EX-99.1 2 v123809_ex99-1.htm Unassociated Document


IceWEB™ Announces Third Quarter Financial Results

HERNDON, Va. ─ (BUSINESS WIRE) ─ August 14, 2008, ─ IceWEB, Inc. (OTCBB:IWEB), www.IceWEB.com, today announced financial results for its fiscal third quarter which ended June 30, 2008. As projected, revenues continued to increase as the Company continues to gain traction and share in the Storage and On-Demand Software markets.

Revenues for the third quarter were up 64% at $6.0 million compared to $3.7 million for the same period in 2007. Revenues for the nine months ended June 30, 2008 were up $16.4% at $14.1 million compared to $12.1 million for same nine-month period in 2007.

Third quarter total operating expenses were $2.8 million, which included approximately $1.8 million in Non-Cash items from FAS 123R, Acquisition costs, Depreciation and Amortization expense. EBITDA loss for the quarter was $365,000 or approximately $121,000 per month.

John R. Signorello, Chairman and Chief Executive Officer of IceWEB, Inc., stated, “Our products margins remain strong, the sales for IceWEB products continue to increase, and we are rapidly closing in on positive EBITDA. Our cash overhead was approximately $1,119,000 for the quarter and we expect that to drop an additional 15% in the fourth quarter due to rent reduction and consolidation of personnel.”

Signorello Continued, “The vision and direction for IceWEB is crystal clear. We have positioned the company to become the market leader in providing GEOSPATIAL storage solutions. We will soon be filing our provisional patents to protect the company’s intellectual property, which will differentiate our technology in the marketplace and drive shareholder value.”

2008 Fiscal Highlights

For the nine months ended June 30, 2008 compared to the nine months ended June 30, 2007:

 
·
Revenues increased 16.4% from $12.1 Million to $14.1 Million.
 
·
Sales of storage, network and security solutions to the Company’s government and enterprise customers increased 14.8% from $12.0 Million to $13.8 million.
 
·
On-demand software sales increased 188% to $316,665 from $109,786.
 
·
Gross margin on sales rose 15.7%.
 
·
Research and development expenses increased to $207,636 from $0 due to R&D activities related to the Company’s proprietary INLINE storage products.
 
·
Marketing and selling costs were $139,000, an 18% increase from $117,000. The increase was attributable to an increase in web marketing, advertising and print advertising during the nine months period.
 
·
For the three months ended June 30, 2008 compared to the three months ended June 30, 2007:
 
·
Revenues increased 64% to $6.0 Million from $3.7 Million.
 
·
Network, storage and security solution sales totaled $5.6 Million, reflecting a 55% increase from $3.6 Million.
 
·
EBIDTA Loss for the Quarter was $365,000 or $122,000 per month.

The Company’s fourth quarter and fiscal year ends on September 30, 2008. Fourth quarter plans include increased concentration on select, niche storage markets such as the fast-growing geospatial application segment. 

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ICEWEB, Inc.
Consolidated Balance Sheet
June 30, 2008
(Unaudited)
 
CURRENT ASSETS:
  
 
  
Cash
  
$
48,344
  
Accounts receivable, net of allowance of $9,000
    
4,100,548
  
Inventory, net of allowance of $73,518
    
694,557
  
Other current assets
    
45,504
  
Prepaid expenses
    
97,668
  
 
    
4,986,621
  
 
      
OTHER ASSETS:
      
Property and equipment, net
    
1,141,939
  
Deposits
    
61,418
  
Intangible assets, net of accumulated amortization of $369,589
    
1,221,341
  
Total Assets
  
$
7,411,319
  
 
      
 
      
CURRENT LIABILITIES:
      
Accounts payable and accrued liabilities
  
$
7,522,868
  
Notes payable
    
1,931,469
  
Deferred revenue
    
15,625
  
 
    
9,469,962
  
 
      
Long-Term Liabilities
      
Notes payable
    
1,016,558
  
 
    
 
  
Total Liabilities
    
10,486,520
  
 
      
Stockholders’ Deficit
      
Preferred stock ($.001 par value; 10,000,000 shares authorized)
      
Series A convertible preferred stock ($.001 par value; 0 shares issued and outstanding)
    
—
  
Series B convertible preferred stock ($.001 par value; 1,253,334 shares issued and outstanding)
    
1,253
  
Common stock ($.001 par value; 1,000,000,000 shares authorized; 22,279,088 shares issued and 22,116,588, shares outstanding)
    
22,118
  
Additional paid in capital
    
15,092,767
  
Accumulated deficit
    
(18,178,339
)
Treasury stock, at cost, (162,500 shares)
    
(13,000
)
 
    
  
  
Total stockholders’ deficit
    
(3,075,201
)
 
      
Total liabilities and stockholders’ deficit
  
$
7,411,319
  
 

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ICEWEB, Inc.
Consolidated Statements of Operations
(Unaudited)
 
 
  
Three Months Ended
June 30
  
Nine Months Ended
June 30
  
 
  
2008
  
2007
  
2008
  
2007
  
 
  
 
  
 
  
 
  
 
  
Sales
  
$
5,981,083
  
$
3,655,019
  
$
14,095,946
  
$
12,114,253
  
 
                  
Cost of sales
    
5,249,906
    
3,176,055
    
12,127,796
    
10,652,698
  
 
                                  
