VCampus Announces Fourth Quarter and 2004 Financial Results.RESTON Reston, uninc. city (1990 pop. 48,556), Fairfax co., N Va., a planned community established in 1961. A suburb of Washington, D.C., Reston is organized in a series of residential villages and commercial areas. , Va. -- Demand Increases for Select Partner(TM) Information Security Course Offerings VCampus VCampus Corporation, once known as University Online (UOL), specializes in providing certification offerings for non-profit, government and profit-based certifications. As University Online, the company was involved in the historically significant PLATO project. Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :VCMP VCMP Vice City Multi-Player (gaming, Grand Theft Auto Online Mod) VCMP Voice Call Management Protocol ) today announced its financial results for the fourth quarter and the fiscal year ended December December: see month. 31, 2004. The company reported revenue of $987,228 for the fourth quarter of 2004, compared to $1,374,776 in the same period a year earlier and $917,635 in the third quarter of 2004. This amount includes online tuition For tuition fees in the United Kingdom, see . Tuition means instruction, teaching or a fee charged for educational instruction especially at a formal institution of learning or by a private tutor usually in the form of one-to-one tuition. revenue of $852,389, compared to $1,317,148 for the 2003 fourth quarter and $839,968 in the third quarter of 2004. The company reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the fourth quarter of 2004 of $1,211,266, versus $732,350 in the year earlier period and $1,321,648 in the third quarter of 2004. During the fourth quarter, the company recorded non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of approximately $485,000, which consisted of amortization of debt discount and deferred debt offering costs related to the issuance of $3,649,625 (current principal amount $2,137,500) of convertible promissory notes promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. in March 2004. Including this non-cash charge, VCampus reported a net loss for the fourth quarter of $1,723,863, or $0.22 per share, compared to a net loss of $1,267,711, or $0.25 per share, for the 2003 fourth quarter and $1,768,487, or $0.24 per share, for the third quarter of 2004. For the year ended December 31, 2004, the company reported revenue of $4,863,859 compared to $6,066,035 in 2003. This 2004 amount includes online tuition revenue of $4,497,513, compared to $5,508,154 in 2003. The company reported an operating loss for 2004 of $4,181,337, compared to $3,353,517 in 2003. Including approximately $2.4 million of non-cash charges in connection with the March 2004 financing, VCampus reported a net loss of $6,579,416 for 2004, compared to a net loss of $3,259,023 for 2003. VCampus reported a net loss to common stockholders of $6,579,416, or $0.97 per share, for 2004, compared to $6,185,877 (which included approximately $2.9 million of non-cash charges for deemed dividends paid to preferred stockholders), or $1.81 per share, for 2003. The company ended the year with approximately $2.6 million in cash and cash equivalents. Fourth quarter enrollment in the previously released security courses offered for preparation for the (ISC (1) (Internet Systems Consortium, Redwood City, CA www.isc.org) An organization founded by Paul Vixie, Carl Malamud and Rick Adams in 1994 and later sponsored by UUNET and other Internet companies. )2 CISSP (Certified Information Systems Security Professional) The award for successful completion of an examination in computer security administered by the International Information Systems Security Certification Consortium (ISC)2. (R) and SSCP (1) (System Services Control Point) A controlling program in an SNA domain. It resides in the host and is a component within VTAM. See also SCCP. (R) exams increased more than 7.4% compared to the third quarter of 2004. In addition, during the fourth quarter, the company released the following Select Partner(TM) courses: the PMP See point-to-multipoint and portable media player. PMP - Portable Media Player (R) Exam Certification Review, AFP (1) (AppleTalk Filing Protocol) The file sharing protocol used in an AppleTalk network. In order for non-Apple networks to access data in an AppleShare server, their protocols must translate into the AFP language. See file sharing protocol. Technology Innovations to Enhance Cash Management, and the CISSP(R) Online CBK CBK Common Body of Knowledge CBK Commerzbank AG CBK Central Bank of Kuwait CBK Commercial Bank of Kuwait CBK Christiania Bank og Kreditkasse CBK Campus Beiaard Kring CBK Cannabis-Bundeskonferenz (Germany) Review. Nat Kannan, 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. of VCampus, said, "We started 2004 with four objectives. First was to get VCampus positioned in terms of financial, technical and management resources to implement the new Select Partner Strategy; the second was to gradually transition away from some of the commoditized segments of hosting virtual campuses; the third was to sign six to eight exclusive partnerships with institutions that provide valuable must-have credentials CREDENTIALS, international law. The instruments which authorize and establish a public minister in his character with the state or prince to whom they are addressed. If the state or prince receive the minister, he can be received only in the quality attributed to him in his credentials. to working professionals; and finally to publish course content and start to monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. it. The VCampus team has delivered on all four counts. The business foundation laid down during 2004 has already created momentum in revenue growth. Investors should start to see positive results from these efforts in 2005 and beyond." "Many of the initiatives we pursued resulted in growth in our Select Partner revenues," added Mr. Kannan. "Our Select Partner revenues started from a relatively