April 16th, 2007
MARINA DEL REY, CA--(MARKET WIRE)--Apr 17, 2007 -- InfoSearch Media, Inc. (OTC BB:ISHM.OB - News), a leading on-line text and video content producer, today reported financial results for its fiscal year ending December 31, 2006. The Company's ContentLogic revenue grew 55% in 2006 to $6.0 million, up from $3.9 million in 2005. InfoSearch's total 2006 revenue was $7.6 million, compared to $9.4 million in 2005. Total revenues were negatively impacted as legacy deferred revenue associated with the Company's Web Properties group was recognized.
"During the year, we continued to focus on growing our ContentLogic revenue and customer base while expanding our product line with the introduction of InfoSearch:Video, our new search-targeted video content product," said George Lichter, President and CEO, InfoSearch Media. "InfoSearch:Video leverages our strong content capabilities to provide the same customer benefits as our written, text-based product line, including improved organic search engine rankings, increased, quality site traffic and brand recognition. We have also expanded into the publisher market to deliver editorial content and are continuing to launch products to expand our offerings beyond marketing content. Additionally, we are exploring new creative opportunities around our search-targeted ecosphere and are optimistic that we will capture growth opportunities in 2007."
InfoSearch reported a GAAP (generally accepted accounting principals), net loss of $4.0 million, or $(0.09) per share (basic and diluted) for 2006, compared to a net gain of $0.3 million, or $0.01 per share (basic and diluted) for 2005. The results for the 2006 fiscal year included a $1.7 million gain related to a change in the fair value of warrants InfoSearch issued in conjunction with the financing it completed in November 2005 and to Demand Media pursuant to the sale of Answerbag; a $1.9 million gain on the sale of Answerbag and a $4.2 million in non-cash equity compensation expenses related to options and restricted stock grants provided to consultants, members of the Board of Directors and employees.
Recent Company Highlights:
- Introduction of Search-Targeted Video - During the first quarter, the Company introduced its new search-targeted on-line video product which uses a scalable, proprietary production process to provide on-line text-to-video content at an affordable price. Search-targeted video is currently being offered to a select number of major partners, and will be made widely available to on-line publishers and businesses through the InfoSearch Media sales force in the second quarter of this year.
- Expansion of SEO Services - InfoSearch also announced that it is expanding its range of complementary products to include a suite of search engine optimization (SEO) consulting and implementation services. Based on client feedback, the Company is introducing a full-range of integrated SEO services with its on-line content development capabilities. A client engagement for SEO services consists of a four-step process including initial project scope definition; site analysis and audit; site implementation; and results monitoring and tuning.
- New Hires Added to Talented Team - The Company appointed Bob Myers as Vice President of Production to lead the production team in addressing existing content and new on-line video and rich-media platforms, as well as meeting the rapidly growing needs of high-volume publisher clients. InfoSearch also named Heather Gore, a seasoned marketer from Yahoo!, as Vice President of Product Marketing and Development, to accelerate product development, marketing and the Company's on-line sales strategy.
About InfoSearch Media
InfoSearch Media is the largest dedicated provider of search-targeted text and video content for the Internet designed to obtain higher rankings, brand recognition and better website performance for publishing and media clients. InfoSearch Media's network of professional writers, editors, technical specialists and video producers also helps businesses succeed on the web by implementing text and video content-based Internet marketing solutions. Whether a business needs local ranking in 100 cities or is a content publisher who understands the need for targeted on-line content, InfoSearch Media offers the outsourced solutions, capacity and reputation to help it win the audience it needs on the Internet.
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's filings with the Securities and Exchange Commission. In particular, see InfoSearch's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from InfoSearch. InfoSearch does not assume any obligation to update the forward-looking information contained in this press release.
