SOURCE: InfoSearch Media

May 22, 2007 07:55 ET

InfoSearch Media Reports First Quarter 2007 Results

Internet Video and Text Marketing Company Improves Gross Margins and Operating Costs

MARINA DEL REY, CA -- (MARKET WIRE) -- May 22, 2007 -- InfoSearch Media, Inc. (OTCBB: ISHM), a leading Internet marketing firm that delivers search-targeted video and text content, has announced financial results for its first quarter ended March 31, 2007.

InfoSearch Media reported revenue of $1.3 million for the first quarter of 2007, compared to $2.9 million for the first quarter of 2006. The first quarter of 2006 revenues included the recognition of $1.4 million of deferred revenue from the Company's discontinued ArticleInsider product. Gross margins improved 340 basis points to 63.5% for the first quarter of 2007 compared to 60.1% for the first quarter of 2006.

Total operating costs and expenses in the first quarter of 2007 decreased to $1.6 million from $2.4 million in the first quarter of 2006. The Company reported a GAAP net loss of $0.4 million, or $0.01 per share (basic and diluted) for the first quarter of 2007, compared to GAAP net income of $0.1 million, or $0.00 per share (basic and diluted) for the first quarter of 2006.

"During the quarter, we made important progress on signing major beta partners for our new search-targeted video product, while re-branding our core product lines as TrafficBuilder Text and TrafficBuilder Video to appeal to an even wider customer base," said George Lichter, President and CEO, InfoSearch Media. "This re-branding follows the completion of an in-depth client value study that established the overall effectiveness and ROI of our traffic-building capabilities as compared to mainstream pay-per-click search marketing products. Based on our experience and research findings, we plan to launch a number of new initiatives throughout the year to bolster market awareness and understanding of our traffic-building capabilities and capture customers away from competitors' pay-per-click products. As always, we are strategically focused on broadening our product portfolio and expanding our customer base to drive revenue growth and improve profitability."

During the first quarter, InfoSearch Media introduced, in limited availability, its Internet video product, TrafficBuilder Video, which leverages the Company's existing search-targeting platform and uses a scalable, proprietary production process to provide Internet video at an affordable price. The Company intends to announce signed beta partners in the coming weeks and TrafficBuilder Video is now being made widely available to on-line publishers and businesses through the InfoSearch Media sales force.

About InfoSearch Media

InfoSearch Media (http://www.infosearchmedia.com), an Internet marketing company, is the largest dedicated provider of search-targeted text and video content for the Internet designed to obtain more cost-effective traffic for customers of every size. InfoSearch Media's network of professional writers, editors, technical specialists and video producers also helps businesses succeed on the web by implementing text and video content-based Internet marketing solutions. Whether a business needs local traffic in 100 cities or is a content publisher who understands the need for targeted on-line 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
                              March 31, 2007
                                (unaudited)


                            ASSETS
CURRENT ASSETS:
        Cash and cash equivalents                              $ 1,646,442
        Restricted cash                                            376,715
        Accounts receivable                                         63,808
        Due from related parties                                    15,704
        Prepaid and other current assets                           205,886
                                                               -----------
           TOTAL CURRENT ASSETS                                  2,308,555

PROPERTY AND EQUIPMENT, NET                                        146,886

SECURITY DEPOSIT                                                    37,500

EQUITY WARRANT ASSET                                               330,708

          TOTAL ASSETS                                         $ 2,823,650
                                                               ===========


             LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
      Accounts payable                                         $    50,434
      Accrued bonuses                                              192,907
      Accrued salaries and expenses                                135,190
      Capital leases                                                 8,918
      Deferred revenue                                             751,633
      Provision for refunds payable/chargebacks                     26,851
      Current tax liability                                          1,250
                                                               -----------
           TOTAL CURRENT LIABILITIES                             1,167,181

 INCOME TAX PAYABLE                                                156,000

FAIR VALUE OF WARRANT LIABILITY                                  1,121,882
                                                               -----------

            TOTAL LIABILITIES                                    2,445,065
                                                               -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' (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                  52,337
        Committed stock, 0 shares                                        -
        Additional paid in capital                              11,264,929
        Accumulated deficit                                    (10,938,681)
                                                               -----------
             TOTAL STOCKHOLDERS' EQUITY:                           378,585
                                                               -----------

             TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 2,823,650
                                                               ===========


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



                                                  Three Months Ended March
                                                            31,
                                                  ------------------------
                                                      2007         2006
                                                  -----------  -----------
CONTENTLOGIC SALES                                $ 1,275,915  $ 1,463,083
WEB PROPERTIES SALES                                   30,950    1,390,481
                                                  -----------  -----------
NET SALES                                           1,306,865    2,853,564

CONTENTLOGIC COST OF SALES                            461,175      411,310
WEB PROPERTIES COST OF SALES                           15,321      726,122
                                                  -----------  -----------
COST OF SALES                                         476,496    1,137,432
                                                  -----------  -----------

GROSS PROFIT                                          830,369    1,716,132
                                                  -----------  -----------

OPERATING EXPENSES
       General & administrative                     1,022,275    1,940,011
       Sales & marketing                              534,127      414,916
                                                  -----------  -----------
               TOTAL COSTS AND EXPENSES             1,556,402    2,354,927

LOSS FROM OPERATIONS                                 (726,034)    (638,795)

CHANGE IN FAIR VALUE OF WARRANTS                      296,203      666,774

INTEREST INCOME (NET)                                  16,780       32,290
                                                  -----------  -----------

EARNINGS (LOSS) BEFORE TAX                           (413,050)      60,269

TAXES                                                   2,050            -
                                                  -----------  -----------

NET EARNINGS (LOSS)                               $  (415,100) $    60,269
                                                  ===========  ===========

EARNINGS (LOSS) PER SHARE
        BASIC                                     $     (0.01) $      0.00
                                                  ===========  ===========
        DILUTED                                   $     (0.01) $      0.00
                                                  ===========  ===========

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC        51,825,450   45,123,401
                                                  ===========  ===========

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED      51,825,450   45,141,583
                                                  ===========  ===========


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


                                                  Three Months Ended March
                                                            31,
                                                  ------------------------
                                                      2007         2006
                                                  -----------  -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings (loss)                         $  (415,100) $    60,269

      Adjustment to reconcile net earnings (loss)
      to net cash used in operating activities
                      Depreciation and
                       amortization                    23,529      205,173
                      Equity based compensation       109,479      874,207
                     Change in fair value of
                      warrant liability              (274,332)    (666,774)
                     Change in fair value of
                      equity warrant asset            (21,871)           -

     Changes in assets and liabilities:
                     Accounts receivable                5,132      (30,934)
                     Due from related parties          35,028            -
                     Prepaid expenses and other
                      current assets                   (3,281)    (144,962)
                     Accounts payable, accrued
                      expenses and other
                      liabilities                    (565,463)      65,215
                     Current tax liability              1,250            -
                     Provision for refunds             (3,991)      64,152
                     Deferred revenue                 296,891   (1,769,655)
                                                  -----------  -----------
                           Total adjustments         (234,435)  (1,403,758)

NET CASH USED IN OPERATING ACTIVITIES:               (812,730)  (1,343,489)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Restricted cash                                     3,815            -
    Acquisition of Answerbag                                -     (174,400)
    Capital expenditures - fixed assets               (35,193)     (18,611)
    Capital expenditures - content development              -      (49,360)
                                                  -----------  -----------
NET CASH USED IN INVESTING ACTIVITIES                 (31,378)    (242,371)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of capital lease
     obligations                                       (8,703)      (7,971)
    Gross proceeds from private placements              3,600            -
                                                  -----------  -----------
NET CASH PROVIDED BY (USED IN) FINANCING
 ACTIVITIES                                            (5,103)      (7,971)

Net increase (decrease) in cash and cash
 equivalents                                         (849,212)  (1,593,831)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD     2,495,654    4,828,560
                                                  -----------  -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD         $ 1,646,442  $ 3,234,729
                                                  ===========  ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid for interest                        $       841  $     1,982
                                                  ===========  ===========

    Income tax paid                               $       800  $         -
                                                  ===========  ===========

Contact Information

  • Contact:
    Investor Contact:
    Brinlea Johnson
    The Blueshirt Group, for InfoSearch Media
    415-217-5861
    Email Contact

    Media Contact:
    Heather Gore
    310-437-7380 x7741
    Email Contact