in year one and $2,500,000 in year two. The Company
 has capitalized the amounts upon payment and is amortizing the
expense ratably over the life of the contract. The Company also
agreed to spend a minimum of $250,000 on promotional activities
related to the co-branded service. CNNfn is solely responsible
for the sale of all advertising and sponsorships on the
co-branded service, and the Company has rights to 40% of net
advertising revenues. In 1998 and 1999 and for the six months
ended June 30, 2000 (unaudited), respectively, the Company
recognized approximately $65,500, $1.42 million, and
$387,000 in revenue related to this contract.
In April 1999, the Company entered into an amendment to the
CNNfn agreement. The amendment provides for the Company to pay
CNNfn $1 million in outstanding branding fees under the
initial year one obligation on the earlier of September 30,
1999 or immediately following the closing of the issue and sale
of equity and/or debt securities by the Company (to any party
other
F-18
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
9.  Commitments (continued)
than CNNfn or any of its affiliates), having an aggregate gross
sales price of at least $6 million. The Company has accrued
$1 million in accounts payable to CNNfn for these fees at
December 31, 1999.
As part of the amendment, the Company also accelerated the
remaining $2.5 million branding and exclusivity fee for the
second year of the Distribution Agreement (the "Year 2
Branding Fee") and agreed to pay an additional $1 million
for certain promotions previously provided by CNNfn (the
"Promotion Fee"). As part of the transaction underlying
 the restructuring of the distribution agreement, CNNfn
completely released the Company from any obligation to pay the
Year 2 Branding Fee and the Promotional Fee, in exchange for a
promissory note for $3.5 million, which was immediately
converted to 470,638 shares of the Company's common stock.
CNNfn is also entitled to receive additional shares of common
stock upon the conversion of the QIP promissory notes and bridge
note pursuant to anti-dilution provisions in the stock purchase
agreement.
Moreover, CNNfn assigned the Company its rights to receive an
incremental $1 million in revenue from the co-branded site (i.e.,
 beyond the revenue to which the Company already is entitled).
Finally, CNNfn released the Company from any outstanding and all
future obligations to purchase advertising from CNNfn, and the
Company released CNNfn from its obligation to provide such
advertising.
Operating Leases
The Company leases facilities and equipment under various
operating leases. The Company also subleases certain of its
facilities. Rental expense was approximately $36,000, $318,000,
$809,000, $388,281 (unaudited), and $428,939 (unaudited) for
 the period from October 1, 1997 (inception) to
December 31, 1997, the years ended December 31, 1998
and 1999, and the six months ended June 30, 1999 and 2000,
respectively. Future minimum payments and sublease income under
noncancelable operating leases with initial terms of one year or
more as of December 31, 1999 consist of the following:
Sublease
Payments
2000
$
127,992
$
535,136
2001
130,779
541,243
2002
110,939
595,258
2003
—
512,720
2004
—
528,101
Thereafter
—
1,974,077
$
369,710
$
4,686,535
The Company entered into a $200,000 irrevocable letter of credit
agreement with a lending institution in June 1998 to serve
as a security deposit on leased facilities. No amounts have been
drawn down on the letter of credit.
Capital Lease
In November 1999, the Company entered into a capital lease
agreement for computer equipment totaling $138,935, which expires
 in 2002. Depreciation on this asset is included in
F-19
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
9.  Commitments (continued)
depreciation expense in the accompanying financial statements. At
 December 31, 1999 future minimum payments due under the
capital lease are as follows:
Year ended December 31,
2000
$53,340
2001
53,340
2002
22,225
128,905
Less amounts representing interest
(25,291)
Present value of future minimum lease payments
103,614
Less current portion
(39,342)
$64,272
Employment Agreements
The Company has entered into employment agreements with certain
members of management and other key employees. These agreements
specify minimum annual salaries as well as bonus amounts to be
paid over the next two years.
Other
The Company has entered into agreements ranging from 1 to
2 years with various content providers that require the
Company to pay a monthly flat fee or the greater of a flat fee or
 a royalty based on the number of users or page views generated
from accessing the Company's or a partner's website.
The Company's current monthly obligation to content
providers is approximately $42,000.
10.  Income Taxes
Following is a summary of the components of deferred taxes:
December 31,
June 30,
1998
1999
2000
(unaudited)
Deferred tax assets:
Net operating loss carryforward
$
3,521,671
$
6,319,099
$
8,781,601
Warrant expense
—
532,560
1,970,089
Stock compensation
—
97,590
318,580
Reserves
—
28,470
45,806
Depreciation and amortization
68,466
200,170
188,947
Net deferred tax asset
3,590,137
7,177,889
11,305,023
Valuation allowance
(3,590,137
)
(7,177,889
)
(11,305,023
)
Net deferred tax asset, after valuation allowance
$
—
$
—
$
—
F-20
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
10.  Income Taxes (continued)
The Company has approximately $23.1 million in net operating
 loss carryforwards that expire beginning principally in 2018 and
 through 2020. The timing and manner in which the operating loss
carryforwards may be utilized in any year will be limited to the
Company's ability to generate future earnings and by
limitations imposed due to changes in ownership. The Company has
established a valuation allowance for the full amount of the net
deferred tax asset due to the uncertainty regarding its ability
to realize the benefits of such asset. The change in the
valuation allowance was $4,127,135. There was no current or
deferred provision for income taxes for the years ended
December 31, 1998 or 1999 nor for the six months ended
June 30, 2000.
