CenterSpan Communications Reports Third Quarter Results.Business Editors, High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers 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)--Oct. 24, 2000 Company to Accelerate Digital Media Distribution Strategy with New Product Release Expected in First Quarter 2001 Peer-to-Peer Technology to be Core of Legitimate and Secure Digital Distribution Channel CenterSpan Communications Corporation (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) ), today announced its third quarter 2000 financial results. For the third quarter ended September 30, 2000, the company's 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 communications and collaboration software See collaborative software. business recognized a 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 of $2,410,000, or a loss of $0.39 per share. For the nine months ended September 30, 2000, the company reported a loss from continuing operations of $7,220,000, or a loss of $1.17 per share. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased in the third quarter 2000 to $2,651,000 from $3,691,000 in the second quarter, primarily as a result of a one-time research and development expense of $1,300,000 incurred during the second quarter 2000 for warrants issued to Intel Corporation (company) Intel Corporation - A US microelectronics manufacturer. They produced the Intel 4004, Intel 8080, Intel 8086, Intel 80186, Intel 80286, Intel 80386, Intel 486 and Pentium microprocessor families as well as many other integrated circuits and personal computer networking for technology rights. Research and engineering expenses for the third quarter totaled $1,086,000 as compared to $858,000, excluding the warrant expense in the second quarter 2000, or an increase of 26.6%. CenterSpan also announced that the company's next product release leverages the core technology infrastructure of Socket(TM) to create a next generation solution that enables the secure sale and transfer of legitimate digital content over the Internet. It will push the edge of the web from its current location at the ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. out to the individual desktop. The new software will enable the company to engage in the secure sale and transfer of digital content including music, videos, e-books, photos, graphics, commentary, etc. The company currently anticipates that the beta version A pre-shipping release of hardware or software that has gone through alpha test. A beta version of software is supposed to be very close to the final product, but, in practice, it is more a way of getting users to test the software in the first place under real conditions. of the product will be released in the first quarter of 2001. The capabilities of the new software are expected to allow users to: -- publish legitimate sharable content, -- search the peer-to-peer network for content and capabilities, -- purchase and transfer multiple types of content, -- compare content and capabilities among multiple users, and -- communicate with other users regardless of firewalls. The company anticipates that revenue from the new software will be generated from the distribution and purchase of digital content, applications and physical goods including: -- fees for the sale of licensed digital content, -- service fees for enabling individuals to wrap, publish and sell personal content, -- service fees from major content owners for providing a turnkey See turnkey system. secure digital distribution channel, and -- fees for the direct licensing of the underlying technology to major portals and ISP's. "CenterSpan remains at the forefront of peer-to-peer technology development," stated Frank G. Hausmann, CenterSpan's Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "New market opportunities driven by the growing demand for collaborative information sharing See data conferencing. over the Internet are emerging and evolving at an increasing pace. With these opportunities in mind, we have made the strategic decision to substantially accelerate our product roadmap from the end of 2001 into the beginning of the year. The significant press regarding peer-to-peer networks (1) A network of computers configured to allow certain files and folders to be shared with everyone or with selected users. Peer-to-peer networks are quite common in small offices that do not use a dedicated file server. that enable the illegal sharing of copyrighted content has highlighted and greatly increased the current need for a solution to enable the secure and legitimate distribution of digital content. Bringing this solution to market is now timely." CenterSpan ended the third quarter 2000 with $12,705,000 in available and restricted cash and 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. . Interested parties can access today's conference call at 1:30 PM Pacific time discussing the above third quarter results by going to CenterSpan's web site at www.centerspan.com or StreetEvents at www.streetevents.com, or may dial-in to 212/271-4574. A replay of CenterSpan's quarterly conference call will be available via the Internet through StreetEvents, or CenterSpan's website, or for 48 hours after the call at the dial-in number 800/633-8284 with passcode 16576886. About CenterSpan Communications Corporation CenterSpan Communications Corp. is a developer and marketer of software applications for PC-to-PC text messaging Sending short messages to a smartphone, pager, PDA or other handheld device. Text messaging implies sending short messages generally no more than a couple of hundred characters in length. and multi-point voice conferencing See teleconferencing. over the Internet enabling communication and collaborative information sharing. The company is focusing on next generation peer-to-peer communication and collaboration Working together on a project. See collaborative software. technologies that enable real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. small group multimedia interaction over the Internet. Visit www.CenterSpan.com to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. Socket. This press 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. The Company's Internet community and communications initiative is a new business in a rapidly evolving market. Specific statements regarding the timely release of new products, 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 1999 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , for a further 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.
CENTERSPAN COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues $ -- $ 85 $ 1 $ 806
Cost of goods sold -- 14 -- 254
-------- -------- -------- --------
Gross profit -- 71 1 552
-------- -------- -------- --------
Operating expenses:
Research and
engineering 1,086 148 3,796 278
Selling, general
and administrative 1,565 916 4,161 1,820
-------- -------- -------- --------
Total operating expenses 2,651 1,064 7,957 2,098
-------- -------- -------- --------
Loss from operations (2,651) (993) (7,956) (1,546)
Interest income 241 26 736 26
Expense from beneficial
conversion feature -- (757) -- (987)
-------- -------- -------- --------
Loss from continuing
operations before taxes (2,410) (1,724) (7,220) (2,507)
Provision from income taxes -- -- -- 4,532
-------- -------- -------- --------
Loss from continuing
operations (2,410) (1,724) (7,220) (7,039)
Loss from discontinued
operations -- -- -- (5,207)
-------- -------- -------- --------
Net loss $ (2,410) $ (1,724) $ (7,220) $(12,246)
======== ======== ======== ========
Basic and diluted loss
per share from
continuing operations $ (0.39) $ (0.34) $ (1.17) $ (1.44)
======== ======== ======== ========
Basic and diluted loss
per share from
discontinuing operations $ -- $ -- $ -- $ (1.07)
======== ======== ======== ========
Basic and diluted
net loss per share $ (0.39) $ (0.34) $ (1.17) $ (2.51)
======== ======== ======== ========
Weighted average shares
outstanding
basic and diluted 6,250 5,004 6,174 4,887
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CENTERSPAN COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2000 1999
------------ -----------
(Unaudited)
Cash and cash equivalents $10,320 $16,467
Restricted cash 2,385 2,282
Prepaid and other expenses 80 179
Other assets 1,486 429
------- -------
Total assets $14,271 $19,357
======= =======
Accounts payable $ 912 $ 1,055
Accrued liabilities 1,921 2,342
------- -------
Total liabilities 2,833 3,397
Shareholders' equity 11,438 15,960
------- -------
Total liabilities and
shareholders' equity $14,271 $19,357
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