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INFOSEARCH MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
December December
31, 2006 31, 2005
----------- -----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,495,654 $ 4,828,560
Restricted cash 380,530 -
Accounts receivable 68,941 4,449
Due from related parties 50,732 25,000
Prepaid and other current assets 201,604 209,762
----------- -----------
TOTAL CURRENT ASSETS 3,197,461 5,067,771
EMPLOYEE ADVANCE 1,000 2,500
CONTENT DEVELOPMENT 4,083 349,054
PROPERTY AND EQUIPMENT, NET 131,139 285,021
SECURITY DEPOSIT 37,500 37,500
EQUITY WARRANT ASSET 308,837 -
----------- -----------
TOTAL ASSETS $ 3,680,020 $ 5,741,846
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 204,271 $ 276,704
Accrued bonuses 264,515 176,505
Accrued expenses 400,052 268,645
Accrued expenses Answerbag acquisition 75,156 -
Capital leases 17,621 33,004
Deferred revenue 454,741 2,074,103
Provision for refunds payable/chargebacks 30,842 44,151
----------- -----------
TOTAL CURRENT LIABILITIES 1,447,198 2,873,112
CAPITAL LEASES, NET OF CURRENT PORTION - 17,621
DEFERRED REVENUE, NET OF CURRENT PORTION - 553,943
FAIR VALUE OF WARRANT LIABILITY 1,396,215 2,526,272
----------- -----------
TOTAL LIABILITIES 2,843,413 5,970,948
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, undesignated, par value
$.001per share, 25,000,000 shares
authorized; no shares issued and
outstanding; - -
Common stock, $.001 par value, authorized
200,000,000 shares; issued and
outstanding 51,162,267 and 42,277,775,
respectively 51,491 42,278
Committed stock, 164,282 shares 22,586 -
Additional paid in capital 11,130,109 6,056,291
Accumulated deficit (10,367,580) (6,327,671)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY
(DEFICIT): 836,606 (229,102)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 3,680,020 $ 5,741,846
=========== ===========
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
--------------------------
2006 2005
------------ ------------
CONTENTLOGIC SALES $ 6,016,080 $ 3,872,489
WEB PROPERTIES SALES 1,583,980 5,491,912
------------ ------------
NET SALES 7,600,060 9,364,401
CONTENTLOGIC COST OF SALES 1,686,645 1,354,917
WEB PROPERTIES COST OF SALES 987,040 1,190,193
------------ ------------
COST OF SALES 2,673,685 2,545,110
------------ ------------
GROSS PROFIT 4,926,375 6,819,291
------------ ------------
OPERATING EXPENSES
General & administrative 9,600,049 4,753,820
Sales & marketing 2,138,695 2,337,747
------------ ------------
TOTAL COSTS AND EXPENSES 11,738,744 7,091,567
LOSS FROM OPERATIONS (6,812,369) (272,276)
CHANGE IN FAIR VALUE OF WARRANTS 1,728,443 536,900
LIQUIDATED DAMAGES (502,397) -
OTHER EXPENSES (35,244) -
INTEREST INCOME (NET) 92,414 50,373
------------ ------------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE TAX (5,529,153) 314,997
TAXES FROM CONTINUING OPERATIONS 18,585 -
------------ ------------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS (5,547,738) 314,997
DISCONTINUED OPERATIONS
Loss from discontinued operations of
Answerbag, Inc. (412,132) -
Gain on disposal of discontinued
operations 1,919,962 -
Tax Provision - -
------------ ------------
EARNINGS FROM DISCONTINUED OPERATIONS 1,507,830 -
------------ ------------
NET EARNINGS (LOSS) $ (4,039,908) $ 314,997
============ ============
EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS -
BASIC $ (0.12) $ 0.01
============ ============
DILUTED $ (0.12) $ 0.01
============ ============
EARNINGS (LOSS) PER SHARE FROM DISCONTINUED
OPERATIONS -
BASIC $ 0.03 $ -
============ ============
DILUTED $ 0.03 $ -
============ ============
EARNINGS (LOSS) PER SHARE
BASIC $ (0.09) $ 0.01
============ ============
DILUTED $ (0.09) $ 0.01
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 47,202,261 42,277,775
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 47,202,261 43,055,104
============ ============
INFOSEARCH MEDIA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended December 31,
2006 2005
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ (4,039,908) $ 314,997
Adjustment to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Depreciation and amortization 615,529 420,595
Equity based compensation 4,223,245 645,502
Issuance of warrants 78,331
Loss from disposal of fixed assets 10,937 -
Liquidated damages 509,904 -
Change in fair value of warrants (1,728,443) (536,900)
Gain on sales of Answerbag asset (1,919,962) -
Changes in assets and liabilities:
Accounts receivable (64,492) 130,577
Prepaid expenses and other current
assets (16,074) (160,706)
Accounts payable, accrued expenses and
other liabilities 222,141 75,377
Provision for refunds (13,309) (754,659)
Deferred revenue (2,173,306) (4,608,043)
------------ ------------
NET CASH USED IN CONTINUING OPERATIONS: (4,295,406) (4,473,260)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash (380,530)
Net cash payments in purchase of Answerbag (479,888)
Net cash proceeds from sales of Answerbag
assets 2,937,149 -
Capital expenditures - fixed assets (37,640) (158,459)
Capital expenditures - content development (49,361) (604,491)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES 1,989,729 (762,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of capital lease
obligations (33,004) (32,034)
Stock option exercise 5,775 -
Gross proceeds from private placements - 8,767,845
------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (27,229) 8,735,811
Net increase (decrease) in cash and cash
equivalents (2,332,906) 3,499,601
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 4,828,560 1,328,959
------------ ------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 2,495,654 $ 4,828,560
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid for interest $ 13,406 $ 12,791
============ ============
Income tax paid (refunded) $ 18,585 $ (6,097)
============ ============
NON-CASH SUPPLEMENTAL DISCLOSURE OF INVESTING
AND FINANCING ACTIVITIES:
Stock issued or committed to be issued for
the acquisition of Answerbag $ 462,499 -
============ ============ Investor Contact:
Brinlea Johnson
The Blueshirt Group, for InfoSearch Media
415/217-5861
Email Contact
Media Contact:
Heather Gore
310/437-7380 ext. 7741
Email Contact
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