A reconciliation of tax benefit from the expected amount to the
actual follows:
December
December
June
1998
1999
2000
Expected federal benefit at 34%
$
(3,178,655
)
$
(5,984,598
)
$
(3,863,512
)
State income tax
(370,220
)
(697,030
)
(449,985
)
Nondeductible beneficial conversion feature
—
2,979,860
—
Permanent and other
22,281
114,016
186,362
Change in valuation allowance
$
(3,526,594
)
$
(3,587,752
)
$
(4,127,135
)
Tax benefit
0
0
0
11.  401(k) Profit Sharing Plan
In October 1998, the Company established a qualified 401(k)
profit sharing plan available to all employees meeting certain
eligibility requirements. Employees may elect to contribute up to
 15% of their earnings each month. The Company may, at its
discretion, match up to 5% of the employees' compensation,
with amounts vesting ratably over six years. The Company may also
 make additional non-matching contributions at its discretion of
up to 3% of the employees' compensation, subject to the same
 six-year vesting schedule. The Company did not make any
contributions in 1998, 1999 or for the six months ended
June 30, 2000.
F-21
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
12.  Net Loss Per Share
The following table sets forth the computation of basic and
diluted net loss per share:
Period from
October 1,
1997
(inception)
Year Ended
Six Months
to
December 31,
Ended June 30,
December 31,
1997
1998
1999
1999
2000
(unaudited)
(unaudited)
Numerator:
Net loss
$
(861,423
)
$
(9,348,985
)
$
(17,601,758
)
$
(8,563,876
)
$
(11,363,267
)
Denominator:
Denominator for basic net loss per
	share — weighted average shares
1,811,111
5,000,000
5,420,047
5,182,015
8,328,570
Effect of dilutive securities:
Preferred stock
—
—
—
—
—
Stock options
—
—
—
—
—
Warrants
—
—
—
—
—
Dilutive potential common shares
1,811,111
5,000,000
5,420,047
5,182,015
8,328,570
Denominator for diluted net loss per
	share — adjusted weighted average shares
1,811,111
5,000,000
5,420,047
5,182,015
8,328,570
Basic net loss per share
$
(0.48
)
$
(1.87
)
$
(3.25
)
$
(1.65
)
$
(1.36
)
Diluted net loss per share
$
(0.48
)
$
(1.87
)
$
(3.25
)
$
(1.65
)
$
(1.36
)
The following equity instruments were not included in the diluted
 net loss per share calculation because their effect would be
anti-dilutive:
Period from
October 1,
1997
(inception)
Year Ended
Six Months
to
December 31,
Ended June 30,
December 31,
1997
1998
1999
1999
2000
(unaudited)
(unaudited)
Series A preferred stock
—
—
—
—
537,634
Stock options
3,609,500
4,691,170
9,856,840
9,253,360
8,927,137
Warrants
1,077,500
1,077,500
1,701,679
1,077,500
4,117,689
13.  Non-monetary Transactions (unaudited)
On December 31, 1999, the Company entered into a
non-monetary transaction. Effective December 31, 1999, the
Company entered into a one year License Agreement with InfoUSA.
The agreement requires the Company to pay InfoUSA a nonrefundable
 license fee of $1,050,000. As of
F-22
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
13.  Non-monetary Transactions (unaudited)
(continued)
June 30, 2000, the Company had paid the fee and included the
 amount in prepaid content fees. The Company is recording the
expense ratably over the term of the agreement.
Additionally, on December 31, 1999, the Company amended
their Distribution Agreement with InfoUSA. The amendment required
 the Company to provide additional products to InfoUSA and to
perform custom development work. As of June 30, 2000,
InfoUSA had paid the Company the value of the contract,
$1,225,050, and recorded the amount as deferred revenue. The
Company is recording the revenue for the custom development work
as the service is provided and is recording the remainder of the
revenue ratably over the term of the contract, one year.
14.  Subsequent Events
In 2000 the Company issued 4,840,893 shares of common stock at a
price of $3.72 per share to various investors in a private
placement. The Company also issued 200,000 shares of
Series A Convertible Preferred Stock (the
"Series A stock") at a price of $10.00 per share
to two of the new investors. The Company raised approximately
$20 million in this private placement. In connection with
the financing, the Company issued warrants to purchase 235,974
shares of common stock.
The Series A stock is convertible into common stock at the
option of the holder by multiplying the number of shares of
common stock held by $10 and dividing the result by a conversion
price of $3.72 per share and is automatically convertible in
 the event the public offering closes by March 31, 2001. In
the event the public offering does not close, the Series A
stock automatically converts at a conversion price of $1.78 on
the first anniversary. The Series A stock does not
accumulate dividends and each holder of Series A stock is
entitled to vote on all matters as if their shares of preferred
stock were converted to voting common stock.
15.  Events (unaudited) Subsequent to Date of
Independent Auditors' Report
On April 7, 2000, the Company entered into an Interactive
Services Agreement (the "Agreement") with AOL, Inc.
("AOL"). The agreement requires the Company to pay AOL
$3,000,000 as follows: $1,500,000 on April 7, 2000, and
$300,000 on each of the following dates: July 1, 2000,
October 1, 2000, January 1, 2001, April 1, 2001, and
July 1, 2001 in exchange for promotion services and
impression commitments. As of June 30, 2000, the Company had
 made payments of $1,800,000, which was recorded as prepaid
marketing fees. The Company is recording the expense ratably over
 the 18-month term of the agreement.
The Agreement also provides for the Company to share in
advertising and transaction revenues through the customized site
should revenues ever be earned under the agreement. Through
June 30, 2000 and October 16, 2000, no revenues have
been earned by the Company under this agreement, and furthermore,
 the Company is unsure if they will ever generate revenues under
the agreement.