small base of $12,000 in 2003 and increased to $204,000 in 2004 largely on the strength of the two (ISC)2 courses. With the addition of four new courses we expect this trend to continue. We also tripled the number of Select Partners from three in 2003 to ten in 2004, which should position us well for the balance of 2005." "The fourth quarter showed stable revenue and increased gross margins from our legacy accounts. In addition, we continued to see traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in Select Partner course revenues," said Christopher Nelson, Chief Financial Officer of VCampus. "With additional releases of Select Partner courses, we expect this trend to continue. We have also pursued initiatives to maximize operating efficiencies. We have increased outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. of both software and courseware Educational software. See CBT and OpenCourseWare. (application) courseware - Programs and data used in Computer-Based Training. development which has helped reduce our product development costs. Finally, with our strong cash position, I believe we have sufficient resources to continue execution of our Select Partner strategy throughout 2005." Conference Call and Webcast Mr. Kannan and Mr. Nelson will hold a conference call to discuss the fourth quarter and 2004 financial results and business outlook. The call is scheduled for 4:30 pm Eastern Time today. Interested parties may participate by dialing (800) 638-5439. International callers may dial (617) 614-3945. Please enter the passcode 21806685. This call is also being webcast by Thomson/CCBN and can be accessed at the VCampus web site at www.vcampus.com. The webcast is also being distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can access the call via Thomson's password-protected event management site, StreetEvents (www.streetevents.com). A replay of the call will be available via telephone from approximately 6:30 pm. ET on March 31, 2005 until 6:30 pm. ET on April 14, 2005. To listen to the replay, participants in 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 should dial (888) 286-8010, and international participants should dial (617) 801-6888. The conference ID for the replay is 88432561. About VCampus(R) VCampus Corporation (NASDAQ:VCMP), a provider of end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. e-Learning (Electronic-LEARNING) An umbrella term for providing computer instruction (courseware) online over the public Internet, private distance learning networks or inhouse via an intranet. See CBT. services, helps organizations that offer professional certifications Professional certification, trade certification, or professional designation, often called simply certification or qualification, is a designation earned by a person to assure that he/she is qualified to perform a job or task. and credentials unlock the value of their traditional branded course content. Through its innovative Select Partner(TM) Program, VCampus repurposes value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: training content for online delivery to enhance and support professional development programs. The Select Partner Program provides custom course development, publishing, hosting, e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. , reporting, account support and marketing services. With over a decade of e-Learning experience, VCampus has delivered more than 2.9 million courses to more than 920,000 desktops/users in professional credentialing Credentialing is the administrative process for validating the qualifications of licensed professionals, organizational members or organizations, and assessing their background and legitimacy. and certification organizations, associations, non-profits, corporations, government agencies and higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. institutions. VCampus distributes a courseware library of more than 5,000 web-based courses. VCampus Corporation is headquartered in Reston, VA. For more information, call 800-915-9298, or visit the VCampus Web site at www.vcampus.com. "VCampus" is a registered trademark and "Select Partner" is a trademark of VCampus Corporation. "PMP" is a certification mark A certification mark on a commercial product indicates five things:
This press release contains 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. within the meaning of the federal Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Statements contained herein that are not statements of historical fact are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Without limiting the foregoing, references to future growth or expansion or scheduled product launch dates are forward-looking, and words such as "anticipates," "believes," "could," "estimate," "expect," "intend," "may," "might," "should," "will," and "would" and other forms of these words or similar words are intended to identify forward-looking information. You should read statements that contain these words carefully because they discuss our future expectations contain projections of our future results of operations or of our financial position or state other forward-looking information. There might be events in the future that we are not able to predict accurately or control, and any forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include: (1) our history of losses, projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. of future losses and our need to raise additional capital; (2) market acceptance of our new and future products; (3) uncertainties regarding the successful implementation of our Select Partner Program or the timely release of products; (4) growing competition; and (5) our ability to maintain and manage our growth. For additional information regarding risk factors that could affect our future results, please refer to the discussions of "Risk and Uncertainties" in our Annual Report on 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 the year ended December 31, 2004, and other SEC filings.
