HispanicBusiness

For a more detailed discussion of risk factors that may affect Crexendo's operations and results, please refer to the company's Form 10-K for the year ended December 31, 2011 and Forms 10Q for 2012 as well as the company's Form 10-K for the year ended December 31, 2012 which will be released subsequent to this press release. These forward-looking statements speak only as of the date on which such statements are made, and the company undertakes no obligation to update such forward-looking statements, except as required by law.

                       CREXENDO, INC. AND SUBSIDIARIES                         Consolidated Balance Sheets              (In thousands, except par value and share data)                                                       December 31,                                                    2012           2011                                               -------------  -------------AssetsCurrent assets:  Cash and cash equivalents                    $       7,440  $       8,658  Restricted cash                                      1,444          1,965  Trade receivables, net of allowance for   doubtful accounts of $1,326 as of December   31, 2012 and $3,512 as of December 31, 2011         3,043          9,420  Inventories                                            171            232  Equipment financing receivables                         28              -  Income tax receivable                                  434            552  Prepaid expenses and other                             333            725                                               -------------  -------------    Total current assets                              12,893         21,552Certificate of deposit                                   500            500Long-term trade receivables, net of allowance for doubtful accounts of $196 as December 31, 2012 and $1,949 as of December 31, 2011                 395          6,097Long-term equipment financing receivables                 96              -Property and equipment, net                            3,172          4,055Deferred income tax assets, net                          103            279Intangible assets                                          6             79Goodwill                                                 265            265Other long-term assets                                    97            233                                               -------------  -------------  Total Assets                                 $      17,527  $      33,060                                               =============  =============Liabilities and Stockholders' EquityCurrent liabilities:  Accounts payable                             $         418  $       1,153  Accrued expenses and other                           3,010          2,240  Dividend payable                                         -            211  Deferred income tax liability                          103            279  Deferred revenue, current portion                    3,052          9,288                                               -------------  -------------    Total current liabilities                          6,583         13,171Deferred revenue, net of current portion                 399          6,123Other long-term liabilities                              253            419                                               -------------  -------------    Total liabilities                                  7,235         19,713                                               -------------  -------------Stockholders' equity:Preferred stock, par value $0.001 per share - authorized 5,000,000 shares; none issued                  -              -Common stock, par value $0.001 per share - authorized 100,000,000 shares; 10,669,201 shares outstanding as of December 31, 2012 and 10,523,078 shares outstanding as of December 31, 2011                                        11             11Additional paid-in capital                            49,824         48,938Accumulated deficit                                  (39,543)       (35,602)                                               -------------  -------------    Total stockholders' equity                        10,292         13,347                                               -------------  -------------    Total Liabilities and Stockholders' Equity $      17,527  $      33,060                                               =============  =============                       CREXENDO, INC. AND SUBSIDIARIES                    Consolidated Statements of Operations               (In thousands, except per share and share data)                                                  Year Ended December 31,                                               ----------------------------                                                    2012           2011                                               -------------  -------------Revenue                                        $      17,167  $      48,024Operating expenses:  Cost of revenue                                      5,092         17,729  Selling and marketing                                3,977         20,709  General and administrative                          12,228         12,215  Research and development                             1,985          3,262                                               -------------  -------------    Total operating expenses                          23,282         53,915                                               -------------  -------------Loss from operations                                  (6,115)        (5,891)                                               -------------  -------------Other income (expense):  Interest income                                      1,907          4,751  Interest expense                                         -             (2)  Other income (expense), net                             55            (36)                                               -------------  -------------    Total other income, net                            1,962          4,713                                               -------------  -------------Loss before income tax                                (4,153)        (1,178)Income tax benefit (provision)                           212         (5,052)                                               -------------  -------------Net loss                                       $      (3,941) $      (6,230)                                               =============  =============Net loss per common share:  