LONDON and NEW YORK, Jan. 12 /PRNewswire-FirstCall/ --
Narrowstep(TM) Inc (OTC:NRWS) (BULLETIN BOARD: NRWS) , the TV on
the Internet Company, today reported results for its fiscal 2006
third quarter and nine months ended November 30, 2005. Total
revenues for the fiscal 2006 third quarter and nine months
increased by 21 percent and 32 percent respectively, from total
revenue in the comparable periods of fiscal 2005, with the growth
coming primarily from license sales. For the first nine months of
fiscal 2006, total revenue was $1.88 million, with a net loss of
$3.36 million, or $0.11 loss per share, versus $1.43 million in
total revenue with a net loss of $2.74 million, or $0.10 loss per
share, for the fiscal 2005 nine-month period. Revenue for the third
quarter of fiscal 2006 was $778,737, with a net loss of $1,389,187,
or $0.04 loss per share, compared to revenue of $643,283, with a
net loss of $777,174, or $0.03 loss per share, for the fiscal 2005
third quarter. Narrowstep CEO Iolo Jones said, "We are pleased to
report further dramatic increases in revenue from license sales.
Inclusive of a once-off implementation fee of approximately
$160,000, license revenue for the third quarter and first nine
months increased by 228 percent and 63 percent respectively over
the comparable periods of our 2005 fiscal year. Since license fees
are a recurring revenue stream, the Company is building a strong
revenue base. "The production services business continues to
perform in line with expectations. The reduction in revenue for the
quarter compared to the corresponding period of last year was due
to the timing of production events. Revenues for the first nine
months of the 2006 fiscal year increased by eight percent over the
corresponding period of fiscal 2005. "Narrowstep already powers
over seventy live channels. Recent new business wins include
channels for Real Estate TV, Travelocity's Lastminute.com, Sail TV
and Teachers' TV for the UK Government. In addition, the trial of
ITV Local, for the UK's leading commercial broadcaster, is being
extended for a further three months." Jones added, "We have
strengthened our US presence considerably with the appointments of
Carolyn Wall, former publisher of Newsweek and New York magazines
and General Manager of Fox's New York affiliate, as President,
North America, and Roger Werner, former CEO of ESPN and founder of
the Speedvision and the Outdoor Life Networks, as a special
advisor." TelVOS(TM) remains the only technology commercially
available for the universal distribution and commercialization of
television services using Internet protocol on mobile, wireless,
broadband and broadcast services. The system 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. 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. For further information
please contact Narrowstep CEO Iolo Jones, Tel: +44 207 731 4242;
Email: NARROWSTEP(TM) INC CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited; in US $, except per share amounts) Nine
months Nine months Three months Three months ended ended ended
ended November 30, November 30, November 30, November 30, 2005 2004
2005 2004 (unaudited) (unaudited) (unaudited) (unaudited) $ $ $ $
Revenue: Production services 865,516 803,816 239,045 406,987
Narrowcasting and other (including related party transactions of $0
in the three and nine months ended November 30, 2005 and $(24,659)
in the three months and $141,696 in the nine months ended November
30, 2004) 1,023,458 628,058 539,692 236,296 Total revenue 1,888,974
1,431,874 778,737 643,283 Costs of revenue: Direct costs 695,953
528,009 232,790 192,366 Software amortization 95,377 76,377 30,646
28,778 Total costs of revenue 791,330 604,386 263,436 221,144 Gross
profit 1,097,644 827,488 515,301 422,139 Operating expenses:
Selling, general and administrative (including non-cash stock
compensation expense of $644,248 for the three months and
$1,047,100 for the nine months ended November 30, 2005 and $137,439
for the three months and $1,003,037 for the nine months ended
November 30, 2004) 4,458,304 3,565,974 1,921,189 1,201,733 Total
operating expenses 4,458,304 3,565,974 1,921,189 1,201,733 Loss
from operations (3,360,660) (2,738,486) (1,405,888) (779,594) Other
income 549 1,163 199 415 Exchange (losses) income (6,388) (430)
16,502 1,465 Net loss (3,366,499) (2,737,753) (1,389,187) (777,714)
Net loss per share - basic and diluted (0.11) (0.10) (0.04) (0.03)
Weighted-average number of shares outstanding, basic and diluted
31,814,258 27,736,691 32,673,022 28,559,517 NARROWSTEP(TM) INC
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in US $) November
30, February 28, 2005 2005 $ $ ASSETS Current assets: Cash 308,938
58,791 Accounts receivable, net of allowance for doubtful accounts
of $95,687 at November 30, 2005 and $43,305 at February 28, 2005
340,566 378,774 Amounts receivable from related parties, net of
allowance for doubtful accounts of $75,208 at November 30, 2005 and
$238,851 at February 28, 2005 -- -- Prepaid expenses and other
current assets 63,923 87,207 Total current assets 713,427 524,772
Property and equipment, net of accumulated depreciation 366,849
551,499 Software development costs, net of accumulated amortization
158,510 187,333 Goodwill 1,157,581 1,157,581 Intangible assets, net
of accumulated amortization 123,752 155,488 Total assets 2,520,119
2,576,673 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current
liabilities: Accounts payable 818,806 447,381 Net obligations under
capital leases 57,008 109,569 Accrued expenses and other
liabilities 701,600 845,705 Total current liabilities 1,577,414
1,402,655 Net obligations under capital leases - greater than 1
year -- 40,284 Total liabilities 1,577,414 1,442,939 STOCKHOLDERS'
EQUITY Common stock, $0.000001 par value 450,000,000 shares
authorized with 32,718,141 issued at November 30, 2005 and
30,375,743 issued at February 28, 2005 32 30 Additional paid-in
capital 9,939,706 8,111,046 Deferred stock compensation 2,583,311
1,212,531 Accumulated deficit (11,570,781) (8,204,282) Accumulated
other comprehensive (loss) income (9,563) 14,409 Total
stockholders' equity 942,705 1,133,734 Total liabilities and
stockholders' equity 2,520,119 2,576,673 DATASOURCE: Narrowstep Inc
CONTACT: Iolo Jones, CEO of Narrowstep Inc, +44 207 731 4242, Web
site: http://www.narrowstep.com/
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