HONG KONG, April 1, 2006 (PRIMEZONE) -- Hong Kong based Artificial Life, Inc. (OTCBB:ALIF), a leading provider of award winning mobile technology and applications, today announced its fiscal 2005 results.
"2005 has been a very productive year for us. We have produced and released 4 leading edge 3G products: our v-girls, v-boys, v-disco and v-penguins. We have successfully launched the v-girl game in 4 countries (Hong Kong, Taiwan, Malaysia and Brunei) and are preparing the launch of all products in many more countries in the rest of 2006 and 2007. We are currently building a global contact network with operators for the distribution of our future products. In addition, we will soon launch our recently announced m-commerce portal to directly sell mobile content and games to end users globally. These two independent channels will provide the basis for our sales and expected revenue growth in the future. The new funding in excess of $2 million will give us the operational cash required for this build up. Revenues were still minor in 2005 and comparable to 2004 due to extended roll out procedures of our clients and losses have increased mainly due to our re-expansion and increased engineering efforts and a reclassification of issued options and warrants. However, in 2005 our auditors did no longer qualify our annual report with a going concern opinion. The exciting and just announced co-operation with The Walt Disney Company in the USA, Canada and the UK and other upcoming global partnerships are expected to give us a solid foundation for our expansion in 2006," said Eberhard Schoeneburg, CEO of Artificial Life, Inc.
Revenues for the year ended December 31, 2005 were $266,757 as compared to $262,026 for the year ended December 31, 2004. The revenues and the minor increase of $4,731 were primarily due to license sales and income generated from our new mobile communication products and technologies. Engineering expenses for the year ended December 31, 2005 were $865,036 as compared to $414,914 for the year ended December 31, 2004. The increase of $450,122 or 108% was due to new hires and the increase of efforts in engineering.
Research & Development expenses for the year ended December 31, 2005 were $103,841 compared to $109,555 in the year ended December 31, 2004. The minor decrease of $5,714 is primarily due to lower traveling expense in 2005.
General and Administrative expenses for the year ended December 31, 2005 were $476,929 as compared to $421,231 for the year ended December 31, 2004. The increase of $55,698 or 13% was primarily due to increase in depreciation costs on office equipment and furniture and fixtures. Sales and Marketing expenses for the year ended December 31, 2005 were $257,344 as compared to $254,928 for the year ended December 31, 2004. The less then 1% variance was due to tight control of traveling and entertaining expenses on marketing activities.
Revenues for the three months period ended December 31, 2005 were $20,526 as compared to $121,872 for the same quarter of 2004 and compared to $37,637 for the three months ended September 30, 2005, a decrease of revenues of 45.5% mainly due to extended roll out procedures of our operator clients. The Net Loss for the quarter ended December 31, 2005 was $704,672 as compared to a net loss of $269,935 for the same quarter of 2004, an increase of $434,737 or 161.1% and compared to a net loss of $341,321 for the three months ended September 30, 2005, an increase of 106.5%. This increase was mainly due to higher engineering costs, extended marketing and new hires during the quarter and a loss on value of derivative liability of $214,000 resulted from the fair value of options and warrants reclassified as derivative liabilities being marked to market at December 31, 2005.
Net Loss for the year ended December 31, 2005 was $1,684,449 as compared to $945,809 for the year ended December 31, 2004. This increase of $738,640 or 78.1% was primarily due to increased development and engineering efforts for new products, new hires, extensive global roll activities and loss on value of derivative liability of $214,000 resulted from the fair value of options and warrants reclassified as derivative liabilities being marked to market at December 31, 2005. The net loss per share for the year ended 31 December, 2005 was $0.07 compared to $0.05 for 2004.
For the fiscal 2005 the Independent Auditors Report on the Company's financial statements as of and for the year ended December 31, 2005 does no longer contain a `going concern' explanatory paragraph.
About Artificial Life
Artificial Life, Inc. (OTCBB:ALIF) is a public U.S. corporation headquartered in Hong Kong and a leading global provider of award winning mobile technology, content, games and applications (see also: www.artificial-life.com ; www.v-girl.com ; www.v-disco.com ; www.botme.com ; www.v-penguins.com ).
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Artificial Life, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the "Risk Factors" described in the Company's Annual Report or Forms 10-K, 10-K(SB) or 10-Q(SB) for the recent fiscal years. All information set forth in this press release is as of March 31, 2006 and Artificial Life, Inc. undertakes no duty to update this information unless required by law.