SOURCE: InfoSearch Media

April 17, 2007 07:55 ET

InfoSearch Media's Core Business Revenue Grows 55% Year-Over-Year

Company Introduces Search-Targeted Video and Expands SEO Services

MARINA DEL REY, CA -- (MARKET WIRE) -- April 17, 2007 -- InfoSearch Media, Inc. (OTCBB: ISHM), a leading on-line text and video content producer, today reported financial results for its fiscal year ending December 31, 2006. The Company's ContentLogic revenue grew 55% in 2006 to $6.0 million, up from $3.9 million in 2005. InfoSearch's total 2006 revenue was $7.6 million, compared to $9.4 million in 2005. Total revenues were negatively impacted as legacy deferred revenue associated with the Company's Web Properties group was recognized.

"During the year, we continued to focus on growing our ContentLogic revenue and customer base while expanding our product line with the introduction of InfoSearch:Video, our new search-targeted video content product," said George Lichter, President and CEO, InfoSearch Media. "InfoSearch:Video leverages our strong content capabilities to provide the same customer benefits as our written, text-based product line, including improved organic search engine rankings, increased, quality site traffic and brand recognition. We have also expanded into the publisher market to deliver editorial content and are continuing to launch products to expand our offerings beyond marketing content. Additionally, we are exploring new creative opportunities around our search-targeted ecosphere and are optimistic that we will capture growth opportunities in 2007."

InfoSearch reported a GAAP (generally accepted accounting principals), net loss of $4.0 million, or $(0.09) per share (basic and diluted) for 2006, compared to a net gain of $0.3 million, or $0.01 per share (basic and diluted) for 2005. The results for the 2006 fiscal year included a $1.7 million gain related to a change in the fair value of warrants InfoSearch issued in conjunction with the financing it completed in November 2005 and to Demand Media pursuant to the sale of Answerbag; a $1.9 million gain on the sale of Answerbag and a $4.2 million in non-cash equity compensation expenses related to options and restricted stock grants provided to consultants, members of the Board of Directors and employees.

Recent Company Highlights:

--  Introduction of Search-Targeted Video - During the first quarter, the
    Company introduced its new search-targeted on-line video product which uses
    a scalable, proprietary production process to provide on-line text-to-video
    content at an affordable price. Search-targeted video is currently being
    offered to a select number of major partners, and will be made widely
    available to on-line publishers and businesses through the InfoSearch Media
    sales force in the second quarter of this year.
    
--  Expansion of SEO Services - InfoSearch also announced that it is
    expanding its range of complementary products to include a suite of search
    engine optimization (SEO) consulting and implementation services. Based on
    client feedback, the Company is introducing a full-range of integrated SEO
    services with its on-line content development capabilities. A client
    engagement for SEO services consists of a four-step process including
    initial project scope definition; site analysis and audit; site
    implementation; and results monitoring and tuning.
    
--  New Hires Added to Talented Team - The Company appointed Bob Myers as
    Vice President of Production to lead the production team in addressing
    existing content and new on-line video and rich-media platforms, as well as
    meeting the rapidly growing needs of high-volume publisher clients.
    InfoSearch also named Heather Gore, a seasoned marketer from Yahoo!, as
    Vice President of Product Marketing and Development, to accelerate product
    development, marketing and the Company's on-line sales strategy.
    
About InfoSearch Media

InfoSearch Media (http://www.infosearchmedia.com) is the largest dedicated provider of search-targeted text and video content for the Internet designed to obtain higher rankings, brand recognition and better website performance for publishing and media clients. 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 ranking 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

                                                    December     December
                                                    31, 2006     31, 2005
                                                  -----------  -----------
ASSETS

CURRENT ASSETS:
        Cash and cash equivalents                 $ 2,495,654  $ 4,828,560
        Restricted cash                               380,530            -
        Accounts receivable                            68,941        4,449
        Due from related parties                       50,732       25,000
        Prepaid and other current assets              201,604      209,762
                                                  -----------  -----------

           TOTAL CURRENT ASSETS                     3,197,461    5,067,771

EMPLOYEE ADVANCE                                        1,000        2,500

CONTENT DEVELOPMENT                                     4,083      349,054

PROPERTY AND EQUIPMENT, NET                           131,139      285,021

SECURITY DEPOSIT                                       37,500       37,500

EQUITY WARRANT ASSET                                  308,837            -
                                                  -----------  -----------

          TOTAL ASSETS                            $ 3,680,020  $ 5,741,846
                                                  ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
      Accounts payable                            $   204,271  $   276,704
      Accrued bonuses                                 264,515      176,505
      Accrued expenses                                400,052      268,645
      Accrued expenses Answerbag acquisition           75,156            -
      Capital leases                                   17,621       33,004
      Deferred revenue                                454,741    2,074,103
      Provision for refunds payable/chargebacks        30,842       44,151
                                                  -----------  -----------
           TOTAL CURRENT LIABILITIES                1,447,198    2,873,112

CAPITAL LEASES, NET OF CURRENT PORTION                      -       17,621

DEFERRED REVENUE, NET OF CURRENT PORTION                    -      553,943

FAIR VALUE OF WARRANT LIABILITY                     1,396,215    2,526,272
                                                  -----------  -----------

            TOTAL LIABILITIES                       2,843,413    5,970,948
                                                  -----------  -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
        Preferred stock, undesignated, par value
         $.001per share, 25,000,000 shares
         authorized; no shares issued and
         outstanding;                                       -            -
        Common stock, $.001 par value, authorized
         200,000,000 shares; issued and
         outstanding 51,162,267 and 42,277,775,
         respectively                                  51,491       42,278
        Committed stock, 164,282 shares                22,586            -
        Additional paid in capital                 11,130,109    6,056,291
        Accumulated deficit                       (10,367,580)  (6,327,671)
                                                  -----------  -----------
             TOTAL STOCKHOLDERS' EQUITY
              (DEFICIT):                              836,606     (229,102)
                                                  -----------  -----------

