AppSwarm Inc (SWRM)

[SteveKing]

San West Inc. Reports Fourth Quarter and Full Year 2009 Results
Q4 Revenue Increases 130% Sequentially vs. Q3 and Up 14.8% vs. Q4 2008; Company Restates Fiscal 2008 Results

SANTEE, CA--(Marketwire - April 16, 2010) - San West Inc. (OTCBB: SNWT), an emerging leader in the design, manufacturing, sales and repairs of off-road buggies, today reported financial results for its fourth quarter and full-year period ended December 31, 2009 and provided guidance for expected first quarter 2010 results.

Restatement of Financial Results for the Year Ended December 31, 2008

San West announced that it had restated its financial statements for the year ended December 31, 2008 due to the Public Accounting Oversight Board revoking the license of the Blackwing Group, LLC, San West, Inc's former auditor who opined on San West's 2008 financial statements. As a result, L.L. Bradford & Company, LLC, the Company's current auditors, have audited San West's financial statements for 2008. Accordingly, the Company updated its 2008 financial statements to reflect the following changes:

• The write off of uncollectible accounts receivable of $12,353 in 2008.
• The write down of inventory to market value of $57,269.
• The write down of goodwill by $54,889.
• The reclassification of flooring notes payable of $465,849 from accounts payable to floorplan notes payable.
• The reclassification of $80,000 from shareholder loans to notes payable.
• Increase of $17,090 in other current liabilities to recognize expense related to deferred rent and accrued salaries.
• The results stated in this press release relating to 2008 or prior-year figures reflect the restatement noted above.

Operational and Corporate Highlights

San West announced significant improvements to a number of key business metrics pertaining to efficiency of the online advertising strategy employed by partner website, www.CountyImports.com. The keyword marketing overhaul campaign, launched in early February and announced March 4, 2010, has rapidly transformed www.CountyImports.com into the leading online off-road vehicle (ORV) dealer with regard to "natural" or "organic" web traffic, driving a record flow of free, highly-targeted web traffic to the website, and in turn facilitating a 37% decrease in overall online advertising costs compared to both 2008 and 2009, the two most lucrative years in the website's history.

• San West and its wholly owned subsidiary, CountyImports.com, announced that CBS Entertainment's long-running and popular game show, "The Price is Right" will award a pair of CMS 110cc Mini Kids ATVs with Remote Shut Off Safety, provided by CountyImports.com, to a future contestant on the show. As part of this agreement, CountyImports.com will have its logo shown during the show, as part of the description of the prize.

• San West reinforced its balance sheet and working capital position by entering into an investment agreement for a $10 million equity line of credit with Dutchess Opportunity Fund, II, LP.

• San West launched the first of its marketing and advertising campaigns designed to increase sales of the Company's Buggy World product line and exposure of their full suite of products and services. The ad campaign, which includes 20 sixty second 'on-air' and 125 'online streaming' commercials per week, centers on the winning of a Buggy World Exclusive "Truggy!"

• The Company elected Jesse Gonzales, founder and president of CountyImports.com, to its board of directors. Mr. Gonzales is responsible for quickly transforming CountyImports.com into the second largest online dealer of off-road recreational vehicles (ORVs) in the United States with annual revenues exceeding $3 million and more than 25,000 customers. He has deep roots in both the motor-sports and e-commerce sectors and is directly responsible for the sales of over 50,000 affordable ATVs, Gas Scooters, Go Karts and Dirt bikes since 2004, a milestone achieved by very few individuals to date.

• The Company announced the launch of a parts division of the www.CountyImports.com site, at www.CountyImportParts.com. The launch adds yet another revenue stream to CountyImports.com and San West, as the Company is now poised to become the leader in the online distribution of parts and accessories to off-road motorsports enthusiasts around the world.

• Buggy World presented at Glamis Dunes on Thanksgiving weekend. The Glamis Dunes weekend is considered to be the busiest weekend of the season with more than 250,000 attendees.

• Buggy World added an additional retail location, by entering into a sales partnership with Joy Ride USA (www.JoyRideUSA.net), located in Ocotillo off Highway 78 in Imperial County, California. Under the terms of the agreement Joy Ride USA will sell Buggy World products, such as off-road vehicles, vehicle parts and accessories at its store which is situated in one of the region's most popular off-road recreation locations.

