IOTN Ionatron (MM)

Ionatron, Inc., (Nasdaq:IOTN) a Laser Guided Energy (LGE�) Company developing next generation Directed Energy Weapons, today reported financial results for the first quarter ended March 31, 2007. The Company will host a live conference call today, May 10, 2007, at 11:00 AM (Eastern Standard Time). Ionatron highlighted the following activities and accomplishments during the quarter: Independent test were conducted on Ionatron�s latest counter-IED technologies by a combined USMC/USN team, as directed by Congress in late 2006 Ionatron entered into an exclusive �Preferred Supplier Agreement� with a major defense contractor for proprietary non-military high voltage technologies One additional patent application was filed, and additional patent secrecy orders were received Dana Marshall, Ionatron�s president and Chief Executive Officer, stated, �We made progress on a number of programs and initiatives during the first quarter of 2007. We completed a very successful development and testing program with a key customer in a critical mission area, and we expect that it will lead to greater opportunities this year and beyond. The Company also established an exciting new capability in our Military Laser Group. This highly experienced team fills a critical need as we move forward in our goal to develop our Laser Guided Energy technologies into significant military and commercial applications.� The Company has also reported the following additional events thus far this year: Received a sole source U.S. Navy contract for $9.8 million for further development of its Laser Guided Energy technologies. This contract funds significant advancement in the Company�s laser technologies, and the completion of an advanced Technology Demonstrator vehicle Received a sole source contract for approximately $500,000 from the U.S. Navy for initial work on the Dual Effects, Stand-off IED Neutralization System (�DESINS�) Established a new organization, based in St. Louis, Missouri, to pursue new military and aerospace applications for its ultrashort pulsed laser technologies First Quarter 2007 Financial Results Revenue for the first quarter of 2007 was approximately $2.1 million, compared to approximately $5.1 million for the same period last year. The decrease in revenue of approximately $3.0 million for the first quarter was primarily attributable to the completion of certain Ionatron government contracts initiated and performed in 2005 and substantially completed in early 2006 related to our counter-IED (Improvised Explosive Device) technologies while revenue from our LIPC project increased by a modest amount. Net loss attributable to common stockholders for the first quarter of 2007 was ($2.7) million, or ($0.03) per basic and diluted share as compared to a net loss of ($3.7) million or ($0.05) per basic and diluted common share for the same period last year. This loss decreased primarily due to reductions in research and development costs of approximately $951,000, general and administrative expenses of $402,000 and an increase in our interest income of $272,000, offset by negative gross margins attributed to non-government based contracts. At March 31, 2007, the Company had approximately $27.5 million in cash and cash equivalents and securities available-for-sale as compared to $30.6 million in cash and cash equivalents and securities available-for-sale at December 31, 2006. As of March 31, 2007 the Company had a backlog of $2.6 million, which is expected to be completed within the next twelve-months. This backlog does not include proposals and contracts under negotiation. Conference Call As previously announced, Ionatron will host a conference call on May 10, 2007, at 11:00 a.m. (Eastern Daylight Time). Shareholders and other interested parties may participate in the conference call by dialing +1 866 800 8649(domestic) or +1 617 614 2703 (international) and entering access code 67736305, a few minutes before 11:00 a.m. EDT on May 10, 2007. The call will also be broadcast live on the Internet at www.streetevents.com, www.fulldisclosure.com and www.ionatron.com. A replay of the conference call will be accessible two hours after its completion through May 17, 2007, by dialing +1 888 286 8010 (domestic) or +1 617 801 6888 (international) and entering access code 41278928. The call will also be archived for 30 days at www.streetevents.com, www.fulldisclosure.com and www.ionatron.com. About Ionatron Inc. Ionatron, Inc. is a solution provider that develops and markets Laser Guided Energy (LGE�) and related products to defense and security customers for unique applications worldwide. Ionatron has significant expertise in the application of high-power lasers, optics and energy management technologies. Headquartered in Tucson, Arizona, Ionatron is focused on solving technology problems directly for its government and security-conscious customers. For more information about Ionatron, please visit www.ionatron.com. