VLST's change in revenue model. The Form 10-QSB (Dec 31,'99) was filed a few days ago. I've posted the section regarding the Changing Revenue Model, pg 13. I hope this helps you better understand the rev's.
Also, thanks for your response.
Changing Revenue Model
Our current business revenue model, similar to other membership based organizations, is predicated on a growing number of certified businesses and maintaining high renewal rates. Certified businesses that renew contribute higher gross margins than new applicants due to reduced sales and rating costs. We plan to migrate to a transaction based revenue model where our business will be predicated on creating and maintaining a growing number of registered buyers and sellers transacting commerce in local services.
Considerable portions of our operations are engaged towards the solicitation of new service and professional business applicants and we incur substantial costs towards this activity. We expect that these will continue to be significant costs in the future. During the six months ended December 31, 1999 we also incurred significant product development costs consisting of (a) capturing information on a large number of service companies in the United States (our new proprietary content), (b) developing systems to store, monitor and update this content, (c) developing systems to register consumers and (d) developing systems to monitor and generate commissions based on transactions between buyers and sellers of local services. We expect these product development costs to continue during the balance of fiscal 2000 and early fiscal 2001. Exact amounts and timing are subject to a variety of factors and are not currently determinable by management.
Future operations will be impacted by changes in cost structure and elections regarding new product development, advertising, promotions and growth rates. We have recently increased numbers of sales, marketing, development and support personnel. Rapid growth, due to the nature of our operations, is expected to contribute to continued operating losses in the foreseeable future.
At December 31, 1999 we had 1,755 certified businesses. At December 31, 1999, we also had 497 (473 new and 24 renewal) business customers in the application and rating phase. The total represents approximately 75 days of sale to new businesses. Northern California business customers in the rating phase are expected to represent approximately $325,000 of revenues that should be recognized in the third quarter of fiscal 2000 (generally analogous to backlog).
SOURCE: FORM 10-QSB, quarterly period ended Dec. 31, 1999 |
