SOURCE: IceWEB Inc.

May 16, 2011 16:15 ET

IceWEB Reports Fiscal 2011 Second Quarter Financial Results

Quarter-Over-Quarter Revenues Increased 65%; Year-Over-Year Revenues Increased 11%

STERLING, VA--(Marketwire - May 16, 2011) - IceWEB™, Inc., (OTCBB: IWEB), a leading provider of unified data storage and building blocks for cloud storage, announced today results for the fiscal 2011 second quarter period ended March 31, 2010.

Quarterly Highlights and Recent Developments

--  Revenue increased 65% quarter-over-quarter; 11% year-over-year
--  Operating expenses decreased 54% for the quarter compared to same
    quarter in fiscal 2010 and 36% year to date over the prior fiscal
    year to date period
--  Net loss of $0.01/share current year to date compared to a net loss of
    $0.04/share in prior year
--  Company announced definitive merger agreement with Promark Technology,
    one of the premier value-added storage distributors in the United
    States
--  Received reorder for geospatial storage appliance from BP for Gulf oil
    spill monitoring and analysis
--  Received add-on order from Fortune 500 Telecommunications Company
--  Company partners with Thermopylae Science and Technology to offer the
    Enterprise visualization appliance powered by Google Earth on GSA
    contract

For the three months ended March 31, 2011, we reported revenues of $1,116,585 as compared to revenues of $1,011,205 for the three months ended March 31, 2010, an increase of $105,380 or approximately 10%. The increase is primarily due to the Company's focus on our high margin data storage business unit.

Operating expenses decreased approximately 54% to $1,064,568 for the three months ended March 31, 2011 as compared to $2,301,431 for the three months ended March 31, 2010.

John R. Signorello, Chairman and CEO, stated, "In the second quarter, 2011, we reduced operating expenses by more than 50 percent, yet we were still able to increase revenues and reduce the Company's operating loss. Our unified storage line has started to gain serious traction for three primary reasons; one, they have been priced and positioned into niche markets where end users realize, immediate, measurable and meaningful ROI; two, we are working with experienced partners like Thermopylae Science and Technology and; three, Promark's nationwide network of over 1,200 value-added resellers are building our new business pipeline.

"Both Dale Foster, President of Promark Technologies, and I are looking forward to the pending merger between our two companies. The merger will transform our companies into a data storage/technology company with revenues in excess of $100 million annually, led by an industry experienced management team. In addition, the Company will continue to expand its intellectual property portfolio, nationwide distribution and proprietary products in some of the fastest growing markets in the world. We expect the planned merger to close during IceWEB's fiscal third quarter which ends June 30, 2011."

About IceWEB, Inc.

Headquartered just outside of Washington, D.C., IceWEB manufactures and markets data storage products. For more information, please visit www.IceWEB.com.

This press release may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases you can identify those so-called "forward looking statements" by words such as "may," "will," "should," "expects," "plans," "targets," "believes," "anticipates," "estimates," "predicts," "potential," or "continue" or the negative of those words and other comparable words. These forward looking statements are subject to risks and uncertainties, product tests, commercialization risks, availability of financing and results of financing efforts that could cause actual results to differ materially from historical results or those anticipated. Further information regarding these and other risks is described from time to time in the Company's filings with the SEC, which are available on its website at: http://www.sec.gov. We assume no obligation to update or alter our forward-looking statements made in this release or in any periodic report filed by us under the Securities Exchange Act of 1934, as amended, or any other document, whether as a result of new information, future events or otherwise, except as otherwise required by applicable federal securities laws.

- Tables to Follow -



                             ICEWEB, Inc.
                    Consolidated Balance Sheets


                                            March 31, 2011  September 30,
                                              (Unaudited)       2010(1)
                                            --------------  --------------
CURRENT ASSETS:
Cash                                        $       42,259  $      540,156
Accounts receivable, net                         2,173,588       1,529,852
Inventory                                           84,252          62,197
Other current assets                                20,624           6,875
Prepaid expenses                                    40,150          31,230
                                            --------------  --------------
                                                 2,360,875       2,170,310
                                            --------------  --------------

OTHER ASSETS:
Property and equipment, net                        262,344         418,873
Deposits                                            13,320          13,320
Marketable Securities                              172,800         524,800
Intangible assets, net                             425,407         546,952
                                            --------------  --------------
Total Assets                                $    3,234,745  $    3,674,255
                                            ==============  ==============

