Mr. Joel Chin reports

GINSMS ANNOUNCES FINANCIAL RESULTS FOR THE THREE AND TWELVE MONTHS ENDED MARCH 31, 2014

GINSMS Inc. has released its financial results for the fourth quarter and year ended March 31, 2014.

Performance highlights for the three and 12 months ended March 31, 2014:

• The acquisition of Inphosoft Group Pte. Ltd. was completed on Sept. 28, 2012. GINSMS's income statement for the three and 12 months ended March 31, 2014, includes the operating results of Inphosoft Group and its subsidiaries, resulting in total revenue of $219,135 and $1,130,787, respectively, compared with $518,678 and $1,302,915 for the corresponding three and 12 months in the previous year;
• Activities for the three months and 12 months ended March 31, 2014, resulted in a net loss of $994,330 and $2,972,208, respectively, including a non-realized exchange loss of $2,513 and $10,310, respectively, and a non-cash charge to earnings of $397,577 and $1,321,854, respectively, representing accretion on obligations related to the convertible debentures and promissory notes issued in connection with the acquisition of Inphosoft. The net loss for the 12 months ended March 31, 2014, could have been higher if not for the decrease to the contingent consideration of approximately $109,000, resulting from an event that occurred subsequent to the acquisition date, initially recorded in the company's Sept. 30, 2013, and Dec. 31, 2013, interim financial statements based upon an estimate which was based upon factors available to the company at the date of the interim financial statements. In connection with the annual financial statements, the company obtained a third party appraisal of the debentures. Based on the third party appraisal, the company adjusted (increased) the fair value adjustment of the debentures by approximately $72,000, with a related increase in accretion of approximately $64,000 in the quarter ended March 31, 2014. For the three and 12 months ended March 31, 2013, the company recorded a net loss of $717,852 and $1,534,662, respectively;
• EBITDA (earnings before interest, taxes, depreciation and amortization) of negative $622,071 and $1,286,738, respectively, for the three and 12 months ended March 31, 2014. This is a deterioration of $438,746 and $725,681, compared with EBITDA of negative $183,325 and negative $561,057, respectively, during the corresponding three and 12 months in the previous year. The lower EBITDA principally reflects much higher losses due to lower revenue generated by the IOSMS platform, and also lower revenue contributed by Inphosoft Group and its subsidiaries. There are also higher costs incurred by the whole group in relation to salaries and wages, amortization and depreciation, and accretion costs of debenture and notes payables;
• Volume of interSMS (short message service) traffic for the three-month period ended March 31, 2014, was down by 63.9 per cent to 4,850,223 from the same period of the previous year. When compared with the previous quarter ended Dec. 31, 2013, traffic was down by 21 per cent. This downward trend in SMS traffic is largely caused by cellphone users migrating to mobile instant messaging (MIM) applications, and the removal of bundle fees in the new agreements signed with mobile network operators that came into effect on March 1, 2013;
• Liquidity deteriorated considerably with cash on hand of $115,309, down 88.1 per cent from March 31, 2013. Net current liabilities as at March 31, 2014, were $596,118, compared with net current assets of $797,995 as at March 31, 2013.

                          FINANCIAL HIGHLIGHTS

                      Three-month period ended   Twelve-month period ended
                                      March 31,                   March 31,
                             2014         2013          2014          2013

Revenues $                219,135      518,678     1,130,787     1,302,915
Cost of sales $          (239,473)    (154,237)     (581,770)     (400,908)
Gross profit $            (20,338)     364,441       549,017       902,007
Gross margin %               (9.3)        70.3          48.6          69.2
EBITDA (1) $             (622,071)    (183,325)   (1,286,738)     (561,057)
EBITDA margin %            (283.9)       (35.3)       (113.8)        (43.1)
Net (loss) $             (994,330)    (717,852)   (2,972,208)   (1,534,662)
Net (loss) margin %        (453.8)      (138.4)       (262.8)       (117.8)
Net (loss)
per share $
Basic                       (0.02)       (0.02)        (0.06)        (0.04)
Diluted                     (0.02)       (0.02)        (0.06)        (0.04)

(1) EBITDA is a non-generally accepted accounting principles measure
related to cash earnings, and is defined for these purposes as earnings
before income taxes, depreciation, amortization and the accretion
on obligations.