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this News Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the dependence on sales of a limited number of products and the uncertainty of the timing and magnitude of government funding and orders, dependence on sales to government customers; the uncertainty of patent protection; the uncertainty of strategic alliances; the uncertainty of management tenure; the impact of third-party suppliers' manufacturing constraints or difficulties; management's ability to achieve business performance objectives, market acceptance of, and demand for, the Company's products, and resulting revenues; development and testing of technology and products; manufacturing capabilities; impact of competitive products and pricing; litigation and other risks detailed in the Company's filings with the Securities and Exchange Commission. The words "looking forward," "believe," "demonstrate," "intend," "expect," "contemplate," "estimate," "anticipate," "likely" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Ionatron undertakes no obligation to update any forward-looking statements contained in this news release. IONATRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) � For the three months ended March 31, � 2007� � � � 2006� � Revenue $ 2,070,610� $ 5,074,827� � Cost of revenue � 2,337,994� � � � 4,767,178� � Gross profit (loss) (267,384) 307,649� � Operating expenses: General and administrative 2,219,622� 2,621,496� Selling and marketing 129,800� 148,958� Research and development � 124,023� � � � 1,075,066� Total operating expenses � 2,473,445� � � � 3,845,520� � Operating loss (2,740,829) (3,537,871) � Other (expense) income Interest expense (999) (5,243) Interest income 383,826� 112,120� Other � 12� � � � 9� Total other � 382,839� � � � 106,886� � Loss before provision for income taxes (2,357,990) (3,430,985) � Provision for income taxes � -� � � � 11,299� � Net loss (2,357,990) (3,442,284) � Preferred stock dividends � (295,119) � � � (303,660) � Net loss attributable to common stockholders $ (2,653,109) � � $ (3,745,944) � Net loss per common share � basic and diluted $ (0.03) � � $ (0.05) � Weighted average number of shares outstanding, basic and diluted � 78,171,872� � � � 72,174,683� IONATRON, INC. CONSOLIDATED BALANCE SHEETS � March 31, 2007 � � December 31, 2006 ASSETS (Unaudited) � � (Audited) Current assets Cash and cash equivalents $ 18,971,812� $ 22,123,792� Accounts receivable - net 2,509,169� 1,258,363� Inventory 2,948,727� 2,214,471� Securities available-for-sale 8,500,000� 8,500,000� Prepaid expenses and deposits 476,367� 639,728� Other receivables � 1,279� � � � 2,918� Total current assets 33,407,354� 34,739,272� Property and equipment - net 1,966,240� 2,205,278� Other assets 72,776� 72,776� Intangible assets - net � 123,000� � � � 135,300� TOTAL ASSETS $ 35,569,370� � � $ 37,152,626� � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities Accounts payable - net $ 794,992� $ 570,572� Accrued expenses 277,386� 638,925� Accrued compensation 692,358� 818,779� Customer deposits 255,127� 284,279� Current portion of capital lease obligations � 23,080� � � � 46,974� Total current liabilities 2,042,943� 2,359,529� Capital lease obligations 10,438� 30,536� Deferred rent � 121,074� � � � 112,641� Total liabilities � 2,174,455� � � � 2,502,706� � Commitments and contingencies � Stockholders� equity Series A Convertible Preferred stock, $.001 par value, 2,000,000 shares authorized and 690,000 shares issued and outstanding at March 31, 2007 and December 31, 2006. 690� 690� Common stock, $.001 par value, 100,000,000 shares authorized; 78,225,936 shares issued and outstanding at March 31, 2007 and 78,171,267 shares issued and outstanding at December 31, 2006 78,226� 78,171� Additional paid-in capital 61,886,666� 60,488,633� Accumulated deficit � (28,570,667) � � � (25,917,574) Total stockholders� equity � 33,394,915� � � � 34,649,920� TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 35,569,370� � � $ 37,152,626