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August 11, 2005 - 5:21 PM EDT


RelationServe Media, Inc. Announces Second Quarter Results
RelationServe Media, Inc. (OTC Bulletin Board: RSVM) a leading provider of permission-based e-marketing solutions, today announced financial results for the second quarter ended June 30, 2005. The Company's quarterly results were highlighted by $3.9 million in revenues, an increase of 57.5% in revenues compared to the corresponding period in 2004. Total revenues for the six month period ended June 30, 2005 were $6.7 million, an increase of 73.8% from the corresponding period in 2004. Earnings for the quarter were $703,797 or earnings per diluted share of $0.04. Earnings for the six-month period were $1,050,827 or earnings per diluted share of $0.06. Earnings in the 2004 periods benefited from the predecessor company's status as a partnership thereby resulting in no tax impact on earnings.

"We are extremely pleased with our performance this quarter and especially with the expansion in our business development efforts," said Warren Musser, Chairman of RelationServe Media. "Our recurring customer base has been steadily increasing and has facilitated an ongoing expansion in our database. Consequently, we have been able to grow the business efficiently by leveraging our growing database as evidenced by the company's improved margins."

Quarterly gross profit grew during the quarter to $3.6 million representing 90.5% of revenues compared to $2.2 million representing 85.6% of revenues in the corresponding period in 2004. Operating income for the quarter was $1.1 million, an increase of 59.9% from the corresponding period in 2004. However, on a percentage of revenues basis, operating income grew at a more moderate rate to 28.6% in the 2005 second quarter, compared to 28.2% in the corresponding period in 2004, primarily due to the initiation of a reserve for receivables in 2005.

As of June 30, 2005, the Company had only $700,000 of debt outstanding. Total cash and short-term investments available was approximately $2.9 million.

"We believe that RelationServe has established an excellent foundation for future growth as evidenced by our healthy and growing financial condition and expanding client base," commented Mr. Musser. "We expect the strength of our brand and the quality of our customer experience will enable us to continue to expand our client base and unearth complementary acquisition opportunities as we execute our business model."

About RelationServe Media, Inc.

Headquartered in Fort Lauderdale, Florida, RelationServe Media develops and executes client-tailored online and offline marketing programs. As part of its full suite of marketing solutions, RelationServe Media owns and manages one of the industry's largest email databases with over 175 million email addresses and a total postal database of 180 million records for its client's direct marketing initiatives. RelationServe Media believes that it has the industry's largest and most accurate database for appending and enhancing customer database records with information on more than 85 million opt-in consumers. In addition, RelationServe Media owns a collection of over 60 web-mining properties that generate over 10 million online registration page views per month for client lead generation initiatives. For more information, visit http://www.relationserve.com.

Safe Harbor Statement under the Private Securities Litigation reform Act of 1995: Forward-looking statements often are proceeded by words such as "believes", "expects", "may", "anticipates", "plans", "intends", "assumes", "will" or similar expressions. Forward-looking statements reflect management's current expectations, as of the date of this press release, and involve certain risks and uncertainties. RelationServe Media's actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. The statements that are not historical facts contained in this press release are "forward-looking statements" that involve certain risks and uncertainties, including, but not limited to, risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, the effectiveness, probability and marketability of such products, the ability to protect proprietary information, the impact of current, pending or future legislation and regulation on the electronic marketing industry, the impact of competitive products or pricing, technological changes, the effect of general economic and business conditions and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission.


--------------------------------------------------------------------------------


RELATIONSERVE MEDIA, INC. AND SUBSIDIARIES
BALANCE SHEET
June 30, 2005
(Unaudited)


ASSETS

CURRENT ASSETS:
Cash $ 2,907,801
Accounts receivable, less allowance for doubtful
accounts of $1,682,619 2,970,199
Prepaid expenses and other assets 84,283
------------

Total current assets 5,962,283
------------

Property and equipment, net 737,745

Intangibles, net 1,250,304
Other assets 28,966
------------

Total Assets $ 7,979,298
============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 319,305
Accrued expenses 416,179
Accrued commissions 598,335
Income taxes payable 644,055
Deferred rent 180,630
Customer deposits 105,161
------------

Total current liabilities 2,263,665

LONG-TERM NOTE PAYABLE 700,000
------------

Total liabilities 2,963,665
------------

SHAREHOLDERS' EQUITY:
Preferred stock ($.001 Par value; 10,000,000 share
authorized; No shares issued and outstanding) -
Common stock ($.001 Par value; 90,000,000 share
authorized; 18,641,015 shares issued and outstanding) 18,641
Common stock issuable (1,130,000 shares) 1,130
Paid-in capital 7,088,156
Accumulated deficit (43,693)
Less: Deferred compensation (2,048,601)
------------

