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Last updated on April 17, 2014 at 21:23 EDT

Santeon Files 2012 SEC Form 10-K and Announces Record Financial Results

March 20, 2013

– Full Year Revenue of $4.3 million increased 90% over prior year

RESTON, Va., March 20, 2013 /PRNewswire/ –­ Santeon Group Inc. (OTC: SANT, “Santeon” or “the Company”) announced today that it filed its full year 2012 financial results on SEC Form 10-K and reported record financial results for the year ending December 31, 2012.

“We are very proud of our achievements and growth and the fact that we have made significant strides to grow the business organically without the need to raise either debt or equity capital. The full year 2012 results are a strong indication of this commitment to our customers, our shareholders and our employees,” commented Dr. Ashraf Rofail, Chairman and Chief Executive Officer of Santeon Group Inc. “As we kick-off 2013, our plan is to continue growing at the same revenue trajectory, stay profitable and expand our business offerings into new markets. I strongly believe that the best for Santeon is yet to come in 2013,” concluded Dr. Rofail.

Full Year 2012 Financial and Operational Achievements:

  • Achieved year-over-year revenue growth of 90% for the year ended December 31, 2012 vs. 2011;
  • Grew revenue sequentially for the last six quarters;
  • Reached Net Income profitability in each of the last three consecutive quarters and for the full year 2012;
  • Produced significant net cash flows from operating activities in each of the last two quarters for the year ended December 31, 2012, achieving cash flow independence and providing the Company with operating flexibility;
  • Improved the Company’s working capital position by nearly $365K over the year ended December 31, 2011;
  • Improved Net Equity position at December 31, 2012 to nearly positive vs. negative balance of $173K at December 31, 2011;
  • Grew Agile revenue by nearly $1.1 million over 2011 due to the acquisition of two major customers in 2012 and significantly higher revenue from three other existing Agile customers;
  • Augmented consulting practice to include ten top-tier Agile coaches to serve both the commercial and government markets;
  • Significantly expanded the number of partnership agreements with major human resources software providers positioning the electronic Benefits Network (“eBN”) business for substantial future growth;
  • Launched in December 2012 a significantly improved rich media video platform, branded “ubroadcast.com,” with enhanced features and functionality;
  • Achieved full compliance with SEC filing requirements in October 2012 to provide our shareholders and investors with current information regarding the Company’s financial and operating performance;
  • Approved a stock repurchase program of up to $500K over the next twelve months; and
  • Effected a one for four hundred (1:400) reverse stock split reducing the number of shares outstanding from approximately four hundred seventy-six million to approximately one million two hundred thousand to enhance and stabilize the share price as well as attract the attention of larger potential shareholders.

Financial Highlights:

“The past year was in many ways a break-out year for Santeon and we are especially proud of the Company’s financial and operating achievements. The Company is on more solid financial footing than in previous periods and we continue to make strides toward enhancing and securing the financial profile,” said Mark Guirgis, Executive Vice President and Chief Financial Officer. “The Company has steadily grown the top line over the last six quarters and, including the fourth quarter 2012, has shown three consecutive quarters of Net Income. The full year 2012 showed Revenues of $4.3 million and Net Income of $185,815, or $0.16 per share; two first-time highs for Santeon. We are very pleased with the 2012 financial performance and believe the revenue run-rate exiting 2012 provides a stable platform for further growth,” continued Mr. Guirgis.

                                                                          SANTEON GROUP INC.

                                                                 CONSOLIDATED STATEMENTS OF OPERATIONS

                                      Fourth Quarter                         Third Quarter              Fourth Quarter            Full Year            Full Year

                                                           2012                                   2012                      2011                  2012                 2011
                                                           ----                                   ----                      ----                  ----                 ----

    Revenues                                         $1,378,584                             $1,196,711                  $722,183            $4,276,488           $2,245,389

    Cost of revenues                                    660,593                                588,741                   331,080             2,269,426            1,355,873
                                                        -------                                -------                   -------             ---------            ---------

    Gross Profit                                        717,991                                607,970                   391,103             2,007,062              889,516

    Total operating expenses                            594,489                                457,938                   389,757             1,875,077            1,372,529
                                                        -------                                -------                   -------             ---------            ---------

    Income (loss) from operations                       123,502                                150,032                     1,345               131,985             (483,013)

    Other income & expenses                             (12,784)                                (1,149)                  (19,772)               53,004                8,549

    Gain (loss) from foreign currency                    (1,561)                                 1,840                       102                   826                 (869)

    transactions

    Income (loss) before tax                            109,158                                150,723                   (18,324)              185,815             (475,333)

    Income tax (benefit) expense                              -                                      -                         -                     -                    -
                                                            ---                                    ---                       ---                   ---                  ---

