BOCA RATON, Fla.--April 9, 2001-- MerchantOnline.com, Inc. (OTCBB:MRTO), a provider of secure transaction products for credit cards and debit cards, announced today that it filed its Quarterly Report on Form 10-QSB and its financial results.
For the quarter ended January 31, 2001, MerchantOnline reported a net loss of $5,706,545 on revenues of $88,979 compared to net loss of $1,099,566 on revenues of $21,388 for the quarter ended January 31, 2000. Total costs and expenses were $4,664,777, including $3,106,367 of amortization of intangibles, $663,775 of general and administrative and $884,920 of salaries and wages. In addition, the Company recorded a $1,895,401 charge due to the equity in net loss of its 90.1% owned subsidiary, Innovonics, Inc. Innovonics is not consolidated for financial reporting purposes due to the existence of certain minority shareholder rights held by Dereck Clark, the president of Innovonics.
Tarek Kirschen, Chairman, commented "As you can see from the size and type of expenses recorded in our 10-QSB, as well as our 10-KSB, the Company is aggressively trying to clean-up its financial statements and eliminate future charges against revenue. Specifically, we have decided to write-off all the intangibles (i.e., goodwill, etc.) from our past acquisitions since our stock is already depressed and the overall market is extremely depressed for tech stocks. While this decision will make current periods look worse, this will enable the Company to report better results in the future by reducing the charges/expenses as revenues begin to materialize in the third and fourth quarters of fiscal year 2001."
Mr. Kirschen went on to state, "in addition to writing off our intangibles and taking other one-time charges now, we have completely streamlined the Company. We have reduced our staff and overhead considerably by rolling back salaries and redirecting our focus to the key revenue areas instead of going in multiple directions. This refocusing has reduced our monthly cash burn rate by over 50%. Due to these changes and reductions, the investor group that has already funded the Company over $3.5 million during the past year, has agreed to another $3 million commitment over the next 12 months. These factors together will help ensure our future success."
Mr. Kirschen also stated, "while many dot coms and internet companies have had to make significant reductions as well, many have gone out of business, even after raising hundreds of millions in IPOs. Our Company has only used approximately $7.5 million in cash since inception and, with our funding commitment and significant reductions, we have taken great steps to help ensure that the Company is even more viable for the future. We are still committed to our brick and mortar approach and strongly believe that our patented technology is one of the most innovative and most secure payment methods on the market today." Please review the 10-QSB filing for additional information about MerchantOnline.
Founded in December 1997, MerchantOnline provides a secure transaction network that enables businesses and consumers to use one payment system for both their real world and virtual world needs, utilizing credit cards, ATM/debit cards and other payment programs.
Except for historical matters, the matters in theis press release are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect assumptions and involve risks and uncertainties which might affect the Company`s business and prospects and cause actual results to differ materially from these forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including those risk and uncertainties detailed in the Company`s filings with the Securities and Exchange Commission.
Excel Financial Services Inc., Boca Raton
Investor Relations Contact:
Kevin Spencer, 888/369-9976