May 21st, 2008
Net Loss Cut by Fifty Percent
MARINA DEL REY, CA--(MARKET WIRE)--May 21, 2008 -- InfoSearch Media, Inc. (OTC BB:ISHM.OB - News), , a leading Internet marketing firm that delivers search-targeted text content, video, and SEO services, has announced financial results for its first quarter ended March 31, 2008.
InfoSearch Media reported revenue of $1.11 million for the first quarter of 2008, a decrease from $1.31 million for the first quarter of 2007 and $1.25 million from the fourth quarter of 2007. The decrease from Q1 2007 was primarily due to a reduction of $185,428 in sales for the Content Group as a decrease in legacy license revenue of $299,306 was partially offset by sales of a new license program launched in January 2008. The sequential decrease from Q4 2007 reflects seasonality.
Total operating expenses decreased 37.1% to $978,320 in the first quarter of 2008 from $1,556,402 in the same period the prior year, as general and administrative expenses and sales and marketing expenses were decreased by 28.5% and 53.6%, respectively. These reductions were largely due to decreases in the number of personnel and a lower share-based compensation expense for employees and members of the board of directors. The Company reported a GAAP net loss of ($198,532), or ($0.00) per share (basic and diluted) for the first quarter of 2008, which represents a 52.2% decrease from the GAAP net loss of ($415,100), or ($0.01) per share (basic and diluted) for the first quarter of 2007.
Operationally, although the Company has entered into a second agreement with Demand Media, Q1 2008 included the final content delivery for Demand Media’s first contract which had generated $300,000 in quarterly revenue. The Company has already adjusted its expense levels accordingly and going forward will continue to explore ways to increase liquidity and reduce its operating expenses, including those disproportionate periodic reporting costs of being a small public company.
"The Company’s first quarter slow-down in sequential revenue was somewhat less pronounced this year at 11.7% compared to 12.6% a year ago. During the quarter we increased efforts to attract major customers, expand distribution and sign new product partnerships,” said Chief Executive Officer George Lichter, of InfoSearch Media. “These more significant initiatives have longer sales cycles and take more time to bear fruit, but we are encouraged by early indications and anticipate issuing more definitive announcements in the near future.”
“The Company was able to reduce its operating expenses by more than 35% year over year while increasing sales productivity by using resellers to leverage our inside sales team," said InfoSearch Media's Chief Financial Officer Scott Brogi. “We will continue to manage costs very closely to ensure that we remain competitive for our clients and our shareholders.”
About InfoSearch Media
InfoSearch Media is a leading, comprehensive Internet search marketing Company and a leading provider of cost-effective Web traffic via search optimized text and video content, pay-per-click and SEO services. InfoSearch Media's network of hundreds of professional writers, editors, and technical specialists help businesses succeed on the Web by implementing cost-effective Internet marketing solutions designed to deliver more web traffic and conversions for customers of every size. Whether a business needs more local traffic in 100 cities or is a content publisher with an ongoing need for fresh, targeted Web content, InfoSearch Media offers the outsourced solutions, capacity and reputation to help clients secure Internet traffic. Incorporated in 2000, the publicly-traded Company is headquartered in Marina del Rey, California.
Safe Harbor Statement
This release contains "forward-looking statements" that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Management assumes no obligation to comment on or provide an update to its stock purchases or sales in the future except as specifically required by law and by the Securities and Exchange Commission. Factors that might cause such differences include, but are not limited to the challenges of attracting new customers and maintaining existing customers and developing, deploying and delivering InfoSearch services; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers and other risks described from time to time in InfoSearch Media's filings with the Securities and Exchange Commission. In particular, see InfoSearch Media's Annual Report on Form 10-KSB/A for the fiscal year ending December 31, 2007 and its latest quarterly report on Form 10-QSB for the quarter ending March 31, 2008, filed with the Securities and Exchange Commission which are available on the SEC website at www.sec.gov. InfoSearch Media does not assume any obligation to update the forward-looking information contained in this press release.
