eSynch Corporation Announces Second Quarter and Six-Month Results; Key Milestones Reached in Digital Distribution Strategy.

TUSTIN, Calif.--(BUSINESS WIRE)--Sept. 13, 1999--

eSynch Corp. (OTC BB: ESYN), Monday reported a 436 percent increase in sales from continuing operations for the second quarter over the same quarter in the prior year, and a 38 percent increase in sales from continuing operations for the six-month period.

Results of Operations

For the second quarter and six months ended June 30, 1999, net sales were $252,882 and $661,732 respectively compared with $47,163 and $62,033 for the comparable periods of the prior year. The cost of products sold in the quarter and six months ended June 30, 1999 were $88,726 and $368,423 compared with $77,922 and $171,553 for the comparable periods in the prior year.

eSynch reported an operating loss for the second quarter and six months ended June 30, 1999 of $3,887,340 and $4,507,802 respectively, compared with an operating loss of $396,301 and $708,432 for the comparable periods in the prior year. The increased operating loss was due to the difficulties associated with the now discontinued Softkat Inc. operations and a one-time charge for employee acquisition and retention, related to the Kiss Software Corp. acquisition.

Total assets for the period ended June 30, 1999 were $5,054,992 compared with $46,669 for the same period ended in the prior year. The increase in total assets is attributable to goodwill of $4,654,693 related to the Kiss Software Corp. acquisition. Total stockholders' equity for the six months ended June 30, 1999 was $625,282, compared with a deficit of $617,268 in the prior year.

Summary of Operations

eSynch Corp. reached a number of key milestones thus far in 1999. On Feb. 26, 1999 the company completed the acquisition of Kiss Software Corp.; Kissco develops, publishes and sells software utilities to a substantial list of resellers such as CompUSA, Staples, Best Buy and Fry's Electronics. Kissco also has had considerable success with Internet commerce, international software sales, and direct-to-consumer software sales.

On April 13, 1999 eSynch Corp appointed Don Watters as the company's new president and chief operating officer. As president and COO, Watters has been instrumental in the development and marketing of new Internet products and services. Watters was also appointed to the eSynch board of directors.

On March 18, 1999, eSynch Corp. announced the opening of its new 30,000 square foot headquarters, providing for greater warehousing and distribution capabilities, as well as expansion of publishing, marketing and sales operations.

The company also announced the establishment of many significant business relationships, including several with industry giants including Ziff-Davis, Ingram Micro and MindSpring Enterprises. The company expects these relationships will immediately result in greater market penetration of its core software products and provide broader exposure of its proprietary digital distribution technology.

On June 28, 1999, the company signed a letter of agreement allowing its NetMonitor to be distributed on CD-ROMs to all Ziff-Davis (Nasdaq: ZD) publications including PC Magazine, PC Computing and PC Week. The NetMonitor, which debuted on ZDNet.com in early June, received an overwhelming response in its first 48-hour premiere by amassing nearly 60,000 downloads, instantly becoming the No. 1 download for the week on ZD Net. In just three weeks, NetMonitor surpassed all expectations and triggered nearly 2.5 million banner views, and more than 1 million visitors to www.kissco.com, one of the company's Web sites. The company fully expects to continue attracting industry leaders, such as Ziff-Davis, with its popular software products and believes its service solutions will allow further expansion into higher levels of Internet marketing.

On July 20, 1999, the company announced it had signed a licensing agreement with Ingram Micro (NYSE: IM), with headquarters in Santa Ana, Calif., the world's largest wholesale provider of technology products and services. Under the Electronic Data Transfer agreement, eSynch is entitled to offer Ingram Micro's entire product line through the eSynch e-commerce system.

eSynch was the latest of six designated e-commerce resellers selected to resell over 55,000 hardware and software products via the Internet. The company feels this partnership is a major step toward industry recognition of its technical facility and believes the Ingram Micro agreement represents a significant milestone achieved in its EDD (electronic digital distribution) strategy.

On Aug. 10, 1999, the company announced a partnership with MindSpring Enterprises Inc. (Nasdaq: MSPG), a leading national Internet service provider. Under terms of the agreement, customers who purchase eSynch utilities, including Modem Wizard 4.0, Undo & Recover Toolbox, and WebSnake, will receive the MindSpring software bundled with the utility. The software will allow customers to start a free 30-day trial subscription to MindSpring's Internet Service. eSynch predicts tremendous market exposure from this bundling program and believes the partnership represents the first of many important steps in its ES (electronic services) marketing strategy.

eSynch Corp. specializes in proprietary Internet utilities and electronic software distribution (ESD). The company has headquarters at 15502 Mosher Drive, Tustin, Calif. 92780. Phone: [phone], Fax: [phone], Web sites: http://www.esynch.com, http://www.kissco.com.

eSynch Corp., founded in 1994, is a developer of propriety software technology for Electronic Software Distribution (ESD). eSynch is a pioneer in this area and uses advanced technology to enable digital content to be downloaded quickly and securely over the Internet. eSynch utilizes its highly developed ESD system as a powerful software delivery resource for super VARs, resellers and channel distributors. For more information, visit their Web site at www.esynch.com.

Safe Harbor Statement

Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, the ability to negotiate outstanding prior debts of acquired companies; properly identify acquisition partners; adequately perform due diligence; manage and integrate acquired businesses; react to quarterly fluctuations in results; raise working capital and secure other financing; respond to competition and rapidly changing technology; deal with market and stock price fluctuations; and other risks. These risks are and will be detailed, from time to time, in eSynch's Securities and Exchange Commission filings, including Form 10-KSB for the year ended Dec. 31, 1998 and subsequent Forms 10-QSB and 8-K. Actual results may differ materially from management's expectations.