VCLD Verecloud Inc (CE)

Verecloud, Inc. (OTCBB: VCLD), innovators in the emerging cloud computing services business, today announced financial results for its fiscal year ended June 30, 2011.

In March 2011, Verecloud shifted its focus to providing an online cloud marketplace targeted directly to small and medium businesses, after building the platform for the telecommunications industry. On August 2, 2011, Verecloud launched Cloudwrangler™ which makes it easier for SMBs to shop for, purchase, monitor and manage the performance of their hosted/cloud services at no additional charge.

"Fiscal year 2011 was a big transition year for us as we shifted our business model to launching our own marketplace," said John McCawley, chief executive officer of Verecloud. "We invested a lot of resources to prepare for the launch and will continue to build out our sales marketing and operations to serve our expanding customer base."

Full Year Financial Highlights

• Revenue of $4,424,608, down 24 percent from the year ended June 30, 2010 and up 285 percent compared to the year ago quarter. The decline is driven by the focus on the transition of the company in March 2011 to delivering cloud services as a complete, customized suite directly to the small and medium business market (SMBs).
• Net loss of $6,095,895 compared to a loss of $400,493 in 2010. Excluding stock-based compensation, the 2011 loss was $1,758,717.
• The Company recorded capitalized software of $614,837 for the year ended June 30, 2011 associated with the completion and introduction of its Cloudwrangler™ platform.
• Ended the year with a cash balance of $202,256 compared to $197,151 as of the fiscal year ended June 30, 2010 and up from $32,961 at March 31, 2011.

The Company is moving rapidly to broaden its service offerings and drive customer growth. As of today, Verecloud has nine services on its platform and is launching an aggressive marketing campaign in October to expand its customer base.

Additional financial information, including historical SEC filings and the current Annual Report on Form 10-K can be found on Verecloud's website at www.verecloud.com.

About Verecloud Based in Denver, Colorado, Verecloud®, Inc. is an innovative technology company that developed and operates a cloud service brokerage platform that integrates cloud service suppliers and connects to SMBs through multiple distribution channels. Verecloud is targeted at organizations that need innovative, high-margin cloud services to drive growth including SMBs, communications service providers (CSPs), managed service providers (MSPs), and innovative cloud computing solution suppliers who want access to the evolving distribution channels. For more information on Verecloud visit: http://www.verecloud.com

Forward-Looking Statement This release may contain projections and other forward-looking statements that involve risks and uncertainties. Forward-looking statements are projections reflecting management's judgment and assumptions based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Future performance cannot be assured. Readers are referred to the documents filed by Verecloud with the Securities and Exchange Commission (SEC), specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Recent documents filed with the SEC can be found in the Investor Relations section of our website (www.verecloud.com). Verecloud believes the forward-looking statements in this release are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. Verecloud is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release.

                                                  June 30,       June 30,
                                                    2011           2010
                                               -------------  -------------

                    ASSETS

Current assets
  Cash                                         $     202,256  $     197,151
  Accounts receivable                                128,050        632,962
  Other current assets                                62,537         34,243
                                               -------------  -------------
    Total current assets                             392,843        864,356

Property and equipment
  Computer related                                    89,307         87,655
  Equipment and machinery                             40,372         36,255
  Other property and equipment                        36,330         36,330
                                               -------------  -------------
    Subtotal                                         166,009        160,240
  Accumulated depreciation                          (136,026)       (98,839)
                                               -------------  -------------
    Net property and equipment                        29,983         61,401

Other assets
  Capitalized software, net                          614,837              -

                                               -------------  -------------
  Total assets                                 $   1,037,663  $     925,757
                                               =============  =============

    LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current liabilities
  Accounts payable                             $     271,126  $     174,899
  Current portion of long term debt                2,414,000              -
  Accrued liabilities                                485,380        319,899
                                               -------------  -------------
    Total current liabilities                      3,170,505        494,798

Long term debt                                             -        864,000

                                               -------------  -------------
Deferred taxes payable                               485,380        319,899

                                               -------------  -------------
  Total liabilities                                3,170,505      1,358,798

Commitments and contingencies

Stockholders' (deficit)
      Preferred stock - $0.001 par value,
       5,000,000 shares authorized: No shares
       issued or outstanding                               -              -
      Common stock - $0.001 par value,
       200,000,000 shares authorized:
       71,791,068 and 70,098,000 shares issued
       and outstanding, respectively                  71,791         70,098
      Additional paid-in capital                   5,192,072        797,670
  Accumulated (deficit)                           (7,396,705)    (1,300,809)
                                               -------------  -------------
    Total stockholders' (deficit)                 (2,132,842)      (433,041)

