Narrowstep Announces Year-End Results

Narrowstep Announces Year-End Results

LONDON and NEW YORK, May 31 /PRNewswire-FirstCall/ -- Narrowstep(TM) Inc. (BULLETIN BOARD: NRWS) , the TV on the Internet Company, announced its financial results for the fiscal year ended February 28, 2007. Revenue for the year was a record $6,008,835, an increase of 122% compared to $2,706,262 for fiscal year ended February 28, 2006. The increase in revenue was primarily driven by an increase in customers.

Net loss for year ended February 28, 2007 was $7,061,474, or a loss of $0.16 per common share, versus a net loss of $4,289,777, or a loss of $0.13 per common share, for the prior year.

David C. McCourt, Chairman and interim CEO of Narrowstep, commented on the earnings release, saying, "This was a great year for Narrowstep. Although we spent more time than expected cleaning up old issues, we still grew revenue by 122%, and took out over 30% of non-sales SG&A headcount and increased the sales force by over 85%. Going forward, Narrowstep should maintain its position as the premier choice for a company looking to monetize its content online."

Narrowstep expects to attain profitability by streamlining existing costs, growing revenue and investing in technology. Management believes that these efforts will allow the company to continue to provide what they believe is the best opportunity for customers to monetize their content, while offering a superior end-viewer experience.

Commenting on the growth of the business, David McCourt said, "We are continuing to build a world-class team experienced in scaling operations. We will continue to execute on our vision to provide the most flexible service offering to content owners for monetizing their assets."

Narrowstep management will host a conference call to discuss the results on Friday, June 1, 2007 at 11:00AM EDT, and it will be broadcast live over the Internet. Those interested in listening to the live webcast may do so by going to the Company's website at http://www.narrowstep.com/ or to http://www.vcall.com/.

Web participants are encouraged to go to either website at least 15 minutes prior to the start of the call to register, download, and install any necessary audio software. The audio and online archives will be available shortly after the conclusion of the call and continue to be available for seven days.

NARROWSTEP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
Year Ended
February 28,
2007 2006
$ $
Revenue
Narrowcasting and other 4,369,117 1,499,633
Production services 1,639,718 1,206,629

Total revenue 6,008,835 2,706,262

Costs and Expenses
Operating 2,655,395 1,804,879
Selling, general and administrative 8,206,223 4,779,764
Research & development 1,088,723 390,606
Impairment charge on long-lived assets 1,228,437 -

Total operating expenses 13,178,778 6,975,249

Operating Loss (7,169,943) (4,268,987)
Other income (expense), net 118,814 (14,641)
Currency exchange income (loss) (10,345) (6,149)

Net Loss (7,061,474) (4,289,777)

Foreign currency translation adjustment 74,135 (36,669)

Comprehensive Loss (6,987,339) (4,326,446)

Net Loss per Common Share
- Basic and Diluted (0.16) (0.13)
Weighted-Average Number of Shares
Outstanding, Basic and Diluted 45,240,652 32,190,594

See Notes to Consolidated Financial Statements.

NARROWSTEP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
February 28,
2007
$
Assets
Current assets:
Cash and cash equivalents 466,870
Accounts receivable, net of allowance
for doubtful accounts of $940,534 1,403,779
Prepaid expenses and other current assets 332,192
Total current assets 2,202,841
Property and equipment, net 1,234,557
Software development costs, net 149,080
Total Assets 3,586,478

Liabilities and Stockholders' Equity
Liabilities
Current liabilities:
Unearned revenue 384,295
Accounts payable 960,580
Net obligations under capital leases, current 88,110
Accrued expenses and other current liabilities 977,948
Total current liabilities 2,410,933
Net obligations under capital leases - long-term 135,470
Total Liabilities 2,546,403

Commitments and Contingencies
Stockholders' Equity
Common stock, $0.000001 par value 450,000,000 shares
authorized, 45,348,974 issued and outstanding 45
Additional paid-in capital 20,543,688
Accumulated deficit (19,555,533)
Accumulated other comprehensive income (loss) 51,875

Total Stockholders' Equity 1,040,075

Total Liabilities and Stockholders' Equity 3,586,478

See Notes to Consolidated Financial Statements.

About Narrowstep(TM) Inc.

Narrowstep(TM) Inc. (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. 100+ 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 http://www.narrowstep.com/ or call 212-404-1400.

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.

First Call Analyst:
FCMN Contact: mmarich@narrowstep.com

Source: Narrowstep(TM) Inc.

CONTACT: Investors, Jesse Deal of Allen & Caron, +1-212-691-8087,
jesse@allencaron.com

Web site:

http://www.narrowstep.com/

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