Not in Med space anymore..............


iLinc Announces Third Quarter Fiscal 2008 Results

Third Quarter Highlights

Total revenue of $3.4 million, a decrease of eight percent over the same three-month period last year
Increased subscription license revenue to $752,000, a 54 percent increase over the same three-month period last year, and to $2.1 million, a 41 percent increase over the same nine-month period last year

Maintained combined cash and certificate of deposit balance of $1.5 million

Audio conferencing revenue declined more than the seasonal average, but is expected to rebound in the March quarter
Changing market conditions and a change in vertical sales focus adds long-term subscription revenue

Net loss before tax of $558,000, the result of continued investment in research and development and sales and marketing activities intended to foster revenue growth
Continued positive cash flow with Adjusted EBITDA1 of $1 million through first three quarters of fiscal year

ILC just keeps going up and down but no long term trend.

Profitable, junior WEBX competitor, in Med. space....those numbers look to to me!

iLinc Announces Fiscal 2007 Second Quarter Results
Thursday October 26, 8:30 am ET

Fourth Consecutive Quarter of Profitability
Second Fiscal Quarter Highlights
* Earned revenues of $3.5 million, an increase of 15% over the same three-month period last year
* Fourth consecutive quarter of profitability with net income of $156,000
* New records set in per minute usage and number of concurrent connections to hosted servers
* Achieved Adjusted EBITDA(1) of $754,000


PHOENIX, Oct. 26 /PRNewswire-FirstCall/ -- iLinc Communications, Inc. (Amex: ILC - News), developers of Web conferencing software and audio conferencing solutions, today announced results for fiscal 2007 second quarter ended September 30, 2006.
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Revenues increased 15% to $3.5 million for the three months ended September 30, 2006, when compared with revenues of $3.0 million for the same three-month period last year. Revenues increased 24% to $7.1 million for the six months ended September 30, 2006, when compared with revenues of $5.7 million for the same six-month period last year.

The Company reported a net income of $156,000 or breakeven per basic and diluted share, as compared with a net loss of $521,000, or ($0.02) per basic and diluted share, for the same three-month period last year. The Company reported a net income of $290,000 or $0.01 per basic and diluted share, as compared with a net loss of $1.4 million, or ($0.06) per basic and diluted share, for the same six-month period last year.

For the three months ended September 30, 2006, income from operations was $536,000, compared to $312,000 for the same three-month period last year. For the six months ended September 30, 2006, income from operations was $1.1 million compared to a loss from operations of $146,000 for the same six-month period last year. The Company reported Adjusted EBITDA(1) of $754,000 for the three months ended September 30, 2006, an improvement of $33,000 over the same three-month period last year. The Company reported Adjusted EBITDA(1) of $1.6 million for the six months ended September 30, 2006, an improvement of $934,000 over the same six-month period last year.

James M. Powers, Jr., President and Chief Executive Officer of iLinc Communications, said "iLinc again recorded significant gains in the September quarter in top-line revenue growth and bottom-line net income improvement when compared to the same period last year. We continue to advance our announced indirect sales distribution strategy which is beginning to have an impact after two quarters of implementation. Recent accolades put iLinc in the top four enterprise class Web conferencing software providers, with version 8.5 of our award winning software suite due for release in December. While our quarter-over-quarter revenue growth was less than planned, we have made course corrections where necessary to achieve our fiscal year goals."

James Dunn, Jr., Senior Vice President and Chief Financial Officer of iLinc Communications, said, "The September quarter marks our fourth consecutive quarter of profitability and continued improvement in our overall financial condition. We were pleased to post record level of earnings from operations and net income. With our relatively flat cost structure, we expect to see rapidly improving margins as we grow top-line revenue. We remain well-positioned from an operational and financial standpoint to achieve the goals we established for the 2007 fiscal year."

"With the execution of two significant distribution agreements in June and another OEM agreement this quarter, we look to aggressively grow market share and sales by leveraging our new indirect channels. During the quarter we made significant progress with those new distribution partners and we expect to see meaningful revenues from indirect channels in the December quarter. With indirect sales ramping up and our growing pipeline of direct sales opportunities, we expect to exceed the 22% annual projected growth rate in the Web conferencing industry during fiscal 2007," concluded Dr. Powers.

A Webcast of iLinc Communications' second quarter fiscal year 2007 conference call will be hosted live at 11:00 a.m. Eastern time on October 26, 2006. A replay of the event will be available after the call and accessible online through the Company's Web site at www.iLinc.com.

(1) Explanation of Adjusted EBITDA, Non-GAAP Financial Measure

We report adjusted EBITDA, a financial measure that is not defined by Generally Accepted Accounting Principles. We believe that adjusted EBITDA is a useful performance metric for our investors and is a measure of operating performance that is commonly reported and widely used by financial and industry analysts, investors and other interested parties because it eliminates significant non-cash and/or one-time charges to earnings. It is important to note that non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income (loss), cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of net loss to Adjusted EBITDA is as follows for the three months and six months ended September 30, 2006 and 2005.




Three months ended Six months ended
September 30, September 30,
2006 2005 2006 2005
(in thousands) (in thousands)
Net income (loss) $156 $(521) $290 $(1,406)
Non-cash charges and credits:
Interest expense 397 588 798 1,019
Financing and late fees 7 13 23 16
Debt conversion expense -- 329 -- 329
Warrant expense -- -- 15 7
Gain on debt settlement (8) (50) (8) (42)
Gain on sale of assets (3) (40) (3) (40)
Interest income (13) (2) (16) (4)
Stock Compensation Expense 46 10 73 20
Depreciation 55 235 226 471
Amortization 117 159 234 328
Adjusted EBITDA $754 $721 $1,632 $698



About iLinc Communications, Inc.
iLinc Communications, Inc. is a leading developer of Web conferencing software and audio conferencing services for highly secure and cost-effective collaborative meetings, presentations, and training sessions. The Company enables customers to purchase and own iLinc Web conferencing software, which can be installed inside of a customer's network or hosted by iLinc. Our products and services include the iLinc Suite of Web Conferencing software (MeetingLinc, LearnLinc, ConferenceLinc, and SupportLinc); Audio Conferencing Services; On-Demand Conferencing; and EventPlus, a service for professionally managed online and audio conferencing events. iLinc's products and services are used by organizations worldwide in sales, HR and training, marketing, and customer support. More information about the Phoenix-based Company may be found on the Web at www.ilinc.com.

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described within the forward-looking statements. Factors that could contribute to such differences are disclosed in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company's estimates and expectations as of the date of the press release, and subsequent events and developments may cause the Company's estimates and expectations to change. The Company specifically disclaims any obligation to update the forward- looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates and expectations of its future financial performance as of any date subsequent to the date of this press release.



iLinc, iLinc Communications, iLinc Suite, MeetingLinc, LearnLinc,
ConferenceLinc, SupportLinc, EventPlus, On-Demand, Web Presenter and its logos
are trademarks or registered trademarks of iLinc Communications, Inc. All
other company names and products may be trademarks of their respective
companies.



iLINC COMMUNICATIONS, INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Three months ended Six months ended
September 30, September 30,
2006 2005 2006 2005
(unaudited) (unaudited)
Revenues
Software licenses $916 $751 $2,150 $1,273
Software and audio services 1,841 1,711 3,609 3,411
Maintenance and professional
services 694 543 1,297 994
Total revenues $3,451 $3,005 $7,056 $5,678

Cost of revenues
Software Licenses 36 -- 81 32
Software and audio services 867 796 1,843 1,879
Maintenance and professional
services 230 185 400 298
Amortization of acquired
developed technology 67 108 134 227
Total cost of revenues 1,200 1,089 2,458 2,436

Gross profit 2,251 1,916 4,598 3,242

Operating expenses
Research and development 294 346 598 704
Sales and marketing 756 769 1,614 1,554
General and administrative 665 489 1,299 1,130
Total operating expenses 1,715 1,604 3,511 3,388

Income (loss) from operations 536 312 1,087 (146)

