CenterSpan Communications Reports Fourth Quarter and Year End 2001 Financial Results.Business Editors HILLSBORO Hillsboro, city (1990 pop. 37,520), seat of Washington co., NW Oreg., in the Tualatin valley; inc. 1876. Integrated circuits, other high-tech products, furniture, plastics, and medical equipment are manufactured in this growing city in Oregon's "Sunset Corridor. , Ore.--(BUSINESS WIRE)--Feb. 28, 2002 CenterSpan Communications Corp. (Nasdaq:CSCC CSCC Calgary Sports Car Club (Alberta, Canada) CSCC Clemson Sports Car Club CSCC Columbus State Community College (Ohio) CSCC Classic Sports Car Club (UK) ), a leading developer of next generation peer-to-peer From user to user. Peer-to-peer implies that either side can initiate a session and has equal responsibility. Peer-to-peer is a somewhat confusing term, because it has always been contrasted to a central system that initiates and controls everything. (P2P See peer-to-peer and point-to-point. ) Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the content distribution solutions, today announced results of its fourth quarter and year ended December December: see month. 31, 2001. Fourth quarter net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the totaled $6,463,000, or $(0.74) per share, compared with a net loss from continuing operations of $5,648,000, or $(0.65) per share, for the third quarter and a net loss from continuing operations of $2,248,000, or $(0.35) per share, for the fourth quarter of 2000. Fourth quarter 2001 results include $3,491,000, or $0.40 per share, of non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) compared to $145,815, or $0.02 per share, in last year's comparable quarter. For the year ended December 31, 2001, the company reported a net loss from continuing operations of $21,536,000, or $(2.59) per share, compared with a net loss from continuing operations of $9,468,000, or $(1.52) per share for the year ended December 31, 2000. Research and engineering expenses for the fourth quarter totaled $1,696,000, compared with $2,798,000 in the third quarter and $1,069,000 in last year's comparable quarter. Third quarter 2001 research and engineering included a non-cash expense of $750,000 for technology purchased from Supertracks. For the full year, research and engineering expenses totaled $8,403,000, compared with $4,865,000 during 2000. Research and engineering expenses increased significantly in 2001 to develop the C-Star platform and to support the Scour scour, scours 1. the chemical and physical cleaning of fleece wool. 2. diarrhea. dietetic scour see dietary diarrhea. peat scour see secondary nutritional copper deficiency. beta. For the year 2001, research and engineering included non-cash expenses of $2,151,000, compared to $1,473,000 in 2000. Selling, general and administrative expenses in the fourth quarter of 2001 totaled $4,805,000, compared with $2,935,000 in the third quarter and $1,338,000 in last year's fourth quarter. For the full year, selling, general and administrative expenses totaled $13,521,000, compared with $5,499,000 during 2000. The increases include non-cash expenses of $3,250,000 in the fourth quarter and $6,030,000 during 2001 for amortization and cost-basis adjustment of the Scour assets purchased in December of 2000 as well as depreciation and non-employee equity compensation costs, compared with $272,000 in 2000. At December 31, 2001 CenterSpan's cash and restricted cash totaled $5,838,000 and the company had no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . On February February: see month. 12, 2002 the company received an additional $4,000,000 equity infusion INFUSION, med. jur. A pharmaceutical operation, which consists in pouring a hot or cold fluid upon a substance, whose medical properties it is desired to extract. Infusion is also used for the product of this operation. Although infusion differs from decoction, (q.v. from the private placement of approximately 650,000 shares at $6.00 per share. "In 2001 we made great progress toward our objective of creating a cost effective digital distribution channel for worldwide delivery of rich digital media," said Frank G. Hausmann, chairman and chief executive officer. "Our intensive development efforts led to the recent launch of our C-Star CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. Services(TM) 2.0, our signature suite of modular content delivery solutions for distributing digital audio, video and data files. Today, Sony Music Entertainment Sony Music Entertainment is a major global record label controlled by the Sony Corporation. In 1988, Sony Corporation acquired CBS Records, Inc. for $2 billion. CBS Inc., now CBS Corporation, retained the rights to the CBS name, and Sony renamed the label provided critical validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. of