MVE Smart Move,

DENVER, March 31 /PRNewswire-FirstCall/ -- Smart Move, Inc. (AMEX:MVE), a Denver-based asset logistics manager providing a unique, and increasingly popular alternative solution for transporting household and commercial goods, today reported financial results for the fourth quarter and the years ended December 31, 2007 and 2006. For the year ended December 31, 2007 revenue increased by 39% to $5.8 million from $4.2 million recognized in 2006. The net loss for 2007 was $12.8 million, compared to a net loss of $9.9 million for the same period in 2006. The Company incurred significant non-cash expenses in 2007 and 2006. Total non-cash expenses in 2007 were approximately $8 million compared to non-cash expenses of approximately $5.1 million in 2006. The increase in net loss from 2006 to 2007 is due primarily to: -- an increase in interest expense of $1.1 million ($1.0 million of non cash interest expense), -- a non-cash loss on debt extinguishment of $1.3 million, -- an increase in depreciation of $1.8 million, -- non-cash impairment expense of $1.6 million, and an -- increase in selling, general and administrative expenses of approximately $141,000 (exclusive of depreciation, amortization and non-cash compensation). The above were reduced by an increase in income tax benefit of $2.1 million and the increase of $1.6 million in revenues. Basic and diluted net loss per share for the year ended December 31, 2007 was $(1.21), compared to $(1.77) reported in the same period in 2006. Net loss per share is based upon weighted average shares outstanding of 10,623,167 for the year ended December 31, 2007, compared to 5,584,420 for the year ended December 31, 2006. The increase in weighted average shares is primarily due to the shares issued in conjunction with the December 2006 IPO, the conversion of debt and interest expense to common stock in 2006 and 2007. Revenue for the fourth quarter increased by approximately $250,000 to $1,208,000, an increase of 26%. "2007 has been a transition year for Smart Move. The company did not achieve the top line revenue we had anticipated for the year, but we believe that all of our efforts in establishing new revenue opportunities with van lines, our affiliate program and the acquisition of StarMove Alliance, set the stage for 2008. We have been very aggressive in partnering with van lines and corporate relocation companies, and are excited about the growth we project from these alliances. In addition we continue to see month over month and year over year growth in our internal move bookings. The company needs to secure additional capital in the near future to support operations while it continues to increase sales volume. We expect general sales activity to increase from all sources as we enter the 2008 moving season" said Chris Sapyta, President and Chief Executive Officer. He added, "We continue to explore alliance relationships as well as commercial opportunities that we believe will add value to Smart Move." Selected highlights for the year ended December 31, 2007 versus the prior year follows: -- We have added over $10.9 million of property and equipment, including over 4,100 new SmartVault(TM) containers. -- We believe our current fleet of approximately 4,500 SmartVaults(TM) has the capacity to enable us to generate over $18 million in annual revenues. -- Smart Move lowered its average freight expense as compared to the prior year period by 25%. Freight expense is the single biggest component of cost of goods sold; in 2006 freight expense was 83% of the top line revenues, for 2007, the average was 58%. -- We launched our affiliate program which allows local moving companies to book moves through our proprietary software. We estimate that there are over 5,000 local moving companies in the markets that we serve that we can target for this program. -- We refined our software to provide for automation in the quoting of long-distance freight costs, and to help improve our operating margins. -- We have refined our internal processes to allow us to handle significant increases in the volume of moves with our existing infrastructure. -- The Smart Move concept gained recognition within the close-knit moving industry community. National relocation firms became aware that Smart Move's service offering addresses specific current needs in their industry. -- We expanded our alliances with leading interstate van lines that are taking advantage of the outstanding transit times and performance metrics that Smart Move has demonstrated it can deliver. -- We acquired Star Move Alliance, which establishes us as a third party move manager. The platform allows us to generate revenue from move lead referrals, from direct booking fees from van lines and from our completed jobs. Cash