Interest expense (246) (259) (497) (527)
Amortization of beneficial
debt conversion (151) (329) (301) (492)
Total interest expense (397) (588) (798) (1,019)
Net (loss) gain on settlement
of debt and other obligations 8 (279) 8 (287)
Interest income (charges)
and other 7 (11) (20) (6)
Gain on sale of assets 3 40 3 40
Income (loss) from continuing
operations before income
taxes 157 (526) 280 (1,418)

Income taxes -- -- -- --

Income (loss) from continuing
operations 157 (526) 280 (1,418)
Income (loss) from
discontinued operations (1) 5 10 12
Net income (loss) 156 (521) 290 (1,406)

Series A and B preferred stock
dividends (40) (26) (79) (51)
Imputed preferred stock dividends -- (55) -- (55)
Income (loss) available to
common shareholders 116 (602) 211 (1,512)
Income (loss) per common share,
basic and diluted
From continuing operations $-- $(0.02) $0.01 $(0.06)
From discontinued operations -- -- -- --
Income (loss) per
common share $-- $(0.02) $0.01 $(0.06)

Number of shares used in
calculation of income
(loss) per share:
Basic 33,020 25,855 30,919 25,000
Diluted 33,227 25,855 31,104 25,000



iLINC COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

September 30, March 31,
2006 2006
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $401 $466
Certificates of deposit and marketable
securities 1,012 --
Accounts receivable, net of allowance
for doubtful accounts of $103 and $120,
respectively 2,498 2,207
Note receivable 64 12
Prepaid and other current assets 538 30
Total current assets 4,513 2,715

Property and equipment, net 469 336
Goodwill 11,206 11,206
Intangible assets, net 1,585 1,731
Other assets 14 12
Assets of discontinued operations -- --
Total assets $17,787 $16,000

Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long term debt $3,269 $199
Accounts payable trade 1,228 1,257
Accrued liabilities 1,511 2,213
Current portion of capital lease liabilities -- 70
Deferred revenue 998 917
Total current liabilities 7,006 4,656

Long term debt, less current maturities,
net of discount and beneficial conversion
feature of $1,273 and $1,493,
at September 30, and March 31, 2006,
respectively 4,006 6,974
Capital lease liabilities, less
current maturities -- --
Total liabilities 11,012 11,630

Shareholders' Equity:
Preferred stock, $.001 par value
10,000,000 shares authorized, Series A
120,000 and 127,5000 shares issued and
outstanding, respectively, liquidation
preference of $1,200,000 and $1,275,000,
respectively; and Series B, 70,000 shares
issued and outstanding, liquidation
preference of $700,000 -- --
Common stock, $.001 par value
100,000,000 shares authorized,
34,493,677 and 28,923,168 issued,
respectively 34 29
Additional paid-in capital 46,417 44,228
Accumulated deficit (38,268) (38,479)
Less: 1,432,412 treasury shares at cost (1,408) (1,408)
Total shareholders' equity 6,775 4,370
Total liabilities and shareholders'
equity $17,787 $16,000

Net Tangible Assets ($5,984) ($7,879) ($7,849) ($6,355)

Ummm, reasons?

I doubt it very much...

Seems to be gaining steam going into the earnings reporting season early next year.

Yesterday was wild and today calm as can be.

Volatile day! What price swings.

What's wrong with this piece of shit? It goes up day after day. I buy and it goes down 2 straight days.

Scary day for a while. Let's not see that again.

Nice accumulation day today...needed a pullback.

Good DD, JAYBIRD! Let's get this party started. I'm in for 15,000 shares @.78.

This board has fallen into disrepair!

ILC DD HIGHLIGHTS:
ILC is a rare find: A Profitable web conferencing stock with high margins growing 25% per year and 28 MM shares OS.
ILC fair value is in excess of $2 IMO based on financial metrics:
Based on Managements 25% growth forecast, ILC should earn $.10 EPS and going forward, most companies in the sector trade at 30 X EPS.
ILC has an incredibly scaleable business, as a fixed cost structure means increasing revenue goes straight to the bottom line. Teleconferencing use will continue to grow rapidly as an alternative to high cost air travel. ILC Management stated that ILC sales growth will match or exceed the Industry average 22% growth rate.
Another company in the sector with a similar float, SOFO:NASDAQ has ran from $1 to $3 + and is NOT profitable like ILC
Buy recommendation issued for iLinc on http://www.smallcaps.us....................
124% average return for their picks.
ILC won't be a secret much longer. ILC has all the ingredients for rapid price appreciation, low float, low PE, trading at a 75% discount to peers in a booming sector.
ILC reports earnings BEFORE market open Thursday and stated revenue will benefit from TWO new agreements.

Here is a Friday Alert issued on ILC:
ILC ilinc Communications -- Speculator's Radar (0.67 +0.04)

iLinc Communications is a little technology stock that has been showing good momentum on increasing volume so we thought we'd take a look. The co is a provider of Web conferencing and audio conferencing software. It can be used to provide real-time collaboration and training using Web-based tools for meetings, presentations, and training sessions etc.... It's interesting because the co has been profitable for the past three qtrs and is cash flow positive, despite being a small company. It has good growth as Q1 (Jun) revenue rose 35% yr/yr to $3.6 mln. It's important to note that license revenue is becoming a larger part of the mix as JunQ license revenue represented 34% of total revs vs 20% in the year ago period. Remember that license revs are much higher margin and almost all of it falls to the EPS line as there is little cost associated with those revs. Also, the co has been announcing a number of deals lately. Its main competitor, WebEx (WEBX) has been moving higher all year and is up 70% YTD. ILC has been trending higher and is at a new 52-wk high. It's speculative, but it has good growth, is profitable and under most radar screens as a secondary play on WEBX. Of note, the co is set to report Q2 (Sep) results on Thursday, Oct 26 in the pre-market. Mkt cap $22 mln, float 21.1 mln, avg vol 51K. (PROFX)

ILC seems to be slowly climbing back up.

I wasn't promoting it.... I just thought the iBox info should be updated. Why not just post the link to the 10k instead of littering the board with each paragraph seperately?

RESULTS OF OPERATIONS

As of December 31, 2003, we provide Web collaboration and Web conferencing software that includes a comprehensive set of features and functionality. Our name change is reflective of our focus in terms of research, development, sales and marketing on our award-winning suite of Web conferencing and Web collaboration software known as the iLinc(TM) Suite. The iLinc suite includes: LearnLinc(TM) - permits live instructor-led training and education over the Internet to remote students replicating the instructor-led environment; MeetingLinc(TM) - facilitates more effective and economical communication through online meetings using voice-over-IP technology to avoid the expense of travel and long-distance charges; ConferenceLinc(TM) - delivers your message more consistently in a one-to-many format replicating professionally managed conferencing events; and SupportLinc(TM) - gives customer service organizations the ability to provide remote, hands-on support for products, systems, or software applications. Our iLinc Web collaboration software suite is available in both an ASP and license purchase model. Since its beginnings in 1994, LearnLinc and MeetingLinc have been installed and operational in corporate, government, and educational organizations in the United States and Internationally. LearnLinc(TM), the flagship of EDT Learning's four-product iLinc suite, won first place at the Synchronous e-Learning Shootout held at Online Learning's Conference in the fall of 2002, winning by a vote of training professionals over such other notable companies as WebEx, PlaceWare (now Microsoft Live), and Centra. Our iLinc suite of products includes the ability to use integrated voice-over-IP and two-way live video.

On June 14, 2002, the Company acquired certain assets of Quisic Corporation ("Quisic"); a California based private e-Learning company in an asset purchase and common stock purchase transaction that involved the issuance of 2,000,000 common shares to certain shareholders of Quisic. The operating results of Quisic have been included in the consolidated operations of the Company commencing June 17, 2002. The purchase agreement requires that the Company pay certain contingent compensation to the seller if during the 5 year period following the closing certain sales to PBS and others occur. Through December 31, 2003, the Company has collected funds subject to this contingent provision totaling $300,000. On December 31, 2003, the seller agreed to convert the entire amount then due instead into 333,333 common shares our common stock at the fair market price of $0.90 per share.

