Softlink Announces Second Quarter/Six Months Results - quarter ending September 30, 1999 - Company Financial Information

Edge: Work-Group Computing Report, Nov 29, 1999

Softlink, Inc., the leader in multimedia email software, Monday announced financial results for the three and six months ended Sept. 30, 1999.

For the quarter, revenues totaled $336,300, up 92 percent from $175,100 in the three months ended Sept. 30, 1998, and up four percent from $324,600 in the first quarter of the fiscal 2000. Gross profit for the quarter equaled $217,300, versus $155,700 last year, an increase of 40 percent. The net loss for the period was $1,183,100, or 15 cents per basic and diluted share, compared with a net loss of $231,700, or three cents per basic and diluted share, for the corresponding period in 1998.

For the first six months of fiscal 2000, Softlink's revenues rose 97 percent to $660,900, compared with $335,500 for the first six months of fiscal 1999. Gross profit for the six-month period totaled $484,900, up 61 percent from $300,400 for the same period last year. The net loss for the first six months of fiscal 2000 was $1,745,800, or 22 cents per basic and diluted share, versus a net loss of $272,000, or four cents per basic and diluted share, for the corresponding period in fiscal 1999.

The company attributes the sharp rise in revenues to increased sales of its VOICELink and inChorus products, which allow users to record and send email messages in their own voice at extremely high transmission speeds. Operating expenses for the three and six month periods of fiscal 2000 compared to the corresponding periods in fiscal 1999 increased significantly, largely as the result of the company's continued investment in its infrastructure, including expenditures for new staff, research and development, and marketing and sales.

"We are very pleased with the strong market acceptance of our products, which has led to steadily rising sales," said Pat Coan, Softlink's chief financial officer. "We continue to improve our gross profit margins and to invest heavily in our infrastructure by tripling our head count and undertaking new sales and marketing initiatives. We believe these investments are critical to helping us increase our market penetration and achieve sustainable revenue growth."

Commented William Yuan, CEO of Softlink, "During this quarter, we took steps to further solidify our position among email technology leaders. Among the highlights, we introduced our new inChorus Pro product, which allows recipients to view messages on any platform with no plug-ins or players required and which we'll target to high-end corporate users. We significantly expanded our retail and OEM markets, and we have signed distribution and bundling agreements with many national retail chains and major electronic manufacturers, which we have previously announced.

"Our goal is to pursue additional strategic partnerships that will help us bring our products to broader markets worldwide and to continue to improve our operating results."

Founded in 1996 and based in Santa Clara, CA, Softlink, Inc. (OTC BB: SFLK), is an innovator in multimedia-based Internet communications. Using advanced compression and composition technology, Softlink's eMail inChorus and eMail VOICELink products revolutionize conventional text-based email with voice, graphics, pictures, animation and live annotation.

For more information, visit the company's web site at http://www.inChorus.com.

SOFTLINK, INC.
Financial Highlights

                   Three Months Ended          Six Months Ended
                      September 30,              September 30,
                    1999           1998         1999         1998
              (Unaudited)    (Unaudited)  (Unaudited)  (Unaudited)
              -----------    -----------  -----------  -----------
Net Sales,
 including
 license
 fee income   $  336,300    $  175,100    $  660,900   $  335,500

Cost of
 Sales           119,000        19,400       176,000       35,100
               ---------    ----------     ---------   ----------

Gross
 Profit          217,300       155,700       484,900      300,400
               ---------     ---------     ---------    ---------

Operating
 Expenses      1,377,300       387,700     2,200,500      572,600
               ---------     ---------     ---------    ---------

Loss From
 Operations   (1,160,000)     (232,000)   (1,715,600)    (272,200)

Other Income
 (Expense)         7,000           300           700        1,000
             ------------ ------------   -----------  -----------

Loss Before
 Provision for
 Income Taxes (1,153,000)     (231,700)   (1,714,900)    (271,200)

Provision for
 Income Taxes     30,100             -        30,900          800
             ------------               ------------  -----------

Net Loss     $(1,183,100)    $(231,700)  $(1,745,800)   $(272,000)
             ============    ==========  ============   ==========

Basic and
 diluted loss
 per share   $     (0.15) $      (0.03) $      (0.22) $     (0.04)
             ============ ============= ============= ============

Basic and diluted
 weighted-average
 common shares
 outstanding   7,909,600      6,625,400     7,856,700   6,062,900
             ============   ===========   ===========  ===========

SOFTLINK, INC.
CONSOLIDATED BALANCE SHEET
                                       September 30,    March 31,
                                               1999         1999
                                   ----------------  -------------
                                       (Unaudited)      (Audited)
Assets

Current Assets                          $3,149,600     $  861,200

Property and Equipment, net                121,400         54,300

Deposits and Other Assets                   25,600         52,000
                                    --------------   ------------

Total Assets                           $ 3,296,600    $   967,500
                                       ===========    ===========

Liabilities and Stockholders' Equity

Current Liabilities                  $     358,700    $    86,400
                                     -------------    -----------

Commitments, Contingencies
 and Subsequent Events

Stockholders' Equity:
    Convertible preferred
      stock $0.001 par value;
      1,000,000 shares
      authorized;  300 shares
      issued and outstanding             3,026,300             --
    Common stock, $0.001 par
      value; 50,000,000
      shares authorized;
      9,364,130 and 9,363,130
      shares issued and
      outstanding, respectively              9,400          9,400
    Additional paid-in capital           6,077,300      5,634,700
    Accumulated deficit                 (3,418,600)    (1,646,500)
                                        -----------    -----------
                                         5,694,400      3,997,600

    Less: Treasury stock at
     cost (1,454,356 and
     1,593,750 shares, respectively)    (2,756,500)    (3,116,500)

Total Stockholders' Equity             $ 2,937,900    $   881,100
                                        -----------    -----------
                                       $ 3,296,600    $   967,500