LONDON and NEW YORK, Oct. 13 /PRNewswire-FirstCall/ --
Narrowstep(TM) Inc. (OTC:NRWS) (BULLETIN BOARD: NRWS) , the TV on
the Internet Company, today reported results for its fiscal 2006
second quarter and six months ended August 31, 2005. Total revenues
for the fiscal 2006 second quarter and first six months were up
more than 70 percent and 65 percent, respectively, from total
revenue in the comparable periods in fiscal year 2005 driven by
increases in both license sales and related production services
revenues. During August, the Company's shares of common stock began
trading on the Over-the-counter Bulletin Board under the symbol
"NRWS." For the first six months of fiscal year 2006 total revenue
was $1.1 million, with a net loss of $1.9 million, or $0.06 loss
per share, versus $788,500 in total revenue with a net loss, also
of $1.9 million, or $0.07 loss per share, for the fiscal 2005
six-month period. Revenue for the fiscal 2006 second quarter was
$717,985, with a net loss of $741,243, or 0.02 loss per share,
compared to revenue of $449,468, with a net loss of $807,482, or
$0.03 loss per share, for the fiscal 2005 second quarter.
Narrowstep Inc. CEO Iolo Jones said, "We are satisfied to report
across-the-board increases in revenue, however, these results do
not reflect the actual strength of our products and our business
model. Momentum is just now pushing us towards critical mass,
exemplified by the rate at which we are adding new channels. This
is demonstrated further by some very important trials currently
underway. For example, during September, ITV, the UK's largest
commercial network, announced that it was testing a new service in
two markets called ITV Local, to be launched on the 17th of
October. "In addition, a number of major media content and
distribution companies are currently evaluating the use of our
technology platform: Television Operating System -- or TelVOS(TM).
It remains the only technology commercially available for the
universal distribution of television services using Internet
protocol on mobile, wireless, broadband and broadcast services. In
fact, TelVOS won a 2005 Best of IBC Award, presented for the very
best new product innovations in the world's premier television
marketplace." The award was given to technology that showed clear
potential to make or save money for end users, rather than to
technology that was simply clever. The Company also announced that
TelVOS will support Apple's new video iPod, enabling any content
held on the Narrowstep Network to be available for download to a
video iPod. About Narrowstep(TM) Inc. Narrowstep(TM) Inc.
(OTC:NRWS) (BULLETIN BOARD: NRWS) is a leading provider of
internet-based video content delivery (TV on IP). Narrowstep's
product and service offerings enable customers to distribute
channels of video-based content and provide related services over
the internet. The Narrowstep system, TelVOS(TM), enables
comprehensive delivery of video content and television-like
programming to mobile, wireless, internet, broadband and broadcast
services. The Narrowstep system enables owners and users of video
content to reach audiences by "narrowcasting" -- targeting delivery
of specific content to interested groups. Narrowstep provides
services to clients in the United Kingdom, the United States, and
various other countries throughout the world, including Germany,
Sweden and the Netherlands. To learn more, visit
http://www.narrowstep.com/. Forward-Looking Statement Certain
statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
or unknown risks, including those detailed in the Company's filings
with the Securities and Exchange Commission, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Contact:
Narrowstep Inc. Jesse Deal (investors) Iolo Jones, CEO Allen &
Caron +44 781 682 0745 212 691 8087 NARROWSTEP(TM) INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands,
except per share amounts) Six Six Three Three months months months
months ended ended ended ended Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2005 2004 2005 2004 (unaudited) (unaudited)(unaudited) (unaudited)
$ $ $ $ Revenue: Production services 626,471 396,829 462,681
283,676 Narrowcasting and other (including related party
transactions of $0 in the three and six months ended August 31,
2005 and $72,888 in the three months and $166,355 in the six months
ended August 31, 2004) 483,765 391,762 255,304 165,792 Total
revenue 1,110,236 788,591 717,985 449,468 Cost of revenue: Direct
costs 463,163 335,643 294,457 156,866 Software amortization 64,730
47,599 32,448 26,623 Total costs of revenue 527,893 383,242 326,905
183,489 Gross profit 582,343 405,349 391,080 265,979 Operating
expenses: Selling, general and administrative (including non-cash
stock compensation expense of $13,524 for the three months and
$402,852 for the six months ended August 31, 2005 and $285,067 for
the three months and $865,598 for the six months ended August 31,
2004) 2,537,115 2,364,241 1,132,902 1,086,671 Total operating
expenses 2,537,115 2,364,241 1,132,902 1,086,671 Loss from
operations (1,954,772) (1,958,892) (741,822) (820,692) Other income
350 748 71 64 Exchange (losses)/profits (22,890) (1,895) 508 13,146
Net loss (1,977,312) (1,960,039) (741,243) (807,482) Net loss per
share - basic and diluted (0.06) (0.07) (0.02) (0.03)
Weighted-average number of shares outstanding, basic and diluted
30,878,929 27,329,750 31,809,656 27,939,310 NARROWSTEP(TM) INC
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in
thousands) August 31, February 28, 2005 2005 ASSETS Current assets:
Cash and cash equivalents 561,837 58,791 Accounts receivable, net
of allowance for doubtful accounts of $43,305 at February 28, 2005
and $25,144 at August 31, 2005 454,836 378,774 Amounts receivable
from related parties, net of allowance for doubtful accounts of
$238,851 at February 28, 2005 and $231,707 at August 31, 2005 -- --
Prepaid expenses and other current assets 71,206 87,207 Total
current assets 1,087,879 524,772 Property and equipment, net of
accumulated depreciation 350,826 551,499 Software development
costs, net of accumulated amortization 188,787 187,333 Goodwill
1,157,581 1,157,581 Intangible assets, net 134,331 155,488 Total
assets 2,919,404 2,576,673 LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES Current liabilities: Accounts payable 580,599 447,381
Net obligations under capital leases 78,618 109,569 Accrued
expenses and other liabilities 560,493 845,705 Total current
liabilities 1,219,710 1,402,655 Net obligations under capital
leases - greater than 1 year 8,059 40,284 Total liabilities
1,227,769 1,442,939 STOCKHOLDERS' EQUITY: Common stock, $0.000001
par value 450,000,000 shares authorized with 30,375,740 issued at
February 28, 2005 and 32,462,796 issued at August 31, 2005 32 30
Additional paid-in capital 9,941,256 8,111,046 Deferred stock
compensation 1,937,513 1,212,531 Accumulated deficit (10,181,594)
(8,204,282) Accumulated other comprehensive (loss)/income (5,572)
14,409 Total stockholders' equity 1,691,635 1,133,734 Total
liabilities and stockholders' equity 2,919,404 2,576,673
DATASOURCE: Narrowstep Inc. CONTACT: Iolo Jones, CEO of Narrowstep
Inc., +44 781 682 0745, ; or Investors, Jesse Deal of Allen &
Caron for Narrowstep Inc., +1-212-691-8087, Web site:
http://www.narrowstep.com/
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