MathStar posts strong growth

MARCH 1--MathStar (Minnetonka, MN; www.mathstar.com) has announced results for the quarter and year ended December 31, 2005.

MARCH 1--MathStar (Minnetonka, MN; www.mathstar.com) has announced results for the quarter and year ended December 31, 2005. For the fourth quarter of 2005, the company's revenues were $80,000 compared to $30,000 for the same quarter last year. Research-and-development costs for the quarter ended December 31, 2005, were $2.4 million compared to $1.7 million for the same quarter last year. The increase of $700,000 was primarily the result of increased payroll and contract engineering costs. Selling, general, and administrative costs were $2.2 million compared to $900,000 for the same quarter last year. The increase of $1.3 million was primarily the result of increased payroll costs of about $800,000, of which approximately $500,000 was the non-cash expense associated with restricted stock awards and employee options, and increased costs associated with being a public company of approximately $500,000. This includes legal, outside audit costs, insurance, printing, and transfer-agent costs.

The company's cash used in operations and investing activities for the quarter ended December 31, 2005, was $5.6 million compared to $2.8 million for the same quarter last year. The $2.8 million increase in cash used in operations and investing activities was primarily the result of increased R&D expenditures, building the selling, general and administrative infrastructure and costs associated with being a public company.

Revenues for the year ended December 31, 2005, were $134,000 compared to $130,000 for 2004. Research and development costs for the year ended December 31, 2005 were $8.8 million compared to $5.2 million for last year. The $3.6 million increase was the result of increased payroll; contract engineering costs and material costs. Selling, general and administrative costs were $6.2 million compared to $3.7 million for the same period last year. The $2.5 million increase was the result of increased payroll costs of approximately $1.4 million, of which $600,000 was non-cash expenses related to stock options and restricted stock awards, and the remaining increase was costs associated with building the selling, general and administrative infrastructure and increased costs associated with being a public company of approximately $1.0 million. This includes legal, outside audit costs, travel, insurance, printing, and transfer-agent costs.

MathStar is a fabless semiconductor company that designs, manufactures, and markets a new class of programmable logic chips called "field programmable object arrays," or FPOAs. FPOAs are high-performance, reprogrammable integrated circuits based on proprietary Silicon Object technology. FPOAs process logic functions at a clock rate up to 1 GHz, which is two to four times faster than current commercially available programmable logic devices. MathStar's flagship product, the SOA13D40 FPOA, represents a powerful solution that is ideal for digital-signal processing and filtering applications in the machine vision, video processing, medical imaging and military/aerospace markets. FPOAs are available now and supported by a wide range of development tools, libraries, application notes and technical documentation.

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