SANTA MONICA, Calif., May 24, 2006 (PRIMEZONE) -- iMedia International, Inc. (OTCBB:IMNL) (www.imedia-intl.com) announced today the results of its operations for the first quarter of 2006.
For the three-month period ending March 31, 2006, the Company saw an increase in net sales of 219%, with revenues of $1,424,000, an increase of $978,000 from the comparative period in 2005.
Even with a substantial increase in net sales, general and administrative expenses decreased $1,603,000 or 74% to $552,000, from $2,155,000. Correspondingly, net loss decreased by $3,689,000 or 87% to $572,000, from $4,262,000 during the same comparable three-month period. On a fully diluted basis, net losses decreased to $0.01 per share from $0.06 per share during the comparative period in 2005.
The net loss as disclosed in the Company's financial statements included two significant non-cash items. The Company recorded estimated non-cash other income of $1,398,000 from gains associated with the revaluation of outstanding warrants, and expenses of $160,000 related to the issuance of warrants allocated to various general and administrative costs.
"Our first quarter results are very encouraging as we continue to see an increase in net sales and a decrease in our net losses," said David MacEachern, Chairman and CEO of iMedia International. "These improvements are the direct results of our concerted effort to boost sales and contain overhead expenses related to our growth. I am confident that as we continue to expand in new markets and secure new syndication partners for our branded publications, we will continue to see significant growth in the circulation of Hollywood Previews, and in our net sales and revenues."
The Company reports that their net sales reported for this first quarter period were specifically limited to the production of custom interactive disc programs, and did not include revenues related to their newspaper syndication program which was launched in Dallas, Texas during the second quarter. This program continues to expand, with secured distribution now ahead of Company projections. The Company has recently secured its second distribution agreement with a major independent East Coast newspaper which will bring the total monthly distribution of Hollywood Previews Entertainment iMagazine to approximately 1,542,000 by fourth quarter 2006. This single contract will help make Hollywood Previews one of the largest entertainment-based monthly magazines circulated in the United States.
According to Mr. MacEachern, the Company intends to make a formal announcement for this and each new partnership agreement as they are formalized and approved.
About iMedia International Inc.
iMedia International, Inc. (IMNL) is a publicly held digital media solutions company producing DVD's and CD-ROM's for digital multimedia marketing and promotional campaigns. iMedia publishes proprietary and custom digital iMagazines and offers expert digital media solutions services including: strategic planning, content aggregation and production, disc audio/video design, authoring, editing and compression, disc packaging, manufacturing and distribution. A key feature of iMedia's technology is its iReporting(tm) real-time, online tracking system which provides quantitative data on disc viewer usage patterns and effectiveness of iMedia marketing and promotional campaigns.
For more information on iMedia International, Inc. please contact:
Kelly R. Konzelman, Executive Vice President 1721 21st Street, Santa Monica, CA 90404 Phone: (310) 453-4499 Fax: (310) 453-6120 kellyk@imedia-intl.com
The information in this news release includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements to the future financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development and acceptance, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the Company's filings with the United States Securities and Exchange Commission. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date thereof. Please refer to the full filing of the Company's Quarterly Report on Form 10-QSB at http://www.sec.gov.
iMedia International, Inc.
Condensed Combined Balance Sheet
As of March 31, 2006 (unaudited)
Assets
Current Assets
Cash $ 1,272,823
Accounts receivable, net of allowance for
doubtful accounts of $34,000 838,762
Work in process 19,066
Due from affiliate 13,331
Prepaid expense 8,684
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Total current assets 2,152,666
Property and equipment, net 148,751
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Total Assets $ 2,301,417
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Liabilities and shareholders' deficit
Current liabilities:
Accounts payable and accrued expenses $ 1,364,620
Accrued liquidated damages 1,723,860
Deferred revenue and customer deposits 174,194
Note payable -- related party 2,011
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Total current liabilities 3,264,685
Warrant liability 3,716,963
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Total Liabilities 6,981,648
Commitments and contingencies
Mandatory redeemable convertible
preferred stock, net of discount
of $1,807,111 1,232,889
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Total shareholders' deficit (5,913,120)
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Total liabilities and
shareholders' equity $ 2,301,417
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iMedia International, Inc.
Condensed Combined Statements of Operations
For the Three Months Ended March 31, 2006 and 2005 (unaudited)
2006 2005
------------ ------------
Net Sales $ 1,424,077 $ 446,464
Cost of sales 977,372 267,954
------------ ------------
Gross profit 446,705 178,510
Operating expenses:
Selling and marketing 1,192,654 339,690
General and administrative 551,610 2,154,563
Operating expenses -- related party 165,000 156,000
------------ ------------
Total operating expenses 1,909,264 2,650,253
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Loss from operations (1,462,559) (2,471,743)
------------ ------------
Other (income) expense:
Net gain on revaluation of warrants (1,398,342) --
Penalty on late filing of SB2 514,342 --
Interest (income) expense, net (7,498) 132,546
Loss on investment -- 143,477
Impairment loss on investment in
available for sale securities -- 1,513,030
------------ ------------
Total other (income) expense (891,498) 1,789,053
Loss before provision
for income taxes (571,061) (4,260,796)
Provision for income taxes 1,092 800
------------ ------------
Net loss (572,153) (4,261,596)
Interest on fixed conversion feature
and amortization of debt discount
on Series A redeemable
preferred stock (379,998) --
Preferred stock dividends
Series A and B (119,400) --
Preferred stock dividends
-- iPublishing, an affiliated company (6,750) (6,750)
------------ ------------
Net loss allocable to common
shareholders 1,078,301 (4,268,346)
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Net loss per common share allocated
to common shareholders,
Basic and Diluted $ (0.01) $ (0.06)
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Weighted average common
outstanding shares, Basic and Diluted 72,986,850 67,027,824
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iMedia International, Inc.
Condensed Combined Statements of Cash Flows
For the Three Months Ended March 31, 2006 (unaudited)
2006 2005
----------- -----------
Net loss $ (572,153) $(4,261,596)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 15,014 15,323
Allowance for doubtful accounts 8,700 --
Loss on sale of investments -- 143,477
Unrealized loss on investment in
available for sale securities -- 1,513,030
Change in warrant liability due
to revaluation (1,398,342) --
Issuance of warrants for services 127,149 1,147,437
Issuance of common stock for services 76,000 1,926,750
Net increase in deferred compensation (16,236) (1,429,211)
Amortization of note discount -- 47,203
Changes in assets and liabilities
Accounts receivable 973,021 (296,046)
Work in process 8,713 --
Prepaid expenses and other assets 4,879 --
Accounts payable and
accrued expenses 146,581 46,818
Accrued liquidated damages 514,342 --
Deferred revenue and
customer deposits 83,754 83,920
----------- -----------
Net cash provided by/(used in)
operating activities (28,578) (1,062,895)
----------- -----------
Cash flows from Investing activities
Purchase of equipment (23,280) (833)
Sale of investment in available
for sale securities -- 201,882
Due to/from affiliates, net (60,000) --
----------- -----------
Net cash provided by/(used in)
investing activities (83,280) 201,049
Cash flows from financing activities
Payments on notes payable (6,473) --
Proceeds from notes payable
-- related parties -- 41,445
Proceeds from issuance of common
stock for cash -- 446,789
Dividend on iPublishing
preferred stock (6,750) (6,750)
----------- -----------
Net cash provided by/(used in)
financing activities (13,223) 481,484
Net change in cash (125,081) (380,362)
Cash, beginning of period 1,397,904 453,304
----------- -----------
Cash, end of period $ 1,272,823 $ 72,942
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