Additionally on April 7, 2000, the Company issued AOL a
warrant to purchase up to 832,691 shares of common stock at an
exercise price of $3.72 per share. The warrant vests as follows:
one-third of the shares vest upon the issuance of the warrant,
one-third vests upon the Company earning gross revenue under the
Agreement of $1,750,000, but in no event will vest prior to one
year from the issuance date, and one-third vests upon the Company
 earning gross revenue under the Agreement of $3,500,000, but in
no event will vest prior to one year from the issuance date. The
F-23
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
15.  Events (unaudited) Subsequent to Date of
Independent Auditors' Report (continued)
Company has valued the vested portion of the warrant using the
Black-Scholes option pricing model and has recorded prepaid
marketing fees in the amount of $741,096. The Company is
recording the expense related to this warrant ratably over the
18-month term of the agreement. In accordance with the guidance
under EITF 96-18, the Company will record the fair value of
the remaining two-thirds of the warrant when it becomes probable
that the revenue thresholds that trigger vesting will be met. The
 Company intends to evaluate quarterly the probability that these
 revenue thresholds will be met and will record the fair value of
 the two-thirds of the warrants as contra revenues (to the extent
 revenues have been recorded) over the remaining term of the
agreement.
During 2000, the Company issued warrants to various vendors and
contractors to purchase a total of 2,180,036 shares of common
stock with exercise prices ranging from $3.72 per share to $4.77
per share. The Company valued these warrants using the
Black-Scholes option pricing model and recorded compensation
expense of approximately $3.8 million. The weighted average
fair value of the warrants granted during 2000 was estimated as
$2.67 as of the date of grant using the Black-Scholes option
pricing model with the following assumptions: dividend yield 0%,
volatility 100%, risk-free interest rate of 6%, and expected
lives ranging from 5 to 10 years. The Company also issued
warrants to purchase 235,974 shares of common stock in connection
 with the private placement in March 2000 and recorded the
warrants as part of the issuance costs.
A summary of all of the warrants outstanding as of June 30,
2000 is as follows (unaudited):
Exercise
Shares
Price
Expiration Date
1,077,500
$
0.001
December 2007
26,131
$
2.00
November 2004
504,478
$
3.00
November 2004
11,904
$
3.15
July 2005
89,661
$
3.18
May 2005
4,285
$
3.50
May 2002
54,000
$
3.50
August 2004
3,000
$
3.50
January 2005
832,691
$
3.72
April 2010
166,202
$
4.73
July 2005
677,784
$
4.77
April 2005
500,359
$
4.77
April 2005
4,673
$
5.88
January 2005
134,409
$
5.88
March 2005
30,612
$
8.82
October 2004
4,117,689
In January 2000, the Company extended the exercise period for
stock options granted to a former employee. Upon the modification
 of the options the Company recorded an expense of $634,410.
In January 2000, the Company established the 2000 Stock Option
Plan (the "Plan") and reserved 6.8 million shares of
common stock for issuance. The plan provides for the grant of
options
F-24
Table of Contents
YellowBrix, Inc.
(formerly NewsReal, Inc.)
Notes to Financial Statements — (continued)
15.  Events (unaudited) Subsequent to Date of
Independent Auditors' Report (continued)
to employees, directors, and consultants. As of June 30,
2000 options to purchase an aggregate 5,449,101 shares were
outstanding.
During the six months ended June 30, 2000, the Company
entered into four additional promissory notes with the same
executive officer. The notes were for $186,000, $99,121, $15,000
and $22,500 and were issued on April 15, 2000, May 15,
2000, June 15, 2000 and June 29, 2000, respectively.
All of the notes have a term of three years and bear interest at
9%.
On June 29, 2000, the Company entered into a stock purchase
agreement with a media corporation whereby the Company issued
268,817 shares of its common stock at $3.72 per share in exchange
 for $1,000,000 worth of media credits. The Company recorded
$1,000,000 in prepaid marketing upon the issuance of the
stock.The Company will purchase various advertising space and
half of the purchase price will be applied against these media
credits and the other half will be paid in cash. In addition, the
 Company issued the media corporation an option to purchase
$500,000 worth of common stock at a purchase price of $3.72 at
any time during the next 18 months at the option of the
Company. If the Company does not exercise its right to put the
shares to the media corporation, the media corporation will have
the right to participate in a subsequent private placement by the
 Company, which may occur prior to or contemporaneous with an
initial public offering.
F-25
Table of Contents
[Artwork description of graphics on inside back cover to
follow]
Table of Contents
Shares
Common Stock
CHASE H&Q
DAIN RAUSCHER WESSELS
WIT SOUNDVIEW
,
2000
You should rely only on information contained in this
prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. We
are offering to sell, and seeking offers to buy, shares of common
 stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any sale of our
common stock.
We have not taken any action in any jurisdiction outside the
United States to permit a public offering of the common stock or
possession or distribution of this prospectus in any such
jurisdiction. Persons who come into possession of this prospectus
 in jurisdictions outside the United States are required to
inform themselves about and to observe any restrictions as to
this offering and the distribution of this prospectus applicable
to that jurisdiction.
Until
          ,
2000, all dealers that buy, sell or trade our common stock,
whether or not participating in this offering, may be required to
 deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or subscriptions.
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered
(other than underwriting accounts and commissions) are estimated
to be as follows:
Securities and Exchange Commission registration fee
$
18,216.00
National Association of Securities Dealers filing fee
7,400.00
Nasdaq National Market Listing Fee
22,505.00
Legal fees and expenses
*
Blue Sky fees and expenses
10,000.00
Accounting fees and expenses
*
Transfer agent's fees and expenses
*
Printing and engraving fees
*
Miscellaneous
*
Total
$
*
*
To be filed by amendment.
