SOURCE: InfoSearch Media

April 18, 2008 09:00 ET

InfoSearch Media Reports 2007 Results

Breakeven Results for Third and Fourth Quarter; 2007 Earnings per Share Improves From ($0.09) to ($0.03)

MARINA DEL REY, CA--(Marketwire - April 18, 2008) - InfoSearch Media, Inc. (OTCBB: ISHM), a diversified search marketing firm delivering Web traffic via search-optimized text and video content, pay-per-click and SEO services, today reported financial results for its fiscal year ended December 31, 2007. Although revenues decreased 35.4% to $4.91 million for the fiscal year ended December 31, 2007, from $7.60 million the prior year, significant expense reductions resulted in the Company's net loss narrowing by 62% to $1.54 million in 2007, down from a loss of $4.04 million in 2006. As a result, the loss per share improved from ($0.09) to ($0.03).

This improvement resulted from breakeven results in earnings per share during the third and fourth quarter of $0.00 and $0.00, respectively. Improvements shown in the second half of 2007 resulted from a significant rationalization of the Company's business during the second quarter, which included the elimination of low-performing clients plus a corresponding reduction in Company headcount and expenses. Subsequently, revenues for the fourth quarter grew 5.3% to $1.25 million over the prior quarter. Total revenues were negatively impacted by the second quarter elimination of certain customer categories and decreased revenue from non-core Web properties, although much of this decline resulted primarily from the Company's FY 2006 extinguishment of that remaining deferred revenue accumulated during 2004 and early 2005.

"We recognized the need to qualify prospective clients into those positioned to benefit the most from our products and services, and have been targeting only those companies," said Scott Brogi, Chief Financial Officer. "This enabled InfoSearch to increase revenue over the third quarter, and coupled with further expense reductions, allowed the Company to achieve its first quarterly operating profit of fiscal 2007."

"The improvement to earnings over the second half of the year is a result of financial and operating discipline combined with a modest increase in revenue," said George Lichter, president and CEO, InfoSearch Media. "InfoSearch must now deliver higher growth rates; the Company is actively pursuing complementary search marketing opportunities which may require additional financing."

Q4 Financial Summary

InfoSearch Media reported an operating profit of $24,390 for the quarter ended Dec. 31, 2007, representing an improvement from the loss of $294,491 in the third quarter of 2007 and from the loss of $572,429 for the fourth quarter of 2006. Additionally:

--  The Company reported a GAAP net profit of $180,432, or $0.00 per share
    (basic and diluted).
    
--  Cash on-hand increased by 23.1% during the quarter, partly due to
    receipt of a one-time legal settlement.
    

2007 Financial Summary

InfoSearch Media reported an operating loss of $2.07 million for the year ended Dec. 31, 2007, representing an improvement of 69.6% from the operating loss of $6.81 million during the year ended Dec. 31, 2006.

Revenues from FY 2007, as compared to FY 2006, decreased 35.4% to $4.91 million from $7.60 million. Revenues were negatively impacted by:

--  A reduction in TrafficBuilder revenues as a result of the Company's
    decision during the second quarter to eliminate sales to those lower-
    performing customers.
    
--  A reduction of non-core Web Properties of $126,236 in 2007 versus
    $1,583,980 in 2006. This decline was primarily a result of $1,354,055 in
    deferred revenue being relieved from the balance sheet for which cash had
    been received in 2004 and early 2005. The actual monetized revenue
    decreased by only $103,689 to $126,236 in 2007 from $229,925 in 2006.
    

As part of its review, the Company's auditors raised an issue related to the Company's ability to continue as a going concern. The Company discussion of this can be found in its 10-KSB as follows:

"Although the Company reduced its net loss to $4,588 for the second half of the year by significantly lowering operating expenses and has increased cash to $787,239 as of December 31, 2007, the Company has historically experienced recurring net losses and negative cash flows from operations... the Company's ability to continue as a going concern is contingent upon its ability to ultimately maintain profitable operations or secure additional financing. Management believes that its current and future plans provide an opportunity to continue as a going concern."

Recent Company Highlights

--  PPC campaign management - During the first quarter of 2008, and in
    response to customer requests for a one-stop solution to their Internet
    marketing needs, InfoSearch Media began offering PPC campaign management
    along with landing page optimization engineered to produce higher customer
    conversions. PPC and other SEM marketing products currently represent the
    largest percentage of all Internet advertising and, according to a recent
    study by SEMPO, account for $10.6 billion or 87% of overall Internet
    spending in 2007. Offering PPC campaign management in combination with the
    Company's established search-targeted content and SEO services provides
    clients a singular management of their overall Internet advertising budget.
    