Flow In view of our lack of operating history and present inability to generate revenues sufficient to cover our operating expenses, our auditors have stated in their audit opinion that there currently exists a substantial doubt about our ability to continue as a going concern. Net cash used in operations was approximately $5.6 for the year ended December 31, 2007. Cash was consumed by the net loss of $12.8 million, less total non-cash expenses of approximately $8 million. Noncash items included: -- $3 million for depreciation, -- $1.4 million of amortization of debt discounts, -- $1.3 million of loss on debt extinguishment, -- $1.6 million of impairments, -- $284,000 in non-cash compensation costs, -- $250,000 of shares and warrants issued upon conversion of interest to equity, and -- $168,000 of bad debts. These non-cash charges were offset by a deferred income tax benefit of $2.4 million. Cash was also consumed by increases in accounts receivable of $126,000, prepaid expense and packing supplies of $125,000 and contracts in process of $149,000 during the period. An increase in accounts payable of $934,000, an increase in accrued interest of $705,000 and an increase in deferred revenue of $343,000 provided cash. Smart Move, Inc. Conference Call Management will hold a conference call to discuss year end results on April 2, 2008 at 12:00 pm Eastern Time (10:00 a.m. Mountain). The call in number is 800-218-8862 (local 303-262-2131) About Smart Move, Inc. Smart Move is an innovative logistics company providing services through deployment of a fleet of Company-owned, SmartVault(TM) shipping containers to execute the movement of goods. Smart Move utilizes its proprietary and licensed technologies to efficiently manage its fleet of assets, providing superior security, scheduling flexibility and expedited service on behalf of its customers and alliance partners. Smart Move sells its services direct to moving consumers, and provides moving capacity and guaranteed logistic services to van lines and agents nation wide. http://www.gosmartmove.com/ Safe Harbor Statement Under The U.S. Private Securities Litigation Reform Act Of 1995 Certain statements in this release which are not historical facts are forward-looking statements such as statements relating to future operating results, existing and expected competition, financing and refinancing sources and availability and plans for future development or expansion activities and capital expenditures. These "forward-looking statements" are within the meaning of the Private Securities Litigation Reform Act of 1995. In many but not all cases you can identify forward-looking statements by words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "should," "will" and "would" or the negative of these terms or other similar expressions. These forward-looking statements include statements regarding the company's expectations, beliefs, or intentions about the future, and are based on information available to the company at this time. Smart Move assumes no obligation to update any of these statements and specifically declines any obligation to update or correct any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Such forward-looking statements involve a number of risks and uncertainties that may significantly affect our liquidity and results in the future and, accordingly, actual results may differ materially from those expressed in any forward-looking statements. Such risks and uncertainties include, but are not limited to, those related to effects of competition, leverage and debt service financing and refinancing efforts, general economic conditions, changes in laws or regulations and risks related to development activities as described in our registration statement on Form SB-2 filed for Smart Move's initial public offering, and other risk factors that will be described from time to time in the company's SEC reports, including its annual report on Form 10-KSB for the year ended December 31, 2007. Contact: Pete Bloomquist Smart Move, Inc. 303-339-9558 Smart Move, Inc. Balance Sheet December 31, 2007 ASSETS Current assets: Cash and cash equivalents $ 369,189 Account receivable trade, net of allowance of $45,000 80,112 Packing supplies 94,437 Contracts in process 517,485 Prepaid and other 146,259 Total current assets 1,207,482 Property and equipment, net 15,942,718 Other assets 113,546 16,056,264 Total assets $ 17,263,746 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,550,281 Accrued interest 435,804 Deferred revenue 456,247 Current portion of long-term debt and notes payable, (face amount of $1,460,380) net of discounts of $1,051,310 409,070 Current portion of obligations under capital leases 91,648 Total current liabilities 3,943,050 Long-term liabilities: Long-term debt and notes payable, less current portion, (face amount of $9,905,148) net of discounts of $3,552,103 6,353,045 Obligations under capital leases, less current portion 145,653 Total long-term liabilities 6,498,698 Total liabilities 10,441,748 Commitments and contingent liabilities Shareholders' equity: Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued - Common stock, $0.0001 par value, 100,000,000 shares authorized 10,979,699 issued and outstanding 1,097 Additional paid-in-capital 20,807,395 Accumulated deficit (13,986,494) Total shareholders' equity 6,821,998 Total liabilities and shareholders' equity $ 17,263,746 Smart Move, Inc. Statements of Operations Year ended Year ended December 31, December 31, 2007 2006 Sales $ 5,810,898 $ 4,184,554 Cost of moving and storage (exclusive of depreciation, amortization and impairment shown separately below) 6,337,360 4,827,273 Depreciation and amortization 2,878,391 1,104,590 Impairment of fixed assets 1,539,563 - Total cost of moving and storage 10,755,314 5,931,863 Gross loss (4,944,416) (1,747,309) Selling, general and administrative expenses (exclusive of depreciation, amortization and impairment shown separately below and including non-cash compensation of $284,180 and $2,690,836 for the year ended December 31, 2007 and 2006, respectively) 6,240,640 6,099,422 Depreciation and amortization 162,553 99,395 Impairment of note receivable - 47,000 Impairment of capitalized software 30,795 Write off of deferred offering costs - 602,262 Total selling, general and administrative expenses 6,433,988 6,848,079 Operating loss (11,378,404) (8,595,388) Other income (expense): Interest income 288,437 107,043 Interest expense (2,754,027) (1,614,331) Loss on extinguishment of debt (1,328,565) - Total other expense (3,794,155) (1,507,288) Loss before income tax benefit (15,172,559) (10,102,676) Income tax (benefit) (2,367,000) (233,000) Net loss $ (12,805,559) $ (9,869,676) Net loss per share: Basic and diluted $ (1.21) $ (1.77) Shares used to compute net loss per share: Basic and diluted 10,623,167 5,584,420 Smart Move, Inc. Statements of Cash Flows Year ended Year ended December 31, December 31, 2007 2006 Cash flows from operating activities: Net loss $ (12,805,559) $ (9,869,676) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 3,040,944 1,203,985 Impairment of fixed assets 1,539,563 - Impairment of capitalized/purchased software 30,795 - Non-cash compensation 284,180 2,690,836 Write off of deferred offering costs - 602,262 Amortization of debt discount 1,371,057 351,754 Loss on debt extinguishment 1,328,565 - Amortization of warrants for services - 11,786 Bad debt expense 168,014 31,858 Additional shares issued upon conversion of debt to equity 185,482 36,670 Additional warrants issued upon conversion of debt to equity 64,955 124,470 Loss on asset disposal - 7,446 Impairment of notes receivable - 47,000 Deferred income tax benefit (2,367,000) (233,000) Change in operating assets and liabilities: Accounts receivable (126,846) (114,720) Prepaid and other (31,434) (102,083) Packing supplies (94,437) - Contracts in process (149,597) (149,168) Accounts payable 934,247 121,996 Accrued interest 704,847 442,433 Deferred revenue 342,783 15,273 Net cash used in operating activities (5,579,441) (4,780,878) Cash flows from investing activities: Additions of property and equipment (excluding items under capital lease) (9,788,357) (5,789,427) Capitalized internally developed software (252,816) - Notes receivable - (47,000) Deposits on office lease (39,200) (44,000) Net cash used in investing activities (10,080,373) (5,880,427) Cash flows from financing activities: Proceeds from sale of member shares - 2,100,008 Offering costs on sale of and conversion to member shares - (176,766) Proceeds from IPO - 16,560,000 Offering costs on IPO - (2,302,315) Proceeds from exercise of options - 25,000 Proceeds from notes payable 2,829,000 6,832,500 Notes payable issuance costs (233,395) (532,113) Proceeds from bank debt - 500,000 Bank debt issuance costs - (4,500) Payments on bank debt (704,930) (649,637) Payments on obligations under capital leases (97,495) (79,139) Issuance of underwriter warrants in connection with IPO for cash - 100 Checks drawn in excess of available bank balances - (199,802) Deferred offering costs - (520,279) Net cash provided by financing activities 1,793,180 21,553,057 Net increase (decrease) in cash and cash equivalents (13,866,634) 10,891,752 Cash and cash equivalents at beginning of year 14,235,823 3,344,071 Cash and cash equivalents at end of year $ 369,189 $ 14,235,823 DATASOURCE: Smart Move, Inc. CONTACT: Pete Bloomquist of Smart Move, Inc., +1-303-339-9558 Web site: http://www.gosmartmove.com/

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