CURRENT LIABILITIES:
Accounts payable and accrued liabilities    $    2,173,786  $    1,711,621
Notes payable                                    1,776,133       1,649,140
Deferred revenue                                    27,124          59,582
                                            --------------  --------------
                                                 3,977,043       3,420,343
                                            --------------  --------------

                                            --------------  --------------
Total Liabilities                                3,977,043       3,420,343
                                            --------------  --------------

Stockholders' Equity (Deficit)
Series B convertible preferred stock ($.001
 par value; 626,667 shares issued and
 outstanding)                                          626             626
Common stock ($.001 par value;
 1,000,000,000 shares authorized;
 142,912,886 shares issued and 142,750,386
 shares outstanding)                               142,752         134,445
Additional paid in capital                      30,598,377      29,360,833
Accumulated deficit                            (31,512,853)    (29,622,792)
Accumulated other comprehensive income             124,800         476,800
Subscription receivable                            (83,000)        (83,000)
Treasury stock, at cost, (162,500 shares)          (13,000)        (13,000)
                                            --------------  --------------
Total stockholders' equity (deficit)              (742,298)        253,912
                                            --------------  --------------

Total Liabilities and Stockholders' Equity
 (Deficit)                                  $    3,234,745  $    3,674,255
                                            ==============  ==============


(1) Derived from audited financial statements





                                   ICEWEB, Inc.
                      Consolidated Statements of Operations
                                   (Unaudited)



                          Three Months Ended          Six Months Ended
                               March 31,                  March 31,
                        ------------------------  ------------------------
                            2011         2010         2011         2010
                        -----------  -----------  -----------  -----------

Sales                   $ 1,116,585  $ 1,011,205  $ 1,794,437  $ 1,612,022

Cost of sales               585,858      456,094      936,515      729,718

                        -----------  -----------  -----------  -----------
Gross profit                530,727      555,111      857,922      882,304
                        -----------  -----------  -----------  -----------

Operating expenses:
Sales and marketing         319,322      472,359      774,344      785,217
Depreciation and
 amortization expense       127,177      162,926      293,794      330,399
Research and
 development expense        153,642      105,745      359,768      185,311
General and
 administrative             464,457    1,560,401    1,121,823    2,654,370

                        -----------  -----------  -----------  -----------
Total Operating
 Expenses                 1,064,598    2,301,431    2,549,729    3,955,297
                        -----------  -----------  -----------  -----------

                        -----------  -----------  -----------  -----------
Loss from operations       (533,871)  (1,746,320)  (1,691,806)  (3,072,993)
                        -----------  -----------  -----------  -----------

Other income
 (expenses):
Interest expense           (100,376)    (141,995)    (198,256)    (274,956)
                        -----------  -----------  -----------  -----------
Total other expenses:      (100,376)    (141,995)    (198,256)    (274,956)
                        -----------  -----------  -----------  -----------

                        -----------  -----------  -----------  -----------
Net loss                $  (634,247) $(1,888,315) $(1,890,063) $(3,347,949)
                        -----------  -----------  -----------  -----------

Basic and diluted loss
 per common share       $     (0.00) $     (0.02) $     (0.01) $     (0.04)

Basic and diluted
 weighted average
 common shares
 outstanding            140,456,142   88,205,555  138,429,677   83,652,224





                             ICEWEB, Inc.
                 Consolidated Statements of Cash Flows
                            (Unaudited)


                                                     Six Months Ended
                                                          March 31,
                                                --------------------------
                                                    2011          2010
                                                ------------  ------------

NET CASH USED IN OPERATING ACTIVITIES           $ (1,456,279) $ (1,431,078)
                                                ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in marketable securities                       --       (48,000)
Purchase of property and equipment                   (15,720)      (37,444)
                                                ------------  ------------
NET CASH USED IN INVESTING ACTIVITIES                (15,720)      (85,444)
                                                ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of restricted common
 stock                                               225,000       490,000
Proceeds from notes payable                          628,428       799,460
Proceeds from exercise of common stock options       622,109     1,122,134
Payments on notes payable                           (501,435)     (811,082)

                                                ------------  ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES            974,102     1,600,512
                                                ------------  ------------

NET INCREASE (DECREASE) IN CASH                     (497,897)       83,990

CASH - beginning of period                           540,156        63,310

                                                ------------  ------------
CASH - end of period                            $     42,259  $    147,300
                                                ============  ============

Supplemental disclosure of cash flow
 information:
Cash paid for:
                                                ------------  ------------
Interest                                        $    198,225  $    274,956
                                                ============  ============
Income taxes                                              --            --
                                                ============  ============

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