Effective November 4, 2002, the Company acquired certain assets of Mentergy, Inc. ("Mentergy") that included the LearnLinc Web collaboration and Web conferencing software that is the foundation for the iLinc suite of products (the "LearnLinc Assets"). In exchange for the LearnLinc Assets, the Company paid $500,000, with one half due at closing and the remaining payment due in a note that was due December 13, 2003, assumed scheduled liabilities equal to $462,000 and agreed to provide a royalty earn-out payment due upon sales of the LearnLinc product. The royalty earn-out is equal to 20% for all revenues collected from the sale or license of LearnLinc software over a three-year period beginning with the closing date, with the first $600,000 of collected revenues not subject to the royalty, and the maximum amount ever due is $5,000,000. The Company accounts for any such amounts collected as additional purchase consideration in accordance with EITF No. 95-8 at the time such amounts are collected. The Company has accrued LearnLinc royalties totaling $227,000 for the nine months ended December 31, 2003. The operating results are included with the Company's as of November 4, 2002.

The operations of the Company involve many risks, which, even through a combination of experience, knowledge and careful evaluation, may not be overcome. These risks include the fact that the market for e-learning products and services is in the early stages of development and may not grow to a sufficient size or at a sufficient rate to sustain the Company's business. The Company also faces intense competition from other e-learning providers and may be unable to compete successfully. Many of the Company's existing and potential competitors have longer operating histories and significantly greater financial, technical and other resources and therefore may be able to more quickly respond to changing opportunities or customer requirements. New competitors are also likely to enter this market in the future due to the lack of significant barrier to entry in the market share. See "Additional Risk Factors That May Affect Our Operating Results and The Market Price of Our Common Stock."

REVENUES


Total revenues generated for the three months ended December 31, 2003 and December 31, 2002 were $1.6 million and $1.7 million respectively, a decrease of $100,000. Web collaboration and Learning revenues for the three months ended December 31, 2003 and December 31, 2002 were $1.6 million and $1.1 million, respectively, an increase of $500,000. The increase was a result of an increase in license revenue of $260,000 and an increase of $240,000 in service and maintenance revenues. The Company continues to focus its efforts on the higher margin license revenues while maintaining the service and maintenance revenues.

Total revenues generated for the nine months ended December 31, 2003 and 2002 were $4.4 million and $6.0 million respectively, a decrease of $1.6 million. The Company recognized $4.3 million in Web collaboration and learning revenues in the nine months ended December 31, 2003 compared with $3.3 million of Web collaboration and learning revenues in the nine months ended December 31, 2002, an increase of $1.0 million. The increase is a result of the Company's continuing focus on the Web collaboration and Web conferencing markets as well as the sales of other Learning products and services.

Revenue from dental contracts decreased by $630,000 from $642,000 for the three months ended December 31, 2002 to $12,000 for the three months ended December 31, 2003 due to the previously announced and planned modification and termination of certain dental management service contracts. As anticipated and previously announced, all of the remaining legacy management service agreements terminated during the three months ended December 31, 2003. Revenue from dental contracts decreased by $2.5 million during the nine months ended December 31, 2003 due to the previously announced and planned modification and termination of certain dental management service contracts. As anticipated and previously announced, all of the remaining legacy management service agreements terminated during the three months ended December 31, 2003.

OPERATING EXPENSES


Operating expenses consist of research and development, sales and marketing, general and administrative, and depreciation and amortization expenses. The Company incurred operating expenses of $1.7 million for the three months ended December 31, 2003, a decrease of $700,000 from $2.4 million for the three months ended December 31, 2002. This is due to decreases in salaries and wages of $437,000, depreciation and amortization of $367,000, and bad debt expense of $353,000. These were offset by increases of $391,000 in product development costs and $138,000 in legal fees. The Company has reduced head count from 66 in December of 2002 to 43 at December 31, 2003. In addition, the Company has streamlined its operations by closing non-essential facilities and consolidating those functions in its Phoenix and Troy, New York locations and is now receiving the full benefit of those cost reduction programs.

The Company incurred operating expenses of $4.8 million and $7.4 million for the nine months ended December 31, 2003 and 2002 respectively, a decrease of $2.6 million. The decrease is primarily due to decreases in salaries and wages of $1.6 million and depreciation and amortization of $1.1 million.

Research and development expenses represent expenses incurred in connection with the development of custom content services, the development of new iLinc products and new product versions and consist primarily of salaries and benefits, communication equipment and supplies. Research and development expenses for the three months ended December 31, 2003 and December 31, 2002 were $741,000 and $786,000 respectively, a decrease of $45,000. The decrease is a result of the Company's closure of the Memphis and Los Angeles offices, outsourcing of custom content development and elimination of dental operations costs. These changes caused a decrease in salaries and wages of $399,000 and dental operations of $7,000. This was partially offset by an increase in product development costs of $358,000 due to increased costs of custom development and royalty expense.

The Company incurred research and development costs of $2.0 million and $2.6 million for the nine months ended December 31, 2003 and 2002 respectively, a decrease of $650,000. The decrease is primarily a result of a decrease in compensation expenses of $1.3 million and dental operations of $34,000. This was partially offset by an increase in product development costs of $699,000 due to increased costs of custom development and royalty expense.


Sales and marketing expenses consist primarily of sales and marketing salaries and benefits, travel, advertising, and other marketing literature. Sales and marketing expenses were $460,000 and $427,000 for the three months ended December 31, 2003 and December 31, 2002, respectively, an increase of $33,000. The increase is a result of an increase in advertising and printing of $29,000 and compensation expenses of $14,000. These increased expenses were partially offset by a decrease in travel expenses of $15,000.

The Company incurred $1.2 million and $1.3 million in sales and marketing expenses for the nine months ended December 31, 2003 and 2002 respectively, a decrease of $100,000. This decrease is primarily a result of decreases in general office expenses of $83,000 and travel expenses of $73,000. These decreases were partially offset with increases of $34,000 in compensation expense and $29,000 in advertising and printing expense.

General and administrative expenses consist of the corporate expenses of the Company. These corporate expenses include salaries and benefits of executive, finance and administrative personnel, rent, bad debt expense, professional services, travel, office costs and other general corporate expenses. During the three months ended December 31, 2003 and December 31, 2002, general and administrative expenses were $358,000 and $699,000, respectively, a decrease of $341,000. The change in general and administrative expenses was primarily due to decreases in bad debt expense of $353,000, investor relations and board fees of $43,000, occupancy of $25,000, compensation and related benefit expense of $22,000, telephone of $16,000, liability insurance of $7,000 and increases in legal fees of $137,000 and travel expenses of $12,000.

The Company incurred general and administrative expenses of $1.4 million and $2.2 million for the nine months ended December 31, 2003 and 2002 respectively, a decrease of $800,000. The change was primarily due to decreases in compensation expenses of $277,000, bad debt expense of $243,000, investor relations of $121,000, accounting fees of $52,000, telephone expenses of $38,000, general office expenses of $29,000 and occupancy of $9,000.

For the three months ended December 31, 2003 and December 31, 2002 depreciation and amortization expense was $97,000 and $464,000, respectively. For the nine months ended December 31, 2003 and December 31, 2002 depreciation and amortization expense was $300,000 and $1.4 million, respectively. Beginning in fiscal 2003 the Company ceased amortizing goodwill in accordance with SFAS No. 142. The decrease is also attributed to the termination of the service agreements that returned ownership of the dental practice equipment to the related dental practices.

INCOME TAX EXPENSE


The Company recorded no tax benefit during the three and nine months ended December 31, 2003 or 2002 because it concluded it is not likely it would be able to recognize the tax asset created due to the lack of operating history. At March 31, 2003, the Company has a net deferred tax asset of $9.9 million with a corresponding valuation allowance. The Company's tax benefits are scheduled to expire over a period of six to fourteen years.