             TOTAL LIABILITIES AND STOCKHOLDERS'
              EQUITY (DEFICIT)                    $ 3,680,020  $ 5,741,846
                                                  ===========  ===========


                          INFOSEARCH MEDIA, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  Year Ended December 31,
                                                --------------------------
                                                    2006          2005
                                                ------------  ------------
CONTENTLOGIC SALES                              $  6,016,080  $  3,872,489
WEB PROPERTIES SALES                               1,583,980     5,491,912
                                                ------------  ------------
NET SALES                                          7,600,060     9,364,401

CONTENTLOGIC COST OF SALES                         1,686,645     1,354,917
WEB PROPERTIES COST OF SALES                         987,040     1,190,193
                                                ------------  ------------
COST OF SALES                                      2,673,685     2,545,110
                                                ------------  ------------

GROSS PROFIT                                       4,926,375     6,819,291
                                                ------------  ------------

OPERATING EXPENSES
       General & administrative                    9,600,049     4,753,820
       Sales & marketing                           2,138,695     2,337,747
                                                ------------  ------------
               TOTAL COSTS AND EXPENSES           11,738,744     7,091,567

LOSS FROM OPERATIONS                              (6,812,369)     (272,276)

CHANGE IN FAIR VALUE OF WARRANTS                   1,728,443       536,900

LIQUIDATED DAMAGES                                  (502,397)            -

OTHER EXPENSES                                       (35,244)            -

INTEREST INCOME (NET)                                 92,414        50,373
                                                ------------  ------------

EARNINGS (LOSS) FROM CONTINUING OPERATIONS
 BEFORE TAX                                       (5,529,153)      314,997

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

NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS    (5,547,738)      314,997

DISCONTINUED OPERATIONS
        Loss from discontinued operations of
         Answerbag, Inc.                            (412,132)            -

       Gain on disposal of discontinued
        operations                                 1,919,962             -

       Tax Provision                                       -             -
                                                ------------  ------------

EARNINGS FROM DISCONTINUED OPERATIONS              1,507,830             -
                                                ------------  ------------

NET EARNINGS (LOSS)                             $ (4,039,908) $    314,997
                                                ============  ============

EARNINGS (LOSS) PER SHARE FROM CONTINUING
 OPERATIONS -
        BASIC                                   $      (0.12) $       0.01
                                                ============  ============
        DILUTED                                 $      (0.12) $       0.01
                                                ============  ============
EARNINGS (LOSS) PER SHARE FROM DISCONTINUED
 OPERATIONS -
        BASIC                                   $       0.03  $          -
                                                ============  ============
        DILUTED                                 $       0.03  $          -
                                                ============  ============
EARNINGS (LOSS) PER SHARE
        BASIC                                   $      (0.09) $       0.01
                                                ============  ============
        DILUTED                                 $      (0.09) $       0.01
                                                ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC       47,202,261    42,277,775
                                                ============  ============

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED     47,202,261    43,055,104
                                                ============  ============



                          INFOSEARCH MEDIA, INC.
                  CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  Year ended December 31,
                                                     2006          2005
                                                ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net earnings (loss)                       $ (4,039,908) $    314,997

     Adjustment to reconcile net income (loss)
      to net cash provided by (used in)
      operating activities
        Depreciation and amortization                615,529       420,595
        Equity based compensation                  4,223,245       645,502
        Issuance of warrants                          78,331
        Loss from disposal of fixed assets            10,937             -
        Liquidated damages                           509,904             -
        Change in fair value of warrants          (1,728,443)     (536,900)
        Gain on sales of Answerbag asset          (1,919,962)            -
     Changes in assets and liabilities:
        Accounts receivable                          (64,492)      130,577
        Prepaid expenses and other current
         assets                                      (16,074)     (160,706)
        Accounts payable, accrued expenses and
         other liabilities                           222,141        75,377
        Provision for refunds                        (13,309)     (754,659)
        Deferred revenue                          (2,173,306)   (4,608,043)
                                                ------------  ------------
NET CASH USED IN CONTINUING OPERATIONS:           (4,295,406)   (4,473,260)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Restricted cash                                 (380,530)
    Net cash payments in purchase of Answerbag      (479,888)
    Net cash proceeds from sales of Answerbag
     assets                                        2,937,149             -
    Capital expenditures - fixed assets              (37,640)     (158,459)
    Capital expenditures - content development       (49,361)     (604,491)
                                                ------------  ------------
NET CASH USED IN INVESTING ACTIVITIES              1,989,729      (762,950)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments of capital lease
     obligations                                     (33,004)      (32,034)
    Stock option exercise                              5,775             -
    Gross proceeds from private placements                 -     8,767,845
                                                ------------  ------------
NET CASH PROVIDED BY (USED IN) FINANCING
 ACTIVITIES                                          (27,229)    8,735,811

Net increase (decrease) in cash and cash
 equivalents                                      (2,332,906)    3,499,601

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD    4,828,560     1,328,959
                                                ------------  ------------

CASH AND CASH EQUIVALENTS - END OF PERIOD       $  2,495,654  $  4,828,560
                                                ============  ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION
    Cash paid for interest                      $     13,406  $     12,791
                                                ============  ============

    Income tax paid (refunded)                  $     18,585  $     (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             -
                                                ============  ============


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 ext. 7741
    Email Contact