Narrowstep, Inc. Reports Annual Results for Fiscal Year 2008

  
    
  
  
    
      Narrowstep(TM) Inc. (OTC Bulletin Board: NRWS), the TV on the Internet 
      Company, announced its financial results for the fiscal year ended 
      February 28, 2008. Narrowcasting revenue for fiscal year ended February 
      29, 2008 increased $1,190,000 or 25% over the prior year, however, total 
      revenue for the year declined by 3% compared to $6,008,835 fiscal year 
      ended February 28, 2007. The decrease in revenue was primarily driven by 
      the reduction in production services, a business segment which the 
      company exited during the fiscal year.
    
    
      The increase in narrowcasting revenue resulted primarily from the 
      addition of new customers as well as additional contracts with existing 
      customers. Comprehensive loss for year ended February 28, 2008 was 
      $14,654,656, or $0.16 per share, versus a comprehensive loss of 
      $6,987,339, or $0.15 per share, for the prior year. Contributing to the 
      loss was the substantial investment made in the technology platform and 
      upgrades to Narrowstep’s CDN.
    
    
      Louis Holder, Chief Technology Officer of Narrowstep commented on the 
      earnings release, stating, “As we told you 
      over the past year, we were making significant investment in our 
      platform to provide more tools and functionality. Our technology now 
      offers content owners a comprehensive set of tools to move, manage and 
      monetize their online video. Additionally, the sales effort was 
      re-focused on broadcasters, telcos and enterprise customers. As a 
      result, our sales team has executed agreements for a number of exciting 
      projects, (some which have already launched, some which will launch in 
      the coming weeks), including Fox International’s 
      Baby TV, Agnes Nixon’s All My Children (one of 
      America’s longest running and most popular 
      soap operas), Georgetown University, and La Liga de Futbol Profesional, 
      the top professional football league in Spain, and ICEX, the Spanish 
      Institute for Foreign Trade.”
    
    
      In the latter half of the 2008 fiscal year, the company released its 
      Player 2.7, which integrated Microsoft Silverlight technology. The 
      player, which takes advantage of the benefits of Windows Media 
      technology, and is cross-browser and cross-platform compatible, can also 
      be integrated with Atlas Ad Solutions, an enterprise ad-serving platform 
      for customers who wish to automate their ad campaigns, or leverage 
      third-party advertising networks.
    
    
      Narrowstep has previously announced that it entered into a definitive 
      Merger Agreement with Onstream Media Corp, an online service provider of 
      live and on-demand internet video, based in Pompano Beach, Florida. The 
      combination of Narrowstep’s automated IPTV 
      platform, Telvos™, and Onstream’s 
      Digital Media Services Platform (DMSP) is expected to result in a single 
      comprehensive platform with a unique ability to acquire, store, manage, 
      process, protect, monetize and deliver, digital broadcast quality video 
      to TV’s, computers, iPods, mobile phones, and 
      other devices.
    
    
      Narrowstep expects to host an investor call in the coming weeks as the 
      company works through the integration plan with Onstream Media. An 
      announcement will be made accordingly.
    
    
      
        
        
        
        
        
           
        
        
        
      
      
        
          NARROWSTEP INC. AND SUBSIDIARIES
        
        
        
        
        
        
        
      
      
        
          CONSOLIDATED STATEMENTS OF OPERATIONS
        
        
        
        
        
        
        
      
      
        
          AND COMPREHENSIVE LOSS
        
        
           
        
        
           
        
        
           
        
      
      
        
        
        
          Year ended
        
      
      
        
        
        
          February 29, 2008
        
        
        
        
          February 28, 2007
        
      
      
        
           
        
        
          $
        
        
           
        
        
          $
        
      
      
        
          Revenue
        
        
        
        
        
        
        
      
      
        
          Narrowcasting and other
        
        
          5,559,042
        
        
        
        
        
        
          4,369,117
        
        
        
      
      
        
          Production services
        
        
          286,691
        
        
           
        
        
           
        
        
          1,639,718
        
        
           
        
      
      
        
          Total revenue
        
        
          5,845,733
        
        
           
        
        
           
        
        
          6,008,835
        
        
           
        
      
      
        
          Costs and Expenses
        
        
        
        
        
        
        
      
      
        
          Operating
        
        
          5,679,898
        
        
        
        
        
        
          2,655,395
        
        
        
      
      
        
          Selling, general and administrative
        
        
          10,486,333
        
        
        
        
        
        
          8,206,223
        
        
        
      
      
        
          Research & development
        
        
          2,738,259
        
        
        
        
        
        
          1,088,723
        
        
        
      
      
        
          
            Impairment charge on long-lived assets
          
        
        
          861,858
        
        
           
        
        
           
        
        
          1,228,437
        
        
           
        
      
      
        
          Total operating expenses
        
        
          19,766,348
        
        
           
        
        
           
        
        
          13,178,778
        
        
           
        
      
      
        
          Operating Loss
        
        
          (13,920,615
        
        
          )
        
        
           
        
        
          (7,169,943
        
        
          )
        
      
      
        
          Interest income
        
        
          185,646
        
        
        
        
        
        
          132,042
        
        
        
      
      
        
          Interest expense
        
        
          (883,031
        
        
          )
        
        
        
        
          (13,228
        
        
          )
        
      
      
