ALBUQUERQUE, N.M., May 20 /PRNewswire/ -- MUSE Technologies, Inc. (Nasdaq: MUZE, MUZEW), an advanced software and technology firm, today announced revenues of $714,994 for the quarter ended March 31, 1999, an increase of 230% over the $216,410 reported for the same quarter of the previous fiscal year. The Company's net loss for the second quarter of fiscal 1999 was $1,398,728, or ($.14) per share. Excluding a charge of $563,605 relating to costs in excess of repurchased stock, the Company recorded a net loss of $835,123 or ($.08) per share for the second quarter, ended March 31, 1999, a 9% improvement over the net loss of $918,000 or ($0.09) per share reported for the first quarter of 1999. For the six months ended March 31, 1999, total revenues were $1,113,875, an increase of 114% over the $521,676 reported for the six months ended March 31, 1998. A net loss of $2,317,065 or ($.24) per share was recorded for the first six months of fiscal 1999, as compared to a net loss of $1,186,688 or ($.16) per share for the first six months of the previous fiscal year. Commenting on results of operations, Brian Clark, Chief Financial Officer of MUSE Technologies, noted, "For the second quarter of fiscal 1999, selling, general, and administrative expenses increased by approximately 115% over the previous quarter, which was anticipated and reflects our focused and aggressive staffing and infrastructure-building program. We are continuing to upgrade corporate networking, communications and administrative capabilities that are required to meet customer demands expected throughout the current fiscal year and beyond." "Research and Development spending increased by a planned 17% over the previous quarter, which reflects our ongoing effort to enhance our software products, complete the migration of our technology to the WindowsNT platform, and continue UNIX-based development. During the most recent quarter, the Company also expended approximately $972,000 for computer hardware, which has significantly increased the R&D capability of our Engineering Department and will enable us to develop new software solutions for our customers." In conclusion, Mr. Clark noted, "The results of the most recent quarter show the Company tracking with our projections, growing internally at a well-managed and steady rate, and significantly ramping up its marketing efforts. Our cash position remains extremely strong, with approximately $16 million on-hand, and no debt. We are well positioned to continue our planned growth and business development trend." In February, the Company announced that Federal Data Corporation (FDC) had named MUSE Technologies as a subcontractor to a Government-wide Acquisition Program, enabling federal agencies and contractors to purchase MUSE software with a minimum of administrative obstacles. In March, FDC entered into a three-year Strategic Reselling Partner agreement, which provides for up to $1 million per year in sales of MUSE software during the term of the agreement. FDC has offices in eight states and more than 1,000 degreed professionals. FDC customers include the Department of the Navy, NASA, the Veterans Benefits Administration, the National Institutes of Health, the Federal Aviation Administration, the Department of State, and the Internal Revenue Service. In February, the Company also announced that Boeing North American, Inc. had purchased its advanced visualization and collaboration software for use by its Reusable Space Systems business unit in Downey, CA. In March, MUSE Technologies announced that Analytic Mechanics Associates became a Strategic Reselling Partner and entered into a three-year agreement with a commitment of $3 million in sales of MUSE Technologies software. AMA will use MUSE products to develop solutions for clients in the aerospace and robotics industries, among others. AMA clients include NASA, the Departments of Defense and Transportation, Northrop, General Dynamics, Ford Aerospace, Rockwell International, Raytheon, General Electric, and Hughes Aircraft. In March, MUSE Technologies announced the appointment of Jack C. Berenzweig to its Board of Directors. Mr. Berenzweig is an attorney with the intellectual property law firm of Brinks Hofer Gilson and Lione (Chicago), specializing in patent and trademark litigation, and has been particularly active in cases protecting manufacturers against the distribution of counterfeit copies of their products. During the second quarter of fiscal 1999, the Company announced appointments of the following management positions: Director of Marketing, Director of Communications, Director of Petroleum Industry Business Development, Director of Quality Assurance, Manager of Application Development, Manager of Database Industry Business Development, and Manager of Corporate Sales. Company President Curtiz Gangi stated, "Our second quarter as a public company showed a marked increase in revenues and a carefully planned expansion that is setting