SOURCE: InfoSearch Media

November 14, 2006 08:30 ET

InfoSearch Media Reports Third Quarter 2006 Results

Company Showed Dramatic Sequential Improvement in Bottom Line Results and Its Core ContentLogic Business Grew 62% Year-Over-Year

MARINA DEL REY, CA -- (MARKET WIRE) -- November 14, 2006 --InfoSearch Media, Inc. (OTCBB: ISHM), a leading online media and search marketing firm, today announced financial results for its third quarter ended September 30, 2006.

InfoSearch Media reported revenue of $1.6 million for the third quarter of 2006, compared to $2.7 million for the third quarter of 2005. The third quarter of 2005 revenues included the recognition of $1.7 million of deferred revenue from the Company's discontinued ArticleInsider product. Revenue for ContentLogic grew 62.1% year-over-year to $1.6 million during the third quarter of 2006, compared to $1.0 million for the third quarter of 2005. The Company reported a GAAP net loss of $0.8 million, or $0.02 per share (basic and diluted) for the third quarter of 2006, compared to a GAAP net income of $0.1 million, or $0.00 per share (basic and diluted) for the third quarter of 2005.

"The third quarter results indicate strong progress for InfoSearch as we dramatically improved the bottom line, narrowing our net loss from $3.8 million in the second quarter of 2006 to $0.8 million in the most recent quarter. We continued to control expenses, reducing sales and marketing expenses by over 25%, both sequentially and year-over-year, and have streamlined our sales team to bring compensation in line with revenue generation, all in an effort to drive towards profitability. This streamlining process did produce flat sequential revenues in the third quarter, but we are already seeing enhanced productivity and expect to report continued revenue growth in our core content business going forward. In addition and importantly, as a result of the Answerbag divestiture in early October following the close of the quarter, we strengthened our balance sheet with the addition of $3 million in cash related to the sale," said George Lichter, President and CEO, InfoSearch Media.

"InfoSearch Media has a strong track record as a content-oriented company, and we are focused on broadening our product line of content and content-based online marketing solutions to continue to expand our customer base. We plan to announce a number of new upcoming initiatives, products and enhancements to our technology platform in the coming weeks that address the widespread content needs of both large customers like Demand Media as well as the SOHO and small business sector. We expect that these new initiatives, combined with improving financial results in the coming quarters, will demonstrate the progress that InfoSearch is making amidst the vast opportunities in the content and online marketing sectors," concluded Lichter.

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 more than 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 ContentLogic product.

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
                            (unaudited)


                                             September 30,    December 31,
                                                 2006             2005
                                            -------------     ------------
ASSETS

Current assets:
Cash                                        $     417,858     $  4,828,560
Accounts Receivables                        $     174,230     $      4,449
Due from related parties                    $           -     $     25,000
Prepaid current assets and other            $     345,930     $    209,762
Assets Held For Sale                        $      15,532     $          -
                                            -------------     ------------

Total Current Assets                        $     953,550     $  5,067,771

Employee Advance                            $           -     $      2,500

Content Development                         $      19,341     $    349,054

Property and Equipment                      $     165,886     $    285,021

Security Deposit                            $      37,500     $     37,500

Assets Held For Sale                        $     902,380     $          -
                                            -------------     ------------

Total Assets                                $   2,078,657     $  5,741,846
                                            =============     ============

LIABILITY AND SHAREHOLDER'S DEFICIT

Current liabilities:
Accounts Payable                            $     272,045     $    276,704
Accrued Bonuses                             $      57,169     $    176,505
Accrued Expenses                            $     235,707     $    268,645
Accrued Expenses AnswerBag Acquisition      $     150,312     $          -
Capital Leases Current Portion              $      26,357     $     33,004
Deferred Revenue Current Portion            $     382,110     $  2,074,103
Provision for Refunds Payable/Bad Debt      $      52,844     $     44,151
Liabilities Held For Sale                   $      44,657     $          -
                                            -------------     ------------

Total Current Liabilities                   $   1,221,201     $  2,873,112

Capital Leases, net of current portion      $           -     $     17,621

Deferred Revenue                            $           -     $    553,943

Fair Value of Warrant Liability             $     279,170     $  2,526,272
                                            -------------     ------------

Total Liabilities                           $   1,500,371     $  5,970,948

Shareholder's Equity (Deficit):
Preferred Stock                             $           -     $          -
Common Stock                                $      51,929     $     42,278
Committed Equity                            $     150,312     $          -
Additional Paid in Capital                  $  11,598,416     $  6,056,291
Accumulated Deficit                         $ (11,222,371)    $ (6,327,671)
                                            -------------     ------------

Total Shareholder's Equity (Deficit)        $     578,286     $   (229,102)

Total Liabilities and
 Shareholders Equity (deficit)              $   2,078,657     $  5,741,846
                                            =============     ============


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

                   For the Three Months Ended   For the Nine Months Ended
                          September 30,                September 30,
                    ------------  -----------   ------------  ------------
                         2006         2005          2006           2005
                    ------------  -----------   ------------  ------------
Net Sales           $  1,618,942  $ 2,685,510   $  6,104,684  $  6,496,249

Cost of Sales       $    404,171  $   628,464   $  2,193,712  $  1,441,380
                    ------------  -----------   ------------  ------------

Gross Profit        $  1,214,771  $ 2,057,046   $  3,910,972  $  5,054,869

Operating Expenses:

  General &
   Administrative   $  1,444,647  $ 1,279,901   $  9,104,840  $  3,733,332

  Sales &
   Marketing        $    476,611  $   661,355   $  1,560,645  $  1,703,062
                    ------------  -----------   ------------  ------------