Item 14. Indemnification of Directors and Officers
Section 145(a) of the General Corporation Law of the State
of Delaware provides that a Delaware corporation may indemnify
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director,
 officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
 employee or agent of another corporation or enterprise, against
expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
 interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
Section 145(b) provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be
 made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that such person acted in any
of the capacities set forth above, against expenses actually and
reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under standards
similar to those discussed above, except that no indemnification
may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the court in which
 such action or suit was brought shall determine that despite the
 adjudication of liability, such person is fairly and reasonably
entitled to be indemnified for such expenses which the Court
shall deem proper.
Section 145 further provides that to the extent a director
or officer of a corporation has been successful in the defense of
 any action, suit or proceeding referred to in subsections
(a) and (b) or in the defense of any claim, issue or
matter therein, he shall be indemnified against expenses actually
 and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be
deemed exclusive of any other rights to
II-1
Table of Contents
which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability
asserted against him or incurred by him in any such capacity or
arising out of his status as such whether or not the corporation
would have the power to indemnify him against such liabilities
under such Section 145. The Company's directors and
officers are insured against losses arising from any claim
against them as such for wrongful acts or omissions, subject to
certain limitations.
Section 102(b)(7) of the DGCL provides that a certificate of
 incorporation may contain a provision eliminating or limiting
the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
 a director provided that such provision shall not eliminate or
limit the liability of a director: (i) for any breach of the
 director's duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
 law; (iii) under Section 174 of the DGCL; or
(iv) for any transaction from which the director derived an
improper personal benefit.
The Company's Certificate of Incorporation and Bylaws
provide that the Company shall indemnify certain persons,
including officers, directors and controlling persons, to the
fullest extent permitted by the General Corporation Law of the
State of Delaware.
Item 15. Recent Sales of Unregistered Securities
The following is a summary of our transactions since
September 1997, involving sales of our securities that were
not registered under the Securities Act of 1933, as amended:
(1)
In October 1997, we issued 853,500 shares (as adjusted) to our
	founders, David  C. Hoppmann (256,200 shares),
	Jeffrey P. Massa (199,100 shares), Peter McKee
	(199,100 shares) and Catherine Michela (199,100), in
	connection with our founding and in consideration for services
	rendered for an aggregate fair market value of $853.50, or the
	par value of the shares. The offer and sale were determined to be
	 exempt from registration pursuant to Section 4(2) of the
	Securities Act.
(2)
In December 1997, we issued 850,000 shares (as adjusted) of
	common stock and warrants to purchase 1,077,500 shares of
	our common stock with an exercise price of $.001 per share
	to Infoseek Corporation, in connection with the registrant's
	 acquisition of certain assets of Infoseek, an accredited
	investor. An additional cash consideration of $1 million was
	 paid to Infoseek. The offer and sale were determined to be
	exempt from registration pursuant to Section 4(2) of the
	Securities Act.
(3)
In December 1997, we sold 3,250,000 shares (as adjusted) of
	common stock for $3  million to Quantum Industrial Partners,
	 LDC, Geosor Corporation, Gary Gladstein, Stewart Paperin and
	Douglas Reid, each an accredited investor, the QIP Investors. The
	 offer and sale were determined to be exempt from registration
	pursuant to Section 4(2) of the Securities Act.
(4)
In April 1999, we issued 470,638 shares of common stock to CNNfn,
	 a division of Cable News Network LP, LLLP, in connection
	with the cancellation of our $3.5 million promissory note to
	 CNNfn, an accredited investor. The offer and sale were
	determined to be exempt from registration pursuant to
	Section 4(2) of the Securities Act.
(5)
In August 1999, we issued warrants to purchase 4,285 shares of
	our common stock with an exercise price of $3.50 per share
	to Insight Investments Corp., an accredited investor, in
	connection with a lease to acquire equipment. The offer and sale
	were determined to be exempt from registration pursuant to
	Section 4(2) of the Securities Act.
II-2
Table of Contents
(6)
In August 1999, we issued warrants to purchase 54,000 shares of
	our common stock with an exercise price of $3.50 per share
	to 3665, Inc., an accredited investor, in connection with
	management consulting service rendered to the registrant. The
	offer and sale were determined to be exempt from registration
	pursuant to Section  4(2) of the Securities Act.
(7)
From September 1999 to August 2000, we issued warrants to
	purchase 1,685,631  shares of common stock with an exercise
	price ranging from $2.00 to $4.77 per share to Mayflower
	Resources, Inc., an accredited investor, in consideration of
	 services rendered by S. Randy Lampert, in his capacity as
	our Chief Financial Officer. Mr. Lampert is the sole
	shareholder of Mayflower. The issuances were determined to be
	exempt from registration pursuant to Section 4(2) of the
	Securities Act.
(8)
In November 1999, we issued a warrant to purchase 26,131 shares
	of common stock with an exercise price of $2.00 per share,
	as a financing fee, to Mayflower Resources, Inc., an
	accredited investor, in connection with the registrant's
	private placement of its common stock. The offer and sale were
	determined to be exempt from registration pursuant to
	Section 4(2) of the Securities Act.
(9)
In November 1999, we issued warrants to purchase 30,612 shares of
	 our common stock with an exercise price of $8.82 per share,
	 as a placement fee, to Millenium Financial Group,  Inc., an
	 accredited investor, as placement agent for the registrant in
	connection with a private placement of the registrant's
	securities. The offer and sale were determined to be exempt from
	registration pursuant to Section 4(2) of the Securities Act.
