Quarterly Revenue Rose 192 Percent Year-over-year; Significant
Inroads Made in the US, the World's Largest Media Market LONDON and
NEW YORK, June 28 /PRNewswire-FirstCall/ -- Narrowstep(TM) Inc
(OTC:NRWS) (BULLETIN BOARD: NRWS) , the TV on the Internet Company,
announced its financial results for the first quarter fiscal 2007
ended May 31, 2006. Annual revenue increased 192 percent
year-over-year, to $1,145,000, from $392,000 for the quarter ended
May 31, 2005. Consecutively, quarterly revenue increased 40
percent, from the $820,000 reported in the fourth quarter of fiscal
2006. The quarter's revenue included $837,000 from narrowcasting
and related activities, versus $228,000 for the fiscal first
quarter ended May 31, 2005, an increase of 266 percent. Revenue for
the first quarter ended May 31, 2006, included one-time revenue of
approximately $112,000 from recovery of a debt previously included
in bad debt provision. The Company made noteworthy progress during
the quarter, announcing several new customers, including Land Rover
(Go Beyond), Martial Arts TV, Tourism Massachusetts, Country
Channel, MAC Experience, and JWTwo, the entertainment division of
JWT, the United States' largest advertising agency. "We are
following through on the statements we made in our year-end
release. Not only do we continue to expand rapidly in Europe, where
we already have a solid customer base and market recognition, but
we added customers in the United States, the world's largest media
market," said Steve Beaumont, Narrowstep CEO. "Acceptance in the
marketplace is the truest bellwether a Company can have, and the
recognition of our Television Operating System(TM), or telvOS(TM)
-- our proprietary broadband television solution, among marketers
as the most powerful, sophisticated and viable offering on the
market today only continues to gain momentum. He continued, "Our
revenue from narrowcasting and related activities for this past
quarter is more than half of the total revenue of $1.5 million for
the fiscal 2006 year. Managing our own growth is as important as
growing our customer base. We recently upgraded our facilities in
London, and added sales and support staff to both our European and
United States operations." The Company's gross profit was $767,000
for the quarter ended May 31, 2006, from $16,000 over the same
period last year. The net loss for the first quarter of fiscal 2007
was $1,170,000, or $0.03 per share, versus a net loss of
$1,236,000, or $0.04 per share, for the quarter ended May 31, 2005.
Results Conference Call At 11:00 AM EDT today (4:00 PM BST and 8:00
AM PST) management will host its first ever conference call to
discuss its quarterly results. This call will be broadcast live
over the Internet. Those interested in listening to the live
webcast may do so by going to the Company's website at
http://www.narrowstep.com/ or http://www.vcall.com/. Web
participants are encouraged to go to either website at least 15
minutes prior to the start of the call to register, download, and
install any necessary audio software. The online archive will be
available shortly after the conclusion of the call and continue for
seven days. About Narrowstep(TM) Inc Narrowstep(TM) Inc (OTC:NRWS)
(BULLETIN BOARD: NRWS) is a leading global provider of broadband TV
services (TV over IP). Narrowstep's offering empowers content
owners, such as national broadcast/cable networks, niche program
producers, and small start-up businesses, with a cost-effective
platform to manage sophisticated commercial video and audio
channels over the Internet. The Narrowstep system, telvOS(TM)
(Television Operating System(TM)), is the most comprehensive
solution that controls all aspects from encoding to playout, all
from an easy-to-use, centrally-operated, web-based solution. 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:
Steve Crowther, CFO Narrowstep(TM) Inc Tel: + 1 609 951 2221 Email:
or Jesse Deal (investors) Allen & Caron Tel: + 1 949 474 4300
Email: NARROWSTEP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
(Unaudited) May 31, 2006 February 28, 2006 (unaudited) $ $ ASSETS
Current assets: Cash and cash equivalents 2,471,539 2,232,854
Short-term investments 2,529,403 2,500,000 Accounts receivable, net
of allowance for doubtful accounts of $103,820 (unaudited) on May
31, 2006 and $201,715 on February 28, 2006 1,063,473 418,394
Prepaid expenses and other current assets 222,776 135,542 Total
current assets 6,287,191 5,286,790 Property and equipment, net of
accumulated depreciation 524,040 289,148 Software development
costs, net of accumulated amortization 156,958 146,166 Goodwill
1,157,581 1,157,581 Intangible assets, net of accumulated
amortization 102,594 113,173 TOTAL ASSETS 8,228,364 6,992,858
LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES Current
liabilities: Accounts payable 734,688 504,919 Net obligations under
capital leases, current 47,621 58,113 Accrued expenses and other
liabilities 810,566 600,732 Total current liabilities 1,592,875
1,163,764 Net obligations under capital leases - long-term 41,223
43,997 Total liabilities 1,634,098 1,207,761 STOCKHOLDERS' EQUITY:
Common stock, $0.000001 par value 450,000,000 shares authorized
with 45,248,974 (unaudited) issued at May 31, 2006 and 45,136,474
issued at February 28, 2006 45 45 Additional paid-in capital
16,512,153 16,443,374 Stock compensation 3,731,428 3,267,997 Stock
subscription receivable (1,410,000) Accumulated deficit
(13,663,864) (12,494,059) Accumulated other comprehensive income
(loss) 14,504 (22,260) Total stockholders' equity 6,594,266
5,785,097 TOTAL LIABILITIES AND STOCKHOLDER EQUITY 8,228,364
6,992,858 NARROWSTEP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF OPERATIONS Three months Three months ended ended May 31, 2006
May 31, 2005 (unaudited) (unaudited) $ $ Revenue: Narrowcasting and
other 836,513 228,461 Production services 308,010 163,790 Total
revenue 1,144,523 392,251 Cost of revenue: Direct costs 345,297
343,570 Software amortization 32,237 32,282 Total costs of revenue
377,534 375,852 Gross profit 766,989 16,399 Operating expenses:
Selling, general and administrative (including non-cash stock-based
compensation expense of $463,431 for the three months ended May 31,
2006 and $389,328 for the three months ended May 31, 2005.)
1,980,304 1,229,349 Total operating expenses 1,980,304 1,229,349
Loss from operations (1,213,315) (1,212,950) Interest income, net
44,099 279 Currency exchange loss (589) (23,398) Net loss
(1,169,805) (1,236,069) Net loss per common share - basic and
diluted (0.03) (0.04) Weighted-average number of shares
outstanding, basic and diluted 43,730,360 30,517,499 DATASOURCE:
Narrowstep(TM) Inc CONTACT: Steve Crowther, CFO of Narrowstep(TM)
Inc, +1-609-951-2221, ; or investors, Jesse Deal of Allen &
Caron, +1-949-474-4300, , for Narrowstep(TM) Inc Web site:
http://www.narrowstep.com/
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