SOURCE: M-Wave, Inc.

May 18, 2006 19:05 ET

M-Wave, Inc. Announces Re-Affirmation of Its NASDAQ Listing & Other Corporate Matters

FRANKLIN PARK, IL -- (MARKET WIRE) -- May 18, 2006 -- M-Wave, Inc., (NASDAQ: MWAV), an international electronics supply chain, procurement and services firm reported today that NASDAQ's decision to continue its listing on the Capital Markets had been affirmed.

NASDAQ Listing

M-Wave has successfully pursued the retention of its NASDAQ Capital Markets listing. The Company has, after a first quarter hearing before the Listing Qualifications Panel, responded by eliminating virtually all non-trade debt to achieve minimum equity levels of $2.5 Million or more.

M-Wave achieved a closing share price of at least $1 for 20 trading days or more prior to its holding a special meeting of its shareholders on May 8th to ask for a split of the shares to effect a $1 minimum closing price. But due to the Company's market trading above $1 for more than 20 days, the special meeting was adjourned until June 5th. Market trading will determine whether the revised meeting will be held, or otherwise rescheduled again.

The minimum trading price and capital levels were precedent to NASDAQ re-affirming its listing.

On Wednesday, May 17, 2005, M-Wave received follow up communication from NASDAQ's legal counsel advising the Company that its listing on the Capital Markets had been retained.

Financial Results

As reported in our 10-QSB filed May 15, 2006, the Company reported significantly lower revenues for first quarter 2006 of approximately $2.3 Million, a $2.4 Million decrease. A decrease was expected by management as the low margin, high-risk RF sales division was sold to American Standard Circuits that represented revenues of $2.2 Million during the 2005 period. Additionally, certain marginal digital programs that represented about $200,000 in revenues were also terminated.

The Company believes these actions to be in the best interest of its long-term strategy and to reduce concentration on relatively few customers in high risk market segments.

Operating loss from continuing operations was approximately $1.18 Million in the first quarter of 2006 compared to an operating loss of approximately $232,000 in the first quarter of 2005.

Management further notes that within the reported total loss of $1.18 Million in 2006, approximately $569,000 was due to recognition of stock compensation in connection with disclosures mandated by FASB rule 123R that requires expensing all forms of non-cash compensation whether to employees or outsiders.

In addition, approximately $384,000 of 2006 operating expenses were non-recurring associated with either the conversion of all Company debt approximating $4.6 Million into equity, or corporate development expenses deemed by the Board precedent to M-Wave initiating any strategic or non-strategic mergers or acquisitions that might be considered.

"The fourth quarter 2005 and the first quarter 2006 were periods in which significant 'right-sizing' and restructuring took place. We look forward to making progress in improving the holdings of our shareholders as we move forward," stated Jim Mayer, the Company's Interim CEO and Chief Restructuring Officer.

Operating Highlights

As the Company moves ahead, reducing its reliance on printed circuit boards, it has seen a significant up-tick in the diversification of its non PCB lines that include metal and plastic extrusions; stampings; wiring harnesses; spun metals and castings; sub-assemblies and box building to name a few.

A diversified manufacturer of environmental and safety products, fire and rescue equipment, and tools, in Oak Brook, Illinois was the initial customer for the Company's launch of its diversified product lines. The Company expects to gather key data from the customer in evaluating expansion and marketing of the program in the near future.

M-Wave's research points to customers purchasing a dollar of printed circuit boards for significant price/logistics advantages have the potential of purchasing five dollars of custom or engineered product as well. The semi-conductor distributors are either unable or uninterested in supplying these products at present. The difficulty in the supply of these products to the middle market are that the products manufactured are often higher mixes, and lower quantities, but carry significantly better gross margins. M-Wave has focused its strategy on this niche.

"Given that the present stream of circuit board sourcing from Asia is about $8 million this year, one can project the significance our course of action will have in the future to the Company's revenues," commented Joe Turek, the Chief Operating Officer of M-Wave.

M-Wave moreover reports that it is achieving its stated goal of liquidating the assets of its former M-Wave DBS, Inc. satellite components division. It moreover is studying certain aspects of that business that fit its current business model and can add complementary revenues in the future.

About M-Wave Inc.

M-Wave, Inc. is a company engaged in procurement, inventory management and supply chain services between Asian and other Low Cost Country manufacturers and U.S. based contract or original equipment manufacturers. The products sourced are utilized in a wide range of telecommunications, communication, commercial and industrial products. The Company has additionally begun customer sourcing of products outside electronics including extrusions, metal fabrications, assembly services, switches, wiring harnesses, and certain other commodities. M-Wave's website is located at www.mwav.com

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts, included or incorporated by reference herein relating to management's current expectations of future financial performance, continued growth, changes in economic conditions or capital markets and changes in customer usage patterns and preferences are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Words or phrases such as "anticipates," "may," "will," "should," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "will likely result," "will continue" or similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and believe such statements are based on reasonable assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that our projections will be achieved. Additional information with respect to the risks and uncertainties faced by M-Wave may be found in, and the prior discussion is qualified in its entirety by, the Risk Factors contained in the company's filings with the Securities and Exchange Commission including M-Wave's Report on Form 10-KSB for the year ended December 31, 2005, its Forms 10-QSB, and other SEC filings.

Contact Information

  • Contact:
    Jim Mayer
    Interim CEO
    or
    Jeff Figlewicz
    Corporate Controller
    (630) 562-5550 Extension 4720