Total shareholders' equity 5,015,633
------------

Total liabilties and shareholders' equity $ 7,979,298
============


RELATIONSERVE MEDIA, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(Unaudited)


For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Revenues, net $ 3,986,353 $ 2,530,907 $ 6,678,023 $ 3,842,193

Cost of revenues 377,701 364,742 733,252 844,931
------------ ------------ ------------ ------------

Gross Profit 3,608,652 2,166,165 5,944,771 2,997,262
------------ ------------ ------------ ------------

Selling Expenses:
Salaries and
commissions 835,940 730,232 1,545,486 1,221,303
Advertising and
trade shows 166,425 124,997 302,278 221,172
------------ ------------ ------------ ------------

1,002,365 855,229 1,847,764 1,442,475
------------ ------------ ------------ ------------

General and
Administrative
Expenses:
Bad debt 276,801 - 577,202 -
Salaries 214,334 183,068 344,323 335,431
Depreciation and
amortization 188,256 103,225 348,547 195,789
Professional fees 233,910 73,411 256,353 106,942
Stock-based
consulting
expense 127,632 - 127,632 -
Stock-based
compensation
expense 4,167 - 4,167 -
Other general and
administrative 419,582 237,337 737,452 425,081
------------ ------------ ------------ ------------

1,464,682 597,041 2,395,676 1,063,243
------------ ------------ ------------ ------------

Income from
Operations 1,141,605 713,895 1,701,331 491,544

Other Expense:
Interest expense (6,449) - (6,449) -
------------ ------------ ------------ ------------

Income before
provision for
income taxes 1,135,156 713,895 1,694,882 491,544

Provision for
income taxes (431,359) - (644,055) -
------------ ------------ ------------ ------------

Net income $ 703,797 $ 713,895 $ 1,050,827 $ 491,544
============ ============ ============ ============


Net income per
common share:
Net income per
common share -
basic $ 0.05 $ 0.06 $ 0.08 $ 0.04
============ ============ ============ ============
Net income per
common share -
diluted $ 0.04 $ 0.06 $ 0.06 $ 0.04
============ ============ ============ ============

Weighted average
common shares
outstanding -
basic 13,469,852 12,001,000 12,739,483 12,001,000
============ ============ ============ ============
Weighted average
common shares
outstanding -
diluted 17,934,012 12,001,000 17,036,254 12,001,000
============ ============ ============ ============


RELATIONSERVE MEDIA, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS

For the Six Months Ended
June 30,
------------------------
2005 2004
------------ ------------
(Unaudited) (Unaudited)
Cash Flows From Operating Activities:
Net income $ 1,050,827 $ 491,544
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 348,547 195,789
Stock-based compensation and
consulting 131,799 -
Changes in assets and liabilities:
Accounts receivable (2,347,138) (1,179,137)
Due from principal member 140,312 (5,654)
Prepaid expenses and other
current assets (17,749) 57,691
Other assets - 28,966
Accounts payable (18,492) (108,048)
Accrued expenses 209,547 10,971
Accrued commissions 342,065 201,739
Income taxes payable 644,055
Deferred rent (12,235) 172,238
Customer deposits (199,052) 286,528
------------ ------------

Net cash provided by
operating activities 272,486 152,627
------------ ------------

Cash Flows From Investing Activities:
Cash used in acquisition (150,000) -
Purchase of property and equipment (50,480) (116,997)
Purchase of intangible assets (708,767) (525,695)
------------ ------------

Net cash used in investing
activities (909,247) (642,692)
------------ ------------

Cash Flows From Financing Activities:
Net proceeds from sales of common stock 3,459,807 -
Proceeds from exercise of warrants 137,500
Contributions from members - 1,030,001
Draws by members (207,124) -
Payments on notes payable - (674,499)
------------ ------------

Net cash provided by
financing activities 3,390,183 355,502
------------ ------------

Net increase (decrease) in cash 2,753,422 (134,563)

Cash - Beginning of period 154,379 213,943
------------ ------------

Cash - End of period $ 2,907,801 $ 79,380
============ ============

Supplemental Disclosures of Cash Flow
Information
Cash payments for interest $ 810 $ -
============ ============
Cash payments for income taxes $ - $ -
============ ============

Non-cash investing and financing activities:
Note payable assumed in connection with
acquisition $ 700,000 $ -
============ ============
Common stock issued for future services $ 2,180,000 $ -
============ ============
Distribution of software to member (pre-
acquisition) $ 200,000 $ -
============ ============



for RelationServe Media:
Summit Financial Partners, LLC
Anthony D. Altavilla, President
317-218-0204



Source: Business Wire (August 11, 2005 - 5:21 PM EDT)

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