Narrowstep(TM) Inc. Reports 1st Quarter Results for Fiscal Year 2008

Narrowstep(TM) Inc. Reports 1st Quarter Results for Fiscal Year 2008

NEW YORK and LONDON, July 17 /PRNewswire-FirstCall/ -- Narrowstep(TM) Inc. (BULLETIN BOARD: NRWS) , the TV on the Internet Company, announced results for the first quarter of fiscal year 2008, ended May 31, 2007. Revenue for the quarter was $1.6 million with a loss of $3.3 million or $0.07 loss per share, compared to revenue for the comparable quarter of the previous year of $1.1 million with a loss of $1.2 million or $0.03 loss per share. At quarter's end the company had $4.3 million in cash.

"The future of television is largely dependent on the Internet, and television on the Internet is an area where Narrowstep has a distinct advantage," said David C. McCourt, Chairman and CEO. "We continue to see tremendous demand for Narrowstep's technology and tools for monetizing video content. During the first quarter, we launched a number of exciting channels for industry leaders such as Virgin Media, the Sci Fi Channel and award- winning film company, BreakThru Films. We also entered into exclusive partnerships with the William Morris Agency, the world's largest talent and literary agency, as well as with Telefonica, the third largest telecommunications company in the world."

Overall revenue increased by 39% year over year, the increase in narrowcasting sales was 69% year over year ($1.4 million compared to $0.8 million).

"As we discussed last quarter, Narrowstep is focused on capitalizing on the high growth, high margin narrowcasting segment of our business. As such, we have moved away from the lower margin production business in order to focus on the higher margin channel building and channel development segment which plays to the strength of our telvOS(TM) platform, and where I believe we have a real advantage both in the U.S. and abroad," added McCourt.

At this time, Narrowstep will not be conducting an investor call. For additional information please contact, Jesse Case at (609) 951-2221 or jcase@narrowstep.com.

   PART 1 - FINANCIAL INFORMATION   Item 1 - Financial Statements    NARROWSTEP INC. AND SUBSIDIARIES   CONDENSED CONSOLIDATED STATEMENTS OF   OPERATIONS AND COMPREHENSIVE LOSS   (Unaudited)                                                      Three Months Ended                                                  May 31, 2007  May 31, 2006                                                  $            $   Revenue     Narrowcasting and other                       1,415,160        836,513     Production services                             175,633        308,010   Total revenue                                   1,590,793      1,144,523    Costs and Expenses      Operating                                     1,225,791        422,218      Selling, general and administrative           2,645,624      1,680,563      Research & development                          798,750        255,057    Total operating expenses                        4,670,165      2,357,838    Operating Loss                                 (3,079,372)    (1,213,315)     Interest income (expense), net                 (179,643)        44,099     Currency exchange income (loss)                  (1,903)          (589)                                                   (3,260,91   Net Loss                                                8)    (1,169,805)      Foreign currency translation adjustment          17,472         36,764    Comprehensive Loss                             (3,243,446)    (1,133,041)    Net Loss per Common Share - Basic and Diluted       (0.07)         (0.03)   Weighted-Average Number of Shares   Outstanding, Basic and Diluted                 45,348,974     43,730,360    See Notes to Condensed Consolidated   Financial Statements.      NARROWSTEP INC. AND SUBSIDIARIES   CONDENSED CONSOLIDATED BALANCE SHEETS                                               May 31, 2007    Feb. 28, 2007                                               (Unaudited)                                               $              $   Assets                                                              `     Current assets:     Cash and cash equivalents                     4,328,212        466,870     Accounts receivable, net of allowance      for doubtful accounts of      $1,522,139 and $940,534 at May 31,      2007 (unaudited) and      February 28, 2007, respectively              1,415,949      1,403,779     Prepaid expenses and other current      assets                                         298,942        332,192    Total current assets                            6,043,103      2,202,841      Property and equipment, net                   1,610,274      1,234,557     Software development costs, net                 125,006        149,080      Debt issuance costs, net                        157,191              -    Total Assets                                    7,935,574      3,586,478    Liabilities and Stockholders' Equity (Deficit)   Liabilities    Current liabilities:     Unearned revenue                                461,190        384,295     Accounts payable                                994,621        960,580     Net obligations under capital leases, current    90,666         88,110     Accrued expenses and other current      liabilities                                    979,523        977,948    Total current liabilities                       2,526,000      2,410,933      Net obligations under capital leases      - long-term                                    113,032        135,470   Convertible notes and interest     payable, net of debt discount of     $920,034                                      6,402,682              -    Other long term liabilities                        56,158              -   Total Liabilities                               9,097,872      2,546,403    Commitments and Contingencies   Stockholder's Equity (Deficit)     Common stock, $0.000001 par value      450,000,000  shares      authorized, 45,348,974  issued and      outstanding at May 31,      2007 (unaudited) and February 28,      2007, respectively                                  45             45     Additional paid-in capital                   21,584,762     20,543,688     Accumulated deficit                         (22,816,451)   (19,555,533)     Accumulated other comprehensive income      (loss)                                          69,347         51,875    Total Stockholders' Equity (Deficit)           (1,162,297)    (1,040,075   Total Liabilities and Stockholders'    Equity (Deficit)                               7,935,574      3,586,478    See Notes to Condensed Consolidated   Financial Statements.     About Narrowstep  

Narrowstep(TM) Inc. (BULLETIN BOARD: NRWS) , the TV on the Internet company, is a leading provider of Internet TV services to 100+ companies worldwide. Narrowstep's propriety technology, the Television Operating System(TM) or telvOS(TM) delivers the most television-like and true community building Internet TV experience available. A pioneer in the IPTV spectrum, Narrowstep offers the expertise to build channels, as well as state-of-the-art technology that can send video to multiple platforms. For more information about telvOS(TM), please visit http://www.narrowstep.com/technology/internet-tv-software-platform.aspx and for more information about Narrowstep, please visit http://narrowstep.com/ or call 609-951-2221.

Forward-looking Statement:

Certain statements in this news release constitute 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in the Company's filings with the Securities and Exchange Commission, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

First Call Analyst:
FCMN Contact: j.case@narrowstep.com

Source: Narrowstep Inc.

CONTACT: Jesse Case, Narrowstep(TM) Inc., Public Relations Coordinator,
+1-609-951-2221, or j.case@narrowstep.com

Web site: http://www.narrowstep.com/

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Profile: International Entertainment