Basic                                        $       (0.37) $       (0.59)  Diluted                                      $       (0.37) $       (0.59)Dividends per common share                     $        0.04  $        0.08Weighted-average common shares outstanding:  Basic                                           10,625,530     10,596,231  Diluted                                         10,625,530     10,596,231                       CREXENDO, INC. AND SUBSIDIARIES               Consolidated Statements of Stockholders' Equity             Years Ended December 31, 2012 and December 31, 2011                      (In thousands, except share data)                                     Additional                   Total                     Common Stock      Paid-in   Accumulated  Stockholders'                 -------------------                    Shares    Amount   Capital     Deficit        Equity                 -----------  ------ ----------  -----------  -------------Balance, January 1, 2011          10,664,878  $   11 $   49,481  $   (29,372) $      20,120  Expense for   stock options   granted to   employees               -       -        919            -            919  Stock issued   under stock   award plans        20,993       -         68            -             68  Dividends   declared                -       -       (848)           -           (848)  Repurchase of   common stock     (162,793)      -       (682)           -           (682)  Net loss                 -       -          -       (6,230)        (6,230)                 -----------  ------ ----------  -----------  -------------Balance, December 31, 2011         10,523,078  $   11 $   48,938  $   (35,602) $      13,347  Expense for   stock options   granted to   employees               -       -        812            -            812  Stock issued   under stock   award plans       146,123       -        498            -            498  Dividends   declared                -       -       (424)           -           (424)  Net loss                 -       -          -       (3,941)        (3,941)                 -----------  ------ ----------  -----------  -------------Balance, December 31, 2012         10,669,201  $   11 $   49,824  $   (39,543) $      10,292                 ===========  ====== ==========  ===========  =============                       CREXENDO, INC. AND SUBSIDIARIES                    Consolidated Statements of Cash Flows                               (In thousands)                                                  Year Ended December 31,                                               ----------------------------                                                    2012           2011                                               -------------  -------------CASH FLOWS FROM OPERATING ACTIVITIESNet loss                                       $      (3,941) $      (6,230)Adjustments to reconcile net loss to net cash used for operating activities:  Impairment of inventory, intangible assets,   prepaids and lease cancellation                        35          1,259  Lease abondonment                                    1,393              -  Loss on Subsidiary                                       -             56  Depreciation and amortization                        1,374          1,349  Loss on disposal of property and equipment              83              -  Expense for stock options issued to   employees                                             812            919Deferred income tax provision                              -          5,082Change in uncertain tax positions                       (162)             -Changes in assets and liabilities:  Trade receivables                                   12,079          6,047  Inventories                                             26            555  Financing receivables                                 (124)             -  Income tax receivable                                  118            687  Prepaid expenses and other                             392            541  Other long-term assets                                 136              6  Accounts payable, accrued expenses and other          (709)        (4,019)  Deferred revenue                                   (11,960)        (7,869)  Other long-term liabilities                              2            (31)                                               -------------  -------------    Net cash used for operating activities              (446)        (1,648)                                               -------------  -------------CASH FLOWS FROM INVESTING ACTIVITIES  Acquisition of property and equipment               (1,172)        (1,463)  Proceeds from sale of property and equipment            22              -  Decrease in restricted cash                            521           (877)  Investment in subsidiary                                 -            (56)                                               -------------  -------------    Net cash used for investing activities              (629)        (2,396)                                               -------------  -------------CASH FLOWS FROM FINANCING ACTIVITIES  Repurchase of common stock                               -           (682)  Proceeds from exercise of options                      498             68  Payments made on contingent consideration               (6)           (40)  Dividend payments                                     (635)          (851)                                               -------------  -------------    Net cash used for financing activities              (143)        (1,505)                                               -------------  -------------NET DECREASE IN CASH AND CASH EQUIVALENTS             (1,218)        (5,549)CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR                                              8,658         14,207                                               -------------  -------------CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR                                          $       7,440  $       8,658                                               =============  =============Supplemental disclosure of cash flow information:Cash received during the year for:  Income taxes                                 $         158  $         892Supplemental disclosure of non-cash investing and financing information:  Dividends declared and not paid                          -            211  Purchase of property and equipment included   in accounts payable                                     6            655