--  Launch of TrafficBuilder Text Turbo - InfoSearch Media has completely
    revamped its original TrafficBuilder Text product, launching a Turbo
    edition to create more visually appealing content pages that drive search
    engine traffic more effectively. The new "Turbo" product also follows the
    most current SEO industry best practices and with its increased line-up of
    value-added offerings, is priced 20% higher than the original
    TrafficBuilder Text product.
    
--  Website redesign and new content management system - The Company has
    updated its website to highlight the expansion of its products and
    services. The redesign includes a new home page, the addition of video and
    other changes to improve usability. A best-in-class content management
    system has also been implemented to streamline operations and reduce the
    ongoing cost of maintaining the website.
    

About InfoSearch Media

InfoSearch Media (http://www.InfoSearchMedia.com) is a leading, comprehensive Internet search marketing Company and the largest dedicated provider of cost-effective Web traffic via search optimized text and video content, pay-per-click and SEO services. 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 clients secure Internet traffic. Incorporated in 2000, the Company is publicly traded with headquarters in Marina del Rey, California.

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 Annual Report on Form 10-K for the year ended Dec. 31, 2007, 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.

                       Schedule of Option Expense
                 For the quarter ended March 31, 2007

                          INFOSEARCH MEDIA, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS


                                                  For the Twelve Months
                                                    Ended December 31,
                                                --------------------------
                                                    2007          2006
                                                ------------  ------------
CONTENTLOGIC SALES                              $  4,784,068  $  6,016,080
WEB PROPERTIES SALES                                 126,236     1,583,980
                                                ------------  ------------
NET SALES                                          4,910,304     7,600,060

CONTENTLOGIC COST OF SALES                         1,335,933     1,686,645
WEB PROPERTIES COST OF SALES                          56,954       987,040
                                                ------------  ------------
COST OF SALES                                      1,392,887     2,673,685

GROSS PROFIT                                    $  3,517,417  $  4,926,375

OPERATING EXPENSES
       General & administrative                    3,754,240     9,600,049
       Sales & marketing                           1,831,548     2,138,695
                                                ------------  ------------
               TOTAL COSTS AND EXPENSES            5,585,788    11,738,744

LOSS FROM OPERATIONS                            $ (2,068,371) $ (6,812,369)

CHANGE IN FAIR VALUE OF WARRANTS                     233,285     1,728,443

LIQUIDATED DAMAGES                                         -      (502,397)

OTHER EXPENSES (INCOME)                              252,707       (35,244)

INTEREST INCOME (NET)                                 52,153        92,414
                                                ------------  ------------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
 BEFORE TAX                                     $ (1,530,226) $ (5,529,153)

TAXES FROM CONTINUING OPERATIONS                       6,083        18,585
                                                ------------  ------------

NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS  $ (1,536,309) $ (5,547,738)

DISCONTINUED OPERATIONS (NOTE 12)
        Loss from discontinued operations of
         Answerbag, Inc.                                   -      (412,132)
        Gain on disposal of discontinued
         operations                                        -     1,919,962

LOSS BEFORE TAXES                               $ (1,536,309) $ (4,039,908)
                                                ------------  ------------

EARNINGS FROM DISCONTINUED OPERATIONS                      -     1,507,830

NET EARNINGS (LOSS)                             $ (1,536,309) $ (4,039,908)
                                                ============  ============

EARNINGS (LOSS) PER SHARE FROM CONTINUING
 OPERATIONS -
        BASIC                                          (0.03)        (0.12)
                                                ============  ============
        DILUTED                                        (0.03)        (0.12)
                                                ============  ============
EARNINGS (LOSS) PER SHARE FROM DISCONTINUED
 OPERATIONS -
        BASIC                                              -         (0.03)
                                                ============  ============
        DILUTED                                            -         (0.03)
                                                ============  ============
EARNINGS (LOSS) PER SHARE
        BASIC                                   $      (0.03) $      (0.09)
                                                ============  ============
        DILUTED                                 $      (0.03) $      (0.09)
                                                ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC       51,887,244    47,202,261

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED     51,887,244    47,202,261

The accompanying notes are an integral part of the unaudited consolidated
financial statements.



