CyberDefender Corporation Reports Third Quarter 2009 Financial Results; GAAP Revenue Grows 268% Year-Over-Year

http://www.businesswire.com/news/home/20091112006159/en

- Reports Sixth Consecutive Quarter of Revenue Growth -

- 215 Percent Growth in New Licenses from Q308 -

- 152 Percent Growth in Sales Receipts Related to Licenses over Q308 -

LOS ANGELES--(Business Wire)--
CyberDefender Corporation (OTCBB:CYDE), a provider of award-winning PC security,
Antispyware/Antivirus Software, PC Optimization, PC Support, and Identity Theft
Prevention solutions, today announced financial results for its third quarter
ended September 30, 2009.

Highlights

* 268% Growth in GAAP Revenue over Q308
* 152% Growth in Cash Receipts Related to the Sale of Licenses over Q308
* 367% Growth in Year-To-Date GAAP Revenue over the Same Period of 2008
* 369% Growth in Year-To-Date Cash Receipts Related to the Sale of Licenses over
the Same Period of 2008
* 62% Sequential Increase in New Licenses

"It is an exciting time at CyberDefender as we report our sixth consecutive
quarter of sequential revenue growth," stated Gary Guseinov, CyberDefender CEO.
"Once again we saw triple digit growth in our GAAP revenues and our cash
receipts, record growth in new licenses and strong overall progress in our
business. We are gaining traction with our partnerships, most notably our
relationship with Guthy-Renker, with which we are ramping up our television and
radio campaigns. This relationship has enabled us to maximize our advertising
expenditures, while successfully building our brand."

Results for the Quarter Ended September 30, 2009

GAAP revenues for the third quarter of 2009 grew 268% to $4.4 million, compared
to $1.2 million in the same quarter of 2008. Cash receipts from the sales of new
subscription licenses, which becomes deferred income on the company`s books and
is recognized as revenue over the 12 to 36 month terms of each license, grew
152% to $6.3 million for the third quarter, compared to $2.5 million in the same
quarter of 2008.

Gross profit in the third quarter of 2009 grew 502% to $3.4 million, compared to
$564,000 in the same quarter of 2008.

Advertising expenditures as a percentage of revenue again improved on a
year-over-year basis. In the third quarter of 2009, advertising expenditures
constituted 80% of revenues compared with 227% of revenues in the same quarter
of 2008.

The Company narrowed its net loss for the third quarter, which decreased 8% to
$3.6 million or $0.15 per share, compared $3.9 million or $0.24 per share in the
same quarter of 2008.

Chief Financial Officer of CyberDefender Kevin Harris stated, "The strong
results we reported today indicate that we are on track to reach cash flow
positive by the end of the fourth quarter. We generated total sales receipts of
$6.7 million for the quarter and $19.2 million for the nine months ended
September 30, 2009, which includes licenses, back-up CDs and advertising
revenues. We have continued to grow our subscriber base, increased our deferred
revenue, dramatically lowered our advertising expenses as a percentage of
revenue and narrowed our net loss. In addition, at the end of the quarter we had
no debt on our balance sheet, as we converted all of our short-term debt into
shares of our common stock. We intend to continue to diligently execute on our
growth plan while scaling our operations to match demand and we believe we are
positioned for continued growth into 2010."

Results for the Nine Months Ended September 30, 2009

GAAP revenues for the nine months ended September 30, 2009 grew 367% to $11.3
million compared with $2.4 million in the same period of 2008. Cash receipts
from the sales of new subscription licenses, which become deferred income on the
Company`s books, and is recognized as revenue over the 12 to 36 month terms of
each license, grew 369% to $17.4 million year-to-date, compared to $3.7 million
in the same period of 2008.

Gross Profit for the nine months ended September 30, 2009 grew 367% to $11.3
million compared with the $2.4 million in the same period of 2008.

Outlook

"Looking forward, we expect to realize further growth as we continue to ramp up
our sales and marketing initiatives to expand into new markets, increase
capacity in our call centers, prepare for the upcoming launch of our `For
Dummies` campaign and mass market retail distribution through Allianex. The
market for security software and services for the consumer market is expanding
rapidly as new cyber threats emerge every day. We are working diligently to take
all the right steps to fully capitalize on this growth opportunity and as such,
we look forward to continuing on our growth trajectory throughout 2010,"
concluded Guseinov.

Conference Call Information

CyberDefender will host a conference call to discuss third quarter 2009 results
on Thursday, November 12, 2009 at 1:30 pm PT/4:30 pm ET.

To access the live conference call, dial (877) 407-8035 (toll free) or (201)
689-8035 (International) and give the company name, "CyberDefender."
Participants are asked to call the assigned number approximately 10 minutes
before the conference call begins. A telephone replay will also be available for
one week beginning two hours after the completion of the live call, and can be
accessed by dialing 1-877-660-6853 or 201-612-7415 for international callers and
entering access# 286 and conference ID# 337489 when prompted.