the stage for what we believe to be a dynamic future for MUSE Technologies. With the backbone of our sales, marketing and engineering departments in place, we have commenced an exciting and calculated growth strategy that should enable us to take advantage of numerous market opportunities over the coming months and years." "The Oil & Gas industry remains one of our key target markets, and we are working closely with our Strategic Reselling Partner, Continuum Resources, to help innovate the process of exploring and sharing information within that fast-growing marketplace. The Federal market continues to present both revenues and ongoing validation of our technology, and we are pleased that NASA has elected to install our software at a growing number of its facilities." "Our Technology Department has gone through an important and natural evolution, in which the two original authors of our software (and founding employees) have stepped up to direct our vigorous research and development program. Craig Peterson and Ken Gant have served as the engineers of our technology since 1993, and have demonstrated the creativity and capability to lead our next-generation technology initiative. I have every confidence that they will meet and exceed that challenge." Mr. Gangi added, "As we pass the midway mark of our current fiscal year, we remain clearly focused on our mission: to become the dominant global force defining the future of human-computer interaction, and to lead the new age of Perceptual Computing. Each day we grow closer to realizing these goals through the hard work of our fast-growing Team, widening network of Strategic Reselling Partners, and the excitement being generated by our powerful software products." NOTE: Balance Sheet and Statement of Operations appear at the end of this document. About MUSE Technologies, Inc. MUSE Technologies, Inc. develops and markets software products that enhance a computer user's ability to visualize, analyze and understand large and diverse forms of data using WindowsNT and UNIX-based systems. The Company's software enables engineers, scientists, developers and corporate professionals to collaborate in real-time over local and global networks, and to solve complex data integration and data management problems. For more information on MUSE Technologies, call 800-711-3899, or visit the company's Web site at www.musetech.com. MuSE (spelled with the Greek mu symbol as the first character) and the MUSE Technologies logo are trademarks of MUSE Technologies, Inc., registered in the United States Patent & Trademark Office. Perceptual Computing is a trademark of MUSE Technologies, Inc. Windows NT and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries. Any other trademarks or copyrights referenced herein are the property of their respective owners. Information contained in this press release includes statements that are forward-looking. Actual results could differ materially from those projected in the forward-looking statements. Information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is described in the Company's Annual Report on Form 10-KSB for the fiscal year ended September 30, 1998 and its Quarterly report on Form 10-QSB for the quarter ended December 31, 1998, both of which are on file with the Securities and Exchange Commission. MUSE TECHNOLOGIES, INC. BALANCE SHEET MARCH 31, 1999 (UNAUDITED) ASSETS CURRENT ASSETS: Cash $ 15,674,150 Accounts receivable 454,939 Prepaids 37,287 TOTAL CURRENT ASSETS 16,166,376 PROPERTY AND EQUIPMENT - NET 1,150,729 NOTES RECEIVABLE (including $225,000 from officers) 1,280,000 OTHER ASSETS 125,607 TOTAL ASSETS $ 18,722,712 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 104,902 Accrued liabilities 132,417 Due to shareholders 840,000 Current portion lease payable 2,512 TOTAL CURRENT LIABILITIES 1,079,831 STOCKHOLDERS' EQUITY: Common stock, $.015 par value, authorized 50,000,000 shares; issued and outstanding 10,299,156 shares 154,487 Additional paid-in capital 23,942,807 Stock subscription receivable (87,000) Accumulated deficit (5,591,018) Less treasury stock at cost (776,395) TOTAL STOCKHOLDERS' EQUITY 17,642,881 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 18,722,712 MUSE TECHNOLOGIES, INC. STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended Six Months Ended March 31, March 31, 1999 1998 1999 1998 REVENUE $714,994 $216,410 $1,113,875 $521,676 EXPENSES: Selling, general and administrative expenses 1,020,054 474,460 1,863,609 939,622 Research and development 390,697 334,351 744,290 525,987 Depreciation 139,366 168,775 259,436 242,755 Costs in excess of value of repurchased stock 563,605 -- 563,605 -- TOTAL EXPENSES 2,113,722 977,586 3,430,940 1,708,364 NET LOSS $(1,398,728) $(761,176) $(2,317,065) $(1,186,688) NET LOSS PER SHARE: Basic and assuming dilution $ (.14) $ (.10) $ (0.24) $ (0.16) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: 10,143,893 7,335,843 9,765,431 7,306,239 -=-=- 