SOURCE: InfoSearch Media

November 16, 2007 08:51 ET

InfoSearch Media Reports Third Quarter 2007 Results

Earnings per Share Improvement to ($0.00) Reflects 70% Lower Operating Loss

MARINA DEL REY, CA--(Marketwire - November 16, 2007) - InfoSearch Media, Inc. (OTCBB: ISHM), a leading Internet search marketing firm that cost-effectively delivers web traffic via search optimized text and video content, has announced financial results for its third quarter ended September 30, 2007.

"Improvement in third quarter earnings is a direct result of our repositioned products gaining traction in parallel with significant expense rationalization. It put us back on the path to profitability," said George Lichter, President and CEO, InfoSearch Media. "We continue to focus on driving the growth of our core business and will be opportunistic in looking to expand our customer base as well as the breadth and depth of our offerings in both organic and paid search."

Q3 Financial Summary

InfoSearch Media reported an operating loss of $0.29 million for the quarter ended September 30, 2007, representing a decrease of 51% from the loss of $0.60 million in the third quarter of 2006. Excluding a non-recurring, non-operating expense of $0.11 million, the adjusted operating loss of $0.18 million was a decrease of 70% from the third quarter of 2006 and 83% from the loss of $1.07 million in the second quarter of 2007.

--  The Company reported a GAAP net loss of $0.19 million, or ($0.00) per
    share (basic and diluted), a decrease of 72% from $0.65 million or ($0.02)
    per share (basic and diluted) for the third quarters ended 2007 and 2006,
    respectively.
    
--  Cash on-hand increased by 12% to $0.64 million.
    
--  Revenues were $1.19 million for the third quarter, a decrease of 27%
    compared to the third quarter of 2006 and an increase of 3% compared to the
    second quarter of 2007. Third quarter 2006 revenues included non-recurring
    revenues from a purchase of certain, pre-existing content by Demand Media.
    Gross margins increased to 70% for the third quarter of 2007 as compared to
    61% for the second quarter of 2007.  Total operating expenses for the third
    quarter of 2007 decreased 36% to $1.13 million from $1.78 million in the
    second quarter of 2007.
    
--  New customer orders grew 48 percent over the first half of 2007. New
    customer orders are an important leading indicator of revenues and exclude
    recurring client backlog and advertising revenue from the Company's Web
    Properties.
    

"The Company's 83% lower operating loss quarter over quarter yielded sequential improvement in EPS to ($0.00) as well as a 12% increase in cash on-hand. InfoSearch Media is now well-positioned to grow its share of the expanding online advertising market," said Scott Brogi, CFO of InfoSearch Media. "Accordingly, management intends to purchase shares of the Company's common stock on the open market as buying opportunities present themselves and our insider trading policies permit."

Recent Company Highlights

--  Opening of Austin, Texas Sales Office -- In response to growing new
    customer orders and an attractive local talent pool, the company opened a
    small, regional sales office in Austin, Texas, in October.
    
--  Expansion of TrafficBuilder Text Product Line -- In response to
    customer requests and feedback, the Company launched TrafficBuilder Text
    TuneUp. A cost-effective solution for clients who want more traffic from
    content they already have, TuneUp transforms existing web content by
    applying best practices in search engine optimization in order to increase
    its effectiveness in driving website traffic.
    

About InfoSearch Media

InfoSearch Media (http://www.InfoSearchMedia.com) is a leading Internet search marketing company and the largest dedicated provider of traffic-targeted online text and video content. InfoSearch Media's network of professional writers, editors, technical specialists and video producers helps businesses succeed on the Web by implementing cost-effective Internet marketing solutions designed to deliver more web traffic 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 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.


INFOSEARCH MEDIA, INC.
CONSOLIDATED BALANCE SHEETS

                                             (Unaudited)
                                            September 30,     December 31,
                                                 2007             2006
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                $      639,674   $    2,495,655
  Restricted cash                                 362,392          380,530
  Accounts receivable                              27,619           68,941
  Due from related parties                         16,309           50,732
  Prepaid and other current assets                148,588          201,604

                                           --------------   --------------
    TOTAL CURRENT ASSETS                        1,194,582        3,197,463
                                           --------------   --------------
EMPLOYEE ADVANCE                                    4,500            1,000

