Cornerstone Reports Financial Results for Third Quarter of Fiscal 2001

Apr 16, 2001, 01:00 ET from Cornerstone Internet Solutions

    PARSIPPANY, N.J., April 16 /PRNewswire/ -- Cornerstone Internet Solutions,
 a provider of comprehensive business-to-business (B2B) e-commerce services and
 solutions, today reported results for the quarter ended February 28, 2001.
 For the third quarter of fiscal 2001, the Company reported a net loss
 attributable to common stockholders of $980,085 or $.04 per share, compared
 with a net loss attributable to common stockholders of $3,290,542 or $.15 per
 share for the third quarter of fiscal 2000. For the nine month period ended
 February 28, 2001, the Company reported a net loss attributable to common
 stockholders of $5,972,593 or $.24 per share, compared with a net loss
 attributable to common stockholders of $5,187,262 or $.31 for the nine month
 period ended February 29, 2000.
      The financial results for the three month and nine month periods ended
 February 28, 2001, include the Company's share of the loss of B2Bgalaxy.com,
 $917,874 and $3,897,671, respectively. Additionally, the decision to
 discontinue the Company's Internet services business represents $1,836,720 or
 $.07 per common share of the loss reported for the nine months ended February
 28, 2001.
     Cornerstone is in the process of developing a new growth strategy through
 business combinations, which may or may not include electronic commerce
 opportunities over the Internet, and which may or may not include a change in
 control. The Company plans to use its corporate structure and status as a
 publicly traded company to secure an acquisition or other business combination
 with a viable operating business. To date the Company has no commitments,
 agreements or understandings with respect to any such transaction.
      On February 21, 2001, the Company was advised by the Nasdaq Listing
 Qualifications Panel ("the Panel") that the Company's Common Stock would be
 delisted from the Nasdaq SmallCap Market because the Panel lacked confidence
 that the Company could sustain compliance with the Nasdaq SmallCap Market
 listing requirements.  The Company is awaiting a determination by the NASD as
 to whether the Company's Common Stock will trade on the OTC Bulletin Board
 System or remain on the "Pink Sheets" where it is currently trading.  The
 Company's Common Stock continues to trade on the Boston Stock Exchange.
 However, the Company's Common Stock could be considered a penny stock and be
 subject to various regulations which could have an adverse effect on the
 trading market for and market price of the Company's Common Stock.
     Since the beginning of the third quarter, B2Bgalaxy.com, which is 38%
 owned by Cornerstone, continued to reduce operating expenses, licensed its
 proprietary technology to a major food distributor to power their private
 marketplace and closed its previously announced transaction with Telefonica
 B2B. Katalyx Food Service, a subsidiary of Telefonica B2B, is currently using
 B2B's technology to operate 4 marketplaces: Spain, Argentina, Brazil and
 Mexico.
 
     About Cornerstone Internet Solutions
     Cornerstone Internet Solutions has a 38% interest in B2Bgalaxy.com.
 B2Bgalaxy.com creates industry-specific business-to-business e-commerce
 marketplaces that link buyers and sellers through on-line exchanges and
 focuses on improving member profitability through the use of its award-winning
 technology.
 
     About B2Bgalaxy.com
     B2Bgalaxy.com is leading the development and deployment of proprietary
 web-based marketplace software solutions to streamline the supply chains of
 multiple industries.
     FOODgalaxy.com, a division of B2Bgalaxy.com, is an award-winning
 marketplace for the foodservice that provides a complete e-commerce solution
 to foodservice establishments and distributors.  Foodservice operators utilize
 PowerPurchasing, FOODgalaxy.com's proprietary procurement software, to
 purchase food and supplies online from their distributors. Through
 PowerVendor, FOODgalaxy.com's turnkey sell-side e-commerce application,
 distributors can increase account penetration and reduce their cost of
 customer acquisition, while simultaneously lowering other costs of conducting
 business.
 
