HyperSpace(R) Communications Reports 2004 Results

HyperSpace(R) Communications Reports 2004 Results 


DENVER, April 5  /PRNewswire-FirstCall/ -- HyperSpace(R) Communications, Inc.
(AMEX:HCO), a provider of application and network acceleration software, today
reported financial results for its fourth quarter and year ended December 31,
2004.

In the quarter ending December 31, 2004, HyperSpace reported a net loss
attributable to common shareholders of $996,000, or $0.27 per basic and diluted
share, on revenue of $132,000 for the quarter versus a net loss attributable to
common shareholders of $900,000, or $0.65 per basic and diluted share, on
revenue of $228,000 in the same period of the prior year.

Mark Endry, president and CEO, said, "In 2004 HyperSpace underwent a major
transformation in order to better position the Company to capitalize on long
term growth opportunities.  This transformation included a lengthy IPO process
that diverted resources and consumed management's attention for much of the
year and detracted from sales efforts.  The IPO was critical to our future, and
with its successful completion in the fourth quarter the Company now has the
capital resources it needs to pursue its organic and M&A growth objectives."

"We are refocusing our efforts on new business development to partner and OEM
channels," Endry added.  "On the M&A front, we are aggressively pursuing our
proposed acquisition of MPC".

  Q4 highlights

   *  Continued enhancement and improvement of HyperWeb(TM) and
      HyperTunnel(TM), the Company's acceleration solutions that speed up
      delivery of information over Internet, wireless, broadband, private
      and dial-up networks.  These enhancements have strengthened the
      performance and reliability of the products while making them more
      accessible to customers using older Windows operating systems.

   *  Entry into the emerging satellite broadband access market through a
      reseller agreement with industry leader iDirect Technologies, Inc.
      iDirect is rolling out HyperWeb to end user customers who are seeking
      to accelerate their downloads.

  About HyperSpace Communications


HyperSpace software supports anywhere, anytime access to business-critical data
world wide, with real-time, secure application acceleration over existing
networks.  HyperSpace offers secure, accelerated access right to the desktop.
Customers include ABN AMRO, Deutsche Bank, Bridgestone-Firestone Europe, UBS
PaineWebber, Dex Media, Hunter Douglas, Nokia, Telecom Italia, and Amway along
with many others.  For more information, visit HyperSpace online at
http://www.ehyperspace.com/.

Cautionary Statement

Certain statements in this press release are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934.  These statements involve a number of
risks, uncertainties and other factors that could cause actual results,
performance or achievements of HyperSpace Communications to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements.  Other factors, which could
materially affect such forward-looking statements, can be found in HyperSpace
Communications' filings with the Securities and Exchange Commission, including
risk factors at http://www.sec.gov/.  Investors, potential investors and other
readers are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue reliance on
such forward-looking statements.  The forward-looking statements made herein
are only made as of the date of this press release and HyperSpace
Communications undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.

  Statement of Operations

                          Three Months Ended        Twelve Months Ended
                             December 31,               December 31,
                              (Unaudited)                    (*)
                           2004         2003         2004         2003
  Revenues
    License fees         $77,448     $167,289     $237,109     $787,541
    Service and other     54,797       61,132      220,741      195,678
  Total revenues         132,245      228,421      457,850      983,219
  Cost of revenue
    Amortization of
     capitalized
     software             30,500      244,635      121,965      405,194
    Customer support      43,714       40,524      163,992      268,012
  Total cost of
   revenues               74,214      285,159      285,957      673,206
  Gross Profit            58,031      (56,738)     171,893      310,013
  Operating expenses
    Research and
     development         166,810       23,438      617,949      150,831
    Impairment of
     intangibles          31,530       85,296       31,530       85,296
    Sales and
     marketing           278,466      104,366      786,045      645,589
    General and
     administrative      559,457      465,956    1,470,375      923,087
  Total operating
   expenses            1,036,263      679,056    2,905,899    1,804,803
  Loss from
   operations           (978,232)    (735,794)  (2,734,006)  (1,494,790)
  Other (income)/
   expense
    Interest
     expense, net         19,905      149,680      822,748      345,395
    Other (income)
     expense              (2,136)      (1,200)       5,099       (1,276)
    Gain on
     settlement               --           --     (440,999)          --
  Total other
   (income)/expense       17,769      148,480      386,848      344,119
  Net loss             $(996,001)   $(884,274) $(3,120,854) $(1,838,909)
    Preferred
     dividends               $--      $15,503      $72,489      $15,503
  Net loss
   attributable to
   common
   shareholders        $(996,001)   $(899,777) $(3,193,343) $(1,854,412)
  Basic and
   diluted loss
   per common share        $(.27)       $(.65)      $(1.59)      $(1.42)
  Basic and
   diluted weighted
   average common
   shares
   outstanding         3,732,059    1,378,541    2,014,666    1,300,721

  * Derived from audited consolidated financial statements



  Balance Sheet

                                             December 31,   December 31,
                                                 2004           2003
  Assets
  Current Assets
    Cash and cash equivalents                $5,875,481        $27,429
    Accounts receivable                         158,998        291,913
    Other current assets                        106,182         13,361
  Total current assets                        6,140,661        332,703
  Non-current assets
    Property and equipment, net                 110,782        127,806
    Capitalized software, net of
     accumulated amortization of $593,121
     and 471,157                                298,570        420,536
    Intangible asset, at cost                        --         31,530
  Total non-current assets                      409,352        579,872
  Total assets                               $6,550,013       $912,575

  Liabilities and Shareholders' Equity
   (Deficit)
  Current liabilities
    Accounts payable                           $230,484       $220,993
    Accrued compensation                         83,522        103,611
    Deferred revenue                            122,016        152,089
    Current portion of notes payable and
     debt                                       721,965      1,255,842
  Total current liabilities                   1,157,987      1,732,535
  Long-term liabilities
    Long-term portion of notes payable          425,000             --
  Total long-term liabilities                   425,000             --
  Total liabilities                           1,582,987      1,732,535
  Shareholders' equity (deficit)
    Series A Convertible Preferred Stock             --        926,250
    Common stock                             12,087,134      2,180,555
    Accumulated deficit                      (7,120,108)    (3,926,765)
  Total stockholders' equity (deficit)        4,967,026       (819,960)
  Total liabilities and equity               $6,550,013       $912,575


DATASOURCE: HyperSpace Communications, Inc.



CONTACT:  John Yeros, Chairman, [phone], or investor relations,

Barbara Coy, [phone], , both of HyperSpace

Communications, Inc.



Web site:  http://www.ehyperspace.com/ 

Copyright