CONTENT DEVELOPMENT                                     -            4,082

PROPERTY AND EQUIPMENT, NET                       142,117          131,139

SECURITY DEPOSIT                                   37,500           37,500

EQUITY WARRANT ASSET                              122,573          308,837

                                           --------------   --------------
    TOTAL ASSETS                           $    1,501,272   $    3,680,020
                                           --------------   --------------
LIABILITIES AND STOCKHOLDERS'
 EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable                                299,818          204,271
  Accrued salaries and bonuses                     74,393          206,145
  Accrued expenses                                290,245          458,423
  Accrued expenses Answerbag acquisition                -           75,156
  Capital leases                                      459           17,621
  Deferred revenue                                606,292          454,741
  Provision for refunds
   payable/chargebacks                             10,718           30,842
  Current tax liability                             1,250                -
                                           --------------   --------------
    TOTAL CURRENT LIABILITIES                   1,283,174        1,447,200

CAPITAL LEASES, NET OF CURRENT PORTION                  -                -

INCOME TAX PAYABLE                                156,000                -

FAIR VALUE OF WARRANT LIABILITY                   873,862        1,396,215

                                           --------------   --------------
    TOTAL LIABILITIES                      $    2,313,037   $    2,843,414
                                           --------------   --------------

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;                  52,872           51,491
   issued and outstanding 52,871,973
   and 51,491,197, respectively
  Committed stock, 0 and 164,282 shares                 -           22,586
  Additional paid in capital                   11,375,683       11,130,109
  Accumulated deficit                         (12,240,320)     (10,367,580)
    TOTAL STOCKHOLDERS' EQUITY:                  (811,765)         836,606
                                           --------------   --------------

    TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY                  $    1,501,272   $    3,680,020



                          INFOSEARCH MEDIA, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Unaudited)

                       For the Three Months Ended For the Nine Months Ended
                              September 30,            September 30,
                           2007         2006         2007         2006
NET SALES

  Content               $ 1,151,542  $ 1,278,964  $ 3,547,651  $ 4,822,700
  Web Properties             38,517      339,978      109,266    1,281,984
                        -----------  -----------  -----------  -----------
    NET SALES             1,190,059    1,618,942    3,656,917    6,104,684

COST OF SALES
  Content                   342,606      319,295    1,242,534    1,407,803

  Web Properties              9,420       84,876       41,641      785,907
                        -----------  -----------  -----------  -----------
    COST OF SALES           352,026      404,171    1,284,175    2,193,710
                        -----------  -----------  -----------  -----------

                        -----------  -----------  -----------  -----------
GROSS PROFIT                838,033    1,214,771    2,372,742    3,910,974
                        -----------  -----------  -----------  -----------

OPERATING EXPENSES
  General and
  Administrative            681,368    1,342,991    3,052,837    8,590,268
  Sales and Marketing       341,156      476,611    1,302,666    1,560,645
  Other Expenses            110,000            -      110,000            -
                        -----------  -----------  -----------  -----------
    TOTAL OPERATING
     EXPENSES             1,132,524    1,819,602    4,465,503   10,150,913

                        -----------  -----------  -----------  -----------
LOSS FROM OPERATIONS       (294,491)    (604,831)  (2,092,761)  (6,239,939)
                        -----------  -----------  -----------  -----------

CHANGE IN FAIR VALUE
 OF WARRANTS                103,139      232,119      337,597    2,247,102

OTHER EXPENSES                    -            -            -      (34,103)

INTEREST INCOME              10,389       12,315       46,513       66,832

INTEREST EXPENSE                 (7)      (5,861)      (1,165)     (12,795)
                        -----------  -----------  -----------  -----------

(LOSS) FROM CONTINUING
 OPERATIONS BEFORE TAX     (180,970)    (366,258)  (1,709,816)  (3,972,903)

PROVISION FOR TAX FROM
 CONTINUING OPERATIONS        4,050        7,200        6,925       23,353
                        -----------  -----------  -----------  -----------

NET  (LOSS) FROM
 CONTINUING OPERATIONS     (185,020)    (373,458)  (1,716,741)  (3,996,256)

LOSS FROM DISCONTINUED
 OPERATIONS,  NET OF
 TAXES
                        -----------  -----------  -----------  -----------
  Loss from
   discontinued
   operations of
   Answerbag, Inc.                -     (276,784)           -     (383,870)
                        -----------  -----------  -----------  -----------
                        -----------  -----------  -----------  -----------

NET (LOSS)              $  (185,020) $  (650,242) $(1,716,741) $(4,380,126)
                        ===========  ===========  ===========  ===========