    Net income (loss)                                  $109,158                               $150,723                  $(18,324)             $185,815            $(475,333)
                                                       ========                               ========                  ========              ========            =========

    Net income (loss) per common                          $0.09                                  $0.13                    $(0.02)                $0.16               $(0.41)

    share, basic and diluted

    Weighted average number of                        1,190,038                              1,192,734                 1,171,805             1,196,616            1,147,518

    common shares outstanding, basic

    and diluted

During 2012, we made significant improvements in the Company’s working capital profile (Current Assets less Current Liabilities), improving it nearly $365,000, through higher cash balances and increased accounts receivable (as a result of revenue growth), by paying down accounts payable, other accrued liabilities and expenses and by retiring, reducing or restructuring notes payable. The reduction in current liabilities and notes payable was effected with internally-generated cash.

“Accounts receivable increased more than $200,000 from 2011 to 2012 due to the $2.0 million growth in revenue, less collections during the year. Accounts payable and accrued expenses grew in proportion to revenue, but overall Current Liabilities remained flat year from December 31, 2011 to December 31, 2012, thus improving the working capital deficit quite substantially.

“In the first quarter 2012, we restructured a note payable converting it to an amortizing note with monthly payments of $6,015, a 36-month term and realizing a gain on the forgiveness of debt of $56,540. In addition during the year, we repaid two outstanding notes payables amounting to $97,033.

“In late 2012, the Company’s board and a majority of the Company’s shareholders approved three measures:

  1. A one-for-four hundred (1:400) reverse stock split reducing the number of shares outstanding from approximately 476 million to 1.2 million;
  2. Amendment to the Company’s Certificate of Incorporation to reduce the number of authorized shares from 700 million to 50 million; and
  3. Approval of an employee incentive stock option plan for issuance of up to 150,000 shares.
                                                                           SANTEON GROUP INC.

                                                                       CONSOLIDATED BALANCE SHEETS

                                                                                                   As of
                                                                                                   -----

                                                                                                         12/31/2012  12/31/2011
                                                                                                         ----------  ----------

    ASSETS

    Current assets:

    Cash                                                                                                   $183,785     $16,960

    Accounts receivable                                                                                     796,466     581,479

    Other current assets                                                                                     25,578      15,160
                                                                                                             ------      ------

      Total current assets                                                                                1,005,829     613,599

    Property and equipment, net                                                                              20,364      18,746

    Software assets, net                                                                                    281,212     394,887

       Total non-current assets                                                                             301,576     413,633
                                                                                                            -------     -------

      Total Assets                                                                                       $1,307,405  $1,027,232
                                                                                                         ==========  ==========

    LIABILITIES AND STOCKHOLDERS' DEFICIT

    Current liabilities:

    Accounts payable and accrued expenses                                                                $1,107,345    $861,879

    Notes payable - related party                                                                                 -      97,033

    Notes payable                                                                                           120,509     241,500
                                                                                                            -------     -------

      Total current liabilities                                                                           1,227,854   1,200,412
                                                                                                          ---------   ---------

    Long term liabilities:

    Notes payable                                                                                            83,166           -

      Total long term liabilities                                                                            83,166           -
                                                                                                             ------         ---

    Stockholders' deficit:

    Preferred stock, par value $0.001, 50,000,000 shares authorized:                                              -           -

    0 shares issued and outstanding as of December 31, 2012 and 2011,

    respectively

    Common stock, par value $0.001, 50,000,000 shares authorized;                                             1,185         679

    1,201,137 and 679,050 shares issued as of December 31, 2012 and

    2011, respectively and 1,184,899 and 679,050 shares outstanding as

    of December 31, 2012 and 2011, respectively

    Common stock to be issued                                                                                10,000     484,590

    Additional paid in capital                                                                            1,518,726   1,021,967

    Treasury Stock, at cost, 16,238 shares as of December 31, 2012,                                         (38,925)          -

    15,178 shares as of September 30, 2012 and 0 shares as of

    December 31, 2011

    Accumulated deficit                                                                                  (1,494,601) (1,680,416)
                                                                                                         ----------  ----------

      Total stockholders' deficit                                                                            (3,615)   (173,180)
                                                                                                             ------    --------

      Total Liabilities and Stockholders' Deficit                                                        $1,307,405  $1,027,232
                                                                                                         ==========  ==========

“During the full year ended December 31, 2012, Santeon generated nearly $360,000 in net cash from operating activities, another record! Most of the cash generation occurred in the second half 2012 through strong cash collections and aggressive fiscal discipline, although every quarter on a stand-alone basis was cash flow positive.

“Despite almost $150,000 in repayments of notes payable and $20,000 of treasury stock repurchases, the Company grew its cash balance from $16,960 as of December 31, 2011 to $183, 785 as of December 31, 2012.”