                                               -------------  -------------
Total liabilities and stockholders' (deficit)  $   1,037,663  $     925,757
                                               =============  =============




                                                    Year Ended June 30,
                                               ----------------------------

                                                    2011           2010
                                               -------------  -------------

Revenue                                        $   4,424,608  $   5,840,706

Cost of goods sold                                 2,313,632      2,621,577

                                               -------------  -------------
Gross profit                                       2,110,976      3,219,129

Operating expenses
  Employee related (1)                             2,713,279      1,343,106
  Marketing expense                                  738,878        682,264
  Legal and accounting                               246,648        483,662
  Consulting expense (1)                           3,432,265        296,206
  Research and development                           454,824        897,668
  Rent                                                89,935        119,933
  Travel and entertainment                           119,040         75,587
  Information technology                              48,056         48,624
  Depreciation                                        37,187         33,839
  Other                                              186,912         95,816
                                               -------------  -------------
    Total operating expenses                       8,067,024      4,076,704

                                               -------------  -------------
Operating income (loss)                           (5,956,048)      (857,575)

Other income (expense)
  Interest income                                        242          3,704
  Interest (expense)                                (126,949)      (126,527)
                                               -------------  -------------
  Total other income (expense)                      (126,707)      (122,823)

                                               -------------  -------------
Pretax income (loss)                              (6,082,755)      (980,398)

Income tax expense (benefit)                          13,140       (579,905)

                                               -------------  -------------
Net income (loss)                              $  (6,095,895) $    (400,493)
                                               =============  =============


Basic net income (loss) per common share       $       (0.09) $       (0.01)
Basic weighted average common shares              70,852,885     47,984,619

(1) Includes stock-based compensation as
 follows:
  Salary and wages                             $   1,331,992  $     270,700
  Consulting expenses                          $   3,005,186  $      98,000
                                               -------------  -------------
  Total Stock-based Compensation               $   4,337,178  $     368,700



                                                        Year Ended
                                                         June 30,
                                               ----------------------------
Operating Activities                                2011           2010
                                               -------------  -------------
  Net income (loss)                            $  (6,095,895) $    (400,493)
Adjustments to reconcile net income to net
 cash from operations
  Depreciation and amortization                      273,795         33,839
  Stock for services                                 177,258         98,000
  Stock-based compensation                         4,159,920        270,700
  Income tax expense (benefit)                             -       (579,905)
Change in assets and liabilities
  Accounts receivable                                504,913        739,898
  Other current assets                               (28,294)        37,088
  Accounts payable                                    96,226         (3,619)
  Other current liabilities                          165,481        258,196
                                               -------------  -------------
Net cash provided by (used in) operating
 activities                                         (746,597)       453,703

Investing Activities
  Purchase of computer related                        (1,652)       (12,727)
  Purchase of equipment and machinery                 (4,117)        (2,520)
  Purchase of other property and equipment                 -         (7,946)
  Capitalized software                              (851,445)             -
  Security deposits                                        -         22,785
                                               -------------  -------------
Net cash (used in) investing activities             (857,214)          (408)

Financing Activities
  Issuance of common stock                            58,917        436,000
  Reduction in note payable                                -     (1,590,000)
  Increase (decrease) in line of credit            1,550,000        864,000
  Members distributions                                    -       (506,623)
                                               -------------  -------------
Net cash provided by (used in) financing
 activities                                        1,608,917       (796,623)

Decrease in cash for period                    $       5,105  $    (343,327)
Cash at beginning of period                          197,151        540,479
                                               -------------  -------------
Cash at end of period                          $     202,256  $     197,151
                                               -------------  -------------

Schedule of Noncash Investing and Financing
 Activities
  Share Exchange Agreement                     $           -  $    (576,225)
  Note Purchase Agreement                      $           -  $   1,221,885

Supplemental disclosure:
  Cash paid for interest during the year       $           -  $     126,527
  Cash paid for income taxes during the year   $      13,140  $           -

Media Relations Dirk Van Slyke Corporate Marketing Verecloud, Inc. 303-999-7398 dirk.vanslyke@verecloud.com Investor Relations John McCawley Chief Executive Officer Verecloud, Inc. 877-711-6492 john.mccawley@verecloud.com