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StreamTrack Announces Operating Results for Second Quarter Fiscal 2013

SANTA BARBARA, CA -- (Marketwired) -- 04/23/13 -- StreamTrack, Inc. (PINKSHEETS: STTK) ("StreamTrack" or the "Company"), a digital media technology services company operating within the internet radio and streaming media sectors, today announced its results of operations for the six and three months ended February 28, 2013, respectively.

Second Quarter Fiscal Year 2013 Financial Highlights: (Six Months Ended February 28, 2013 Versus Period From Inception, November 30, 2011, Through February 29, 2012 Results)

  • Revenues increased 44% to $866,214, compared with $602,657

  • Non-GAAP gross margin was 20%

  • Operating loss increased 336% to $1,167,286, compared with $267,945

  • Net loss attributable to shareholders increased 549% to $1,881,118

  • Net loss per share attributable to shareholders increased to $8.06 per share, compared to $3.52 per share

  • Non-GAAP net loss attributable to shareholders for the six months ended February 28, 2013 totaled $779,664

  • Non-GAAP net loss per share attributable to shareholders for the six months ended February 28, 2013 was $3.34 per share

Second Quarter Fiscal Year 2013 Financial Highlights: (Three Months Ended February 28, 2013 Versus February 29, 2012 Results)

  • Revenues decreased 37% to $381,177, compared with $602,657

  • Non-GAAP gross margin increased over the prior quarterly reporting period to 26%

  • Operating loss increased 95% to $523,285, compared with $267,945

  • Net loss attributable to shareholders increased 233% to $964,200

  • Net loss per share attributable to shareholders increased to $3.60 per share, compared to $2.71 per share

  • Non-GAAP net loss attributable to shareholders for the six months ended February 28, 2013 totaled $335,246

  • Non-GAAP net loss per share attributable to shareholders for the six months ended February 28, 2013 was $1.44 per share

Michael Hill, Chairman and Chief Executive Officer of StreamTrack, stated, "Although our results for the year thus far have been modest, the past six months have been critical to our development and deployment as a globally-focused service provider within the internet radio and streaming media sectors. We are now one of the few service providers for internet radio companies that operate on a global scale. Recently announced, we have entered into agreements with both One World Media and China Mobile Entertainment to begin to service the Asian region. We have recently deployed our testing environment with a large publisher in the region. During the first two quarters of fiscal 2013 we witnessed strong continued listening across our broadcaster network. We will continue to commit our capital to growing and retaining our current listener capacity level, with our existing technology infrastructure allowing us to grow to approximately 15 million listener hours per month without additional capital investment. We began working closer with new partners in Asia, Europe and the U.S during the past quarter. Because of our unique patent-pending technologies, we believe our growth in the coming months and years will not be limited to just the U.S. domestic marketplace. We are confident and extremely excited about our growth prospects within the global marketplace both in 2013 and beyond."

Pro Forma Results of Operations

The following table contains selected statements of operations information, which is unaudited and should be read in conjunction with our financial statements and related notes included elsewhere in the Company's Form 10-Q filed with the SEC on April 23, 2013. The Company's financial statements filed on Form 10-Q for the quarterly period ended February 28, 2013 ("10Q") are prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The unaudited pro forma information included herein reflects adjustments to the Company's GAAP-based financial statements included within the 10-Q to present the Net Loss Attributable to Common Shareholders on a non-GAAP basis, whereby the effect of all noncash accounting adjustments for each period presented for the change in the fair value of derivatives, accretion of debt discount, bad debt expense, depreciation and stock based compensation are net to -0- in order to calculate the pro forma adjusted Net Loss Attributable to Common Shareholders. The pro forma adjustments have also been used to calculate the pro forma basic and diluted earnings per share. The Non-GAAP pro forma operating results for the periods presented herein are not necessarily indicative of results for any future periods. Management is providing this calculation to clarify the Company's operations and monthly capital needs on a non-GAAP cash only basis.


