CORRECTING and REPLACING Conolog Reports Results for the Six Months Ended January 31, 2010

SOMERVILLE, N.J.--(BUSINESS WIRE)--

First graph, first sentence should read: Conolog Corporation CNLG announced today the results for the six months ended January 31, 2010 (sted Conolog Corporation CNLGD announced today the results for the six months ended January 31, 2010).

The corrected release reads:

CONOLOG REPORTS RESULTS FOR THE SIX MONTHS ENDED JANUARY 31, 2010

Conolog Corporation CNLG announced today the results for the six months ended January 31, 2010.

Product revenues for the six months ended January 31, 2010 was $580,016 a decrease of $365,624 for the same period ended January 31, 2009. The Company attributes this as a result of customer delivery requirements.

Cost of Goods Sold (Materials and Labor) during the six month period ended January 31, 2010 increased by $59,627 as a result of production delays and rescheduling of shipments.

Gross Profit for the six months ended January 31, 2010 and 2009 were $286,026 and $711,277 respectively. This decrease of $425,251 was directly related to the change in customer delivery schedules and related documentation in the second quarter ended January 31, 2010 when the Gross Profit decreased by $343,815.

Total Selling, general and administrative expenses for the six months ended January 31, 2010 and 2009 amounted to $3,257,251 and $1,133,547 respectively. This increase of $2,123,884 included the amortization of a non-cash expense of $2,054,443 for the 2009 stock incentive grant to employees, officers and directors.

Other non-cash non-operating expenses for the current six month period totaled $5,455,306 and consisted mainly of non-cash costs related to recording equity derivatives on debt in the amount of $5,306,521; and induced conversion cost of $150,201. Non-cash non-operating expenses for the three month period ended January 31, 2010 was $1,456,397. Subsequent to January 31, 2010, all remaining debt and warrants were converted, resulting in the recapturing of equity derivative expenses recorded at January 31, 2010.

As a result of the foregoing, the Company reported a net loss from operations of ($8,426,531) or ($2.93) per share compared to a loss of ($665,744) or ($0.21) per share for the six months ended January 31, 2010 and 2009, respectively. Loss per share of common stock included the weighted average of 1,929,032 common stock purchase warrants for the six months ended January 31, 2010.

About Conolog Corporation

Conolog Corporation is a provider of digital signal processing and digital security solutions to electric utilities worldwide. The Company designs and assembles electromagnetic products to the military and provides engineering and design services to a variety of industries, government organizations and public utilities nationwide. The Company’s INIVEN division is a provider of a line of digital signal processing systems, including transmitters, receivers and multiplexers.

Forward-looking statements in this release are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the Company’s products, increased levels of competition, new products introduced by competitors, and other risks detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission.

CONOLOG CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
ASSETS
		January 31, 2010				July 31, 2009
Current Assets:
Cash and cash equivalents		$	547,890			$	27,358
Accounts receivable, net of allowance			63,260				245,980
Prepaid expenses			42,680				70,843
Prepaid service agreements			498,200				-
Current portion of note receivable			14,864				14,864
Inventory			1,484,351				1,395,452
Other current assets			328,546				551,937
Total Current Assets			2,979,791				2,306,434
Property and equipment:
Net Property and Equipment			420,765				396,704
Other Assets:
Other non-current assets			223,411				-
Deferred financing fees, net of amortization			134,539				8,445
Note receivable, net of current portion			68,239				69,846
Total Other Assets			426,189				78,291
TOTAL ASSETS		$	3,826,745			$	2,781,429
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	117,875			$	217,456
Accrued expenses			10,097				26,132
Derivative Liability			557,466
Current Convertible debenture, net of discount			-				34,318
Total Current Liabilities			685,438				277,906
Non-Current Liabilities:
Convertible debenture, net of discount		$	45,132				-
Total Liabilities			730,570				277,906
Stockholders' Equity:
Preferred stock, par value $.50; Series A; 4% cumulative; 500,000 shares authorized; 155,000 shares issued and outstanding			77,500				77,500
Preferred stock, par value $.50; Series B; $.90 cumulative; 500,000
500,000 shares authorized; 1,197 shares issued and outstanding			597				597
Common stock, par value $0.01; 30,000,000 shares authorized; 4,468,787 and 1,842,485 shares issued and outstanding at January 31, 2010 and July 31, 2009 respectively			44,688				18,425
Contributed capital			60,705,267				52,385,432
Accumulated deficit			(57,600,143	)			(49,173,964	)
Treasury shares at cost - 2 shares			(131,734	)			(131,734	)
Deferred compensation			-				(672,733	)
Total Stockholders’ Equity			3,096,175				2,503,523
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	3,826,745			$	2,781,429
The accompanying notes are an integral part of the condensed consolidated financial statements

CONOLOG CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Operations (Unaudited)
		For the Three Months								For the Six Months
		Ended January 31,								Ended January 31,
		2010				2009				2010				2009
OPERATING REVENUES
Product revenue		$	111,920			$	488,959			$	580,016				945,640
Cost of product revenue
Cost of goods sold			97,107				130,331				293,990				234,363
Total Cost of product revenue			97,107				130,331				293,990				234,363
Gross Profit (Loss) from Operations			14,813				358,628				286,026				711,277
Selling, general and administrative expenses
General and administrative (includes non-cash stock grants)			2,002,097				507,610				2,751,999				880,684
Research and development			30,915				1,720				51,323				27,380
Professional fees			194,533				55,852				317,967				121,953
Marketing and trade shows			76,416				48,947				135,962				103,350
Total selling, general and administrative expenses			2,303,961				614,129				3,257,251				1,133,367
Loss Before Other Income (Expenses)			(2,289,148	)			(255,501	)			(2,971,225	)			(422,090	)
OTHER INCOME (EXPENSES)
Interest expense			(470,531	)			(14,140	)			(3,558,855	)			(69,274	)
Interest income			556				2,483				1,416				13,812
Other Income			-				355,267				-				355,267
Change in Fair Market value of derivatives			(853,134	)			-				(1,678,621	)			-
Induced conversion cost			(118,993	)			(25,406	)			(150,201	)			(205,911	)
Amortization			(33,634	)			(168,774	)			(69,045	)			(337,548	)
Total Other Income (Expense)			(1,475,736	)			149,430				(5,455,306	)			(243,654	)
Loss before provision for income taxes			(3,764,884	)			(106,071	)			(8,426,531	)			(665,744	)
Provision for income taxes			-				-				-				-
NET LOSS		$	(3,764,884	)		$	(106,071	)		$	(8,426,531	)		$	(665,744	)
Preferred stock dividends		$	(1,045	)		$	-			$	(2,090	)		$	-
NET LOSS APPLICABLE TO COMMON SHARES		$	(3,765,929	)		$	(106,071	)		$	(8,428,621	)		$	(665,744	)
NET LOSS PER BASIC AND DILUTED COMMON SHARE		$	(0.99	)		$	(0.03	)		$	(2.93	)		$	(0.21	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING			3,798,852				3,127,079				2,879,293				3,123,736
The accompanying notes are an integral part of the condensed consolidated financial statements