Virtual Technology Corp. 9 Months Net Sales Multiply 20X as Rapid Growth Continues

Business Wire, Dec 2, 1998

MINNEAPOLIS, MN--(BUSINESS WIRE)--Dec. 2, 1998--Virtual Technology Corp. (OTC BB:VTCO), a rapidly expanding computer Internet reseller, today reported soaring revenues for the nine months ending Oct. 31, 1998.

This continues the trend of the past three quarters. Net sales for the nine months grew 20-fold to $3,086,872, from the $151,497 recorded for the nine months ended Oct. 31, 1997. The company also noted that third quarter net sales of $1,557,040 exceeded first half net sales of $1,530,000.

Gross profit for the third quarter ending October 1998 doubled to more than $100,000 from the $47,113 recorded for second quarter of this year. Gross profits continue to grow from the ($120,000) loss of first quarter 1998.

The company provides the latest technology products, hardware and software, in addition to on-site service and free shipping anywhere in the domestic USA from its Internet site, http://www.virtual-world.com.

Kenneth Israel, Virtual Technology's chief executive officer credited the company's e-commerce initiatives and marketing strategy in addition to its experienced management team. "We've been focused on getting the right people and systems in place to support and cultivate this explosive growth. We continue to add to our core alliances with companies such as Ingram Micro (NASD-IM), C/Net (NASD-CNWK) ZDNet (NASD-ZD) PC World and MSN's Sidewalk (NASD-MSFT). Partnerships such as the one with the University of Minnesota whereby VTC will provide the University's TechMart Internet Store and 60,000 students and faculty with over 40,000 items both hardware and software are a result of our e-commerce successes."

Virtual's net loss for the nine months ending Oct. 31, 1998 was ($1,574,781) or ($0.11) per share as compared to the net loss of ($1,160,910) or ($0.17) per share recorded for the prior year's first nine months.

Virtual Technology Corp. is one of the leading Internet resellers of company hardware and software technology and is one of the top advertisers on the Internet with premier positions and portals in CNET (CNWK-computers.com) and ZDNET (ZD-zdnet.com). The company specializes in Speed, Power and Graphics, over 40,000 products from more than 1200 vendors including IBM, HP, Compaq, Hitachi, Sony, Epson, et al.

Statements regarding the company's anticipated performance are forward-looking and therefore involve risks and uncertainties, including but not limited to market conditions in the Internet services industry, competitive products and technologies and other factors that are set forth in the company's filings with the Securities and Exchange Commission.

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                              Nine Months             Nine Months
                          Ended Oct. 31, 1998     Ended Oct. 31, 1997
                               unaudited               unaudited


NET SALES                     $3,086,872                $151,497
Cost of Goods Sold             3,059,144                  21,587

Gross Profit (Loss)
from Operations                   27,728                 129,910

OPERATING EXPENSES
Selling and Marketing            887,051                 458,833
Customer Support                      --                  13,981
Development                       (7,101)                357,213
General and
Administrative                   731,159                 416,085
                               1,611,109                 246,112

LOSS FROM OPERATIONS          (1,583,381)             (1,116,202)

OTHER INCOME (EXPENSE) NET         8,600                 (44,708)

NET LOSS                     ($1,574,781)            ($1,160,910)

NET (LOSS) PER COMMON SHARE        -0.11                   -0.17

WEIGHTED AVERAGE SHARES
OUTSTANDING                   14,007,046               6,831,891

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