INFOSEARCH MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
March December
31, 2008 31, 2007
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 247,703 $ 787,239
Restricted cash 4,927 20,000
Accounts receivable, net of allowance for
doubtful accounts of $25,500 and $0 for 2007 and
2006, respectively 371,173 215,518
Prepaid and other current assets 119,172 141,745
----------- -----------
TOTAL CURRENT ASSETS 742,975 1,164,202
EMPLOYEE ADVANCE 1,300 1,800
PROPERTY AND EQUIPMENT, NET 112,846 130,650
EQUITY WARRANT ASSET 103,276 112,049
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TOTAL ASSETS $ 960,397 $ 1,408,701
=========== ===========
CURRENT LIABILITIES:
Accounts payable $ 246,607 $ 228,308
Accrued salaries and bonuses and expenses 157,557 12,553
Accrued expenses 3,563 172,132
Deferred revenue 313,110 526,868
Provision for refunds payable/chargebacks (9,602) 15,842
Current Tax Liability 1,250 1,250
----------- -----------
TOTAL CURRENT LIABILITIES $ 712,485 $ 956,953
FAIR VALUE OF WARRANT LIABILITY 947,046 967,651
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TOTAL LIABILITIES $ 1,659,530 $ 1,923,354
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STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, undesignated, par value $.001 per
share, 25,000,000 shares Authorized; no shares
issued and outstanding; - -
Common stock, $.001 par value, authorized
200,000,000 shares; issued and outstanding
52,493,592 for both periods ending March 31,
2008 and December 31, 2007. 52,494 52,494
Additional paid in capital 11,364,846 11,336,742
Accumulated deficit (12,116,473) (11,903,889)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT): (699,133) (514,653)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 960,397 $ 1,408,701
=========== ===========
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months
Ended March 31,
------------------------
2008 2007
----------- -----------
CONTENTLOGIC SALES $ 1,090,487 $ 1,275,915
WEB PROPERTIES SALES 16,857 30,950
----------- -----------
NET SALES 1,107,345 1,306,865
CONTENTLOGIC COST OF SALES 345,921 461,175
WEB PROPERTIES COST OF SALES 19,959 15,321
----------- -----------
COST OF SALES 365,880 476,496
----------- -----------
GROSS PROFIT 741,465 830,369
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OPERATING EXPENSES
General & administrative 730,561 1,022,275
Sales & marketing 247,759 534,127
----------- -----------
TOTAL COSTS AND EXPENSES 978,320 1,556,402
----------- -----------
LOSS FROM OPERATIONS (236,856) (726,033)
----------- -----------
CHANGE IN FAIR VALUE OF WARRANTS 11,832 296,203
OTHER EXPENSES (INCOME) 21,380 -
INTEREST INCOME (NET) 4,574 16,780
----------- -----------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE
TAX (199,070) (413,050)
TAXES FROM CONTINUING OPERATIONS (538) 2,050
----------- -----------
NET EARNINGS (LOSS) (198,532) (415,100)
----------- -----------
EARNINGS (LOSS) PER SHARE
BASIC (0.00) (0.01)
=========== ===========
DILUTED (0.00) (0.01)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 52,493,592 51,825,450
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 52,493,592 51,825,450
InfoSearch Media, Inc.
Statements of Cash Flows
For the three months ended March 31,
2008 2007
--------- ---------
Cash flows from operating activities:
Net Loss (198,532) (415,100)
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 13,624 23,529
Equity Based Compensation 14,052 109,479
Change in fair value of equity warrant asset 1,751 (21,871)
Changes in fair value of warrant liability 11,832 (274,332)
Accounts receivable (155,655) 5,132
Due from Related Parties - 35,028
Due from employee advances 500 -
Prepaid Expenses and Other Current Assets 22,573 (3,281)
Accounts Payable, Accrued Expenses, and Other
Liabilities (25,549) (565,463)
Income Tax Payable - 1,250
Provision for refund (25,444) (3,991)
Deferred Revenue (213,758) 296,891
--------- ---------
Net cash provided by (used in) operating
activities (554,607) (812,730)
--------- ---------
Cash flows from investing activities:
Restricted cash 15,073 3,815
Capital expenditures - fixed assets - (35,193)
--------- ---------
Net cash used in investing activities 15,073 (31,378)
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Cash flows from financing activities:
Principal payments of capital lease obligations - (8,703)
Warrants exercised - 3,600
Net cash from financing activities - (5,103)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (539,536) (849,212)
Cash and cash equivalents at beginning of period 787,239 2,495,654
Cash and cash equivalents at end of period 247,703 1,646,442
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