(10)
In November 1999, we sold 592,544 shares of our common stock for
	$3.48 million to certain individual investors and investment
	 entities. The offer and sale were determined to be exempt from
	registration pursuant to Section 4(2) of the Securities Act.
(11)
In January 2000, we issued warrants to purchase 2,122 shares of
	our common stock with an exercise price of $5.88 per share
	to the law firm Park & Vaughan LLP in consideration
	 for legal services rendered. The offer and sale were determined
	to be exempt from registration pursuant to Section 4(2) of
	the Securities Act.
(12)
In January 2000, we issued warrants to purchase 3,000 shares of
	our common stock with an exercise price of $3.50 per share
	to Mike Azzara, in connection with consulting services rendered
	to the registrant. The offer and sale were determined to be
	exempt from registration pursuant to Section 4(2) of the
	Securities Act.
(13)
In January 2000, we issued warrants to purchase 2,551 shares of
	our common stock with an exercise price of $5.88 per share
	to Mike Azzara, in connection with consulting services rendered
	to the registrant. The offer and sale were determined to be
	exempt from registration pursuant to Section 4(2) of the
	Securities Act.
(14)
In January 2000, we issued warrants to purchase 500,359 shares of
	 our common stock with an exercise price of $4.77 per share
	to Stephen Canton, in connection with consulting services
	rendered to the registrant. The consultant represented to us that
	 he was a sophisticated investor. The offer and sale were
	determined to be exempt from registration pursuant to
	Section 4(2) of the Securities Act.
(15)
In March, April and May 2000, we sold 4,840,893 shares of our
	common stock for an aggregate purchase price of $18,008,122.20 to
	 individuals, venture funds and other investment entities. The
	offer and sale were determined to be exempt from registration
	pursuant to Section 4(2) of the Securities Act.
II-3
Table of Contents
(16)
In April 2000, May 2000 and June 2000, we issued warrants to
	purchase 58,491, 31,170 and 11,904 shares, respectively, of
	common stock with exercise prices of $3.18, $3.18 and $3.15 per
	share, respectively, as a financing fee, to Mayflower Resources,
	Inc., an accredited investor, in connection with our private
	placement of common stock. The offer and sale was determined to
	be exempt from registration pursuant to Section 4(2) of the
	Securities Act.
(17)
In March 2000, we issued warrants to purchase 134,409 shares of
	our common stock with an exercise price of $5.88 per share,
	as a placement fee, to I-Bankers Securities, Inc., an
	accredited investor, as placement agent, in connection with a
	private placement of common stock. The offer and sale were
	determined to be exempt from registration pursuant to
	Section 4(2) of the Securities Act.
(18)
In April 2000, we issued warrants to purchase up to 832,691
	shares of our common stock with an exercise price of
	$3.72 per share to America Online, Inc. The offer and
	sale were determined to be exempt from registration pursuant to
	Section 4(2) of the Securities Act.
(19)
In May 2000, we sold 200,000 shares of our Series A
	Convertible Preferred Stock for an aggregate purchase price of
	$2 million to ABN  AMRO Private Equity and Holland
	Ventures III B.V., each an accredited investor. The offer
	and sale were determined to be exempt from registration pursuant
	to Section 4(2) of the Securities Act.
(20)
In June 2000, we issued 268,817 shares of common stock and
	entered into a put option agreement to sell 134,409 additional
	shares of our common stock to Icon International, Inc., all
	rights to the shares and put were immediately assigned to its
	affiliate, Triad Media Ventures LLC, for $999,999.24 of
	media credits. The offer and sale were determined to be exempt
	from registration pursuant to Section 4(2) of the Securities
	 Act.
(21)
From September 1997 to August 2000, we granted options to
	purchase an aggregate of 2,584,600 shares of common stock
	under our Amended and Restated 1998 Stock Option Plan and
	5,444,388  shares of common stock under our 2000 Stock
	Option Plan to employees, consultants and directors with exercise
	 prices ranging from $0.001 to $3.72 per share in
	consideration for services. All options were granted under
	Rule 701 promulgated under the Securities Act or, for those
	employees who are our officers or directors or that are
	accredited investors, under Section 4(2) of the Securities
	Act.
There were no underwritten offerings employed in connection with
any of the transactions set forth above. Appropriate legends are
affixed to the stock certificates issued in such transactions.
Similar legends were imposed in connection with any subsequent
sales of any such securities. Each of the purchasers that are our
 employees or directors had access to information through their
employment by us. Each purchaser was given the opportunity to ask
 questions of and request information from YellowBrix. Each
investor represented and acknowledged to YellowBrix in writing
that it had this opportunity. Some of the purchasers asked
questions and requested information. YellowBrix complied with all
 requests that it deemed reasonable.
Item 16. Exhibits and Financial Statement Schedules
(a)   Exhibits.
No.
Description
1.1
Form of Underwriting Agreement.*
2.1
Asset Acquisition Agreement by and between Infoseek Corporation
	and BizWatch, Inc., dated as of December 11, 1997.
II-4
Table of Contents
No.
Description
2.2
Securities Purchase Agreement by and among the Investors listed
	therein, the Managing Founders (as defined therein) and BizWatch,
	 Inc., dated as of December 11, 1997.
2.3
Common Stock Purchase Agreement by and between CNNfn, a division
	of Cable News Network LP, LLLP and NewsReal Inc., dated as of
	April 4, 1999.
3.1
Form of Amended and Restated Certificate of Incorporation of
	YellowBrix, Inc., as amended to date.
3.2
Form of Amended Bylaws of YellowBrix, Inc.