                                                                                 SANTEON GROUP INC.

                                                                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                             Year ended December 31,

                                                                                                                                         2012                          2011
                                                                                                                                         ----                          ----

    CASH FLOWS FROM OPERATING ACTIVITIES:

    Net income (loss)                                                                                                                $185,815                     $(475,333)

    Adjustments to reconcile net income (loss) to net cash provided by

    (used in) operating activities:

    Depreciation and amortization                                                                                                     135,790                       134,527

    Other income                                                                                                                      (19,155)                            -

    Gain on forgiveness of debt                                                                                                       (56,540)                      (56,498)

    Common stock issued for stock-based compensation                                                                                   22,500                       101,957

    Common stock to be issued for interest expense                                                                                          -                         8,250

    Bad debt expenses                                                                                                                       -                         6,423

    Changes in operating assets and liabilities:

    Accounts receivable                                                                                                              (214,986)                     (546,801)

    Other current assets                                                                                                              (10,419)                       (6,377)

    Accounts payable and accrued expenses                                                                                             315,911                       605,353
                                                                                                                                      -------                       -------

      Net cash provided by (used in) operating activities                                                                             358,916                      (228,499)

    CASH FLOWS FROM INVESTING ACTIVITIES:

    Purchase of property and equipment                                                                                                 (7,434)                      (12,427)

    Purchase of acquired software                                                                                                     (16,299)                            -
                                                                                                                                      -------                           ---

      Net cash used in investing activities                                                                                           (23,733)                      (12,427)

    CASH FLOWS FROM FINANCING ACTIVITIES:

    Proceeds from sale of common stock                                                                                                      -                       205,000

    Purchases of treasury stock                                                                                                       (20,000)                            -

    Proceeds from issuance of notes payable - related party                                                                                 -                        72,033

    Repayment of notes payable-related party                                                                                          (97,033)                      (40,000)

    Repayment of notes payable                                                                                                        (51,325)                       (6,500)
                                                                                                                                      -------                        ------

      Net cash (used in) provided by financing activities                                                                            (168,358)                      230,533

    Net increase (decrease) in cash                                                                                                   166,825                       (10,393)

    Cash, beginning of the year                                                                                                        16,960                        27,353
                                                                                                                                       ------                        ------

    Cash, end of the year                                                                                                            $183,785                       $16,960
                                                                                                                                     ========                       =======

    Supplemental disclosures of cash flow information:

    Income tax paid                                                                                               $                         -  $                          -

    Interest paid                                                                                                                      $6,335  $                          -
                                                                                                                                       ======  ============================

    Supplemental disclosures for non-cash investing and financing

    activities:

    Conversion of accrued interest to note payable                                                                                    $13,500  $                          -
                                                                                                                                      =======  ============================

Mr. Guirgis concluded his remarks by saying, “2013 will be a challenging year for Santeon, but we have assembled a great team and will continue to add talent prudently and judiciously as opportunities arise and as customer demands require. Our greatest financial and operational challenge is meeting increasing demands from our customers.”

About Santeon Group Inc.
Santeon Group Inc. is a technology company headquartered in Northern Virginia with offices in Reston, VA, Tampa, FL and Cairo, Egypt. Santeon offers products and services in Agile training and transformation, healthcare and media. Santeon’s goal is to serve emerging markets by providing technically superior products and solutions while reducing the cost of ownership and deployment of these solutions through a strong channel partner and distribution model. For more information please visit our web site at http://www.santeon.com.

Safe Harbor Statement:
The preceding press release may include statements that include, among others, forward-looking statements about our beliefs, plans, objectives, goals, expectations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may”, “could”, “should”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “intend”, “plan”, “target”, “goal” and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in the forward-looking statements. Our ability to achieve our financial objectives or improve the company’s stock price could be adversely affected by many factors, including, without limitation, the following factors: The strength of the United States economy, changes in the securities markets legislative or regulatory changes, the loss of key personnel, technological changes, changes in customer habits, our ability to manage these and other risks, and our ability to deliver products and services on time. However, other factors besides those listed above could adversely affect our results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. These forward-looking statements are not guarantees of future performance, but reflect the present expectations of future events by our management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Any forward-looking statements made by us speak only as of the date they are made. For additional information about Santeon’s business and financial results, refer to Santeon’s Annual Report on Form 10-K that may be found at sec.gov or on http://santeon.com/Sec_Filings.html. Santeon undertakes no obligation to update any forward-looking statements that may be made from time to time by the company, except as may be required by applicable law, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Mark Guirgis
Santeon Group, Inc.
703-970-9200
markguirgis@santeon.com

SOURCE Santeon Group Inc.


Source: PR Newswire