VCampus Corporation
Consolidated Statements of Operations
Three Months Ended
December 31, September 30, December 31,
------------ ------------- ------------
2003 2004 2004
------------ ------------- ------------
(Unaudited) (Unaudited) (Unaudited)
Revenues:
Online tuition revenues $ 1,317,148 $ 839,968 $ 852,389
Development and other
revenues 36,126 77,667 134,839
Other service revenues 21,502 -- --
------------ ------------- ------------
Net revenues 1,374,776 917,635 987,228
Costs and expenses:
Cost of revenues 308,876 304,900 325,186
Sales and marketing 446,777 474,774 471,234
Product development and
operations 577,628 692,851 647,270
General and administrative 577,028 404,731 384,344
Depreciation and
amortization 166,325 316,529 323,961
Reorganization & other non
recurring costs -- -- --
Stock-based compensation 30,492 45,498 46,499
------------ ------------- ------------
Total costs and expenses 2,107,126 2,239,283 2,198,494
------------ ------------- ------------
Loss from operations (732,350) (1,321,648) (1,211,266)
Other income -- -- 9,311
Interest expense and
amortization of debt discount
and debt offering costs, net (27,539) (446,839) (521,908)
------------ ------------- ------------
Net loss $ (759,889) $ (1,768,487) $(1,723,863)
Dividends to preferred
stockholders (507,822) -- --
------------ ------------- ------------
Net loss attributable to
common stockholders $(1,267,711) $ (1,768,487) $(1,723,863)
============ ============= ============
Net loss per share to common
stockholders, basic and
diluted $ (0.25) $ (0.24) $ (0.22)
============ ============= ============
Weighted average number of
shares outstanding, basic and
diluted 5,088,676 7,369,419 7,748,578
============ ============= ============
Twelve Months Ended
December 31,
--------------------------
2003 2004
------------ -------------
Revenues:
Online tuition revenues $ 5,508,154 $ 4,497,513
Development and other
revenues 448,082 318,456
Other service revenues 109,799 47,890
------------ -------------
Net revenues 6,066,035 4,863,859
Costs and expenses:
Cost of revenues 1,718,340 1,356,699
Sales and marketing 2,137,791 1,895,340
Product development and
operations 2,474,856 2,725,155
General and administrative 1,909,814 1,686,940
Depreciation and
amortization 879,966 1,227,089
Reorganization & other non
recurring costs 172,729 --
Stock-based compensation 126,056 153,973
------------ -------------
Total costs and expenses 9,419,552 9,045,196
------------ -------------
Loss from operations (3,353,517) (4,181,337)
Other income 207,138 183,210
Interest expense and
amortization of debt discount
and debt offering costs, net (112,644) (2,581,289)
------------ -------------
Net loss $(3,259,023) $ (6,579,416)
Dividends to preferred
stockholders (2,926,854) --
------------ -------------
Net loss attributable to
common stockholders $(6,185,877) $ (6,579,416)
============ =============
Net loss per share to common
stockholders, basic and
diluted $ (1.81) $ (0.97)
============ =============
Weighted average number of
shares outstanding, basic and
diluted 3,426,056 6,792,321
============ =============
VCampus Corporation
Consolidated Balance Sheets
December 31, December 31,
------------ ------------
Assets 2003 2004
------------ ------------
Current assets:
Cash and cash equivalents $ 534,984 $ 2,632,504
Accounts receivable, net 290,530 283,101
Loans receivable from related parties 83,745 49,783
Loans receivable -- current 40,526 --
Prepaid expenses and other current assets 691,781 665,663
------------ ------------
Total current assets 1,641,566 3,631,051
Property and equipment, net 509,662 523,662
Capitalized software costs and courseware
development costs, net 1,653,295 1,826,745
Loans receivable -- less current portion 33,726 --
Other assets 127,598 418,684
Other intangible assets, net 569,494 390,502
Goodwill, net 328,317 328,317
------------ ------------
Total assets $ 4,863,658 $ 7,118,961
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,222,987 $ 575,183
Accrued expenses 369,763 318,478
Notes payable -- current portion 225,000 66,207
Deferred revenues 1,010,563 851,118
------------ ------------
Total current liabilities 2,828,313 1,810,986
Long-term liabilities
Notes payable -- less discount and
current portion -- 463,446
------------ ------------
Total liabilities 2,828,313 2,274,432
Commitments and contingencies -- --
Stockholders' equity:
Common Stock 51,670 84,611
Additional paid-in capital 92,376,579 101,732,238
Accumulated deficit (90,392,904) (96,972,320)
------------ ------------
Total stockholders' equity 2,035,345 4,844,529
------------ ------------
Total liabilities and stockholders'
equity $ 4,863,658 $ 7,118,961
============ ============
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