| [May 10, 2007] |
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Innuity, Inc. Reports First Quarter 2007 Financial Results
REDMOND, Wash. --(Business Wire)-- Innuity, Inc. (INNU.OB), a Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver affordable solutions to small business, reported its financial results for the first quarter of 2007.
Consolidated revenues for the first quarter of 2007 increased 6% to $5.3 million from $5.0 million reported during the same quarter of 2006. The Company's net loss for the first quarter of 2007 was $1.6 million, or $0.07 per share, compared with a net loss of $2.5 million, or $0.13 per share, for the first quarter of 2006. The significant improvement to net loss is based on the elimination of royalty payments, tightening of operating costs, and a decline in interest expense.
"Innuity has already made substantial business and financial progress in 2007. In the second quarter, we closed $2 million in funding with Imperium Master Fund, Ltd., which allowed us to settle a $1.2 million liability to Citysearch for $600,000," said John Wall, Innuity chairman and CEO. "As we move towards achieving cash flow positive operations over the next several quarters we now have additional resources and an improved balance sheet to effectively drive our progress."
Wall continued, "We also have successfully introduced a new product line and created customer growth momentum with our launch of LeadConnect, which provides cost-effective local search results for small businesses. Our new agreement with Amerivon should accelerate the penetration of our products into the mass retail market, and our agreement extension with International Merchant Services (IMS) designates that our Creditdiscovery product will serve as their primary customer acquisition tool."
About Innuity
Headquartered in Redmond, WA, Innuity is a Software as a Service (SaaS) company that designs, acquires and integrates applications to deliver solutions for small business. Innuity's Internet technology is based on an affordable, on-demand model that allows small businesses to simply interact with customers, business partners and vendors and efficiently manage their businesses. Innuity delivers its on-demand applications through its Internet technology platform, Innuity Velocity(TM). The Velocity technology platform enables use-based pricing, provides the opportunity to choose applications individually or as an integrated suite and ensures minimum start-up costs and maintenance. For more information on Innuity, go to www.innuity.com.
Forward-Looking Statements
This release contains information about management's view of Innuity's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of a variety of factors, including, but not limited to, risks and uncertainties associated with our ability to develop or offer additional Internet technology applications and solutions in a timely and cost-effective manner. If we are unable to develop, license, acquire or otherwise offer through arrangements with third parties the additional services that our customers desire, or if any of our existing or future relationships with these third parties were to be terminated, we could lose our ability to provide key Internet technology solutions at cost-effective prices to our customers, which could hinder our ability to introduce new products and services and could cause our revenues to decline. Additional risks and uncertainties include our financial condition and those other risk factors described in our quarterly reports on Form 10-QSB, our annual report on Form 10-KSB, and other documents we file periodically with the Securities and Exchange Commission.
INNUITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2007 2006
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(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 232,519 $ 307,483
Settlement deposits 637,547 467,078
Settlement receivable, net 143,955 173,098
Trade accounts receivable, net 1,357,729 1,318,773
Inventories, net 460,151 486,736
Other current assets 178,437 184,891
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Total Current Assets 3,010,338 2,938,059
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Property and equipment, net 821,091 901,318
Intangible Assets, net 1,419,995 1,670,582
Goodwill 1,833,220 1,833,220
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Total Assets $ 7,084,644 $ 7,343,179
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Trade accounts payable $ 2,890,704 $ 2,587,227
Accrued salaries and wages 580,758 612,745
Merchant settlement payable 793,962 453,596
Accrued liabilities 934,205 1,229,872
Deferred revenues 3,315,538 2,543,397
Line of credit 549,940 699,365
Related party notes payable, current
portion, net of discount 377,300 658,105
Long-term debt, current portion 1,194,529 1,294,529
Capital lease obligations, current portion 145,850 142,972
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Total Current Liabilities 10,782,786 10,221,808
Long-Term Liabilities
Related party notes payable, net of
discount 372,981 330,832
Long-term debt 156,714 180,126
Capital lease obligations 152,483 190,024
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Total Long-Term Liabilities 682,178 700,982
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Total Liabilities 11,464,964 10,922,790
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Stockholders' Deficit (4,380,320) (3,579,611)
Total Liabilities and Stockholders' Deficit $ 7,084,644 $ 7,343,179
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INNUITY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ending March 31, 2007 2006
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Revenues
Product sales $ 2,112,871 $ 1,899,841
Services 3,173,870 3,058,030
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Total revenues 5,286,741 4,957,871
Operating expenses
Cost of product sales 1,643,973 1,560,053
Cost of services 1,814,721 1,711,945
General and administrative 1,329,874 1,483,060
Selling and marketing 1,243,171 1,352,186
Research and development 461,165 364,445
Royalty expense - 415,748
Amortization expense 250,587 254,336
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Loss from operations (1,456,750) (2,183,902)
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Other income (expense)
Other income - 67,387
Interest expense (97,955) (339,842)
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Total other income (expense) (97,955) (272,455)
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Net Loss $(1,554,705) $(2,456,357)
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Basic and Diluted Loss Per Common Share $ (0.07) $ (0.13)
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Basic and Diluted Weighted-Average
Common Shares Outstanding 21,446,188 18,291,089
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