Fourth Quarter Financial Results

The Company reported revenues for the fourth quarter of 2009 of $500,554, a sequential increase of 130% compared to the $217,099 for the third quarter of 2009 and an increase of 14.5% compared to the approximately $437,205 reported in the fourth quarter last year, when San West was a private company. Gross profit for the quarter was $111,641, or 22.3% gross profit margin, compared sequentially to gross profit of $35,695, or 16.4% gross profit margin in the third quarter of 2009 and compared to gross margin of $83,911, or 19.2% gross profit margin in the fourth quarter for 2008. Total operating expenses were $690,724 compared to $321,506 in the same period last year with the increase due mainly to increases in personnel, facility, advertising, insurance and other general operating costs related to becoming a publicly traded entity. Net loss for the quarter was $2.7 million, or $(0.03) per share, compared to a net loss of $292,987 or $(0.00) last year. The net loss included a $2.1 million loss on impaired Goodwill related to the Human BioSystems merger and increased interest expense related to the Company's higher debt load.

"We concluded a record year for San West in 2009, and enter 2010 poised to build on this success and solidify our global position as a leader in the ORV industry," commented Frank Drechsler, President and CEO of San West Inc. "The fourth quarter was impacted by lower than expected buggy sales, partially offset by accelerating Internet sales as we continued to strengthen our online presence. However, we continued to demonstrate both sequential and year-over-year progress, growing and diversifying our revenue. In particular, we made progress in our advertising initiatives, designed to increase the quality and quantity of visitors to our online properties, and the early results have been exciting. We believe as we continue to execute our strategic plan, the advertising adjustments, combined with our search engine optimization and marketing strategies, will result in significant growth in our online revenues."

Mr. Drechsler continued, "We have completed the difficult steps necessary to resolve past issues related to our merger with Human BioSystems and our prior auditing firm. As a result, we have restated our 2008 financial results and now move forward with a clean slate and appropriate audit partners."

Full-Year Financial Results

For the year ended December 31, 2009, revenue was approximately $1.0 million, an increase of 73.5% compared to the $603,424 for 2008. Gross profit was $257,977, or 24.6% gross profit margin, compared to gross profit of $103,214, or 17.1% gross profit margin last year. The net loss, inclusive of the aforementioned write-downs, for 2009 was approximately $3.3 million, or $(0.03) per share, compared to a net loss of $433,517, or $(0.00) per share for 2008.

Outlook

For the first quarter ended March 31, 2010, management expects revenue of at least $480,000, compared to revenue of $179,000 for the first quarter last year. This estimate is based on:

Total un-audited Internet sales for its partner website www.CountyImports.com have surpassed $393,000 for the first three months of 2010. These transactions are not associated with goods sold at any Buggy World brick & mortar locations or affiliate shops. This represents a 33.5% increase compared to total, un-audited online sales for the corresponding period of 2009 and is essentially flat on a year-over-year basis compared to the $402,000 for the first quarter of 2009, which represented the highest quarterly online sales in the Company's more than five year existence. Average online orders grew nearly 21% from $1,141 per transaction over the comparative period to nearly $1,700 per order over the first three months of 2010.

Internet sales increased sequentially for each month of 2010 thus far, indicating acceleration due to the more highly-targeted web traffic being driven to www.CountyImports.com through more innovative online advertising.

Mr. Drechsler concluded, "San West and CountyImports.com management continue to be excited about the future. As we move into the seasonally slower first quarter, we are in the strongest position in our company's history. We have diversified our product offerings to begin to mitigate the seasonal slowness in our scooter business. Like many retailers, we did not experience the large holiday season bump we had anticipated, but our weekly and monthly sales levels continue to increase from our online properties. We believe 2010 will be a record year for San West."

About San West Inc.

San West Inc. finds its niche in the off-road arena improving designs of buggy manufacturers and, selling these products and services as well as repairing of these off-road buggies and additionally providing after market performance products and accessories for buggies. Our products are sold both at our Online store and through our growing dealer network, while our buggy repair services are sold and repaired at our store, Buggy World. Buggy World is the exclusive authorized sales, service and parts distributor for San Diego County with a factory-trained staff that can answer all product and service questions. Buggy World currently has two retail locations in San Diego County, California as well as a growing Internet presence. For further information about Buggy World and its products, please visit www.buggyworld.net and http://stores.ebay.com/BuggyWorld-8770.

For further information about San West Inc. you may visit www.sanwestinc.com.