     Some paragraphs of this news release, particularly those describing,
 Cornerstone Internet Solutions', FOODgalaxy.com's and B2Bgalaxy.com's future
 business prospects or financings, contain forward-looking statements within
 the meaning of Section 27A of the Securities Act of 1933, as amended, and
 Section 21E of the Securities Exchange Act of 1934, as amended. Actual results
 could differ materially from those projected in the forward-looking statements
 as a result of a number of factors, including difficulties in implementing
 desired features, delays in completing the B2Bgalaxy and various industry
 specific web sites, including FOODgalaxy.com, technical challenges, cost
 overruns, changes in design, competition, and so on, any of which could have
 an adverse effect on the Company and B2Bgalaxy.com and its communities,
 including FOODgalaxy.com. Factors such as these as well as those contained in
 the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31,
 2000 could have an adverse effect on the Company's results of operations. In
 light of significant uncertainties inherent in forward-looking statements
 included herein, the inclusion of such information should not be regarded as a
 representation by the Company or any other person that the objectives and
 plans of the Company will be achieved.
 
                     Cornerstone Internet Solutions Company
                Condensed Consolidated Statements of Operations
                                  (unaudited)
 
                                                       Three months ended
                                                 February 28,   February 29,
                                                         2001           2000
     Subscription revenue                                 $--        $27,928
     Total revenues                                        --         27,928
 
     Cost of subscription revenue                          --        203,791
     Marketing, sales, and support                         --        711,306
     General and administrative expenses               62,211        479,649
     Research and development                              --        228,774
       Total costs and expenses                        62,211      1,623,520
 
     Operating loss                                  (62,211)    (1,595,592)
 
     Other income (expense):
     Interest income                                       --         29,966
     Loss on sale of investments, net                      --       (59,080)
     Other income, net                                     --          1,367
     Share of loss in B2Bgalaxy.com                 (917,874)             --
 
     Loss from continuing operations
       before minority interest                     (980,085)    (1,623,339)
 
     Minority interest in subsidiary, net                  --      (221,929)
     Loss from continuing operations                (980,085)    (1,845,268)
     Loss from operations of
       discontinued operations                             --    (1,445,274)
 
     Net loss                                      $(980,085)   $(3,290,542)
     Loss per share information:
       Basic and diluted loss per share
       from continuing operations                      $(.04)         $(.08)
       Basic and diluted loss per share
       from discontinued operations                        --          (.07)
     Basic and diluted net loss per share
       attributable to common stockholders             $(.04)         $(.15)
 
     Weighted average shares of common stock
       used to compute loss per share
       information                                 25,108,326     22,613,423
 
 
                     Cornerstone Internet Solutions Company
                Condensed Consolidated Statements of Operations
                                  (unaudited)
 
                                                        Nine months ended
                                                 February 28,   February 29,
                                                         2001           2000
     Subscription revenues                                $--        $41,323
     Total revenues                                        --         41,323
     Cost of subscription revenue                          --        421,404
     Marketing, sales, and support                         --        843,210
     General and administrative expenses              238,202      1,394,175
     Research and development                              --        271,888
       Total costs and expenses                       238,202      2,930,677
 
     Operating loss                                 (238,202)    (2,889,354)
 
     Other income (expense):
       Interest income                                     --         53,941
       Gain on sale of investments, net                    --        669,670
       Other expense, net                                  --          (821)
       Share of loss in B2Bgalaxy.com             (3,897,671)             --
 
     Loss from continuing operations
       before minority interest                   (4,135,873)    (2,166,564)
     Minority interest in subsidiary, net                  --      (665,787)
     Loss from continuing operations              (4,135,873)    (2,832,351)
 
     Discontinued operations:
       Loss from operations of
         discontinued operations                    (915,567)    (2,348,161)
       Loss on disposal of
         discontinued operations                    (921,153)             --
       Total loss from discontinued
         operations                               (1,836,720)    (2,348,161)
       Net loss                                   (5,972,593)    (5,180,512)
 
     Preferred stock dividends and preferences             --        (6,750)
     Net loss attributable to
       common stockholders                       $(5,972,593)   $(5,187,262)
     Loss per share information:
     Basic and diluted loss per share
       from continuing operations                     $(0.17)        $(0.17)
     Basic and diluted loss per share
       from discontinued operations                    (0.07)         (0.14)
     Basic and diluted net loss per share
       attributable to common stockholders            $(0.24)       $ (0.31)
 
     Weighted average shares of common stock
       used to compute loss per share
       information                                 25,108,326     16,631,522
 
