Spescom Software Announces Second Quarter Results SAN DIEGO, May 16 /PRNewswire-FirstCall/ -- Spescom Software Inc. (OTC Bulletin Board: SPCO), a leading provider of enterprise content and configuration management solutions, today reported results of operations for its fiscal second quarter ended March 31, 2005. Total revenue for the second quarter of 2005 was $1.7 million, an increase of 4% versus revenue of $1.6 million in the year earlier quarter. Net loss before deemed and cumulative dividends for the second quarter of 2005 was ($508,000), or ($0.02) per share, compared with net loss before deemed and cumulative dividends of ($573,000), or ($0.02) per share, for the three months ended March 31, 2004. After the effect of the cumulative dividends totalling $86,000 to preferred shareholders in the second quarter of 2005, the net loss available to common shareholders was ($594,000) or ($0.02) per share. In the same period of the prior year after the cumulative dividends totalling $66,000 the net loss available to common shareholders in the second quarter was ($639,000) or ($0.02) per share. For the six months ended March 31, 2005, total revenues were $3.3 million versus $3.7 million in the same period of the prior year. Net loss before deemed and cumulative dividends for the 2005 six month period was ($1,112,000), or ($0.03) per share, compared with net loss before deemed and cumulative dividends of ($562,000), or ($0.02) per share, for the six-months ended March 31, 2004. After the effect of the deemed dividend $2,200,000 and cumulative dividends of $169,000 to the preferred shareholders for the first six months of 2005, the net loss available to common shareholders was ($3,481,000) or ($0.10) per share. In the same period of the prior year after the cumulative dividends totalling $132,000 to preferred shareholders, the net loss available to common shareholders was ($694,000), or ($0.02) per share. "In the second quarter we continued to expand our marketing and sales efforts and direct the Company's focus as outlined in the recently announced strategic plan. The market opportunities for our solutions remains strong and our expectation is that we will begin to see the results of focus in the second half of this year," commented Carl Mostert, CEO, Spescom Software. About Spescom Software Spescom Software is a developer and marketer of leading-edge content and configuration management software and solutions for complex applications in energy, homeland security, defense and other sectors that provide the unique ability to manage disparate types of content and other data on a single platform. The Company's proprietary eB platform provides extensive enterprise content management (ECM) functionality, together with best-of-breed configuration management capabilities. These capabilities enable the secure capture and storage of both structured and unstructured information, in addition to the ability to organize, control and manage this information. Spescom's eB software solution revolutionizes data management through an innovative new paradigm of data management that re-invents how organizations store, track, access, and use their enterprise's data to maximize efficiency and guarantee accuracy and integrity of the data. Key customers include Constellation Energy, Continental Express, AmerenUE, Cities of Las Vegas and Dayton, Lloyds Register, United Space Alliance, Entergy, Northeast Utilities, London Underground, Network Rail, and many others. The Company is headquartered in San Diego, Calif., with an international sales and support center in London. Cautionary Statement Except for historical information contained herein, the matters set forth in this release include forward-looking statements that are dependent on certain risks and uncertainties, including such factors, among others, as market acceptance, market demand, pricing, changing regulatory environment, the effect of the Company's accounting policies, potential seasonality and other risk factors detailed in the Company's SEC filings. For a discussion of additional risk factors relating to Spescom's business, see Spescom's annual report on Form 10-K for the fiscal year ended September 30, 2004 and quarterly reports on Form 10-Q for the quarter ended December 31, 2004, including the discussion in Management's Discussion and Analysis of Financial Condition and Results of Operations contained therein. SPESCOM SOFTWARE INC. Consolidated Statements of Operations (Unaudited) For the three months For the six months Ended March 31, ended March 31, 2005 2004 2005 2004 Revenues: Licenses $86,000 $359,000 $354,000 $1,478,000 Services and other 1,587,000 1,242,000 2,972,000 2,248,000 Total revenues 1,673,000 1,601,000 3,326,000 3,726,000 Cost of revenues: Licenses 64,000 53,000 108,000 141,000 Services and other 620,000 541,000 1,234,000 1,107,000 Total cost of revenues 684,000 594,000 1,342,000 1,248,000 Gross profit 989,000 1,007,000 1,984,000 2,478,000 Operating expenses: Research and development 174,000 336,000 520,000 668,000 Marketing and sales 914,000 726,000 1,738,000 1,331,000 General and administrative 373,000 482,000 772,000 989,000 1,461,000 1,544,000 3,030,000 2,988,000 Loss from operations (472,000) (537,000) (1,046,000) (510,000) Interest and other income 2,000 1,000 2,000 6,000 Interest and other expense (38,000) (37,000) (68,000) (58,000) Net income (loss) (508,000) (573,000) (1,112,000) (562,000) Deemed preferred dividend - - (2,200,000) - Net income (loss) available after deemed preferred dividend (508,000) (573,000) (3,312,000) (562,000) Cumulative preferred dividends (86,000) (66,000) (169,000) (132,000) Net loss available to common shareholders $(594,000) $(639,000) $(3,481,000) $(694,000) Basic and diluted net (loss) per common share $(0.02) $(0.02) $(0.10) $(0.02) Shares used in computing basic and diluted net (loss) per common share 34,215,000 33,979,000 34,187,000 30,954,000 SPESCOM SOFTWARE INC. Consolidated Balance Sheets March 31, September 30, 2005 2004 (Unaudited) ASSETS Current assets: Cash and cash equivalents $1,031,000 $109,000 Receivables, net 914,000 954,000 Other current assets 176,000 209,000 Total current assets 2,121,000 1,272,000 Property and equipment, net 102,000 116,000 Computer software, net 249,000 15,000 Other assets 28,000 27,000 Total assets $2,500,000 $1,430,000 LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $442,000 $440,000 Payable to Spescom Ltd. 51,000 90,000 Preferred stock dividend payable to Spescom Ltd. 417,000 271,000 Accrued liabilities 1,326,000 1,226,000 Notes and accrued interest Payable to Spescom Ltd. 588,000 - Lease obligation - current portion 17,000 19,000 Deferred revenue 2,232,000 1,919,000 Total current liabilities 5,073,000 3,965,000 Notes payable and accrued interest to Spescom Ltd. - 557,000 Lease obligation 35,000 44,000 Total liabilities 5,108,000 4,566,000 Total shareholders' deficit (2,608,000) (3,136,000) Total liabilities and shareholders' deficit $2,500,000 $1,430,000 DATASOURCE: Spescom Software Inc. CONTACT: Carl Mostert or John Low, +1-858-625-3000, Spescom Software Inc. Web site: http://www.spescomsoftware.com/

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