(LOSS) PER SHARE FROM
 CONTINUING
 OPERATIONS -
  BASIC                 $     (0.00) $     (0.01) $     (0.03) $     (0.09)
  DILUTED                     (0.00)       (0.01)       (0.03)       (0.09)
(LOSS) PER SHARE FROM
  DISCONTINUED
  OPERATIONS -
  BASIC                           -        (0.01)           -        (0.01)
  DILUTED                         -        (0.01)           -        (0.01)
(LOSS) PER SHARE
  BASIC                       (0.00)       (0.01)       (0.03)       (0.10)
  DILUTED                     (0.00)       (0.01)       (0.03)       (0.10)

WEIGHTED AVERAGE
 SHARES OUTSTANDING -
 BASIC                   53,280,710   46,301,912   52,396,658   46,028,271

WEIGHTED AVERAGE
 SHARES OUTSTANDING -
 DILUTED                 53,280,710   46,301,912   52,396,658   46,028,271





                          INFOSEARCH MEDIA, INC.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)

                                                 Period ended September 30,
                                                       2007        2006
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net earnings (loss)                              (1,716,741)  (4,894,699)
  Adjustment from Discontinued Operations                   -      383,870
  Net Loss from Continuing Operations              (1,716,741)  (4,510,829)
                                                    ----------  ----------

  Adjustment to reconcile net income (loss) to
   net cash used in operating activities
    Depreciation and amortization                       86,353     566,459
    Equity based compensation                          199,122   4,729,683
    Loss from disposal of fixed assets                       -       9,396
    Dispositions of assets associated with the
     sale of AnswerBag                                       -           -
    Liquidated damages                                       -     509,904
    Change in fair value of warrants                  (336,088) (2,247,102)
    Gain on sales of Answerbag asset                         -           -
  Changes in assets and liabilities:
    Accounts receivable                                 41,322    (158,756)
    Due from related parties                            34,423           -
    Due from employee advances                          (3,500)          -
    Prepaid expenses and other current assets           52,163    (119,691)
    Accounts payable, accrued expenses and other
     liabilities                                      (279,539)     (6,620)
    Income tax payable                                   1,250           -
    Provision for refunds                              (20,124)      8,694
    Deferred revenue                                   151,551  (2,245,937)
                                                    ----------  ----------
      Total adjustments                                (75,567)  1,046,030

NET CASH USED IN CONTINUING OPERATIONS              (1,792,308) (3,464,799)
  Net loss from Discontinued Operations                      -    (383,870)
  Change in Operating Assets Held for Sale from
   Discontinued Operations                                   -      29,125
                                                    ----------  ----------
  Net Cash Used in Discontinued Operations                   -    (354,745)
                                                    ----------  ----------
NET CASH USED IN OPERATING ACTIVITIES               (1,792,308) (3,819,544)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Restricted Cash                                       18,139           -
  Capital expenditures - fixed assets                  (68,250)    (37,640)
  Capital expenditures - content development                 -     (49,361)
                                                    ----------  ----------
NET CASH USED IN CONTINUING INVESTMENT ACTIVITIES      (50,111)    (87,001)
NET CASH USED IN DISCONTINUED INVESTMENT
 ACTIVITIES                                                  -    (479,888)
                                                    ----------  ----------
NET CASH USED IN INVESTING ACTIVITIES                  (50,111)   (566,889)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments of capital lease obligations      (17,162)    (24,269)
  Warrants Exercised                                     3,600           -
                                                    ----------  ----------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES    (13,562)    (24,269)

Net increase (decrease) in cash and cash
 equivalents                                        (1,855,981) (4,410,702)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD      2,495,655   4,828,560
                                                    ----------  ----------

CASH AND CASH EQUIVALENTS - END OF PERIOD           $  639,674  $  417,858
                                                    ==========  ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid for interest                            $      299  $   12,795
                                                    ==========  ==========

  Income tax paid (refunded)                        $    3,875  $   23,353
                                                    ==========  ==========

NON-CASH SUPPLEMENTAL DISCLOSURE OF INVESTING
 AND FINANCING ACTIVITIES:
Stock issued or committed to be issued for the
 acquisition of Answerbag                           $        -  $  462,499
                                                    ==========  ==========

Stock Issuances for Liquidated Damages              $        -  $  509,904
                                                    ==========  ==========

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