Netter Digital Entertainment First Quarter Net Incomeis $0.03 Per Share.

NORTH HOLLYWOOD, Calif.--(BUSINESS WIRE)--November 15, 1999--

Netter Digital Entertainment, Inc. (Nasdaq:NETT) today reported net income for the first quarter of fiscal 2000 ended September 30, 1999 of $102,000, or $0.03 per diluted share. Gross margin increased to 28%, reflecting a shift

For the first quarter of fiscal 1999, net income from continuing operations was $174,000, or $0.05 per diluted share. Revenue was $6,888,000, which included revenue from live-action production projects of approximately $5,300,000.

"Fiscal 2000 is off to an encouraging start and represents a significant turnaround in comparison to our recent fourth quarter. Results for the period included our critically acclaimed special effects work on the theatrical film BATS, which was released for Halloween, and the launch of two new fully computer animated television series which are in production for the current fiscal year," said Douglas Netter, chairman and chief executive officer.

"Netter Digital has a well-earned reputation as a premier producer of high quality, low-cost projects featuring live-action and 100% computer-generated animation and special effects for television, theatrical films. We are in active discussions regarding additional projects for these large and growing markets, including a new emphasis on Internet productions," Netter added.

About Netter Digital

Netter Digital Entertainment, Inc. acquires, develops and produces television series and made-for-TV and theatrical movies, and provides post-production, 3-D and special effects animation services, to the television, movie and video game industries. The Company produced Babylon 5 and Crusade in association with J. Michael Straczynski for Warner Brothers and Turner Network Television. The Company also produced the all 3-D animated children's series Voltronut limitation, demand and competition for the C 1999 1998

(Unaudited) (Unaudited)

REVENUE Interest income S

Income (loss) from operation of

Videsse earnings

(loss) per share:

Continuing operWeighted average common shares

outstanding Sep. 30, Jund cash equivalents $ 545,918 TAL CURRENT ASSETS 3,989,949 3,413,298

EQUIPMENT, net 3,195,643 3,108,890 DEPOSITS AND OTHER ASSETS 364,531 336,669

TOTAL ASSETS $ 7,550,123 $ 6,858,857

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable and production

fee advances $ 1,331,773 $ 1,244,051

Accrued expenses 148,481 95,979

Deferred revenue 491,807 160,228

Current portion of capital

lease obligations 1,119,390 997,040

Notes payable 450,000 450,000

TOTAL CURRENT LIABILITIES 3,541,451 2,947,298

CAPITAL LEASE OBLIGATIONS 963,053 1,000,339 NOTE PAYABLE (net of discount

of $200,000) 800,000 (780,000) MINORITY INTEREST 500 500

TOTAL STOCKHOLDERS' EQUITY 2,245,119 2,130,720

TOTAL LIABILITIES & STOCKHOLDERS'

EQUITY $ 7,550,123 $ 6,858,857