eSynch Reports First-Quarter Results; Company Beats Analysts' Estimates, Reports 39 Percent Reduction in Operating Losses.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 TUSTIN Tustin (tŭs`tĭn), residential city (1990 pop. 50,689), Orange co., S Calif., part of the greater Los Angeles area; founded 1868, inc. 1927. Plastics, furniture, computers, and electronic equipment are manufactured. , Calif.--(BUSINESS WIRE)--May 15, 2000 eSynch Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ESYN), a pioneer of integrated video tools and services for the streaming media See streaming audio, streaming video and digital media hub. and video-on-demand The ability to deliver a movie, sports event or other video program to a TV set whenever the customer requests it. Video-on-demand (VOD) typically refers to free and paid programs from the cable TV companies or the telephone companies that offer video over DSL lines. , Monday Monday: see week. announced financial results for its fiscal first quarter ended March 31, 2000. The company reported revenues of $196,548, compared with $408,850 for quarter ended March 31, 1999. Revenues for 1999 included $373,011 in software product sales of SoftKat Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. . In May 1999, the company sold SoftKat and sales were discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: . The costs of products sold for the quarter ended March 31, 2000, were $11,243, compared with $279,697 for the quarter ended March 31, 1999. The decrease was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of SoftKat sales. Revenue from the core electronic distribution services was up in excess of 140 percent, compared with the previous quarter. Operating performance for the quarter ended March 31, 2000, was $1,489,405, or $0.14 a share, compared with 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. of $620,462, or $0.09 a share for the quarter ended March 31, 1999. 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. excluding goodwill were approximately 30 percent lower for the three months ended March 31, 2000, compared with the previous two quarters. Operating losses greatly exceeded analysts' estimates (April 28, 2000 EquityNet Research Report). The increased operating loss was attributable to the acquisition and continuing operational expenses of Kissco and Oxford, and the expansion of the company's core business into streaming media and video-on-demand. Subsequent to the end of fiscal 1999, the company initiated a major restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan and is in the process of transforming its operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. from hard goods into electronic distribution. By restructuring, the company expects to create new opportunities, including new revenue sources, which management believes will establish greater value for its equity. By redirecting its resources to advanced technologies, the company anticipates building a portfolio of technology-based assets servicing the 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. , 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 and streaming media-on-demand market sectors. eSynch believes that its expertise in identifying technology opportunities and its strategic focus on the emerging online entertainment industry, will create both short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. growth potential for its equity investors and 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. value for its shareholders. "We expect to launch our new technology into beta by late 2000 and anticipate roll out of a commercially viable product in early 2001. eSynch's business philosophy is to leverage the combined talents of its computer engineers and programmers This is a list of programmers notable for their contributions to software, either as original author or architect, or for later additions. See also: Game programmer, List of computer scientists , its management team, and those of its affiliate companies, to create new and innovative products and services with the promise of market leadership," said Thomas Hemingway Brigadier General Thomas Hemingway is an American military lawyer who has served as a legal advisor to the Office of Military Commissions. Thomas Hemingway was a distinguished graduate of the Air Force ROTC program, was commissioned as a second lieutenant in November 1962 after , 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 eSynch. eSynch, founded in 1994, is a pioneer of integrated video tools and services for the streaming media market. To learn more about eSynch, visit www.esynch.com, www.esynchmedia.com, www.choicecinema.com and www.kissco.com. The company has headquarters at 15502 Mosher A mosher is a person who is crossed between goth/punk/skater they have long hair and listen to music like slipknot and metal music. Some people call them headbangers. At certain music shows they have something called a mosh pit, basically its a fight pit with loads of people bashing each other. Ave AVE Avenue AVE Average AVE Alta Velocidad Espanola (train between Madrid and Seville) AVE Alta Velocidad Española (Spanish: High Speed Train) AVE Audio Video Entertainment AVE Advertising Value Equivalent ., Tustin, Calif. 92780. Phone: 714/258-1900; Fax: 714/258-7177; e-mail: info@esynch.com. The EquityNet Research report is available at http://www.equitynet.net. EquityNet's mission is to provide the investing public with professional, independent, objective research on under-followed public companies. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Statements herein express management's beliefs and expectations regarding future performance and 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. 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 Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. ; 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, 1999, and subsequent Forms 10-QSB and 8-K. Actual results may differ materially from management's expectations.