LIQUIDITY AND CAPITAL RESOURCES


The Company has a working capital deficiency, incurred an operating loss and had negative cash flows from operations during the nine months ended December 31, 2003. While the service agreements with Affiliated Practices had provided revenues and corresponding cash flows, all of those service agreements from our legacy business have terminated and therefore we will not receive any further revenues and cash flow from our dental segment. The Company currently does not have existing working capital and does not generate positive cash flows from operations. As a result, we may not have sufficient financial resources to satisfy our obligations as they come due in the near term. These matters, among others, including our limited operating history as a provider of Web conferencing and Web collaboration software, raise substantial doubt about the Company's ability to continue as a going concern. Our plan with regard to these matters includes the continued development, marketing and licensing of our iLinc suite of products and services through both internal sales efforts and through external channel partnerships. We plan to expand where appropriate with external growth by acquisition, with those acquisitions including providers of audio conferencing as well as Web conferencing products and services. Although we continue to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient revenues from its Web collaboration and e-Learning products and services to provide adequate cash flows to sustain our operations. Our continuation as a Company is therefore may be dependent on our ability to raise additional equity or debt capital, to continue to increase sales and revenues, to generate positive cash flows from operations and ultimately to achieve profitability.

In order to increase its liquidity, the Company intends to restructure or extend existing obligations to reduce cash outflows for debt service, seek if necessary additional funding from the placement of debt or equity securities, invest in further marketing and sales efforts that result in the sale of the Company's high margin software products and services. However, there can be no assurance that the Company's plans will be achieved or that the Company will be able to acquire additional sums.

As of December 31, 2003, the Company had a working capital deficit of $1.4 million. Current assets included $227,000 in cash, $1.7 million in accounts receivable, $252,000 in notes receivable and $123,000 in prepaid and other current assets. Current liabilities consisted of $975,000 of deferred revenue, $677,000 of current maturities of long-term debt and capital leases and $2.0 million in accounts payable and accrued liabilities.

Cash used in operating activities was $1.1 million during the nine months ended December 31, 2003 and $1.6 million during the nine months ended December 31, 2002. Cash used in operating activities during the nine months ended December 31, 2003 was primarily attributable to a net loss of $910,000, settlement of debt and other obligations of $632,000 and increases in accounts receivable and prepaid expenses of $893,000 and $110,000, respectively. These items were offset by $379,000 of depreciation and amortization expenses, discount accretion on debt of $210,000, an increase in deferred revenue of $150,000 and an increase in accounts payable and accrued liabilities of $818,000. Cash used in operating activities during the nine months ended December 31, 2002 was primarily attributable to a net loss of $1.7 million, increases in accounts receivable of $406,000, and decreases in deferred revenue and accounts payable and accrued liabilities totaling $740,000 and $399,000, respectively. These items were partially offset by $1.5 million of depreciation and amortization expense.

Cash provided by investing activities was $157,000 and $1.3 million for the nine months ended December 31, 2003 and December 31, 2002, respectively. Cash provided by investing activities for the nine months ended December 31, 2003 was primarily due to $334,000 from the repayment of notes receivable, proceeds received from practice terminations of $91,000 offset by $227,000 of acquisition related royalty expenses. Cash provided by investing activities during the nine months ended December 31, 2002 was primarily due to proceeds received from practice terminations of $1.1 million.

Cash provided by financing activities was $774,000 during the nine months ended December 31, 2003, while cash used in financing activities was $816,000 during the nine months ended December 31, 2002. Cash provided by financing activities during the nine months ended December 31, 2003 was due to the net proceeds of $1,288,000 related to the issuance of convertible preferred stock and warrants which was partially offset by repayment of debt and capital leases of $469,000. Cash used in financing activities during the nine months ended December 31, 2002 was primarily attributable to the repayment of debt and capital leases totaling $835,000.

HISTORICAL ACTIVITIES RELATED TO ACQUISITIONS AND CAPITAL RAISE ACTIVITIES


In connection with the Company's IPO in March of 1998, the Company issued $468,000 of notes (the "IPO Notes") to certain shareholders who had provided capital prior to the IPO. Originally, interest accrued at the rate of 6% with the entire amount due on March 30, 2003. Many of the IPO Note holders agreed to have the accrued interest added to the principal balance and extended the maturity date to April 1, 2005 in exchange for quarterly payments of interest and an increase in the interest rate to 10%. Several of the holders agreed to accept a discounted sum in full payment of their IPO Note. The new principal balance on these renewed and extended IPO Notes is $278,000 as of December 31, 2003. Several of the holders could not be located and therefore the principal portion related to those holders of $44,000 is currently past due.

The Company had issued in 1998 as a part of the consideration due to Affiliated Practices certain subordinated promissory notes (the "Series A Notes"). On September 19, 2003, all of the outstanding principal balance of the Series A Notes, in the sum of $849,000, were converted into 1,572,222 shares of the Company's common stock. A conversion price of $0.54 per share was used as the fair price per share which was the preceding twenty trading day average closing price of the Company's common stock. As a result of that conversion, the Company recorded a $252,000 charge associated with the conversion of the Series A Notes due to a difference in the closing price of the Company's common stock on the day of conversion and the twenty trading day average closing price. Holders of the Series A Notes included James Powers, who had received a $253,000 Series A Note as a part of the consideration paid to him from his own Affiliated Dental Practice transaction in 1998.

In October 2001, the Company issued $1.1 million of subordinated promissory notes to the shareholders of Learning-Edge, Inc. under the terms of the acquisition agreement (the "Learning-Edge Notes"). The Learning-Edge Notes bear interest at rates ranging from at 7.5% to 9.0% and are due in two equal installments on April 5, 2005 and on October 1, 2005, respectively. The terms of the Learning-Edge Notes provided that if the Company raises additional capital equal to or in excess of $3 million, 25% of the principal of the Learning-Edge Notes is to be repaid. For each $500,000 raised above $3 million, the repayment percentage increases by 15%. If more than $5 million is raised, 100% of the principal of the Learning-Edge Notes is to be repaid. The holders of the Learning-Edge Notes waived these accelerated payment provisions in relation to the Convertible Note Offering.

In March 2002, the Company completed a private placement offering (the "Convertible Note Offering") raising capital of $5,775,000 that was used to extinguish an existing line of credit. Under the terms of the Convertible Note Offering, the Company issued unsecured subordinated convertible notes (the "Convertible Notes"). The Convertible Notes bear interest at the rate of 12% per annum and require quarterly interest payments, with the principal due at maturity on March 29, 2012. The holders of the Convertible Note may convert the principal into shares of the Company's common stock at the fixed price of $1.00 per share. The Company may force redemption by conversion of the principal into common stock at the fixed conversion price, if at any time the 20 trading day average closing price of the Company's common stock exceeds $3.00 per share. The notes are subordinated to any present or future senior indebtedness. The placement agent received a commission of $577,500 plus $173,250 as a non-accountable expense reimbursement and received a warrant to purchase units on the same basis as other investors representing ten percent of the gross proceeds at a price of 110% of that paid by investors. During the three months ended December 31, 2003, holders with a principal balance totaling $125,000 converted their notes into common shares of the Company. As a part of the Convertible Note Offering the Company also issued warrants to purchase 5,775,000 shares of the Company's common stock for an exercise price of $3.00 per share. The Company may force redemption of the warrants if at any time the 20 trading day average closing price of the Company's common stock exceeds $5.50 per share, and the warrants expire on March 29, 2005. The fair value of the warrants was estimated using a Black-Scholes pricing model with the following assumptions: contractual and expected life of three years, volatility of 75%, dividend yield


of 0%, and a risk-free rate of 3.87%. A discount to the Convertible Notes of $1,132,000 was recorded using this value, which is being amortized to interest expense over the ten (10) year term of the Convertible Notes. As the carrying value of the notes is less than the conversion value, a beneficial conversion feature of $1,132,000 was calculated and recorded as an additional discount to the notes and is being amortized to interest expense over the ten (10) year term of the Convertible Notes. Upon conversion, any remaining discount associated with the beneficial conversion feature will be expensed in full at the time of conversion.