The results will also be available via live and archived webcast at:

http://www.investorcalendar.com/IC/CEPage.asp?ID=152189

About CyberDefender Corporation

Based in Los Angeles, California, CyberDefender Corporation (CYDE) is a provider
of Internet security technology for the consumer market. With over 5 million
active users of its proprietary patent pending Collaborative Internet Security
Network (or the earlyNETWORK), CyberDefender is an industry leader.
CyberDefender`s earlyNETWORK is designed to address the "zero hour gap," which
effectively reduces the risks associated with new and emerging Internet threats.
By utilizing a proprietary secure peer-to-peer network, CyberDefender delivers
protection to the end user faster than the traditional client-server or cloud
methods. CyberDefender develops and markets PC desktop security utilities in the
following categories: antispyware, antivirus, and PC optimization. In addition,
CyberDefender offers the following services: identity protection and remote PC
repair and optimization services. CyberDefender products are fully compatible
with Microsoft's XP, Vista, and 7 Operating systems and are available at
http://www.cyberdefender.com.

Forward Looking Statements

Statements in this press release that are not statements of historical or
current fact, such as CyberDefender's expectation of future revenue growth and
profitability, constitute "forward-looking statements." Such forward-looking
statements involve known and unknown risks, uncertainties and other unknown
factors that could cause CyberDefender's actual results to be materially
different from the historical results or from any future results expressed or
implied by such forward-looking statements. Factors that could cause
CyberDefender's results to be materially different from the forward-looking
statements include whether CyberDefender will be able to find financing when and
as it needs it and whether CyberDefender's revenues will eventually exceed its
expenses. The forward-looking statements contained herein are also subject
generally to other risks and uncertainties that are described from time to time
in CyberDefender's reports and registration statements filed with the Securities
and Exchange Commission, which are available for review at http://www.sec.gov/.

CYBERDEFENDER CORPORATION

CONDENSED BALANCE SHEETS

(UNAUDITED)

ASSETS September 30, December 31,
CURRENT ASSETS: 2009 2008(1)
Cash $ 1,172,080 $ 779,071
Restricted cash 1,312,093 15,000
Accounts receivable 131,623 204,635
Deferred financing costs - 324,200
Prepaid expenses 530,732 674,478
Deferred charges, current 2,578,223 811,542

Total Current Assets 5,724,751 2,808,926

PROPERTY AND EQUIPMENT, net 72,374 94,883
DEFERRED CHARGES, less current portion 717,446 239,983
OTHER ASSETS 32,859 26,196

Total Assets $ 6,547,430 $ 3,169,988

LIABILITIES AND STOCKHOLDERS` DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 3,900,965 $ 3,798,645
Accrued expenses 396,278 331,229
Accrued expenses - registration rights agreement 48,223 53,745
Deferred revenue, current 8,390,407 4,025,026
Convertible notes payable, net of discount - 2,421,529
Capital lease obligation, current 13,305 27,291

Total Current Liabilities 12,749,178 10,657,465

DEFERRED REVENUE, less current portion 1,265,945 527,927

CAPITAL LEASE OBLIGATION, less current portion 10,862 16,776

Total Liabilities 14,025,985 11,202,168

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS` DEFICIT:
Common stock, no par value; 50,000,000 shares authorized; 25,248,302 and 17,350,798 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively 16,157,041 6,381,921
Additional paid-in capital 14,641,567 11,398,623
Accumulated deficit (38,277,163 ) (25,812,724 )

Total Stockholders` Deficit (7,478,555 ) (8,032,180 )

Total Liabilities and Stockholders` Deficit $ 6,547,430 $ 3,169,988

1) Derived from audited financial statements.

CYBERDEFENDER CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
REVENUES:
Net sales $ 4,427,404 $ 1,202,715 $ 11,305,678 $ 2,420,623

COST OF SALES 1,018,370 638,349 2,451,398 905,574

GROSS PROFIT 3,409,034 564,366 8,854,280 1,515,049

OPERATING EXPENSES:
Advertising 3,545,141 2,679,446 10,697,142 3,961,338
Product development 464,761 121,710 1,129,995 325,571
Selling, general and administrative 1,612,330 869,580 4,429,882 2,232,686
Investor relations and other related consulting 490,277 144,000 3,056,486 344,000
Depreciation and amortization 8,980 9,828 29,076 29,484
Total Operating Expenses 6,121,489 3,824,564 19,342,581 6,893,079

LOSS FROM OPERATIONS (2,712,455 ) (3,260,198 ) (10,488,301 ) (5,378,030 )

OTHER INCOME/(EXPENSES):
Change in fair value of derivative liabilities - - 109,058 -
Loss on registration rights agreement - - - (216,540 )
Interest income 67 - 78 -
Interest expense (843,163 ) (673,232 ) (2,808,604 ) (1,848,928 )
Total Other Expenses, net (843,096 ) (673,232 ) (2,699,468 ) (2,065,468 )

LOSS BEFORE INCOME TAX EXPENSE (3,555,551 ) (3,933,430 ) (13,187,769 ) (7,443,498 )

INCOME TAX EXPENSE 200 200 600 600

NET LOSS $ (3,555,751 ) $ (3,933,630 ) $ (13,188,369 ) $ (7,444,098 )

Basic and diluted net loss per share $ (0.15 ) $ (0.24 ) $ (0.64 ) $ (0.49 )

Weighted Average Shares Outstanding:
Basic and diluted 23,619,718 16,249,557 20,688,198 15,084,239

Investor & Media Contact:
Caye Partners Investor Relations
Marie Dagresto, Partner
310-571-8205
CYDE@cayepartners.com

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