ESYNCH CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, Dec. 31,
2000 1999
(UNAUDITED)
ASSETS
Current Assets
Cash $ 496,757 $ 1,319,971
Accounts receivable 87,099 19,153
Inventory 10,000 15,943
Other receivable 24,296 24,296
Prepaid expenses 14,350 21,814
Total Current Assets 632,502 1,401,177
Property and equipment, net 637,138 621,638
Goodwill 3,723,933 4,142,901
Other assets 148,652 156,948
Total Assets $ 5,142,225 $ 6,322,664
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 362,848 $ 443,164
Accrued liabilities 582,253 831,167
Accrued preacquisition liabilities 1,293,594 1,293,594
Notes payable - current portion 33,292 31,250
Preferred dividends payable 144,132 62,324
Total Current Liabilities 2,416,119 2,661,499
Notes Payable - Long-term 77,150 77,150
Stockholders' Equity
Preferred stock - $0.001 par
value; 400,000 shares authorized
Redeemable Preferred Stock - Series J,
$0.001 par value 275 shares authorized:
275 shares issued and outstanding;
liquidation preference - $2,750,000 2,625,000 2,418,612
Redeemable Preferred Stock - Series K,
$0.001 par value; 250 shares authorized;
212.5 and 157.5 shares issued and outstanding;
liquidation preference - $2,125,000
and $1,575,000 1,474,579 -
Common stock - $0.001 par value;
50 million shares authorized;
11,309,993 and 10,505,464 shares
issued and outstanding 11,310 10,506
Additional paid-in capital 17,651,566 17,044,450
Unearned compensation (354,507) (382,741)
Accumulated deficit (18,758,992) (15,506,812)
Total Stockholders' Equity 2,648,956 3,584,015
Total Liabilities and Stockholders'
Equity $ 5,142,225 $ 6,322,664
See the accompanying notes to the condensed consolidated financial
statements.
ESYNCH CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months
Ended March 31,
2000 1999
Revenues $ 196,548 $ 408,850
Costs of products sold $ 11,243 $ 279,697
Gross Profit $ 185,305 $ 129,153
Operating and Other Expenses
General and administrative 1,167,650 718,998
Stock based compensation 83,654
Amortization of goodwill 418,768
Interest 4,638 30,617
Total Operating and Other Expenses 1,674,710 749,615
Net Loss (1,489,405) (620,462)
Preferred Dividend 1,762,775 -
Loss Applicable to Common Shares $(3,252,180) $ (620,462)
Basic and Diluted Operating Loss
Per Common Share $ (0.14) $ (0.09)
Weighted average number of
common shares used in per-
share calculation 10,727,096 7,234,295
See the accompanying notes to the condensed consolidated financial
statements.
ESYNCH CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three Months
Ended March 31,
2000 1999
Cash Flows from Operating Activities
Net loss $(1,489,405) $ (620,462)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 67,803 9,225
Amortization of goodwill 418,768
Stock issued for services 33,000 649,425
Stock issued for settlement of lawsuit 97,000
Stock Based Compensation 83,654
Changes in operating assets and
liabilities net of the effects
of the acquisitions
Accounts receivable (67,946)
Inventory 5,943
Prepaid expenses 7,464 (290,497)
Other assets (37) (60,030)
Accounts payable (80,316) 16,220
Accrued liabilities (248,914) 76,320
Other liabilities 2,042 5,218
Net Cash Used in Operating Activities (1,170,944) (214,581)
Cash Flows From Investing Activities
Acquisition of property and equipment (74,770) (6,225)
Other receivable (50,000)
Net Cash Used in Investing Activities (74,770) (56,225)
Cash Flows From Financing Activities
Stock issued for cash 22,500
Proceeds from issuance of
Preferred Shares 400,000
Cash received on notes receivable
issued for common stock - 71,433
Proceeds from borrowing - 359,500
Payments on notes payable (150,000)
Net Cash Provided by Financing
Activities 422,500 280,933
Net Increase (Decrease) in Cash (823,214) 10,127
Cash at Beginning of Period 1,319,971 1,413
Cash at End of Period $ 496,757 $ 11,540
See the accompanying notes to the condensed consolidated financial
statements.
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