On September 16, 2003, the Company completed its private placement of convertible preferred stock with detachable warrants. The Company sold 30 units at $50,000 each and raised a total of $1,500,000. Each unit consisted of 5,000 shares of convertible preferred stock, par value $0.001 and a warrant to purchase 25,000 shares of common stock. The convertible preferred stock is convertible into the Company's common stock at a price of $0.50 per share (subject to adjustment in certain events, with a floor of $0.30), and the warrants are immediately exercisable at a price of $1.50 per share with a three-year term. Accordingly, each share of preferred stock is convertible into 20 shares of common stock and retains a $10 liquidation preference. The Company will pay an 8% dividend to holders of the convertible preferred stock, and the dividend is cumulative. The convertible preferred stock is non-voting and non-participating. The shares of convertible preferred stock will not be registered under the Securities Act of 1933, as amended, and were offered in a private placement providing exemption from registration. The placement agent was paid a commission of $150,000 or 10% of the gross proceeds plus $45,000, which represented a 3% non-accountable expense fee and received a warrant to purchase 3 units at the same terms of the original units. In addition, the Company paid $17,000 in legal and accounting fees bringing the net proceeds raised to $1,288,000. The Company plans on using the net proceeds for general working capital, to expand its sales and marketing activities and to retire certain acquisition related liabilities. The cash proceeds of the private placement of convertible preferred stock was allocated pro-rata between the relative fair values of the preferred stock and warrants at issuance using the Black Scholes valuation model for valuing the warrants. After allocating the proceeds between the preferred stock and warrant, an effective conversion price was calculated for the convertible preferred stock to determine the beneficial conversion discount for each share. The aggregate value of the warrants and the beneficial conversion discount of $247,000 are considered a deemed dividend in the calculation of loss per share.

In connection with the acquisition of certain assets from Mentergy, Inc. (and its wholly owned subsidiary LearnLinc Corporation), the Company issued among other consideration a secured promissory note with a principal balance of $250,000 that was due on December 13, 2003 (the "Mentergy Note"). By agreement with Mentergy and its assignees, the Company paid $50,000 on the note during December of 2003, leaving $200,000 of the remaining balance past due. Subsequent to December 31, 2003, the remaining balance of $200,000 plus accrued interest has been paid in full and the associated security interest in the LearnLinc Assets has been terminated.

In February of 2004, the Company completed a private placement offering raising capital of $500,000 that will be used for general corporate purposes. Under the terms of the offering, the Company issued unsecured subordinated convertible notes that have a term of 24 months (subject to adjustment in certain events), and the notes are subordinated to any present or future senior indebtedness. The notes bear interest at the rate of 8% per annum for the first twelve months and then 10% for the second twelve months (subject to a retroactive adjustment to 15% if the underlying shares into which the notes are convertible have not been registered by July 31, 2004) and require quarterly payments of interest only, with the principal due at maturity on February 12, 2006. The holders of the notes may convert the outstanding principal into shares of the Company's common stock at the fixed price of $0.70 per share (subject to adjustments for dilution, as defined). At the issue date, the Company calculated a beneficial conversion feature of the notes to be $214,286, which will be amortized as interest expense over the 2-year life of the debt. The holders of the notes retain certain demand and piggy-back registration rights.

RISK FACTORS THAT MAY AFFECT THE COMPANY, OUR OPERATING RESULTS AND THE MARKET

PRICE OF OUR COMMON STOCK


You should carefully consider the risks factors described below before making an investment decision concerning the Company. Of course the risks and uncertainties described below are not the only ones we face. If any of the following risks actually occur, our business, financial condition, results of operations and market price of our common stock could be materially and adversely affected.

WE HAVE A LIMITED OPERATING HISTORY, WHICH MAKES IT DIFFICULT TO EVALUATE OUR

BUSINESS.


We have a limited operating history in the e-Learning business and particularly as a provider of Web conferencing and Web collaboration software. While the organizations that we have acquired have been engaged in the their respective business for over five years, we only recently acquired those assets and have undertaken to integrate their assets into our operations at varying levels. You should not rely on our historical results as an indication of our future performance. Over the past 18 months we have made significant changes to our product mix and service mix, our growth strategies, our sales and marketing


plans, and other operational matters, including a significant reduction in our employee base. As a result, it may be difficult to evaluate an investment in our company. Given our recent investment in technology, we cannot be certain that our business model and future operating performance will yield the results that we intend. In addition, the competitive and rapidly changing nature of the e-Learning and Web conferencing markets makes it difficult for us to predict future results. Our business strategy may be unsuccessful and we may be unable to address the risks we face.

WE FACE RISKS INHERENT IN EARLY-STAGE COMPANIES IN INTERNET-RELATED BUSINESSES

AND MAY BE UNSUCCESSFUL IN ADDRESSING THESE RISKS.


We face risks frequently encountered by early-stage companies in new and rapidly evolving markets such as e-Learning and Web conferencing. We may fail to adequately address these risks and, as a consequence, our business may suffer. To address these risks among others, we must, successfully introduce and attract new customers to our products and services; successfully implement our sales and marketing strategy to generate sufficient sales and revenues to sustain operations; foster existing relationships with our existing customers to provide for continued or recurring business and cash flow; and, successfully address and establish new products and technologies as new markets develop. As an early-stage company, we may not be able to sufficiently access, address and overcome risks inherent in our business strategy.

OUR QUARTERLY OPERATING RESULTS ARE UNCERTAIN AND MAY FLUCTUATE SIGNIFICANTLY.


Our operating results have varied significantly from quarter to quarter and are likely to continue to fluctuate as a result of a variety of factors, many of which we cannot control. Factors that may adversely affect our quarterly operating results include: the size and timing of product orders; the mix of revenue from custom services and software products; the market acceptance of our products and services; our ability to develop and market new products in a timely manner and the market acceptance of these new products; the timing of revenues and expenses relating to our product sales; and, the timing of revenue recognition. Expense levels are based, in part, on expectations as to future revenue and to a large extent are fixed in the short term. To the extent we are unable to predict future revenue accurately, we may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall.

WE HAVE SIGNIFICANT OPERATING LOSSES, HAVE LIMITED FINANCIAL RESOURCES, AND MAY

NOT BECOME PROFITABLE.


We have incurred substantial operating losses and have limited financial resources at our disposal. We have substantial current and long-term obligations that we will not be able to satisfy without additional debt and/or equity capital and ultimately generating profits and cash flows from our e-Learning and Web conferencing operations. If we are unable to achieve profitability in the near future, we will face increasing demands for capital and liquidity. We may not be successful in raising additional debt or equity capital and may not become profitable in the short term. As a result, we may not have sufficient financial resources to satisfy our obligations as they come due in the short term.

OUR AUDITORS HAVE EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A

GOING CONCERN


Our consolidated financial statements have been prepared on a basis which assumes that we will continue as a going concern and which contemplates the realization of our assets and the satisfaction of our liabilities and commitments in the normal course of business. We have a significant working capital deficiency, and have suffered historically substantial recurring losses and negative cash flows from operations. These matters, among others, and the limited operating history as an e-Learning and Web collaboration company, caused our independent accountants to express their substantial doubt as to our ability to continue as a going concern.

LISTING QUALIFICATIONS MAY NOT BE MET


In September of 2003, the Company was notified by the American Stock Exchange (the "Exchange") that the Company may not have been in compliance with certain of the Exchange's continued listing standards. Specifically, the Exchanged questioned whether the Company was then in compliance with the requirement that a company maintain shareholder's equity of at least $4 million and/or not have losses from continuing operations and/or net losses in three of its four most recent fiscal years. As of September 30, 2003 and December 31, 2003, the Company was in compliance with this listing standard since it had


shareholder's equity of at least $4.0 million. If in the future, the Company fails to maintain a sufficient level of shareholder's equity in compliance with those and other listing standards of the Exchange then the Company would be required to submit a plan to the Exchange describing how it intended to re-gain compliance with the requirements within the Exchange's required time frame, which is generally eighteen months. The Company's ability to continue to meet the Exchange's continued listing requirements cannot be assured and if it could not satisfy the exchange that it complies with the listing requirements then the Exchange could de-list the Company's common stock.

