Investor Contact: Media Contact:
Robert Pons Neil Vineberg
Chief Executive Officer Vineberg Communications
SMARTSERV SmartServ Online, Inc. 631-288-6933
[LOGO] 610-397-0689, Ext. 202 Neil@VinebergCommunications.com
rpons@smartserv.com
www.smartserv.com
SmartServ Reports 2003 Results
PLYMOUTH MEETING, Pa., April 14 /PRNewswire-FirstCall/ - SmartServ Online, Inc.
(OTC: SSRV - News) today announced results of operations for the year ended
December 31, 2003. Revenues were $709,000 for the year ended December 31, 2003,
compared to $196,000 for the previous year. The net loss for 2003 was
$17,538,000, compared to $8,037,000 in 2002. The basic and diluted loss per
share for the year ended December 31, 2003 was $8.46 and $6.01 for the
comparable period in 2002. Excluding charges of $9,897,000 and $1,548,000,
respectively, as to financing costs and impairment of capital assets and
capitalized software, the net loss for 2003 was $6,093,000.
Revenues for the fourth quarter 2003 totaled $95,000 compared to $49,000 in
2002. Net loss was $3,172,000 for the fourth quarter, as compared to $3,204,000
for the same period in 2002. The basic and diluted loss per share was $1.40 for
the quarter ending December 31, 2003 and $1.71 for the comparable period in
2002.
"We believe the recent private placement completed in February should
provide us with the resources necessary to support the expansion of revenues
from our line of ringtones, images and games, as well as our dynamic mobile
content," stated Robert Pons, SmartServ CEO and President. Mr. Pons went on to
state, "We are continuing to make progress to enhance our operating efficiencies
while focusing our financial resources on expanding our revenues."
SmartServ also announced that its stock purchase agreement with Mobile Airwaves,
Inc. had expired, and that SmartServ was not pursuing the acquisition of Mobile
Airwaves, Inc.
About SmartServ
SmartServ (OTC: SSRV - News) has developed a complete suite of wireless
applications and the technologies to bring them to market, spanning the entire
mobile phone industry from the consumer to the enterprise. SmartServ's customer
and distribution relationships include wireless carriers and strategic partners.
SmartServ applications can be delivered via Java(TM) 2 Platform, Micro Edition
(J2ME(TM)), QUALCOMM's Binary Runtime Environment for Wireless(TM) (BREW(TM))
solution, WAP and SMS, as well as RIM Blackberry and Pocket PC devices. NReach,
a SmartServ company, provides the retail, marketing and entertainment industries
with a comprehensive technology platform to access the growing market for
premium content (ringtones, graphics and games) for mobile phones. For more
information, please visit www.smartserv.com.
Forward-Looking Statements
This news release may contain forward-looking statements that involve risks and
uncertainties. Forward-looking statements in this document and those made from
time-to-time by the Company are made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward- looking statements
concerning future plans or results are necessarily only estimates and actual
results could differ materially from expectations. Certain factors that could
cause or contribute to such differences include, and are not limited to,
potential fluctuations in quarterly results, the size and timing of awards and
performances on contracts, dependence on wireless and/or internet networks of
third-parties for certain products and services, lengthy sales and
implementation cycles, market acceptance of new or enhanced products and
services, proprietary technology and changing technology, competitive
conditions, system performance, the risk that the Company's current and future
products and services may contain errors or be affected by technical problems
that would be difficult and costly to detect and correct, dependence on key
personnel and general economic and political conditions and other factors
affecting spending by customers, and other risks described from time to time in
the Company's filings with the Securities and Exchange Commission, including but
not limited to, the "Risk Factors" described under the heading "Certain Factors
That May Affect Future Results" in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 2003.
SmartServ Online, Inc.
Condensed Consolidated Balance Sheets
December 31, December 31,
2003 2002
ASSETS
Current assets
Cash and cash equivalents $139,178 $154,759
Accounts receivable 103,230 55,907
Accrued interest receivable 47,004 50,658
Prepaid compensation 133,127 117,500
Prepaid expenses 86,798 164,258
Deferred financing costs 322,192 --
-------- --------
Total current assets 831,529 543,082
Property and equipment, net -- 1,573,978
Other assets:
Capitalized software development costs,
net of accumulated amortization of
$1,097,148, and $208,681 at December 31,
2003 and 2002 -- 888,467
Security deposits 5,156 238,690
Note receivable from officer,
net of an allowance of $664,640 at
December 31, 2003 and 2002 -- --
Prepaid compensation -- 107,708
-------- --------
5,156 1,234,865
-------- --------
Total Assets $836,685 $3,351,925
======== ==========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Equity
Current liabilities
Accounts payable $1,702,768 $1,307,342
Accrued liabilities 928,393 476,346
Accrued salaries 78,133 295,437
Note payable -- 500,000
Accrued interest payable 218,848 --
---------- ----------
Total current liabilities 2,928,142 2,579,125
Deferred revenues 37,500 193,294
Deferred lease costs -- 242,300
Accounts payable -- non current -- 163,907
Note payable 3,340,430 --
Commitments and Contingencies -- --
Total liabilities 6,306,072 3,178,626
Total stockholders' (deficit) equity (5,469,387) 173,299
---------- ----------
Total Liabilities and Stockholders' (Deficit)
Equity $836,685 $3,351,925
SmartServ Online, Inc.
Consolidated Statements of Operations
Year Ended December 31 Three Months Ended
December 31
------------------------- -----------------------
2003 2002 2003 2002
------------ ----------- ----------- ----------
(unaudited) (unaudited)
Revenues $709,388 $195,817 $95,243 $49,334
Costs and expenses
Cost of services (2,732,571) (5,620,994) (92,615) (1,282,978)
Sales and marketing
expenses (460,836) (3,003,834) (57,263) (305,821)
General and administrative
expenses (3,335,109) (4,423,642) (367,663) (1,095,540)
Provision for losses on
loan to officer (354,206) (664,640) (354,206) (664,640)
Stock-based compensation (374,569) 80,295 (43,501) (42,536)
Impairment of capital
assets and capitalized
software (1,548,473) -- -- --
------------ ----------- ----------- ----------
Total costs and expenses (8,805,764) (13,632,815) (915,248) (3,391,515)
------------ ----------- ----------- ----------
Loss from operations (8,096,376) (13,436,998) (820,005) (3,342,181)
------------ ----------- ----------- ----------
Other income (expense):
Interest income 11,601 266,118 -- 159,834
Interest expense (235,921) (525,165) (59,546) (16,981)
Gain from extinguishment
of debt 305,822 5,679,261 -- --
Insurance recovery 374,000 -- -- --
Debt origination and other
financing costs (9,896,951) -- (2,292,297) --
Foreign exchange gain
(loss) 50 (20,389) -- (4,412)
------------ ----------- ----------- ----------
(9,441,399) 5,399,825 (2,351,843) 138,441
------------ ----------- ----------- ----------
Net loss ($17,537,775) ($8,037,173) ($3,171,848) (3,203,740)
============ =========== =========== ==========
Basic and diluted loss
per share ($8.46) ($6.01) ($1.40) ($1.71)
============ =========== =========== ==========
Weighted average shares
outstanding --
basic and diluted 2,073,448 1,336,673 2,261,300 1,869,062
============ =========== =========== ==========