HomeSeekers (NasdaqSC: HMSK) is joining the list of other troubled dotcoms with its latest press release and SEC filing in which the company expressed its concern that without additional investment it will not be able to continue operations.

According to the filing, HomeSeekers reported, "During the period between July 1, 2000 and September 28, 2000, we raised approximately $3.6 million through the sale of common stock and warrants to institutional and other accredited investors utilizing our shelf registration statement or in private placement transactions. However, we require significant additional financing in the near future. We will not be able to continue to operate our business unless such financing is obtained. If additional funds are raised through the issuance of equity or convertible securities, the percentage ownership of our stockholders will be reduced, our stockholders will experience material dilution and such securities may have rights, preferences or privileges senior to those of our existing stockholders."

In note two of the notes to the consolidated financial statements, HomeSeekers expresses the fear that "We may not be able to obtain additional financing for our future capital needs. We currently are not profitable and may record significant losses for the foreseeable future."

Let it be known, however, that these types of warning statements are typical. A flap over Homestore making a similar statements in one of its filings last year raised considerable alarm among inexperienced stockholders, and the portal weathered the storm just fine.

HomeSeekers stockholders are taking the earnings warnings extremely seriously. On Friday, when the company released its auditors' report at 5:45 p.m. eastern time, the stock was down 5.88 percent at 2 1/8. By Monday morning, it was trading at .50 and was down by 75 percent with over 1.1 million shares traded.

Homeseekers' auditors have questioned whether it can continue as a going concern and have issued an update to the company's fiscal 2000 earnings report, in which the company has restated revenues and losses for the second and third quarters after reassessing marketing and advertising revenues.

According to the revision, revenues for the second quarter were cut to $2.6 million from $2.7 million and for the third quarter to $3.4 million from $4.3 million. Net loss in the second quarter was restated to $4.8 million from $5 million, but its third-quarter net loss was restated to $5.7 million from $5.1 million. For its fourth quarter of fiscal 2000, ending June 30, the company burned 27 cents a share vs. 19 cents a share in the same quarter a year ago.

Published: October 9, 2000

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