DILUTION TO EXISTING SHAREHOLDERS IS LIKELY TO OCCUR UPON ISSUANCE OF SHARES WE

HAVE RESERVED FOR FUTURE ISSUANCE


On December 31, 2003, 19,073,059 shares of our common stock were issued, of which 1,432,412 were held in treasury, and 22,459,769 additional shares of our common stock were reserved for issuance. The issuance of these additional shares will reduce the percentage ownership of existing stockholders in the Company.

The following shares were reserved for issuance as of December 31, 2003:


o Issued and outstanding stock options to purchase common shares
totaling approximately 1,982,105;
o Issued and outstanding warrants to purchase common shares totaling
approximately 7,647,664; includes a warrant for 250,000 shares
that if exercised precluded the delivery of the shares until
February 5, 2004.
o Issued and outstanding warrant to purchase $577,500 of convertible
redeemable subordinated notes with detachable warrants for 577,500
common shares, all of which are exercisable for or convertible
into an aggregate 1,155,000 common shares;
o Issued and outstanding warrant to purchase 15,000 shares of
convertible preferred stock with detachable warrants for 75,500
common shares, all of which are exercisable for or convertible
into a potential aggregate 575,000 common shares;
o A restricted stock grant to receive shares totaling approximately
450,000; and
o Shares issuable upon the conversion of convertible redeemable
subordinated notes and preferred stock totaling a potential
aggregate of 10,650,000 common shares.

The existence of these reserved shares coupled with other factors, such as the relatively small public float, could adversely affect prevailing market prices for our common stock and our ability to raise capital through an offering of equity securities.

THE LOSS OF THE SERVICES OF OUR SENIOR EXECUTIVES AND KEY PERSONNEL WOULD LIKELY

CAUSE OUR BUSINESS TO SUFFER.


Our success depends to a significant degree on the performance of our senior management team. The loss of any of these individuals could harm our business. We do not maintain key person life insurance for any officers or key employees other than on the life of James M. Powers, Jr., our Chairman, President and CEO, with that policy providing a death benefit to the Company of $1.0 Million. Our success also depends on the ability to attract, integrate, motivate and retain additional highly skilled technical, sales and marketing, and professional services personnel. To the extent we are unable to attract and retain a sufficient number of additional skilled personnel, our business will suffer.

OUR INTELLECTUAL PROPERTY MAY BECOME SUBJECT TO LEGAL CHALLENGES, UNAUTHORIZED

USE OR INFRINGEMENT, ANY OF WHICH COULD DIMINISH THE VALUE OF OUR PRODUCTS AND

SERVICES.


Our success depends in large part on our proprietary technology. If we fail to successfully enforce our intellectual property rights, the value of these rights, and consequently the value of our products and services to our customers, could diminish substantially. It may be possible for third parties to copy or otherwise obtain and use our intellectual property or trade secrets without our authorization, and it may also be possible for third parties to independently develop substantially equivalent intellectual property. Currently, we do not have patent protection in place related to our products and services. Litigation may be necessary in the future to enforce our intellectual property rights, to protect trade secrets or to determine the validity and scope of the proprietary rights of others. From time to time we have received, and may in the future receive, notice of claims of infringement of other parties' proprietary rights. Such claims could result in costly litigation and could divert management and technical resources. These types of claims could also delay product shipment or require us to develop non-infringing technology or enter into royalty or licensing agreements, which agreements, if required, may not be available on reasonable terms, or at all.

A DETERIORATION OF GENERAL ECONOMIC CONDITIONS MAY MATERIALLY AND ADVERSELY

AFFECT OUR BUSINESS.


Our revenues are subject to fluctuation as a result of general economic conditions. Our customers may reduce their expenditures for education and training during economic downturns. Therefore, a continued economic downturn could adversely affect the Company's business.

WE OFFER OUR WEB COLLABORATION PRODUCTS ON AN ASP BASIS SO IF WE DO NOT INCREASE

THE CAPACITY OF OUR INFRASTRUCTURE IN EXCESS OF CUSTOMER DEMAND, CUSTOMERS MAY

EXPERIENCE SERVICE PROBLEMS.


We expect the demand on our ASP business to increase significantly. Accordingly, we must increase our capacity to keep pace with that growth in demand. To accommodate increased customer usage requires a significant increase in the capacity of our infrastructure and may cause us to invest significant resources or capital. If we fail to increase our capacity in a timely and efficient manner, customers may experience service problems that could cause us to lose customers and decrease our revenue.

COMPETITION IN THE WEB CONFERENCING SERVICES MARKET IS INTENSE AND WE MAY

BE UNABLE TO COMPETE SUCCESSFULLY, PARTICULARLY AS A RESULT OF RECENT

ANNOUNCEMENTS FROM LARGE SOFTWARE COMPANIES.


The market for Web conferencing services is relatively new, rapidly evolving and intensely competitive. Competition in our market will continue to intensify and may force us to reduce our prices, or cause us to experience reduced sales and margins, loss of market share and reduced acceptance of our services. Many of our competitors have larger and more established customer bases, longer operating histories, greater name recognition, broader service offerings, more employees and significantly greater financial, technical, marketing, public relations and distribution resources than we do. We expect that we will face new competition as others enter our market to develop web conferencing services. These current and future competitors may also offer or develop products or services that perform better than ours. In addition, acquisitions or strategic partnerships involving our current and potential competitors could harm us in a number of ways.

FUTURE REGULATIONS COULD BE ENACTED THAT EITHER DIRECTLY RESTRICT OUR BUSINESS

OR INDIRECTLY IMPACT OUR BUSINESS BY LIMITING THE GROWTH OF INTERNET-BASED

BUSINESS AND SERVICES.


As commercial use of the Internet increases, federal, state and foreign agencies could enact laws or adopt regulations covering issues such as user privacy, content and taxation of products and services. If enacted, such laws or regulations could limit the market for our products and services. Although they might not apply to our business directly, we expect that laws or rules regulating personal and consumer information could indirectly affect our business. It is possible that such legislation or regulation could expose companies involved in providing Internet-based services to liability, which could limit the growth of Web use generally and thereby reduce demand for our products and services. Such legislation or regulation could dampen the growth in Web usage and decrease its acceptance as a medium of communications and commerce.

WE DEPEND LARGELY ON ONE-TIME SALES TO GROW REVENUES.


A high percentage of our revenue is attributable to one-time purchases by our customers rather than long term recurring ASP type contracts. As a result, our inability to continue to obtain new agreements and sales may result in lower than expected revenue, and therefore, harm our ability to sustain operations or profitability on a consistent basis, which could also cause our stock price to decline. Further, because we face competition from larger better-capitalized companies, we could face increased downward pricing pressure that could cause a decrease in our gross margins.

OUR OPERATING RESULTS MAY SUFFER IF WE FAIL TO DEVELOP AND FOSTER OUR VALUE

ADDED RESELLER OR DISTRIBUTION RELATIONSHIPS.


We have an existing channel and distribution network that provides growing revenues and contributes to our high margin software sales. These distribution partners are not obligated to distribute our services at any particular minimum level. As a result, we cannot accurately predict the amount of revenue we will derive from our distribution partners in the future. The inability of our distribution partners to sell our products to their customers and increase their distribution of our products could result in significant reductions in our revenue, and therefore, harm our ability to sustain profitability on a consistent basis.

SALES IN FOREIGN JURISDICTIONS BY US AND OUR INTERNATIONAL DISTRIBUTOR NETWORK

MAY CAUSE COSTS THAT ARE NOT ANTICIPATED.


We continue to expand internationally through our value added reseller network and OEM partners. We have limited experience in international operations and may not be able to compete effectively in international markets. We face certain risks inherent in conducting business internationally, such as: our inability to establish and maintain effective distribution channels and partners; the varying technology standards from country to country; our inability to effectively protect our intellectual property rights or the code to our software; our inexperience with inconsistent regulations and unexpected changes in regulatory requirements in foreign jurisdictions; language and cultural differences; fluctuations in currency exchange rates; our inability to effectively collecting accounts receivable; or our inability to manage sales and other taxes imposed by foreign jurisdictions.