 

SOURCE Cornerstone Internet Solutions
    PARSIPPANY, N.J., April 16 /PRNewswire/ -- Cornerstone Internet Solutions,
 a provider of comprehensive business-to-business (B2B) e-commerce services and
 solutions, today reported results for the quarter ended February 28, 2001.
 For the third quarter of fiscal 2001, the Company reported a net loss
 attributable to common stockholders of $980,085 or $.04 per share, compared
 with a net loss attributable to common stockholders of $3,290,542 or $.15 per
 share for the third quarter of fiscal 2000. For the nine month period ended
 February 28, 2001, the Company reported a net loss attributable to common
 stockholders of $5,972,593 or $.24 per share, compared with a net loss
 attributable to common stockholders of $5,187,262 or $.31 for the nine month
 period ended February 29, 2000.
      The financial results for the three month and nine month periods ended
 February 28, 2001, include the Company's share of the loss of B2Bgalaxy.com,
 $917,874 and $3,897,671, respectively. Additionally, the decision to
 discontinue the Company's Internet services business represents $1,836,720 or
 $.07 per common share of the loss reported for the nine months ended February
 28, 2001.
     Cornerstone is in the process of developing a new growth strategy through
 business combinations, which may or may not include electronic commerce
 opportunities over the Internet, and which may or may not include a change in
 control. The Company plans to use its corporate structure and status as a
 publicly traded company to secure an acquisition or other business combination
 with a viable operating business. To date the Company has no commitments,
 agreements or understandings with respect to any such transaction.
      On February 21, 2001, the Company was advised by the Nasdaq Listing
 Qualifications Panel ("the Panel") that the Company's Common Stock would be
 delisted from the Nasdaq SmallCap Market because the Panel lacked confidence
 that the Company could sustain compliance with the Nasdaq SmallCap Market
 listing requirements.  The Company is awaiting a determination by the NASD as
 to whether the Company's Common Stock will trade on the OTC Bulletin Board
 System or remain on the "Pink Sheets" where it is currently trading.  The
 Company's Common Stock continues to trade on the Boston Stock Exchange.
 However, the Company's Common Stock could be considered a penny stock and be
 subject to various regulations which could have an adverse effect on the
 trading market for and market price of the Company's Common Stock.
     Since the beginning of the third quarter, B2Bgalaxy.com, which is 38%
 owned by Cornerstone, continued to reduce operating expenses, licensed its
 proprietary technology to a major food distributor to power their private
 marketplace and closed its previously announced transaction with Telefonica
 B2B. Katalyx Food Service, a subsidiary of Telefonica B2B, is currently using
 B2B's technology to operate 4 marketplaces: Spain, Argentina, Brazil and
 Mexico.
 
     About Cornerstone Internet Solutions
     Cornerstone Internet Solutions has a 38% interest in B2Bgalaxy.com.
 B2Bgalaxy.com creates industry-specific business-to-business e-commerce
 marketplaces that link buyers and sellers through on-line exchanges and
 focuses on improving member profitability through the use of its award-winning
 technology.
 
     About B2Bgalaxy.com
     B2Bgalaxy.com is leading the development and deployment of proprietary
 web-based marketplace software solutions to streamline the supply chains of
 multiple industries.
     FOODgalaxy.com, a division of B2Bgalaxy.com, is an award-winning
 marketplace for the foodservice that provides a complete e-commerce solution
 to foodservice establishments and distributors.  Foodservice operators utilize
 PowerPurchasing, FOODgalaxy.com's proprietary procurement software, to
 purchase food and supplies online from their distributors. Through
 PowerVendor, FOODgalaxy.com's turnkey sell-side e-commerce application,
 distributors can increase account penetration and reduce their cost of
 customer acquisition, while simultaneously lowering other costs of conducting
 business.
 