Gross profit
    
731,177
    
478,964
    
1,968,150
    
1,461,555
  
 
                  
Operating expenses:
                  
Marketing and selling
    
50,208
    
(53,981
)
  
138,927
    
117,248
  
Depreciation and amortization
    
259,933
    
58,658
    
412,297
    
189,794
  
Research and development
    
121,906
    
—
    
207,636
    
—
  
General and administrative
    
2,369,286
    
764,064
    
5,187,547
    
1,938,947
  
 
                          
Total Operating Expenses
    
2,801,333
    
768,741
    
5,946,407
    
2,245,989
  
 
                          
Income (loss) From Operations
    
(2,070,156
)
  
(289,777
)
  
(3,978,257
)
  
(784,434
)
 
                  
Other income (expenses):
                  
Gain/(loss) from sale of assets
    
—
    
—
    
—
    
153,319
  
Interest income
    
682
    
952
    
3,266
    
2,446
  
Interest expense
    
(196,450
)
  
(103,880
)
  
(481,457
)
  
(447,816
)
 
                          
Total other (expenses):
    
(195,768
)
  
(88,195
)
  
(478,191
)
  
(292,050
)
 
                  
Net income (loss)
  
$
(2,265,924
)
$
16,903
  
$
(4,456,448
)
$
(1,076,484
)
 
                  
 
                  
Basic and diluted loss per common share
  
$
(0.12
)
$
(0.05
)
$
(0.28
)
$
(0.11
)
 
                  
Weighted average common shares outstanding-basic and diluted
    
19,172,959
    
10,352,305
    
16,162,168
    
9,888,434
  
 
See accompanying notes to unaudited consolidated financial statements

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ICEWEB, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
 
 
  
Nine Months Ended
June 30,
  
 
  
2008
  
2007
  
 
  
 
  
 
  
NET CASH USED IN OPERATING ACTIVITIES
  
$
(385,319
)
$
87,556
  
 
          
CASH FLOWS FROM INVESTING ACTIVITIES:
          
Purchase of property and equipment
    
(65,923
)
  
(1,873
)
Net cash received from sale of net assets
    
—
    
138,000
  
Gain on conversion of note payable to equity
    
—
    
(132,875
)
Cash used in acquisitions, net
    
(1,311,318
)
  
(247,000
)
NET CASH USED IN INVESTING ACTIVITIES
    
(1,377,241
)
  
(243,749
)
 
          
CASH FLOWS FROM FINANCING ACTIVITIES:
          
Repayment of equipment financing
    
(60,068
)
  
(57,006
)
Proceeds from notes payable - related party
    
—
    
30,000
  
Repayment of notes payable - related party
    
(115,767
)
  
(26,500
)
Net proceeds from related party advances
    
—
    
11,737
  
Proceeds from notes payable
    
7,092,685
    
610,037
  
Payments on notes payable
    
(6,476,876
)
  
(1,048,070
)
Proceeds from exercise of common stock options
    
198,450
    
185,650
  
Proceeds from sale of common stock
    
80,000
    
—
  
Proceeds from exercise of common stock warrants
    
—
    
407,000
  
 
              
NET CASH PROVIDED BY FINANCING ACTIVITIES
    
718,424
    
112,848
  
 
          
NET INCREASE (DECREASE) IN CASH
    
(1,044,136
)
  
(43,345
)
 
          
CASH - beginning of period
    
1,092,470
    
432,885
  
 
              
CASH - end of period
  
$
48,334
  
$
389,540
  
 
          
Supplemental disclosure of cash flow information:
          
Cash paid for :
          
Interest
  
$
463,245
  
$
435,316
  
Income taxes
    
—
    
—
  
               
Non-cash transactions affecting investing and financing activities:
              
 Fair value of shares issued for services from a retailer and an investor relations firm
  
$
—
   
(350,000
)
Conversion of shares of preferred stock to shares of common stock
    
1,037,000
    
300
  
Fair value of shares issued in satisfaction of debt to related parties
    
—
    
114,000
  
 
          
Acquisition details:
              
Goodwill
  
$
—
  
$
—
  
Liabilities assumed
  
$
1,616,814
  
$
—
  
Common stock issued
  
$
276,845
    
—
  
Direct costs
    
740,000
    
—
  
Fair value of assets acquired
  
$
3,944,977
  
$
—
  
Cash paid
  
$
1,311,318
  
$
250,000
  
 
See accompanying notes to unaudited consolidated financial statements

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About IceWEB, Inc.
 
Headquartered just outside of Washington, D.C., IceWEB manufactures and markets storage solutions and on-line application services. Additionally it is a leading source for best-of-class security products, services and solutions offered in partnership with a wide range of global technology leaders. Its customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (SMB). For more information, please visit www.IceWEB.com.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward looking statements that involve a number of risks and uncertainties. It is possible that the assumptions made by management are not necessarily the most likely and may not materialize. In addition, other important factors that could cause actual results to differ materially include the following: business conditions and the amount of growth in the computer industry and general economy; competitive factors; ability to attract and retain personnel, including key sales and management personnel; the price of the Company's stock; and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-K and its quarterly reports on Forms 10-Q; and any reports on Form 8K. IceWEB takes no obligation to update or correct forward-looking statements.

FOR MORE INFORMATION, PLEASE CONTACT:
703-344-0951 or email at investor@iceweb.com


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