4.1
Specimen Stock Certificate.*
4.2
Shareholders' Agreement by and among Infoseek Corporation,
	QIP Investors (as defined therein), Managing Founders (as defined
	 therein) and BizWatch, Inc., dated as of December  11,
	1997.
4.3
Rights Agreement by and among CNNfn, a division of Cable News
	Network LP, LLLP and NewsReal, Inc., dated as of April  21,
	1999.
4.4
Shareholder Rights Agreement by and among the Investors listed
	therein and YellowBrix, Inc., dated as of October  28, 1999,
	 as amended.
4.5
Shareholder Rights Agreement by and among Investors listed
	therein and YellowBrix, Inc., dated as of March 9, 2000.
4.6
Joinder in Shareholder Rights Agreement of March 9, 2000 by
	and between ABN AMRO Private Equity, and YellowBrix, Inc., dated
	as of May 12, 2000.
4.7
Joinder in Shareholder Rights Agreement of March 9, 2000 by
	and between Triad Media Ventures LLC, and YellowBrix, Inc., dated
	 as of June 29, 2000.
4.8
Letter to ABN AMRO Private Equity dated May 12, 2000.
4.9
Rights Agreement by and among ABN AMRO Private Equity, Holland
	Ventures III B.V. and YellowBrix, Inc. dated as of
	October 20, 2000.*
5.1
Opinion of Fulbright & Jaworski L.L.P. regarding legality of
	shares.*
10.1
Amended 1998 Stock Option Plan.*
10.2
2000 Stock Option Plan.*
10.3
Current News License by and between Press Association (The AP
	Newswire) and NewsReal, Inc., dated as of March 20,
	1998.†
10.4
Agreement by and between Intell-X and BizWatch, Inc., dated as of
	 August 8, 1997, as amended.
10.5
Distribution Agreement by and between InfoUSA and NewsReal, Inc.,
	 dated as of May 10, 1999, as amended December 31,
	1999.
10.6
Custom Distribution and Service Agreement by and between Network
	Solutions, Inc., and NewsReal, Inc., dated as of July 15,
	1999.
10.7
Distribution Agreement by and between ChamberBiz Inc., L.L.C and
	NewsReal, Inc. dated as of October 26, 1999.
10.8
Interactive Services Agreement by and between America Online,
	Inc. and YellowBrix, Inc., dated as of April 4, 2000.†
10.9
Employment Agreement by and between David C. Hoppmann and
	BizWatch Inc., dated as of December 11, 1997.
10.10
Employment Agreement by and between Jeffrey P. Massa and
	BizWatch, Inc., dated as of December 11, 1997.
10.11
Contractor Agreement by and between Mayflower Resources, Inc. and
	 YellowBrix, Inc., dated as of August 30, 1999.
10.12
Settlement Agreement and General Release by and between Catherine
	 Michela and YellowBrix, Inc., dated as of February 1, 2000.
10.13
Settlement Agreement by and between Peter McKee and YellowBrix,
	Inc., dated as of July 31, 1999.
10.14
Conversion Agreement by and among NewsReal, Inc. and each of the
	investors listed on Schedule I thereto, dated as of
	March 31, 1999.
II-5
Table of Contents
No.
Description
10.15
Amendment to Conversion Agreement by and among NewsReal, Inc. and
	 QIP Investors as defined therein, dated as of March 6,
	2000.
10.16
Bridge Note by NewsReal Inc. in favor of persons listed on
	Schedule A thereto, dated as of March 6, 2000.
10.17
Warrant issued to Infoseek Corporation, dated as of
	December 11, 1997.
10.18
Warrant issued to Insight Investments Corp., dated as of
	August 27, 1999.
10.19
Warrant issued to 3665, Inc., dated as of August 29, 1999.
10.20
Warrant issued to Millennium Financial Group, Inc., dated as of
	November 5, 1999.
10.21
Warrant issued to I-Bankers Securities, Inc., dated as of
	March 21, 2000.
10.22
Form of Warrant issued to Mayflower Resources Inc.
10.23
Warrants issued to Mike Azzara, dated as of January 11, 2000
	 and January 19, 2000.
10.24
Warrant issued to Park & Vaughan LLP, dated as of
	January  22, 2000.
10.25
Warrant issued to America Online, Inc., dated as of April 
	4, 2000.
10.26
Form of Warrant issued to Stephen Canton.
10.27
Lease Agreement by and between Bryce Mountain, Inc. and BizWatch,
	 Inc., dated October 23, 1997.
10.28
Office Lease by and between Waterfront II Corporation and
	NewsReal, Inc., dated as of June 1, 1998.
10.29
Sublease Agreement by and between Challenger Center for Space
	Science Education, a Texas non-profit corporation and NewsReal,
	Inc., dated as of April 6, 2000.
10.30
Sublease Agreement by and between Attorney's Diversified
	Services and BizWatch, Inc., dated as of April 19, 2000.
10.31
Form of Agreement of Lease by and between Twin Towers II
	Associates and YellowBrix, Inc.
21.1
Subsidiaries of YellowBrix, Inc.
23.1
Consent of Fulbright & Jaworski L.L.P. (included in
	Exhibit  5.1)
23.2
Consent of Ernst & Young LLP, Independent Auditors
24.1
Power of Attorney (on signature page)
27.1
Financial Data Schedule for year ended December 31, 1999.
*
To be filed by amendment.
†
Confidential treatment has been requested for
	portions of this exhibit. These portions have been omitted from
	the filing and have been filed separately with the Securities and
	 Exchange Commission.
(b)   Financial Statement Schedules.