     Some paragraphs of this news release, particularly those describing,
 Cornerstone Internet Solutions', FOODgalaxy.com's and B2Bgalaxy.com's future
 business prospects or financings, contain forward-looking statements within
 the meaning of Section 27A of the Securities Act of 1933, as amended, and
 Section 21E of the Securities Exchange Act of 1934, as amended. Actual results
 could differ materially from those projected in the forward-looking statements
 as a result of a number of factors, including difficulties in implementing
 desired features, delays in completing the B2Bgalaxy and various industry
 specific web sites, including FOODgalaxy.com, technical challenges, cost
 overruns, changes in design, competition, and so on, any of which could have
 an adverse effect on the Company and B2Bgalaxy.com and its communities,
 including FOODgalaxy.com. Factors such as these as well as those contained in
 the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31,
 2000 could have an adverse effect on the Company's results of operations. In
 light of significant uncertainties inherent in forward-looking statements
 included herein, the inclusion of such information should not be regarded as a
 representation by the Company or any other person that the objectives and
 plans of the Company will be achieved.
 
                     Cornerstone Internet Solutions Company
                Condensed Consolidated Statements of Operations
                                  (unaudited)
 
                                                       Three months ended
                                                 February 28,   February 29,
                                                         2001           2000
     Subscription revenue                                 $--        $27,928
     Total revenues                                        --         27,928
 
     Cost of subscription revenue                          --        203,791
     Marketing, sales, and support                         --        711,306
     General and administrative expenses               62,211        479,649
     Research and development                              --        228,774
       Total costs and expenses                        62,211      1,623,520
 
     Operating loss                                  (62,211)    (1,595,592)
 
     Other income (expense):
     Interest income                                       --         29,966
     Loss on sale of investments, net                      --       (59,080)
     Other income, net                                     --          1,367
     Share of loss in B2Bgalaxy.com                 (917,874)             --
 
     Loss from continuing operations
       before minority interest                     (980,085)    (1,623,339)
 
     Minority interest in subsidiary, net                  --      (221,929)
     Loss from continuing operations                (980,085)    (1,845,268)
     Loss from operations of
       discontinued operations                             --    (1,445,274)
 
     Net loss                                      $(980,085)   $(3,290,542)
     Loss per share information:
       Basic and diluted loss per share
       from continuing operations                      $(.04)         $(.08)
       Basic and diluted loss per share
       from discontinued operations                        --          (.07)
     Basic and diluted net loss per share
       attributable to common stockholders             $(.04)         $(.15)
 
     Weighted average shares of common stock
       used to compute loss per share
       information                                 25,108,326     22,613,423
 
 
                     Cornerstone Internet Solutions Company
                Condensed Consolidated Statements of Operations
                                  (unaudited)
 
                                                        Nine months ended
                                                 February 28,   February 29,
                                                         2001           2000
     Subscription revenues                                $--        $41,323
     Total revenues                                        --         41,323
     Cost of subscription revenue                          --        421,404
     Marketing, sales, and support                         --        843,210
     General and administrative expenses              238,202      1,394,175
     Research and development                              --        271,888
       Total costs and expenses                       238,202      2,930,677
 
     Operating loss                                 (238,202)    (2,889,354)
 
     Other income (expense):
       Interest income                                     --         53,941
       Gain on sale of investments, net                    --        669,670
       Other expense, net                                  --          (821)
       Share of loss in B2Bgalaxy.com             (3,897,671)             --
 
     Loss from continuing operations
       before minority interest                   (4,135,873)    (2,166,564)
     Minority interest in subsidiary, net                  --      (665,787)
     Loss from continuing operations              (4,135,873)    (2,832,351)
 
     Discontinued operations:
       Loss from operations of
         discontinued operations                    (915,567)    (2,348,161)
       Loss on disposal of
         discontinued operations                    (921,153)             --
       Total loss from discontinued
         operations                               (1,836,720)    (2,348,161)
       Net loss                                   (5,972,593)    (5,180,512)
 
     Preferred stock dividends and preferences             --        (6,750)
     Net loss attributable to
       common stockholders                       $(5,972,593)   $(5,187,262)
     Loss per share information:
     Basic and diluted loss per share
       from continuing operations                     $(0.17)        $(0.17)
     Basic and diluted loss per share
       from discontinued operations                    (0.07)         (0.14)
     Basic and diluted net loss per share
       attributable to common stockholders            $(0.24)       $ (0.31)
 
     Weighted average shares of common stock
       used to compute loss per share
       information                                 25,108,326     16,631,522
 
 SOURCE  Cornerstone Internet Solutions