[March 18, 2005]

Xten Networks Announces Third Quarter Results

BY JOHANNE TORRES

Xten Networks, Inc., a provider of VoIP, Video over IP, Instant Messaging (IM), and Presence SIP softphones, today reported financial results for the third quarter which ended in January 31, 2005. The company reported a total revenue of $928,608, compared to $677,364 for the quarter ending in October 31, 2004, an increase of 37 percent quarter-over-quarter. This compared to $10,874 in the year-earlier period ended January 31, 2004.

Xten reported a net loss of $88,827, or ($0.00) per diluted share for the quarter, compared to a net loss of $198,275, or ($0.01) per diluted share, in the previous quarter. This compared to $102,500, or ($0.02) per diluted share, in the year-earlier period. According to the report, the diluted weighted average common shares outstanding for the three months ended January 31, 2005 were 37,638,462 shares compared to 6,226,484 shares in the year-earlier period.

For the first nine months of fiscal 2005, total revenue climbed to $2,093,123, compared to $345,873 (+505) in the corresponding period in fiscal 2004. Net loss for the first nine months of fiscal 2005 was $478,235, or ($0.01) per diluted share, compared to a net loss of $143,961, or ($0.03) per diluted share, in the corresponding period in fiscal 2004.

Software sales for the quarter totaled $838,163 compared to $653,618 for the quarter ended October 31, 2004, a 28 percent increase quarter-over-quarter, according to the report. This compared to $6,820 in the year-earlier period ended January 31, 2004. For the nine-month period, software sales were $1,958,432 compared to $228,281 in the year-earlier period.

Mark Bruk, chief executive officer of Xten Networks, said: “Our record performance in the third quarter reflects strong growth in software sales. We significantly strengthened our customer base in the quarter with new agreements from industry leaders such as Belkin Corporation, Yak Communications, and others. Our latest software product, eyeBeam, continues to receive strong acceptance in the rapidly growing global VoIP marketplace and we expect to build on our record sales going forward. With customers in approximately 30 countries and more than 1,000,000 IP endpoints deployed worldwide, Xten Networks remains well positioned for long-term growth and we expect to continue to improve our operating margins based on growing sales.”

Xten Networks, Inc.
www.xten.com