THE GROWTH OF OUR BUSINESS SUBSTANTIALLY DEPENDS ON OUR ABILITY TO SUCCESSFULLY

DEVELOP AND INTRODUCE NEW SERVICES AND FEATURES IN A TIMELY MANNER.


We acquired our Web collaboration, Web conferencing and virtual classroom software in November of 2002. With our focus upon that product suite our growth depends on our ability to continue to develop new features, products and services around the iLinc suite and line of products. We may not successfully identify, develop and market new products and features in a timely and cost-effective manner. If we fail to develop and maintain market acceptance of our existing and new products to offset our continuing development costs, then our net losses will increase and we may not be able to sustain profitability on a consistent basis.

IF WE FAIL TO OFFER COMPETITIVE PRICING, WE MAY NOT BE ABLE TO ATTRACT AND RETAIN CUSTOMERS.


Because the Web conferencing market is relatively new and still evolving, the prices for these services are subject to rapid and frequent changes. In many cases, businesses provide their services at significantly reduced rates, for free or on a trial basis in order to win customers. Due to competitive factors and the rapidly changing marketplace, we may be required to significantly reduce our pricing structure, which would negatively affect our revenue, margins and our ability to sustain profitability on a consistent basis. We have an existing channel and distribution network that provides growing revenues and contributes to our high margin software sales. These distribution partners are not obligated to distribute our services at any particular minimum level. As a result, we cannot accurately predict the amount of revenue we will derive from our distribution partners in the future. Our inability of our distribution partners to sell our products to their customers and increase their distribution of our products could result in significant reductions in our revenue, and therefore, harm our ability to sustain profitability on a consistent basis.

Old Info removed from IBOX:

EDT has a negative book value of around 70 cents per share and tax losses exceeding $20 million. This company is an ideal investment for a profitable company in the same industry seeking a pooling of interests to make use of the potential tax loss carry forwards against increasing current taxable income or a wealthy individual seeking to shelter existing and future income. This company caters to the Dental Practice Management Industry which has been severly depressed. Competitors include DENT, ADPI, and MDDS all three of which have positive book values and are trading at or below their net tangible book values. This board is for those shareholders who see an oppurtunity to invest in this depressed industry and assist it in making it turn around to profitable levels. Do your own due diligence.

iLinc Communications Announces Integration with Latest U.S. Government-Endorsed Encryption Standard - AES
February 12, 2004 09:00:00 AM ET


First Self-Hosted Web Collaboration Software with Government Approved Security Standard

iLinc Communications ILC, a leading provider of Web conferencing, virtual classroom and Web collaboration software, today announced the upcoming release of iLinc(TM) 7.3, which will allow organizations to encrypt their online meeting data using AES (Advanced Encryption Standard), the standard adopted by the U.S. government as the highest available level of encryption security. iLinc is the first and only carrier class Web collaboration software that incorporates AES, with the added security of offering a solution that can reside inside of an organization's firewall. iLinc 7.3 is scheduled for release at the end of February.

"Security is a core business activity, not just a technology problem. A security breach can severely damage important operations, reduce productivity, compromise data integrity, reduce customer confidence, disrupt revenue flow, and bring communications to a halt," noted Steve Peters, president of the Community Information and Telecommunications Alliance (CITA) and co-chair of the Arizona Cyber Security Alliance. The Security Alliance was developed to help the community understand the rising security threats and develop strategies to reduce personal, customer, and business risks. "iLinc's solution, with both SSL and AES, answers the need for truly secure Web collaboration and communication. CITA has used iLinc for several security events and statewide telecommunications policy planning meetings. We plan to use iLinc as a part of our statewide audio, Web and video conferencing network we are developing."

"We are very pleased to be the first Web conferencing company with this unique combination of SSL and AES that can also be installed inside our customer's networks," commented James M. Powers, president and chief executive officer of iLinc Communications. "Every organization associates a high value with data security, and our solution offers solid confidence that their information is protected from end to end."

Released in 2001, AES is estimated to be more than 32,000 times more difficult to decrypt than its predecessor, Triple DES. AES only requires one pass to encrypt data and was designed specifically to be fast, unbreakable, deliver superior performance, and make better use of resources. AES is imperative for organizations that value security as mission critical such as financial, high tech, and professional services organizations. It also provides faster encryption and compatibility with the widest range of devices.

iLinc uses a unique combination of AES and SSL to deliver end-to-end security. Online session details and content are housed in the iLinc Communications Center, which serves as an online management tool for scheduling sessions and storing user information and content. When a user logs into the iLinc Communications Center, their login, password, live session details, and content are protected by SSL. When users join live sessions, a unique AES key is generated for the first participant that enters the session. The key is then transmitted to all participants as they join the session. iLinc uses AES to encrypt all of the real-time data during the session and the AES key is discarded after the last participant leaves the session. This combination of encryption technologies provides data exchange speed and security unlike any other Web collaboration solution.

iLinc intends to add this "state of the art" encryption capability as standard for all customers that have selected the iLinc Web conferencing solution.

About iLinc Communications, Inc.

Headquartered in Phoenix, Arizona, iLinc Communications (formerly EDT Learning, Inc.) is a leading provider of Web conferencing, virtual classroom and Web collaboration software. Our software and services enable sales, training, marketing, and support professionals to collaborate in real-time via the Internet. The Company's flagship software, iLinc(TM), provides Web conferencing capabilities combined with collaboration tools, high quality voice-over-IP, and video conferencing, all in an easy-to-use interface. The Company distributes its products and services in North America through its direct sales force and worldwide through the Company's international re-seller network. The iLinc software suite is sold in 13 countries, with versions available in six different languages including English, Chinese, German, Japanese, Portuguese, and Spanish. Customers can choose to have iLinc hosted by EDT through its ASP solution or can host it themselves as on-site software. LearnLinc(TM), part of the iLinc suite, won first place at the Synchronous e-Learning Shootout held at Online Learning's Conference, winning over such other notable companies as WebEx and PlaceWare. Under the EDT Learning brand, the Company also provides software and services specifically for the training industry including its i-Canvas(TM) e-Learning authoring software and an online library of training content that includes a business essentials program co-developed with the Tuck School of Business at Dartmouth College. More information about all of the Company's products and services is available at www.ilinc.com and www.edtlearning.com or by calling (602) 952-1200.

EDT Learning Closes Private Placement Offering; Company Oversubscribes Offering and Raises $1.5 Million
September 17, 2003 1:05:00 PM ET



PHOENIX--(BUSINESS WIRE)--Sept. 17, 2003--EDT Learning, Inc. EDT, a leading provider of Web conferencing, virtual classroom and Web collaboration software, today announced that it has completed its private placement of preferred stock. The Company had expected to raise $1.0 million, with the ability to reach as much as $1.5 million in gross proceeds. The Company oversubscribed the Offering and accepted subscriptions with a total gross proceeds of $1.5 million. The Company intends to use the proceeds from this private placement for general corporate purposes.

Closing the offering yesterday, the Company sold 30 units at $50,000 each. Each unit consisted of 5,000 shares of preferred stock and a warrant to purchase 25,000 shares of common stock. The preferred stock is convertible into the Company's common stock at a price of $0.50 per share, and the warrants are exercisable at a price of $1.50 per share with a three-year term. The Company will pay an 8% dividend to holders of the preferred stock, and the dividend is cumulative. The preferred stock is non-voting and non-participating. The shares of preferred stock will not be registered under the Securities Act of 1933, as amended, and were offered in a private placement providing exemption from registration.

About EDT Learning, Inc.