All other schedules are omitted because they are not required or
are not applicable or the information is included in the
financial statements or notes thereto.
Item 17. Undertakings
A.   Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers, and controlling persons of the Registrant
pursuant to the provisions described above in Item 14, or
otherwise, the Registrant has been advised that in the opinion of
 the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
 defense of any action, suit or proceeding) is asserted against
the Registrant by such director, officer or controlling person in
 connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
II-6
Table of Contents
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
B.   The undersigned Registrant hereby undertakes
to provide to the Underwriters at the closing specified in the
Underwriting Agreement, certificates in such denominations and
registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
C.   The undersigned Registrant hereby undertakes
that:
(1)  For purposes of determining any liability under the
	Securities Act of 1933, the information omitted from the form of
	prospectus filed as part of this Registration Statement in
	reliance upon Rule 430A and contained in a form of
	prospectus filed by the registrant pursuant to
	Rule 424(b)(1) or (4) under the Securities Act of 1933
	shall be deemed to be part of this registration statement as of
	the time it was declared effective.
(2)  For the purpose of determining any liability under the
	Securities Act of 1933, each post-effective amendment that
	contains a form of prospectus shall be deemed to be a new
	registration statement relating to the securities offered
	therein, and the offering of such securities at that time shall
	be deemed to be the initial
bona fide
offering thereof.
II-7
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on
October 20, 2000.
By:
/s/ DAVID C. HOPPMANN
Name:  David C. Hoppmann
Title:
President, Chief Executive
Officer and Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS
that each individual whose
signature appears below constitutes and appoints David C.
Hoppmann, S. Randy Lampert and Kevin S. Lapidus, or any one of
them acting alone, his true and lawful attorney-in-fact and agent
 with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign
(i) any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same,
 with all exhibits thereto, and all documents in connection
therewith, and (ii) a Registration Statement, and any and
all amendments thereto, relating to the offering covered hereby
filed pursuant to Rule 462(b) under the Securities Act of
1933, with the Securities and Exchange Commission, granting unto
each said attorney-in-fact and agents full power and authority to
 do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that any said attorneys-in-fact and
agents, or any substitute or substitutes of any of them, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons
in the capacities and on the dates indicated:
Signature
Title
Date
/s/ DAVID C. HOPPMANN
David C. Hoppmann
Chief Executive Officer, President and Chairman of the Board
October 20, 2000
/s/ JEFFREY P. MASSA
Jeffrey P. Massa
Chief Technology Officer and Director
October 20, 2000
/s/ S. RANDY LAMPERT
S. Randy Lampert
Chief Financial Officer
October 20, 2000
/s/ MICHAEL MCCRORY
Michael McCrory
Director
October 20, 2000
/s/ STEWART J. PAPERIN
Stewart J. Paperin
Director
October 20, 2000
/s/ KEITH WALZ
Keith Walz
Director
October 20, 2000
/s/ DOUGLAS M. REID
Douglas M. Reid
Director
October 20, 2000
II-8
Table of Contents
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
YellowBrix, Inc. (formerly NewsReal, Inc.)
We have audited the financial statements of YellowBrix, Inc.
(formerly NewsReal, Inc.) as of December 31, 1998 and 1999,
and the related statements of operations, stockholders'
equity (deficit), and cash flows for the period from
October 1, 1997 (inception) to December 31, 1997 and
for the years ended December 31, 1998 and 1999 and have
issued our report thereon dated April 13, 2000 (included
elsewhere in this report). Our audits also included the financial
 statement schedule listed in Item 14(a) of this report. The
 schedule is the responsibility of the Company's management.
 Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material
respects the information set forth therein.
/s/ Ernst & Young LLP
McLean, VA
April 13, 2000
II-9
Table of Contents
SCHEDULE VIII
YELLOWBRIX, INC.
VALUATION AND QUALIFYING ACCOUNTS
For Years Ended December 31, 1999 and 1998
(unaudited)
Balance
Other
Balance
At
Changes
at
Beginning
Additions
Additions
End of
of Year
At Cost
Retirements
(Deductions)
Year
Six Months Ended
June 30, 2000 (unaudited)
Allowances for doubtful accounts receivable
$
75,000
$
38,121
$
—
$
—
$
113,121
Allowances for income tax valuations
$
7,177,889
$
4,127,135
$
—
$
—
$
11,305,023
Year Ended
December 31, 1999
Allowances for doubtful accounts receivable
$
—
$
85,000
$
10,000
$
—
$
75,000
Allowances for income tax valuations
3,590,137
3,587,752
—
—
7,177,889
$
3,590,137
$
3,672,752
$
10,000
$
—
$
7,252,889
Year Ended
December 31, 1998
Allowances for doubtful accounts receivable
$
—
$
20,000
$
20,000
$
—
$
—
Allowances for income tax valuations
63,543
3,526,594
—
—
3,590,137
$
63,543
$
3,546,594
$
20,000
$
—
$
3,590,137
II-10
Table of Contents
INDEX TO EXHIBITS
No.
Description
1.1
Form of Underwriting Agreement.*
2.1
Asset Acquisition Agreement by and between Infoseek Corporation
	and BizWatch, Inc., dated as of December 11, 1997.
2.2
Securities Purchase Agreement by and among the Investors listed
	therein, the Managing Founders (as defined therein) and BizWatch,
	 Inc., dated as of December 11, 1997.
2.3
Common Stock Purchase Agreement by and between CNNfn, a division
	of Cable News Network LP, LLLP and NewsReal Inc., dated as of
	April 4, 1999.
3.1
Form of Amended and Restated Certificate of Incorporation of
	YellowBrix, Inc., as amended to date.
