HCO Hyperspace Comm

HyperSpace(R) Communications Reports 2004 Results DENVER, April 5 /PRNewswire-FirstCall/ -- HyperSpace(R) Communications, Inc. (AMEX:HCO), a provider of application and network acceleration software, today reported financial results for its fourth quarter and year ended December 31, 2004. In the quarter ending December 31, 2004, HyperSpace reported a net loss attributable to common shareholders of $996,000, or $0.27 per basic and diluted share, on revenue of $132,000 for the quarter versus a net loss attributable to common shareholders of $900,000, or $0.65 per basic and diluted share, on revenue of $228,000 in the same period of the prior year. Mark Endry, president and CEO, said, "In 2004 HyperSpace underwent a major transformation in order to better position the Company to capitalize on long term growth opportunities. This transformation included a lengthy IPO process that diverted resources and consumed management's attention for much of the year and detracted from sales efforts. The IPO was critical to our future, and with its successful completion in the fourth quarter the Company now has the capital resources it needs to pursue its organic and M&A growth objectives." "We are refocusing our efforts on new business development to partner and OEM channels," Endry added. "On the M&A front, we are aggressively pursuing our proposed acquisition of MPC". Q4 highlights * Continued enhancement and improvement of HyperWeb(TM) and HyperTunnel(TM), the Company's acceleration solutions that speed up delivery of information over Internet, wireless, broadband, private and dial-up networks. These enhancements have strengthened the performance and reliability of the products while making them more accessible to customers using older Windows operating systems. * Entry into the emerging satellite broadband access market through a reseller agreement with industry leader iDirect Technologies, Inc. iDirect is rolling out HyperWeb to end user customers who are seeking to accelerate their downloads. About HyperSpace Communications HyperSpace software supports anywhere, anytime access to business-critical data world wide, with real-time, secure application acceleration over existing networks. HyperSpace offers secure, accelerated access right to the desktop. Customers include ABN AMRO, Deutsche Bank, Bridgestone-Firestone Europe, UBS PaineWebber, Dex Media, Hunter Douglas, Nokia, Telecom Italia, and Amway along with many others. For more information, visit HyperSpace online at http://www.ehyperspace.com/. Cautionary Statement Certain statements in this press release 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. These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of HyperSpace Communications to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Other factors, which could materially affect such forward-looking statements, can be found in HyperSpace Communications' filings with the Securities and Exchange Commission, including risk factors at http://www.sec.gov/. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and HyperSpace Communications undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Statement of Operations Three Months Ended Twelve Months Ended December 31, December 31, (Unaudited) (*) 2004 2003 2004 2003 Revenues License fees $77,448 $167,289 $237,109 $787,541 Service and other 54,797 61,132 220,741 195,678 Total revenues 132,245 228,421 457,850 983,219 Cost of revenue Amortization of capitalized software 30,500 244,635 121,965 405,194 Customer support 43,714 40,524 163,992 268,012 Total cost of revenues 74,214 285,159 285,957 673,206 Gross Profit 58,031 (56,738) 171,893 310,013 Operating expenses Research and development 166,810 23,438 617,949 150,831 Impairment of intangibles 31,530 85,296 31,530 85,296 Sales and marketing 278,466 104,366 786,045 645,589 General and administrative 559,457 465,956 1,470,375 923,087 Total operating expenses 1,036,263 679,056 2,905,899 1,804,803 Loss from operations (978,232) (735,794) (2,734,006) (1,494,790) Other (income)/ expense Interest expense, net 19,905 149,680 822,748 345,395 Other (income) expense (2,136) (1,200) 5,099 (1,276) Gain on settlement -- -- (440,999) -- Total other (income)/expense 17,769 148,480 386,848 344,119 Net loss $(996,001) $(884,274) $(3,120,854) $(1,838,909) Preferred dividends $-- $15,503 $72,489 $15,503 Net loss attributable to common shareholders $(996,001) $(899,777) $(3,193,343) $(1,854,412) Basic and diluted loss per common share $(.27) $(.65) $(1.59) $(1.42) Basic and diluted weighted average common shares outstanding 3,732,059 1,378,541 2,014,666 1,300,721 * Derived from audited consolidated financial statements Balance Sheet December 31, December 31, 2004 2003 Assets Current Assets Cash and cash equivalents $5,875,481 $27,429 Accounts receivable 158,998 291,913 Other current assets 106,182 13,361 Total current assets 6,140,661 332,703 Non-current assets Property and equipment, net 110,782 127,806 Capitalized software, net of accumulated amortization of $593,121 and 471,157 298,570 420,536 Intangible asset, at cost -- 31,530 Total non-current assets 409,352 579,872 Total assets $6,550,013 $912,575 Liabilities and Shareholders' Equity (Deficit) Current liabilities Accounts payable $230,484 $220,993 Accrued compensation 83,522 103,611 Deferred revenue 122,016 152,089 Current portion of notes payable and debt 721,965 1,255,842 Total current liabilities 1,157,987 1,732,535 Long-term liabilities Long-term portion of notes payable 425,000 -- Total long-term liabilities 425,000 -- Total liabilities 1,582,987 1,732,535 Shareholders' equity (deficit) Series A Convertible Preferred Stock -- 926,250 Common stock 12,087,134 2,180,555 Accumulated deficit (7,120,108) (3,926,765) Total stockholders' equity (deficit) 4,967,026 (819,960) Total liabilities and equity $6,550,013 $912,575 DATASOURCE: HyperSpace Communications, Inc. CONTACT: John Yeros, Chairman, +1-303-566-6510, or investor relations, Barbara Coy, +1-303-566-6532, , both of HyperSpace Communications, Inc. Web site: http://www.ehyperspace.com/

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