SOURCE: InfoSearch Media, Inc.

May 22, 2006 06:30 ET

InfoSearch Media, Inc. Reports Strong First Quarter 2006 Results

Sequential Monthly Sales Growth, Expanded Distribution Platform and Entry Into Social Content Are Among the Key Highlights

MARINA DEL REY, CA -- (MARKET WIRE) -- May 22, 2006 -- InfoSearch Media, Inc. (OTCBB: ISHM), a leading online media and search marketing firm, today announced financial results for its first quarter ended March 31, 2006.

InfoSearch Media reported revenue of $2.9 million for the first quarter of 2006, compared to $1.6 million for the first quarter of 2005, an increase of 77 percent. The Company reported a GAAP net loss of $0.3 million, or $0.01 per share (basic and diluted) for the first quarter of 2006, compared to a GAAP net loss of $0.2 million, or $0.01 per share (basic and diluted) for the first quarter of 2005. The expenses contributing to the GAAP net loss for the first quarter of 2006 included an expense of $1,230,384, related to non-cash equity compensation for options and restricted stock grants provided to consultants, employees, and members of the Board of Directors. Partially offsetting this was a non-cash gain of $666,744 related to the decrease in fair value of warrants.

"Both of our business groups met important goals during the first quarter. Our core ContentLogic business experienced month over month sales growth and expanded its distribution beyond our internal sales force. Through the launch of a web-based platform, third-party firms will now have direct access to ContentLogic's order processing and production systems. This access makes available new revenue opportunities by leveraging the sales forces of value-added-resellers, major franchisors and a variety of other internet marketing solution providers," explained George Lichter, President and CEO of InfoSearch. "Also and importantly, our Web Properties group completed the integration of recently acquired Answerbag.com and began accelerated website development efforts to enhance both design and functionality. Answerbag, already a leader in human question and answering and social search, is the starting point of the Company's move into user-generated Social Content and Answerbag.com is achieving significant growth, as evidenced by a near doubling of its unique users to over one million per month. During the first quarter, we also recognized the last of the ArticleInsider deferred revenue. The end of that deferred revenue steam, while largely optical, also brings an end to the cash consumptive ArticleInsider affiliate traffic program, which allows us to shift investment and development resources towards our core businesses. We believe that ability for renewed focus, the wider distribution of ContentLogic, plus Answerbag.com's new website and expanding features all position the Company for growth in the second half of the year."

About InfoSearch Media

InfoSearch Media (http://www.infosearchmedia.com) is a leading provider of content based cost-effective search engine marketing services. InfoSearch Media maintains a network of over 200 professional writers that help businesses succeed on the web by implementing content-based solutions that simultaneously increase online search engine rankings and website sales performance. InfoSearch Media drives website performance through its two products: ContentLogic and Web Properties (ArticleInsider and Answerbag).

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. 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 SHEET
                            MARCH 31, 2006
                             (unaudited)

                                ASSETS
                                ------
CURRENT ASSETS:
   Cash                                               $  3,234,731
   Accounts receivable                                      35,383
   Due from related parties                                 25,000
   Prepaid expenses and other current assets               356,724
   Employee advance                                            500
                                                      ------------
      TOTAL CURRENT ASSETS                               3,652,338

PROPERTY AND EQUIPMENT                                     259,180

CONTENT DEVELOPMENT                                        237,692

INTANGIBLE ASSETS                                          336,275

SECURITY DEPOSIT                                            37,500
                                                      ------------

      TOTAL ASSETS                                    $  4,522,985
                                                      ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY
                  ------------------------------------
CURRENT LIABILITIES:
   Accounts payable                                   $    490,739
   Accrued bonuses                                          42,104
   Accrued payroll and taxes                               171,409
   Accrued expenses                                         82,817
   Current portion of deferred revenue                     828,057
   Provision for refunds payable and bad debts             108,303
   Current portion of capital lease obligations             25,033
                                                      ------------
      TOTAL CURRENT LIABILITIES                          1,748,462

CAPITAL LEASE OBLIGATIONS, net of current portion           17,621

FAIR VALUE OF WARRANTS LIABILITY                         1,859,498

DEFERRED REVENUE, net of current portion                    30,334
                                                      ------------

