Adrenalin Interactive, Inc. Announces Fiscal Year 1999 Results.

LOS ANGELES--(BUSINESS WIRE)--Sept. 27, 1999--

Adrenalin Interactive, Inc. (NASDAQ: ADRN) announced today that revenues for the fiscal year ended June 30, 1999 were $2,880,936; a 4% increase from results reported a year earlier. Revenue growth was limited due to management's focus on the proposed merger with McGlen Micro in the latter half of the year. Operating expenses of $4,047,538 incurred during fiscal 1999 (exclusive of the goodwill write-off noted below) were approximately 20% less than the operating expenses in fiscal 1998. This improvement was due in large part to a 52% reduction in the selling, general and administrative expenses resulting from lower non-production related expenses and the elimination of the expenses related to the New York office closed during fiscal 1998.

Prior to the write-off of goodwill, noted below, the Company realized operating losses of $1,166,602 during fiscal 1999 which was approximately 49% less than the operating loss in fiscal 1998. Of this loss, $864,096 was from non-cash charges for depreciation and amortization and charges related to the issuance of securities in exchange for services.

In preparation for the pending merger with McGlen, the Company elected to write-off the entire amount of its remaining un-amortized goodwill of $1,579,132 appearing on the balance sheet which arose from the prior acquisition of Western Technologies in February 1997. As a result, the reported net loss rose to a total of $2,745,734 for fiscal 1999.

Jay Smith, CEO of Adrenalin, said, "We believe the pending merger with McGlen Micro, which is expected to close in late October or early November, will be a significant milestone to both companies."

Adrenalin Interactive, Inc. develops and licenses console video games for Sony, Nintendo and Sega consoles, entertainment titles for personal computers and Internet "play-to-win-cash" games for the World Wide Web. Adrenalin also develops and licenses electronic toys, particularly interactive, Web-powered toys that are refreshed from a PC via the Internet. Adrenalin creates interactive television games for digital set-top boxes and publishes or licenses certain PC games in 24 countries and 15 languages.

The statements set forth above with respect to the proposed merger, the benefits thereof and the potential growth of the combined company are forward looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995. As such, they are inherently uncertain and should not be unduly relied upon. As to the consummation of the proposed acquisition, uncertainties include the ability of the parties to negotiate definitive agreements, completion of satisfactory due diligence by both parties, the receipt of regulatory approvals, the receipt of approval by Adrenalin's shareholders, the satisfaction of other conditions to closing and other uncertainties normally associated with the consummation of business acquisitions. As to the hoped for benefits of the acquisition and potential future growth, uncertainties include the ability to successfully integrate the companies' businesses, technologies and management, the availability of sufficient capital to expand the businesses, customer acceptance on new products, competition and other uncertainties associated with integrating businesses after acquisitions and growth.