Headquartered in Phoenix, Arizona, EDT Learning EDT is a leading provider of software and services that help organizations communicate more effectively and efficiently. EDT Learning's software products include:

-- iLinc(TM) - iLinc is a suite of software that enables organizations to replace in-person meetings with online collaboration. The suite includes: -- LearnLinc(R), an online training software designed to provide live, instructor-led training and education over the Internet to remote students replicating the instructor-led environment; -- MeetingLinc(TM), an online meeting software designed to facilitate the sharing of documents, PowerPoint(TM) presentations, graphics, and applications between meeting participants without leaving their desks; -- ConferenceLinc(TM), a Web casting software designed to communicate in a one-to-many format, providing professional management of Web conferencing events; and -- SupportLinc(TM), a Web-based technical support software designed to give customer service organizations the ability to provide remote, hands-on support for products, systems, or software applications.

iLinc is sold in 13 countries with versions available in six different languages including English, Chinese, German, Japanese, Portuguese, and Spanish. LearnLinc, part of the iLinc suite, won first place at the Synchronous e-Learning Shootout held at Online Learning's Conference in the fall of 2002, winning over such other notable companies as WebEx, PlaceWare, and Interwise.

-- i-Canvas(TM) - An award-winning training development software tool that produces Web-based and CD Rom-based courses and software simulations.

-- The Executive Training Library - An off-the-shelf online library of content on business-specific topics such as innovation, leadership, and communication, co-developed with respected names in business such as the Tuck School of Business at Dartmouth College.

More information is available at www.edtlearning.com.

Total Stockholder Equity $2,320,000 $5,316,000 $6,283,000 $6,635,000
Net Tangible Assets ($7,849,000) ($6,355,000) ($4,821,000) ($4,792,000)

The struggle continues:

http://biz.yahoo.com/bw/030630/305594_1.html

EDT Learning Releases LearnLinc Version 7.0; Company Improves Award-Winning Software Capabilities and Announces Future Product Suite
May 22, 2003 12:53:00 PM ET


PHOENIX--(BUSINESS WIRE)--May 22, 2003--EDT Learning, Inc. EDT announced today the release of LearnLinc(R) Version 7.0. This release is the latest improvement of the software that won first place at the Synchronous e-Learning Shootout held at Online Learning's Conference in the fall of 2002, winning over such other notable companies as WebEx, PlaceWare, Interwise, and Eluminate. LearnLinc 7.0 incorporates significant product enhancements derived from the LearnLinc customer base, which has logged millions of hours collaboratingin real-time with the software.

"LearnLinc and real-time collaboration are the major initiatives at EDT," said president and chief executive officer James M. Powers, Jr. "LearnLinc has superior functionality when contrasted with other collaboration software, and we consistently defeat our competition on feature strength in third-party evaluations by consultants and customers. Our product depth, in tandem with superior voice-over-IP capabilities, and our flexible and competitive pricing options (licenses can be hosted and leased through EDT or clients may purchase the software and install it on their own servers) make LearnLinc a very attractive Web communication and collaboration solution."

The Company also announced the scheduled release in late June of OfficeLinc(TM), a suite of collaboration products that complement LearnLinc's virtual classroom and online meeting functionality. Commenting on the future direction of the software, Dr. Powers noted, "Although our clients use our software for many types of collaboration activities, LearnLinc has traditionally been categorized as software for virtual classroom instruction. We anticipate delivering new versions of the software that enable organizations to collaborate in new ways. Our new four-product suite of products will include LearnLinc for online instruction as well as new products specifically designed for other collaboration activities including technical support, marketing events, and online meetings."

New Features

LearnLinc 7.0 delivers a large set of new features specifically developed to meet and/or exceed the capabilities of the physical classroom. "I was impressed with the new features in LearnLinc 7.0. With this new version, EDT Learning has enabled the instructor to make a stronger connection with the students. We are excited about using this new release," noted Dave McGann, coordinator for satellite programming & distance learning for the State of New York, Office of Children and Family Services.

New LearnLinc 7.0 features include:

-- Web Casting - In the 7.0 release, EDT has incorporated Web casting as an additional way to collaborate. Users now have a solution for very large meetings (100 or more) in which many participants need to receive information at one time. This new functionality contains a simplified interface that restricts attendees from disrupting the presenter, but allows them to use text chat to communicate with each other or the presenter and to respond to polling questions.

-- Participation Meter - The Participation Meter continuously measures the activities of each participant and reports back to the facilitator (and assistants) if the people in the meeting are engaged, somewhat engaged, or not paying attention. Facilitators can check the levels of participation by each individual person or look at an overall rating for the group.

-- Smart Push - This feature automatically copies content to each participant's local PC before a session starts so that valuable bandwidth is not used during the session. Whiteboard and Powerboard files are sent to a local temp directory for use during class. Content is only sent to participants that are registered for the respective sessions and is automatically deleted if the participant is unregistered or the content is removed. Smart Push can be enabled and disabled for each class, meeting, or Web cast.

-- Event Scheduling and License Management - Classes, Meetings, and Web Casts can be scheduled as recurring events. Users may now easily schedule the same class to occur every week at the same time or have it occur every week at several different times. LearnLinc 7.0 also allows users to schedule the use of their concurrent licenses so they will never have participants trying to join a session without enough licenses.

-- Classroom Email Invites and Reminders - LearnLinc 7.0 now allows users to automatically send an email "invitation" to all of the registered participants. These email invitations allow participants to click on a link that instantly creates a calendar event for the meeting or class inside Microsoft Outlook. LearnLinc will also automatically send a reminder email the day before the class is scheduled to start. Participants can join any type of collaborative session simply by clicking on a link in their email or on their calendars.

-- Instructor-Assisted Scoring - Classroom instructors can now assign scores to each student from inside class. These scores are written to the LearnLinc database in AICC SCORM-compliant format and can be accessed from the LearnLinc Virtual Campus. LearnLinc will also display how long each student stayed in class.

-- Increased Server Efficiency - LearnLinc will now support up to 500 users on a single server. This feature reduces the total cost of ownership for the software. As with previous releases, servers can also be cascaded to support very large numbers of users and to reduce bandwidth.

About EDT

Learning, Inc. Headquartered in Phoenix, Arizona, EDT Learning is a leading provider of collaboration and training software for corporate, government, and education clients. EDT Learning's products include:

-- LearnLinc(R) - A Web conferencing, collaboration and online training software providing live collaboration and virtual classrooms using the Internet.

-- TestLinc(TM) - A software product that allows tests to be created, delivered, graded, and reported in a standard Web browser.

-- i-Canvas(TM) - A training development software tool that produces Web-based and CD Rom-based courses and software simulations.

-- The Executive Training Library - An off-the-shelf online library of content on business-specific topics such as innovation, leadership, and communication, co-developed with respected names in business such as the Tuck School of Business at Dartmouth College.

More Company information is available at www.edtlearning.com.

EDT Learning Wins Exclusive State Contract; LearnLinc Web Conferencing Software Wins in Blind Evaluation Against Other Industry Leaders
March 27, 2003 09:08:00 AM ET


PHOENIX--(BUSINESS WIRE)--March 27, 2003--EDT Learning, Inc. EDT announced today the signing of a contract with a state government for the next two years. The Company won the contract through a blind evaluation process in which Web conferencing software vendors submitted their products and pricing to an independent state evaluation committee for review. The committee judged each organization on their product's functionality, stability, support, and overall value. The LearnLinc(R) software was chosen by this independent committee as having the highest overall rating among the Web conferencing market leaders competing in the evaluation.

Commenting on the announcement, James M. Powers, Jr., EDT Learning's president and chief executive officer, said, "In side-by-side comparisons, LearnLinc consistently defeats other market leaders with its more robust feature set. Although EDT operates with a smaller sales and marketing budget than the companies we compete against in the Web conferencing space (WebEx, PlaceWare, and Centra), we continue to win business by delivering superior products with excellent support and an array of award-winning services. We believe this contract will result in revenues of $500,000 to $1 million over the next two years. We see the awarding of this contract, the referrals our existing clients give us, and the demonstrated success we have over our competition in third-party evaluations as a validation of the superiority of our software."

LearnLinc will be the exclusive collaboration software for the state and their more than 50 agencies for the next two years. EDT Learning estimates that this contract will allow thousands of users within the state to take advantage of LearnLinc's virtual classroom, Web conferencing and collaboration capabilities.