SOURCE: Zolon Corporation

August 23, 2010 14:42 ET

Zolon Corporation Announces Second Quarter 2010 Financial Results

ROLLING MEADOWS, IL--(Marketwire - August 23, 2010) - Zolon Corporation (OTCBB: ZLON) today announced its financial results for the second quarter of 2010. This is the Company's first full quarter of operations under new management and the new business model. As announced earlier, Zolon changed its business model and entered into Information Technology services industry. The business plan calls for delivering integrated full spectrum services including consulting, product architecture, development and support to the Telecommunications, Financial Services and Healthcare & Life Sciences industry verticals.

Zolon delivered $4.3M in revenues for the quarter ending June 30, 2010 and $477K of operating profits. Dr. Nandu Thondavadi, CEO of Zolon, said, "We are very encouraged with our performance in these difficult economic times. Our operating profits came in at 11% and are respectable in this industry. Our top line will continue to grow as the economy gains positive momentum."

Dr. Thondavadi continued, "Collectively, management brings over 60 years of industry experience to Zolon. We have the ability to look out for technology disruptions and see changes in capitalizing and utilizing IT infrastructure for optimal and cost efficient performance in the industry. The industry is dynamic and we continue to look externally to validate our model, make course corrections when necessary, and introduce and/or modify our service offerings. IT services performance is almost a leading economic indicator and is still a very core strategic investment for the American industry's global competitiveness and we are very excited to be in this space."

Dhru Desai, Chairman of the Board, commented, "We are very pleased with our annualized run rate EBITDA of approximately $2 million and believe that is a great start. We have successfully completed integration of our assets into a unified platform that is scalable. We continue to look for additional inorganic profitable assets that will provide synergy and create shareholder value."

Zolon is planning to hold an earnings conference call after Labor Day.

About Zolon Corporation Zolon Corporation is presently focused in the Information Technology (IT) and Software enabled service areas which it has begun to enter through a series of strategic business combinations. The Company intends to target companies in the Financial Services, Health Care and Telecom sectors to create a diversified portfolio. The Company continues to actively pursue and negotiate for business acquisitions and/or combination opportunities with several targets and intends to consummate transactions in the near future to further execute our business strategy.

                          ZOLON CORPORATION
                     CONSOLIDATED BALANCE SHEETS

                                                   June 30,   December 31,
                                                     2010         2009
                                                 ------------ ------------
Assets:
Current assets:
  Cash                                           $    128,032 $      1,286
  Accounts receivable                               5,342,668
  Other current assets                                  5,077
                                                 ------------ ------------
  Total current assets                              5,475,777        1,286

Fixed assets:
  Furniture & fixtures, net                                 -       25,540
                                                 ------------ ------------
  Total fixed assets                                        -       25,540

Other assets:
  Goodwill                                          3,282,675            -
  Unbilled revenue                                    133,347
                                                 ------------ ------------
  Total other assets                                3,416,022            -

  Total assets                                   $  8,891,799 $     26,826
                                                 ============ ============


Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
  Accounts payable                               $     97,466
  Accrued payroll                                      30,403
  Other                                                 8,703       10,000
  Current notes payable                             3,217,832       22,007
  Accounts receivable factoring                     3,373,697
                                                 ------------ ------------
 Total current liabilities                          6,728,101       32,007
                                                 ------------ ------------

 Total liabilities                                  6,728,101       32,007

Stockholder's equity (deficit)
  Common stock                                      3,182,211    3,150,211
  Treasury stock                                      200,000      200,000
  Additional paid in capital                         (329,793)  (2,216,793)
  Accumulated deficit                                (888,720)  (1,138,599)
                                                 ------------ ------------
Total stockholders' equity(deficit)                 2,163,698       (5,181)

  Total liabilities and stockholders' equity
   (deficit)                                     $  8,891,799 $     26,826
                                                 ============ ============





                                 ZOLON CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                          Three months ended          Six months ended
                               June 30,                  June 30,
                        ------------------------- ------------------------
                           2010         2009         2010        2009
                        ---------- -------------- ---------- -------------
Revenue                 $4,324,814 $       12,475 $4,336,539 $     111,409

Cost of revenue          3,648,096                 3,648,096        58,604
                        ---------- -------------- ---------- -------------

Gross margin               676,718         12,475    688,443        52,805

Operating expenses

Selling, general &
 administrative            199,862         40,736    218,967        53,602
                                                           -
                        ---------- -------------- ---------- -------------

    Total operating
     expenses              199,862         40,736    218,967        53,602
                        ---------- -------------- ---------- -------------

Income from operations  $  476,856 $      (28,261)$  469,476 $        (797)
                        ========== ============== ========== =============

Interest expenses          226,978                   226,978
                        ========== ============== ========== =============

Net income                 249,878        (28,261)   242,498          (797)
                        ========== ============== ========== =============

Net income (loss) per
 common share-basic &
 diluted                    0.0071            nil     0.0069           nil
                        ========== ============== ========== =============

Weighted common shares
 outstanding -basic and
 diluted                35,150,211  2,800,324,194 35,150,211 2,790,324,194
                        ========== ============== ========== =============



Forward-Looking Statements

This release contains forward-looking statements which are subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipate," "expects," "estimates," and similar expressions) should be considered to be forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Exchange Act of 1934, as each is amended, for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. Certain factors (including but not limited to those risk factors identified from time to time in our filings with the Securities and Exchange Commission as well as changes in economic conditions; outcome of negotiations; changes in the Company's access to necessary capital; outcome of litigation; volatility of capital markets; variability and timing of business opportunities; changes in accounting policies and practices; the effects of internal organizational changes; adverse state and federal regulation and legislation; and the occurrence of extraordinary or catastrophic events and terrorist acts; or other unforeseen changes in circumstances) could cause actual results and conditions to differ materially from those projected in such forward-looking statements. We do not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this release is based on information currently available and may not be reliable after this date.

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