        
          Currency exchange income (loss)
        
        
          (22,942
        
        
          )
        
        
           
        
        
          (10,345
        
        
          )
        
      
      
        
          Net Loss
        
        
          (14,640,942
        
        
          )
        
        
           
        
        
          (7,061,474
        
        
          )
        
      
      
        
          Foreign currency translation adjustment
        
        
          (13,714
        
        
          )
        
        
           
        
        
          74,135
        
        
           
        
      
      
        
          Comprehensive Loss
        
        
          (14,654,656
        
        
          )
        
        
           
        
        
          (6,987,339
        
        
          )
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Net Loss per Common Share - Basic and Diluted
        
        
          (0.16
        
        
          )
        
        
        
        
          (0.16
        
        
          )
        
      
      
        
          
            Weighted-Average Number of Common Shares Outstanding, Basic and 
            Diluted
          
        
        
          92,399,098
        
        
        
        
        
        
          45,240,652
        
        
        
      
      
        
          See Notes to Consolidated Financial Statements in the 10KSB filing
        
      
    
    
      
        
        
        
           
        
      
      
        
          NARROWSTEP INC. AND SUBSIDIARIES
        
        
        
      
      
        
          CONSOLIDATED BALANCE SHEET
        
        
           
        
      
      
        
        
        
          February 29, 2008
        
      
      
        
           
        
        
          $
        
      
      
        
          Assets
        
        
        
      
      
        
          Current assets:
        
        
        
      
      
        
          Cash and cash equivalents
        
        
          4,170,850
        
        
        
      
      
        
          
            Accounts receivable, net of allowance for doubtful accounts of 
            $767,470
          
        
        
          923,850
        
        
        
      
      
        
          Prepaid expenses and other current assets
        
        
          411,110
        
        
           
        
      
      
        
          Total current assets
        
        
          5,505,810
        
        
           
        
      
      
        
          Property and equipment, net
        
        
          1,995,504
        
        
        
      
      
        
          Software development costs, net of accumulated amortization of 
          $559,119
        
        
          682,060
        
        
        
      
      
        
          Other assets
        
        
          281,790
        
        
           
        
      
      
        
          Total Assets
        
        
          8,465,164
        
        
           
        
      
      
        
        
        
           
        
      
      
        
          Liabilities and Stockholders' Equity
        
        
        
      
      
        
          Liabilities
        
        
        
      
      
        
          Current liabilities:
        
        
        
      
      
        
          Unearned revenue
        
        
          31,536
        
        
        
      
      
        
          Accounts payable
        
        
          735,776
        
        
        
      
      
        
          Net obligations under capital leases, current
        
        
          153,322
        
        
        
      
      
        
          Accrued expenses and other current liabilities
        
        
          814,214
        
        
           
        
      
      
        
          Total current liabilities
        
        
          1,734,848
        
        
        
      
      
        
          Net obligations under capital leases, long-term
        
        
          143,408
        
        
           
        
      
      
        
          Total Liabilities
        
        
          1,878,256
        
        
           
        
      
      
        
          Commitments and Contingencies
        
        
        
      
      
        
        
        
           
        
      
      
        
          Stockholders' Equity
        
        
        
      
      
        
          
            Common stock, $0.000001 par value 450,000,000 shares authorized, 
            137,561,227 issued and outstanding
          
        
        
          137
        
        
        
      
      
        
          Additional paid-in capital
        
        
          40,745,085
        
        
        
      
      
        
          Accumulated deficit
        
        
          
            (34,196,475
          
        
        
          
            )
          
        
      
      
        
          Accumulated other comprehensive income
        
        
          38,161
        
        
           
        
      
      
        
          Total Stockholders' Equity
        
        
          6,586,908
        
        
           
        
      
      
        
          Total Liabilities and Stockholders' Equity
        
        
          8,465,164
        
        
           
        
      
      
        
          See Notes to Consolidated Financial Statements in the 10KSB filing.
        
      
    
    
      About Narrowstep(TM) Inc.
    
    
      Narrowstep(TM) Inc. (OTC Bulletin Board: NRWS), the TV on the Internet 
      Company, is a leading global provider of broadband television services. 
      Narrowstep's proprietary technologies and customer-focused services 
      enable TV channels to be delivered over the Internet. 60+ companies 
      worldwide have chosen Narrowstep because it offers the most 
      television-like and true community building broadband experience. The 
      Company's telvOS(TM) (Television Operating System(TM)) and nBed(TM) 
      technologies enable the most comprehensive delivery of video to mobile, 
      wireless, Internet, broadband, video-over-IP and entirely new 
      IP-delivered broadcast services. For more information, visit www.narrowstep.com 
      or call 609-945-1760.
    
    
      Forward-looking Statement
    
    
      Certain statements in this news release constitute 'forward-looking 
      statements' within the meaning of the Private Securities Litigation 
      Reform Act of 1995. Such forward-looking statements involve known or 
      unknown risks, including those detailed in the Company's filings with 
      the Securities and Exchange Commission, uncertainties and other factors 
      which may cause the actual results, performance or achievements of the 
      Company, or industry results, to be materially different from any future 
      results, performance or achievements expressed or implied by such 
      forward-looking statements. Readers are cautioned not to place undue 
      reliance on these forward-looking statements, which speak only as of the 
      date hereof.