PLYMOUTH MEETING, Pa., Nov. 15, 2005 (PRIMEZONE) -- SmartServ Online, Inc. (OTCBB:SSRV), a Mobile Virtual Network Operator (MVNO) that provides mobile phone service with the best in low cost prepaid minute plans and the latest in mobile content, today announced results of operations for the third quarter ended September 30, 2005.
Robert Pons, President and CEO of SmartServ commented, "During the quarter we completed a $3 million round of financing consisting of a $500,000 senior secured note and a $2.5 million senior revolving credit note. We continue to pursue the launch of our prepaid mobile phone service, Uphonia, and investigate new strategic and financing opportunities. At the same time we are exploring ways to improve the margins of our prepaid calling card division."
Revenues were $13,580,000 for the quarter ended September 30, 2005, compared to $80,000 for the comparable quarter in 2004. The net loss for the third quarter was $998,000 before an accrued preferred stock dividend of $1,221,000 and $2,219,000 thereafter, or $0.35 loss per basic and diluted share, compared to a net loss of $1,120,000 before an accrued preferred stock dividend of $1,114,000 and $2,234,000 thereafter, or $0.74 loss per basic and diluted share for the third quarter of 2004.
For the nine months ended September 30, 2005, revenues were $37,739,000 compared to $268,000 for the comparable period in 2004. The net loss for the first nine months of 2005 was $4,338,000 before an accrued preferred stock dividend of $3,622,000 and $7,960,000 thereafter, or $1.40 loss per share, compared to $9,467,000 or $3.41 loss per share in the first nine months of 2004.
About SmartServ
SmartServ, headquartered in Plymouth Meeting, PA is a Mobile Virtual Network Operator (MVNO) that provides mobile phone service with the best in low cost, pre-paid minute plans, discounted international long distance, and the latest in mobile content, such as ringtones, mobile games, and images. SmartServ products and services are marketed under the Uphonia(tm) brand. For more information please visit: www.SmartServ.com.
Forward-Looking Statements
This news release may contain forward-looking statements that involve risks and uncertainties. Forward-looking statements in this document and those made from time-to-time by the Company are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements concerning future plans or results are necessarily only estimates and actual results could differ materially from expectations. Certain factors that could cause or contribute to such differences are described from time to time in the Company's filings with the Securities and Exchange Commission, including but not limited to, the "Risk Factors" described under the heading "Certain Factors That May Affect Future Results" in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2004 and other SEC filings.
SmartServ Online, Inc.
Condensed Consolidated Balance Sheets
September 30 December 31
2005 2004
----------- -----------
(Unaudited)
Assets
Current assets
Cash $ 1,082,500 $ 1,792,856
Investments 100,743 99,697
Accounts receivable, net 4,525,651 92,496
Prepaid expenses 66,589 349,040
----------- -----------
Total current assets 5,775,483 2,334,089
Property and equipment, net 23,564 73,500
Other assets
Restricted cash 1,000,000 --
Deferred financing costs 1,349,211 --
Goodwill 1,743,819 --
Intangibles, net of accumulated
amortization of $197,121 and
$123,201 as of June 30, 2005
and December 31, 2004,
respectively 800,808 911,688
Security deposit 18,787 18,237
----------- -----------
Total Assets $10,711,672 $ 3,337,514
=========== ===========
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable $ 5,215,842 $ 446,528
Accrued liabilities 2,456,880 1,419,248
Current portion of notes payable 2,400,000 36,898
----------- -----------
Total current liabilities 10,072,722 1,902,674
Notes payable -- 13,415
Commitments and Contingencies
----------- -----------
Total liabilities 10,072,722 1,916,089
----------- -----------
Total stockholders' equity 638,950 1,421,425
----------- -----------
Total Liabilities and
Stockholders' Equity $10,711,672 $ 3,337,514
=========== ===========
SmartServ Online, Inc.
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
September 30 September 30
-------------------------- --------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $ 13,579,708 $ 80,474 $ 37,739,354 $ 268,189
------------ ------------ ------------ ------------
Costs and
expenses
Direct costs of
revenues (13,449,549) (644,762) (37,828,325) (1,626,357)
Sales and
marketing
expenses (126,076) (156,705) (645,214) (298,925)
General and
administrative
expenses (744,286) (506,308) (3,122,430) (1,871,442)
Stock-based
compensation (113,170) 639,107 (339,510) --
------------ ------------ ------------ ------------
Total costs and
expenses (14,433,081) (668,668) (41,935,479) (3,796,724)
------------ ------------ ------------ ------------
Loss from
operations (853,373) (588,194) (4,196,125) (3,528,535)
------------ ------------ ------------ ------------
Other income
(expense)
Interest income 450 6,520 4,345 19,287
Interest
expense and
other
financing
costs (85,080) (538,742) (86,172) (2,630,771)
Legal
settlement (60,000) -- (60,000) (196,800)
------------ ------------ ------------ ------------
(144,630) (532,222) (141,827) (2,808,284)
------------ ------------ ------------ ------------
Net loss $ (998,003) $ (1,120,416) $ (4,337,952) $ (6,336,819)
============ ============ ============ ============
Preferred stock
dividend
accrued (1,220,671) (1,114,366) (3,622,209) (3,130,460)
------------ ------------ ------------ ------------
Net loss
applicable to
common
shareholders $ (2,218,674) $ (2,234,782) $ (7,960,161) $ (9,467,279)
============ ============ ============ ============
Basic and
diluted loss
per share $ (0.35) $ (0.74) $ (1.40) $ (3.41)
============ ============ ============ ============
Weighted
average shares
outstanding
-- basic and
diluted 6,304,018 3,002,167 5,670,089 2,773,669
============ ============ ============ ============