CALVERTON, N.Y., April 29, 2005 (PRIMEZONE) -- AdZone Research, Inc. (OTCBB:ADZR), reported today that its Chairman & CEO, Charles A. Cardona, has issued the company's latest operational report to shareholders. The full text of his message follows:
April 29, 2005
Dear Fellow Shareholders:
In the fourth fiscal quarter, ended March 31, 2005, the company had modest revenues, principally from the recently launched cyber security division. A full report on fiscal 2005 operations will be contained in the Form 10-K that will be filed with the SEC at the end of June. We will have a conference call with investors after the release of that document to report both on fiscal 2005 results and an initial report on operating highlights pertaining to the first quarter of 2006.
Following our last update report on February 22, we reported two days later that a government laboratory, after five months of intensive tests, finally had validated AdZone's core Internet surveillance technology. Since that time, the company has vigilantly pursued defense-related contracts from potential clients that earlier indicated the government validation we had achieved was mandatory for their ongoing interest.
Recently, in response to a fellow shareholder's inquiries, we said that we could not selectively disclose the timing and content of upcoming news announcements. They will, of course, be made immediately as these events occur. And we are still optimistic about the timetables we have laid out.
There has been no news reported in recent weeks for the simple reason that there has been no hard news yet to report. We understand that certain investors desire news more frequently. But, we believe it is best to work on generating business, revenues, and growing the company rather than producing "fluff" news releases to placate investors focused on short-term horizons and not really interested in building a company with us.
We know the majority of shareholders have an interest in supporting the company long term, which is very encouraging to management. We have grown revenues every one of the past three years and are working very hard to continue doing so.
That being said, I am pleased to report to you today that while we seek out the award of defense-related contracts we have been aggressively pursuing the expansion of the mission and scope of our commercial division. As we have indicated in the past, we believe the revenue opportunities in the long run from commercial applications of our core Internet technology, and acquisitions of companies with similar business models, will far overshadow the defense side - by a factor of as much as 10 times.
Over the past two months, our Chief Operating Officer, John A. Cardona, and Executive Vice President Dan Wasserman, have made several trips to the West Coast to meet with leading motion picture industry executives. Their mission: to discuss the implementation of a brand new motion picture anti-piracy program we have developed that has grown out of our core technology. The program will be officially launched next month, and should result in immediately measurable revenues.
Considering that the motion picture industry is losing approximately $300 million a month to digital piracy, our role in assisting the industry to identify and shut down illegal web sites is expected to be a major source of revenue in the coming year.
Simultaneously, we have completed development on a program for a major police department aimed at identifying online child predators that we also anticipate announcing in May. This program, created in collaboration with the authorities, will also be revenue generating. We believe that police departments across the nation may benefit from our efforts, and that our revenue stream will be commensurately higher as a result of that.
Turning to online advertising revenues, in March, spending jumped by more than 20%, to $814 million, up from $672 million in February. Technology-related ads, at more than $202 million, represented 25% of total online spending.
The importance of these developments was underscored in an article in The New York Times two weeks ago, when the American Research Foundation held its annual convention. Several comments in the feature story are worth your consideration:
"For years," the writer observes, "advertising research was perceived on Madison Avenue as a staid, even quaint field with little practical relevance. Now, as clients increasingly hold agencies accountable for effective ads, the researchers are being eagerly sought out.
"In response, the research industry is intensifying its efforts and looking at issues like trying to determine the return on investment for advertising spending, improving the measurement of audiences in media like television and the Internet, helping agencies identify the most efficient media outlets and increasing the role that market research plays in reaching consumers."
The ability to customize our core Internet technology to respond to these challenges was never more important, and we also intend to play an important role in these arenas in the year ahead. Given a name like "AdZone Research," would you expect anything less?
Sincerely,
Charles A. Cardona
Chairman & CEO
AdZone Research is headquartered in Calverton, N.Y., in a facility that formerly housed major defense contractor Northrop Grumman Corporation. The facility was earlier used for top-secret defense research and development, and was part of the United States Navy's Naval Defense Technology Center.
Through monitoring of more than 500,000 Web sites worldwide, AdZone provides tracking and monitoring of targeted information on the Internet, with an expanded focus on global Internet analysis of security-related data transmissions. For additional information, please visit the company's Web site at http://www.adzoneresearch.com. Certain statements contained herein are "forward-looking" statements (as such term is defined in the Private Securities Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.