                                     Pro Forma, Six Months Ended
                                           February 28, 2013
                               ----------------------------------------
                                   GAAP       Adjustments    Non-GAAP
                               ------------  ------------  ------------

Revenue                        $    866,214  $          -  $    866,214
Costs of Sales                      949,448       256,481       692,967  (1)
                               ------------  ------------  ------------
Gross Profit                        (83,234)     (256,481)      173,247
Gross Profit %                          -10%            -            20%
Operating Expenses                1,084,052      (167,092)      916,960  (2)
                               ------------  ------------  ------------
Operating Loss                   (1,167,286)     (423,573)     (743,713)
Other Income and Expenses          (662,905)     (626,954)      (35,951) (3)
Provision for Income Taxes                -             -             -
                               ------------  ------------  ------------
Net Loss                         (1,830,191)   (1,050,527)     (779,664)
Deemed Dividend                     (50,927)      (50,927)            -
                               ------------  ------------  ------------
Net Loss Attributable to
 Shareholders                  $ (1,881,118) $ (1,101,454) $   (779,664)
                               ============  ============  ============
Loss Per Share                 $      (8.06)               $      (3.34)
                               ============                ============
Weighted Average Shares             233,322                     233,322
                               ============                ============

(1) Adjustment includes $256,481 of depreciation and amortization
(2) Adjustment includes $18,050 of bad debt expense and $147,248 of stock
 based compensation and $1,794 of depreciation and amortization
(3) Adjustment includes $377,981 for the change in fair value of derivatives
 and $248,973 for the accretion of debt discount




                                    Pro Forma, Three Months Ended
                                           February 28, 2013
                               ----------------------------------------
                                   GAAP       Adjustments    Non-GAAP
                               ------------  ------------  ------------

Revenue                        $    381,177  $          -  $    381,177
Costs of Sales                      411,818       128,241       283,577  (1)
                               ------------  ------------  ------------
Gross Profit                        (30,641)     (128,241)       97,600
Gross Profit %                           -8%            -            26%
Operating Expenses                  492,644       (75,928)      416,716  (2)
                               ------------  ------------  ------------
Operating Loss                     (523,285)     (204,169)     (319,116)
Other Income and Expenses          (440,915)     (424,785)      (16,130) (3)
Provision for Income Taxes                -             -             -
                               ------------  ------------  ------------
Net Loss                           (964,200)     (628,954)     (335,246)
Deemed Dividend                           -             -             -
                               ------------  ------------  ------------
Net Loss Attributable to
 Shareholders                  $   (964,200) $   (628,954) $   (335,246)
                               ============  ============  ============
Loss Per Share                 $      (3.60)               $      (1.44)
                               ============                ============
Weighted Average Shares             267,640                     233,322
                               ============                ============


(1) Adjustment includes $128,241 of depreciation and amortization
(2) Adjustment includes $7,283 of bad debt expense and $67,748 of stock
 based compensation and $897 of depreciation and amortization
(3) ustment includes $384,079 for the change in fair value of derivatives
 and $40,706 for the accretion of debt discount


About StreamTrack, Inc.
StreamTrack, Inc. (the "Company") is a digital media and technology services company. The Company provides audio and video streaming and advertising services through its RadioLoyalty™ Platform (the "Platform") to over 1,300 internet and terrestrial radio stations and other broadcast content providers. The Platform consists of a web-based and mobile player that manages streaming audio and video content, social media engagement, display and video ad serving within the web player and is also capable of replacing audio ads with video ads within the web player in a live or on-demand environment. The Company offers the Platform directly to its broadcasters and integrates or white labels its technologies with web-based internet radio guides and other web-based content providers. The Company is also continuing development of WatchThis™, a patent-pending technology to provide web, mobile and IP television streaming services that are e-commerce enabled within streamed content.

For more information visit: http://www.streamtrack.com or http://www.radioloyalty.com

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about StreamTrack's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.

Contact:
StreamTrack, Inc.
Michael Hill
Chairman and Chief Executive Officer
[email protected]
+1 805-308-9151

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