      TOTAL LIABILITIES                                  3,655,915

STOCKHOLDERS' EQUITY:
   Preferred stock, undesignated, par value $0.001
    per share, 25,000,000 shares authorized; no
    shares issued and outstanding;                               -
   Common stock, $0.001 par value, authorized
    200,000,000 shares; issued and outstanding
    45,497,177                                              45,498
   Additional paid in capital                            7,445,330
   Accumulated deficit                                  (6,623,758)
                                                      ------------
      TOTAL STOCKHOLDERS' EQUITY                           867,070
                                                      ------------

      TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY      $  4,522,985
                                                      ============


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

                                           Three Months Ended March 31,
                                               2006           2005
                                           ------------   ------------

NET SALES                                  $  2,853,564   $  1,613,694
COST OF SALES                                 1,137,432        231,395
                                           ------------   ------------
GROSS PROFIT                                  1,716,132      1,382,299
                                           ------------   ------------

COSTS AND EXPENSES:
    Selling expenses                            414,916        466,328
    General and administrative                2,296,366      1,160,978
                                           ------------   ------------
            TOTAL COSTS AND EXPENSES          2,711,282      1,627,306
                                           ------------   ------------

LOSS FROM OPERATIONS                           (995,150)      (245,007)

CHANGE IN FAIR VALUE OF WARRANT LIABILITY       666,774              -
INTEREST INCOME                                  32,290         19,416
                                           ------------   ------------

NET LOSS                                   $   (296,086)  $   (225,591)
                                           ============   ============

LOSS PER SHARE - BASIC AND DILUTED         $      (0.01)  $      (0.01)
                                           ============   ============

WEIGHTED AVERAGE SHARES OUTSTANDING          45,123,401     33,816,608
                                           ============   ============


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

                                           Three Months Ended March 31,
                                               2006           2005
                                           ------------   ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                               $   (296,086)  $   (225,591)
                                           ------------   ------------
    Adjustments to reconcile net loss to
     net cash used in operating activities:
         Depreciation and amortization          205,173         44,455
         Stock based compensation             1,230,384        143,080
         Change in fair value of warrants      (666,774)             -
    Changes in assets and liabilities:
       Accounts receivable                      (30,934)      (284,356)
       Prepaid expenses and other
        current assets                         (144,962)      (140,209)
       Accounts payable, accrued expenses
        and other liabilities                    65,215       (237,706)
       Amounts refunded to customers             64,152        (67,801)
       Deferred revenue                      (1,769,655)       292,774
                                           ------------   ------------
         Total adjustments                   (1,047,401)      (249,763)
                                           ------------   ------------

NET CASH USED IN OPERATING ACTIVITIES        (1,343,487)      (475,354)
                                           ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Intangible                                 (174,400)             -
    Capital expenditures - fixed assets         (18,611)       (78,493)
    Capital expenditures - content development  (49,360)      (172,566)
                                           ------------   ------------
NET CASH USED IN INVESTING ACTIVITIES          (242,371)      (251,059)
                                           ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of capital
     lease obligations                           (7,971)        (7,888)
    Gross proceeds from private placement
     and sale of common stock                         -      3,949,868
                                           ------------   ------------
NET CASH (USED IN) PROVIDED BY
 FINANCING ACTIVITIES                            (7,971)     3,941,980
                                           ------------   ------------

NET INCREASE (DECREASE) IN CASH              (1,593,829)     3,215,567

CASH - BEGINNING OF PERIOD                    4,828,560      1,328,958
                                           ------------   ------------

CASH - END OF PERIOD                       $  3,234,731   $  4,544,525
                                           ============   ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:
       Cash paid for interest              $      1,982   $      3,739
                                           ============   ============

NON-CASH SUPPLEMENTAL DISCLOSURE OF
 INVESTING AND FINANCING ACTIVITIES:
       Stock issuances for acquisition     $    161,875   $          -
                                           ============   ============

Contact Information

  • Investor Contact:
    Alex Wellins
    The Blueshirt Group, for InfoSearch Media, Inc.
    415/217-5861
    Email Contact

    Media Contact:
    Aimee Yoon
    Dotted Line Communications for InfoSearch Media, Inc.
    (617) 332-1658
    Email Contact