3.2
Form of Amended Bylaws of YellowBrix, Inc.
4.1
Specimen Stock Certificate.*
4.2
Shareholders' Agreement by and among Infoseek Corporation,
	QIP Investors (as defined therein), Managing Founders (as defined
	 therein) and BizWatch, Inc., dated as of December  11,
	1997.
4.3
Rights Agreement by and among CNNfn, a division of Cable News
	Network LP, LLLP and NewsReal, Inc., dated as of April  21,
	1999.
4.4
Shareholder Rights Agreement by and among the Investors listed
	therein and YellowBrix, Inc., dated as of October  28, 1999,
	 as amended.
4.5
Shareholder Rights Agreement by and among Investors listed
	therein and YellowBrix, Inc., dated as of March 9, 2000.
4.6
Joinder in Shareholder Rights Agreement of March 9, 2000 by
	and between ABN AMRO Private Equity, and YellowBrix, Inc., dated
	as of May 12, 2000.
4.7
Joinder in Shareholder Rights Agreement of March 9, 2000 by
	and between Triad Media Ventures LLC, and YellowBrix, Inc., dated
	 as of June 29, 2000.
4.8
Letter to ABN AMRO Private Equity dated May 12, 2000.
4.9
Rights Agreement by and among ABN AMRO Private Equity, Holland
	Ventures III B.V. and YellowBrix, Inc. dated as of
	October 20, 2000.*
5.1
Opinion of Fulbright & Jaworski L.L.P. regarding legality of
	shares.*
10.1
Amended 1998 Stock Option Plan.*
10.2
2000 Stock Option Plan.*
10.3
Current News License by and between Press Association (The AP
	Newswire) and NewsReal, Inc., dated as of March 20,
	1998.†
10.4
Agreement by and between Intell-X and BizWatch, Inc., dated as of
	 August 8, 1997, as amended.
10.5
Distribution Agreement by and between InfoUSA and NewsReal, Inc.,
	 dated as of May 10, 1999, as amended December 31,
	1999.
10.6
Custom Distribution and Service Agreement by and between Network
	Solutions, Inc., and NewsReal, Inc., dated as of July 15,
	1999.
10.7
Distribution Agreement by and between ChamberBiz Inc., L.L.C and
	NewsReal, Inc. dated as of October 26, 1999.
10.8
Interactive Services Agreement by and between America Online,
	Inc. and YellowBrix, Inc., dated as of April 4, 2000.†
10.9
Employment Agreement by and between David C. Hoppmann and
	BizWatch Inc., dated as of December 11, 1997.
10.10
Employment Agreement by and between Jeffrey P. Massa and
	BizWatch, Inc., dated as of December 11, 1997.
*
To be filed by amendment.
†
Confidential treatment has been requested for
	portions of this exhibit. These portions have been omitted from
	the filing and have been filed separately with the Securities and
	 Exchange Commission.
Table of Contents
No.
Description
10.11
Contractor Agreement by and between Mayflower Resources, Inc. and
	 YellowBrix, Inc., dated as of August 30, 1999.
10.12
Settlement Agreement and General Release by and between Catherine
	 Michela and YellowBrix, Inc., dated as of February 1, 2000.
10.13
Settlement Agreement by and between Peter McKee and YellowBrix,
	Inc., dated as of July 31, 1999.
10.14
Conversion Agreement by and among NewsReal, Inc. and each of the
	investors listed on Schedule I thereto, dated as of
	March 31, 1999.
10.15
Amendment to Conversion Agreement by and among NewsReal, Inc. and
	 QIP Investors as defined therein, dated as of March 6,
	2000.
10.16
Bridge Note by NewsReal Inc. in favor of persons listed on
	Schedule A thereto, dated as of March 6, 2000.
10.17
Warrant issued to Infoseek Corporation, dated as of
	December 11, 1997.
10.18
Warrant issued to Insight Investments Corp., dated as of
	August 27, 1999.
10.19
Warrant issued to 3665, Inc., dated as of August 29, 1999.
10.20
Warrant issued to Millennium Financial Group, Inc., dated as of
	November 5, 1999.
10.21
Warrant issued to I-Bankers Securities, Inc., dated as of
	March 21, 2000.
10.22
Form of Warrant issued to Mayflower Resources Inc.
10.23
Warrants issued to Mike Azzara, dated as of January 11, 2000
	 and January 19, 2000.
10.24
Warrant issued to Park & Vaughan LLP, dated as of
	January  22, 2000.
10.25
Warrant issued to America Online, Inc., dated as of April 
	4, 2000.
10.26
Form of Warrant issued to Stephen Canton.
10.27
Lease Agreement by and between Bryce Mountain, Inc. and BizWatch,
	 Inc., dated October 23, 1997.
10.28
Office Lease by and between Waterfront II Corporation and
	NewsReal, Inc., dated as of June 1, 1998.
10.29
Sublease Agreement by and between Challenger Center for Space
	Science Education, a Texas non-profit corporation and NewsReal,
	Inc., dated as of April 6, 2000.
10.30
Sublease Agreement by and between Attorney's Diversified
	Services and BizWatch, Inc., dated as of April 19, 2000.
10.31
Form of Agreement of Lease by and between Twin Towers II
	Associates and YellowBrix, Inc.
21.1
Subsidiaries of YellowBrix, Inc.
23.1
Consent of Fulbright & Jaworski L.L.P. (included in
	Exhibit  5.1)
23.2
Consent of Ernst & Young LLP, Independent Auditors
24.1
Power of Attorney (on signature page)
27.1
Financial Data Schedule for year ended December 31, 1999.