Qorus.com, Inc. (OTCBB: QRUS), and its wholly owned subsidiary VMdirect, LLC ("VMdirect"), a Las Vegas-based social networking and digital communications company which markets its proprietary suite of communications tools through its social network, VMDirect announced today record financial results for the year ended December 31, 2005 and for the quarter ended March 31, 2006 for VMdirect.
VMdirect reported revenue of $5.1 million for the year ended December 31, 2005, a 136% increase over 2004. The growth in revenue was attributable to increased sales in all product groups and the start-up of business in the United Kingdom and Mexico. Revenue for the quarter ended March 31, 2006 increased from the same period in 2005 by $2.7 million, or 475%, to $3.3 million.
Gross profit for the year ended December 31, 2005 increased by 93% to $3.8 million. Gross profit for the quarter ended March 31, 2006 increased by 473% over the same period in 2005, to $2.6 million. Gross profit for both periods increased as a result of sales growth.
VMdirect incurred a net loss for the year ended December 31, 2005 of $1.2 million, as compared to a net loss of $1.6 million for the year ended December 31, 2004. The Company achieved net income of $41,000 in the quarter ended March 31, 2006, versus a loss of $392,000 in the quarter ended March 31, 2005.
"Our 4.0 product release -- which eliminated major barriers in communicating online with live or recorded streaming video -- coupled with the opening of the Australia and New Zealand markets, propelled our first quarter revenue, " stated Amy Black, co-founder and President of VMdirect.
"This recent profitable quarter is both a milestone for the Company and a testament to what we have achieved in the last year," added VMdirect co-founder, a principal shareholder of Qorus.com, Inc. and chairman of VMdirect, Richard Kall. "With substantial sales growth across all product categories and the extensive expansion of our affiliate network, we are enthusiastic about the continued growth of VMdirect."
About Qorus.com, Inc. and VMdirect, LLC.
Qorus.com, Inc., through its wholly owned subsidiary, VMdirect, is a video-based social networking and digital communications company that, directly and through its multi-tiered affiliate program, offers a suite of digital communication tools. Its products include video e-mail, video instant messaging, live webcasting, and digital vault storage. The Company hosts and markets an internet-based social network: helloWorld, which primarily targets users from ages 25 to 55. The social network utilizes a commercial-free, subscription-based Application Service Provider (ASP) model, providing subscribers with a wide array of streaming video content as well as an integrated suite of consumer-oriented streaming media applications, including video e-mail, video chat, and live webcasting. helloWorld incorporates the functionality of best-in-class social networking sites (such as MySpace and TagWorld) into an all-in-one digital media platform where subscribers can interact with friends and family using the full spectrum of digital communications.
At the closing of the exchange transaction among Qorus, VMdirect, VMdirect's members and Keating Reverse Merger Fund, LLC, which occurred on June 15, 2006, Qorus acquired all of the outstanding membership interests of VMdirect from VMdirect's members, and VMdirect's members contributed all of their interests to Qorus. In exchange, Qorus issued to VMdirect's members 1,014,589 shares of preferred stock. Each share of preferred stock will be convertible into approximately 1,042 shares of Qorus' common stock. The fully diluted number of shares outstanding after the exchange (assuming the conversion of all shares of Preferred Stock) is 1,057,547,455.
Qorus expects that, upon approval by a majority of its stockholders (voting together on an as-converted to common stock basis), it will change its corporate name and approve a 1-for-50 reverse stock split of its outstanding common stock. Upon mandatory conversion of the preferred stock and completion of the reverse stock split, there will be a total of approximately 22,074,456 shares of common stock outstanding. The VMdirect members will receive approximately 21,150,959 shares of Qorus' common stock, representing approximately 95.8% of the outstanding shares of Qorus' common stock. The existing stockholders of Qorus will own approximately 923,495 shares of Qorus' common stock, representing approximately 4.2% of the outstanding shares of common stock.
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
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