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Press release from Marketwire

VoodooVox Inc. Reports Q1 2012 Financial Results

Wednesday, May 16, 2012

VoodooVox Inc. Reports Q1 2012 Financial Results08:00 EDT Wednesday, May 16, 2012TORONTO, ONTARIO--(Marketwire - May 16, 2012) - VoodooVox Inc. ("VoodooVox") (TSX:VVX), a leading provider of mobile advertising solutions, today announced its financial results for the three months ended March 31, 2012.FIRST QUARTER RESULTSRevenues recognized of $1.0 million compares to $1.1 million for first quarter of 2011. Revenue from mobile advertising was $0.6 million in 2012 compared to $0.1 million in 2011. Operating loss of $2.0 million compares to $0.9 million for the first quarter of 2011. Q1 2012 expenses included the additional staff costs from its recent acquisitions. Net loss for the quarter ended March 31, 2012 was $2.5 million ($0.1 per share) compared to $1.7 million for the same period in 2012 ($0.02 per share). Q1 2012 Interest expense on debentures was $0.5 million compared to $0.8 million for the same period in 2011 primarily due to the debenture conversion program implemented by the Company in December of 2011. At March 31, 2012, the Company had a cash balance of $0.2 million compared to $0.4 million at December 31, 2011. The Company had a working capital deficit of $6.4 million which included $4.8 million of debentures scheduled to mature prior to March 31, 2013. In January 2012, the Company completed the asset purchase of a U.S. based mobile advertising and data analytics company then operating as Voodoovox, Inc. and has integrated the operations during the first quarter of 2012.OUTLOOK The Company's future operations remain dependent upon its ability to: 1) raise additional funds; 2) realize transaction revenues from existing customer relationships; or 3) secure new customer relationships that provide the Company with adequate funds to cover expenditures projected for the balance of 2012 (or a combination of the foregoing). In recent years, the Corporation has relied upon external debt financing to provide it with the working capital required to support ongoing operations. In light of current capital market constraints, the Board of Directors has determined to consider a possible business combination transaction with a third-party. On May 9, 2012, the Company announced that it entered into a letter of intent (the "LOI") with a third-party technology company respecting a potential business combination transaction. The LOI includes an exclusivity period until June 30, 2012, which is intended, among other things, to provide VoodooVox and the third-party with sufficient time to conduct due diligence, consider the structure of the proposed transaction and negotiate various deal terms. Other than in respect of provisions relating to the exclusivity period and certain other limited obligations, the LOI is not binding on either party and may be terminated by either party. The LOI is subject to various conditions, including satisfactory completion of due diligence by both VoodooVox and the third-party, negotiation of formal legal documentation and other conditions that may be included in any definitive transaction agreements. The exact nature and structure of a transaction have not been determined and the LOI contemplates that the parties will have further discussions in that regard. Accordingly, VoodooVox cautions that there can be no assurance that a transaction will be completed with the third-party as contemplated by the LOI. This news release should be read in conjunction with VoodooVox's interim consolidated financial statements and the accompanying notes as at and for the three months ended March 31, 2012 and the related Management Discussion and Analysis. These have been filed with certain securities regulatory authorities in Canada and are available on SEDAR (www.sedar.com) and on the VoodooVox website at www.voodoovox.com. About VoodooVox Inc.VoodooVox uses consumer analytics to provide smarter mobile advertising services via the cloud to publishers, advertisers and operators. VoodooVox, which represents the combined assets and knowledge base of three companies, namely Call Genie Inc., UpSnap Services, LLC and VoodooVox, now processes billions of advertising transactions for a marquee list of global clients and partners. Currently, VoodooVox solutions are deployed in 11 countries around the world. www.voodoovox.com.FOR FURTHER INFORMATION PLEASE CONTACT: Alex BlodgettVoodooVox Inc.403.410.6875alex.blodgett@voodoovox.comwww.voodoovox.comThe TSX Exchange has neither approved nor disapproved the contents of this news release.