Total Costs and
 Expenses           $  1,921,258  $ 1,941,256   $ 10,665,485  $  5,436,394

Loss from
 Operations         $   (706,487) $   115,790   $ (6,754,513) $   (381,525)

Change in Fair
 Value of Warrants  $    232,119  $         -   $  2,247,102  $          -

Other Expenses      $          -  $         -   $    (34,103) $          -

Interest
 Income/Expense     $      6,454  $    (2,299)  $     54,038  $     26,042
                    ------------  -----------   ------------  ------------

Earnings < Loss >
 from Continuing
 Operations before
 Taxes              $   (467,914) $   113,491   $ (4,487,476) $   (355,483)

Provision for
 Taxes from
 Continuing
 Operations         $      7,200  $         -   $     23,353  $          -
                    ------------  -----------   ------------  ------------

Net Earnings
 < Loss > from
 Continuing
 Operations         $   (475,114) $   113,491   $ (4,510,829) $   (355,483)

Loss from
 Discontinued
 Operations, net
 of Taxes           $   (276,784) $         -   $   (383,870) $          -
                    ------------  -----------   ------------  ------------

Net Earnings
 < Loss >           $   (751,898) $   113,491   $ (4,894,699) $   (355,483)
                    ============  ===========   ============  ============



Loss per Share
 from Continuing
 Operations -
 Basic and Diluted  $      (0.01) $      0.00   $      (0.10) $      (0.01)

Loss per Share from
 Discontinued
 Operations - Basic
 and Diluted        $      (0.01) $      0.00   $      (0.01) $       0.00
                    ------------  -----------   ------------  ------------

Loss per Share -
 Basic and Diluted  $      (0.02) $      0.00   $      (0.11) $      (0.01)
                    ============  ===========   ============  ============


Weighted Average
 Shares Outstanding   46,301,912   34,393,608     46,028,271    34,375,766
                    ============  ===========   ============  ============


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


                                                YTD            9/30/2005
                                            ------------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                    $ (4,894,699)    $   (355,483)
Adjustment from Discontinued Operations     $    383,870     $          -
                                            ------------     ------------
Net Loss from Continuing Operations         $ (4,510,829)    $   (355,483)

Adjustment to reconcile net
 loss to net cash
  Used in Operating Activities
  Depreciation and Amortization             $    566,459     $    210,067
Equity based compensation                   $  4,729,683     $    642,385
  Disposals-Fixed Assets                    $      9,396     $          -
  Liquidated Damages                        $    509,904     $          -
Change in fair value of warrants            $ (2,247,102)    $          -

Changes in assets and liabilities:
  Accounts Receivable                       $   (158,756)    $    104,751
  Prepaid Expenses and
   Other Current Assets                     $   (119,691)    $   (220,056)
  Accounts Payable, accrued expenses
   and other liabilities                    $     (6,620)    $   (262,076)
  Amounts refunded to customers             $      8,694     $   (533,421)
  Deferred Revenue                          $ (2,245,937)    $ (3,035,684)
                                            ------------     ------------
Total adjustments                           $  1,046,030     $ (3,094,034)

NET CASH USED FROM CONTINUING OPERATIONS    $ (3,464,799)    $ (3,449,517)
Net Loss from Discontinued Operations       $   (383,870)    $          -
Change in Operating Assets Held for Sale
from Discontinued Operations                $     29,125     $          -
                                            ------------     ------------
Net Cash Used in Discontinued Operations    $   (354,744)    $          -
                                            ------------     ------------
NET CASH USED IN OPERATING ACTIVITIES       $ (3,819,544)    $ (3,449,517)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital Expenditures -
   Fixed Assets                             $    (37,640)    $   (150,528)
  Capital Expenditures -
   Content development                      $    (49,361)    $   (480,930)
                                            ------------     ------------
NET CASH USED IN CONTINUING
 INVESTING ACTIVITIES                       $    (87,001)    $   (631,458)
NET CASH USED IN DISCONTINUED
 INVESTING ACTIVITIES                       $   (479,888)    $          -
                                            ------------     ------------
NET CASH USED IN INVESTING ACTIVITIES       $   (566,889)    $   (631,458)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal Payments of
   Capital Lease Obligations                $    (24,269)    $    (23,605)
  Gross Proceeds from Private Placement     $          -     $  3,949,868
  Employee Advances                         $          -     $      4,000
                                            ------------     ------------
NET CASH (USED IN)/PROVIDED BY
 FINANCING ACTIVITIES                       $    (24,269)    $  3,930,263
                                            ------------     ------------

Net Increase (Decrease) in cash             $ (4,410,702)    $   (150,712)

Cash- Beginning of Period                   $  4,828,560     $  1,328,958
                                            ------------     ------------

Cash- End of Period                         $    417,858     $  1,178,246
                                            ============     ============

SUPPLEMENTAL DISCLOSURE OF
 CASH FLOW INFORMATION
  Cash Paid for Interest                    $     12,795     $     10,256
                                            ============     ============

  Income Tax Paid                           $     23,353     $      6,097
                                            ============     ============

NON-CASH SUPPLEMENTAL
 DISCLOSURE OF INVESTING
 AND FINANCING ACTIVITIES:
  Stock Issued or Committed to be Issued
   for the Acquisition of Answerbag         $    462,499     $          -
                                            ============     ============

  Stock Issuances for Liquidated Damages    $    509,904     $          -
                                            ============     ============

Contact Information

  • Investor Contact:
    Brinlea Johnson
    The Blueshirt Group, for InfoSearch Media, Inc.
    415/217-7722
    Email Contact

    Media Contact:
    Bree Friedman
    InfoSearch Media
    310-413-7531
    Email Contact