our technology, marking the first time its large stable of diverse artists has been made available to a digital distributor for use on a secure peer-to-peer delivery network." Hausmann concluded, "We enter 2002 with key technology foundations in place and a new infusion of equity capital with which to aggressively pursue further sales and marketing initiatives. CenterSpan and Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) are committed to driving the legal digital distribution of audio, video and data from an emerging concept into a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. viable business with solid economics." Investor Conference Call The company will host a conference call today at 1:30 p.m. PST PST Paroxysmal supraventricular tachycardia, see there , available to interested parties by dialing (760) 679-7390 or through a live audio Internet broadcast at www.centerspan.com and www.streetevents.com. The call will be archived and accessible on these web sites for 90 days. A telephone replay of the call will be available through March 14, 2002 by dialing (800) 642-1687 from within the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , or (706) 645-9291 from international locations, and providing conference ID 3136198. About CenterSpan CenterSpan Communications develops and markets next-generation, secure Internet content delivery solutions for media and communications service providers A Communications Service Provider or CSP is a company that transports information electronically. The term encompasses public and private companies in the wireline, wireless, Internet, cable, satellite, and managed services businesses. and the enterprise. The company's C-Star CDN Services suite enables the low cost, efficient and secure distribution of digital media. More information is available at www.centerspan.com. This news release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Investors are cautioned that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. CenterSpan is a venture stage company. C-Star, the company's peer-to-peer Internet content distribution network, is a new business in an emerging and rapidly evolving market. Specific statements regarding the timely launch of content distribution services such as C-Star and Scour, new customers, new products, content acquisition, number of registered users, new business opportunities, new revenue model and potential earnings leverage are forward-looking statements. Investors are encouraged to review the company's filings with the Securities and Exchange Commission, including the company's 2000 Form 10-KA, for a more refined description of the risks and uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc forward-looking statements made by the company, as well as to other aspects of the company's business. The company undertakes no obligation to update any forward-looking statements.
CENTERSPAN COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------
2001 2000 2001 2000
-------- ------ ------ ------
Revenues $ -- $ -- $ 51 $ 1
Cost of goods sold -- -- -- --
-------- -------- -------- --------
Gross profit -- -- 51 1
Operating expenses:
Research and engineering 1,696 1,069 8,403 4,865
Selling, general and
administrative 4,805 1,338 13,521 5,499
-------- -------- -------- --------
Total operating expenses 6,501 2,407 21,924 10,364
-------- -------- -------- --------
Loss from operations (6,501) (2,407) (21,873) (10,363)
Interest income 54 159 399 895
Interest expense (16) -- (62) --
-------- -------- -------- --------
Loss from continuing
operations (6,463) (2,248) (21,536) (9,468)
Gain from disposal of
discontinued operations,
net 70 -- 674 --
-------- -------- -------- --------
Net loss $ (6,393) $ (2,248) $(20,862) $ (9,468)
======== ======== ======== ========
Basic and diluted loss per
share from continuing
operations: $ (0.74) $ (0.35) $ (2.59) $ (1.52)
======== ======== ======== ========
Basic and diluted gain per
share from disposal of
discontinuing operations $ 0.01 $ -- $ 0.08 $ --
======== ======== ======== ========
Basic and diluted net
loss per share: $ (0.73) $ (0.35) $ (2.51) $ (1.52)
======== ======== ======== ========
Weighted average common
shares -- basic and
diluted 8,778 6,403 8,309 6,231
======== ======== ======== ========
CENTERSPAN COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31,
2001 2000
------------ ------------
Cash and cash equivalents $ 5,276 $ 7,701
Restricted cash 562 2,420
Prepaid and other expenses 156 42
Other assets 5,314 10,692
------- -------
Total assets $ 11,308 $ 20,855
======= =======
Capital lease obligation $ 225 $ --
Accounts payable 551 608
Accrued liabilities 603 2,557
Shareholders' equity 9,929 17,690
------- -------
Total liabilities and shareholders' equity $ 11,308 $ 20,855
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