                          INFOSEARCH MEDIA, INC.
                        CONSOLIDATED BALANCE SHEETS


                                                    December     December
                                                    31, 2007     31, 2006
                                                  -----------  -----------
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                       $   787,239  $ 2,495,655
  Restricted cash                                      20,000      380,530
  Accounts receivable                                 215,518       68,941
  Due from related parties                                  -       50,732
  Prepaid and other current assets                    104,245      201,604
                                                  -----------  -----------
    TOTAL CURRENT ASSETS                          $ 1,126,702  $ 3,197,463
                                                  -----------  -----------

EMPLOYEE ADVANCE                                        1,800        1,000

CONTENT DEVELOPMENT                                         -        4,082

PROPERTY AND EQUIPMENT, NET                           130,650      131,139

SECURITY DEPOSIT                                       37,500       37,500

EQUITY WARRANT ASSET                                  112,049      308,837
                                                  -----------  -----------
    TOTAL ASSETS                                  $ 1,408,701  $ 3,680,020
                                                  -----------  -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable                                $   228,308  $   204,271
  Accrued salaries and bonuses                         12,553      264,515
  Accrued expenses                                    172,132      400,052
  Accrued expenses Answerbag acquisition                    -       75,156
  Capital leases                                            -       17,621
  Deferred revenue                                    526,868      454,741
  Provision for refunds payable/chargebacks            15,842       30,842
                                                  -----------  -----------
    TOTAL CURRENT LIABILITIES                         955,703    1,447,198

FAIR VALUE OF WARRANT LIABILITY                       967,651    1,396,215
                                                  -----------  -----------

    TOTAL LIABILITIES                             $ 1,923,354  $ 2,843,413
                                                  -----------  -----------

COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred stock, undesignated, par value
   $.001 per share, 25,000,000 shares
   authorized; no shares issued and
   outstanding;                                             -            -
  Common stock, $.001 par value, authorized
   200,000,000 shares; issued and outstanding
   52,336,909 and 42,277,775, respectively             52,494       51,491
  Committed stock, 0 and 164,282 shares                     0       22,586
  Additional paid in capital                       11,336,742   11,130,109
  Accumulated deficit                             (11,903,889) (10,367,580)
                                                  -----------  -----------
    TOTAL STOCKHOLDERS' EQUITY:                   $  (514,653) $   836,606
                                                  -----------  -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $ 1,408,701  $ 3,680,019
                                                  ===========  ===========



                          InfoSearch Media, Inc.
                         Statements of Cash Flows
                   For the twelve months ended 12-31-07

                                                  2007           2006
                                              -------------  -------------

Cash flows from operating
 activities:
  Net Loss                                    $  (1,536,309) $  (4,039,908)
  Adjustments to reconcile net loss to net
   cash used in operating activities:
    Depreciation and amortization                   118,535        615,529
    Equity Based Compensation                       157,959      4,223,245
    Issuance of Warrants                                  -         78,331
    Loss on disposal of equipment                         -         10,937
    Liquidated damages                                    -        509,904
    Changes in fair value of warrants              (233,285)    (1,728,443)
    Gain on sale of Answerbag assets                      -     (1,919,962)
      Accounts receivable                          (171,277)       (64,492)
      Prepaid Expenses and Other Current
       Assets                                       147,291        (16,074)
      Accounts Payable, Accrued Expenses,
       and Other Liabilities                       (531,002)       222,141
      Provision for refund                           10,000        (13,309)
      Deferred Revenue                               72,127     (2,173,306)
                                              -------------  -------------
          Net cash provided by (used in)
           operating activities                  (1,965,961)    (4,295,407)
                                              -------------  -------------

Cash flows from investing activities:
  Restricted cash                                   360,530       (380,530)
  Net cash payments in purchase of Answerbag              -       (479,888)
  Net proceeds from sales of Answerbag
   assets                                                 -      2,937,149
  Capital expenditures - fixed assets               (88,963)       (37,640)
  Capital expenditures - content
   development                                            -        (49,361)
                                              -------------  -------------
          Net cash used in investing
           activities                               271,567      1,989,730
                                              -------------  -------------

Cash flows from financing activities:
  Principal payments of capital lease
   obligations                                      (17,621)       (33,004)
  Stock options exercised                                 -          5,775
  Warrants exercised                                  3,600              -
                                              -------------  -------------
          Net cash from financing activities        (14,021)       (27,229)
                                              -------------  -------------

          Net increase (decrease) in cash
           and cash equivalents                  (1,708,415)    (2,332,906)
Cash and cash equivalents at beginning of
 period                                       $   2,495,654  $   4,828,560

Cash and cash equivalents at end of period    $     787,239  $   2,495,654
                                              -------------  -------------