Revenue for the three months and 12 months ended March 31, 2014, was $219,135 and $1,130,787, respectively, representing a decrease of 57.8 per cent and 13.2 per cent, respectively, compared with $518,678 and $1,302,915 during the corresponding periods in the previous year. The increase of 30.8 per cent in revenue from Inphosoft for 12 months to $1,001,428 is mainly due to the inclusion of a full 12 months of revenue for the period ended March 31, 2014, as compared with the inclusion of only six months of revenue from Inphosoft for the period ended March 31, 2013. However, revenue from Inphosoft for the six months ended March 31, 2014, declined by 45.4 per cent to $418,288 compared with $765,894 for the six months ended March 31, 2013. Revenue generated through its global partner, Acision, has declined significantly from a year ago, and is not expected to recover soon. Acision has downsized its global sales team to focus on Acision's core products and place less emphasis on reselling partners' products. This resulted in the reduced demand for the company's products. Moving forward, the business conditions will remain challenging and the company has to focus its efforts on other areas in order to create new revenue streams. The company has since invested heavily in the current quarter in the development of two mobile applications, namely the InphoShop series of mobile applications including GoMall and Happy Hours, and RightHere Messenger, an over-the-top (OTT) messaging application. The development of the three applications is not completed yet. Revenue from the company's IOSMS activities, taken separately, declined by 68.7 per cent and 75.9 per cent for the three months and 12 months compared with the previous year. The decline in the revenue generated from the IOSMS platform is due to the less favourable terms of the contracts signed with mobile network operators that came into effect on March 1, 2013, as well as a 63.9-per-cent drop in the company's SMS traffic during the quarter ended March 31, 2014, compared with the corresponding quarter in the previous year.

Revenue from Inphosoft for the 12 months aggregated $1,001,428, and is broken down as follows: professional services -- $544,363 (54.4 per cent), software licence fees -- $49,494 (4.9 per cent), and support and maintenance -- $407,571 (40.7 per cent).

The net loss for the quarter ended March 31, 2014, amounted to $994,330, compared with a loss of $717,852 during the same quarter in the previous year. The loss for the fourth quarter this fiscal year includes a net foreign exchange loss of $2,513 and a non-cash charge to earnings of $397,577, representing accretion on obligations related to the convertible debentures and promissory notes issued in connection with the acquisition of Inphosoft. EBITDA for the fourth quarter ended March 31, 2014, amounted to a deficit of $622,071, while EBITDA for the corresponding period in the previous year showed a deficit of $183,325. These results underline a decline in gross profit with gross income decreasing by 105.6 per cent to negative $20,338, and with a lower gross profit margin translating into a gross margin of negative 9.3 per cent, compared with 70.3 per cent during the corresponding quarter in the previous year.

Other than lower revenue generated by the IOSMS platform and the impact the foreign exchange gain have had on the results of the company for the 12 months ended March 31, 2014, the loss of $2,972,208 reported during the period reflects higher operating expenses. With Inphosoft, salaries and wages jumped by 88.5 per cent to $1,126,503, and general and administrative expenses were up by 73.8 per cent to $328,765. However, consultancy fees decreased by 56.8 per cent to $39,407 and professional fees decreased by 49 per cent to $330,770. The decline in professional fees reflected lower legal fees, in particular following the completion of the acquisition at the end of the second quarter of the previous year. The consolidation of Inphosoft also resulted in higher amortization charges, and accretion costs on convertible debenture and notes payables which amounted to $399,730 and $1,321,854, respectively, compared with $327,092 and $654,904, respectively, for the corresponding 12 months in the previous year.

We seek Safe Harbor.