ARTICLE FROM TODAY'S NEW LONDON(CT.) DAY NEWSPAPER:
USVO forecast: Losses and more losses
By Robert A. Hamilton
Published on 8/18/2000
Mystic — USA Video Interactive saw its expenses rise sharply during the first half of 2000, compared to 1999, as it moves from development of its Internet products to selling them, the company said in regulatory filings this week.
In the company's first quarterly report since it was granted publicly reporting company status by the U.S. Securities & Exchange Commission this month, it said its expenses during the three-month period ending June 30 were $1.02 million, up 179 percent from $376,512 during the comparable period in 1999.
Revenues were $75,000 during the quarter. The company generated the first revenues in its 10-year history last year: $20,500 in sales to a single customer.
The company has said in other regulatory filings, however, that only a portion of its revenues are from the company's main products, which provide video-on-demand to Internet and computer network users. A large part stem from the sale of engineering services to other companies.
“The rise in operating expenses is consistent with the cost of adding staff, developing and refining its product and moving into more aggressive sales and marketing,” the company said in a statement released with its earnings.
In its regulatory filing, it noted, “At this time, the company has not achieved profitability and, in fact, expects to incur net losses for the foreseeable future.”
The company's stock closed Thursday at $3.08, down 6 cents for the day.
The company has said that since it has won SEC approval of its disclosure statements, it will apply to be listed on the Nasdaq Over the Counter bulletin board. Currently the stock sales are done on paper, called the “pink sheets,” which limits trading in the stock.
The quarterly filing shows that the company's losses have been mounting in recent years as it attempts to secure its place in the Internet market, climbing from $678,156 in 1997, to $981,598 in 1998, and $1,657,078 last year.
As of December 31, 1999, the deficit accumulated during the development stages totaled more than $20 million.
For the first six months of 2000, the company said revenues were $238,600 during the first six months, and its cost of goods sold totaled $152,583, for a gain of just over $86,000.
But that was only a fraction of what it needed to cover operating costs that climbed well into seven figures.
Its next losses for the first six months of the year were $1.4 million, up 139 percent from $590,446 in 1999.
“As the company expands its business in 2000 and beyond, its research and development, sales and marketing, and general and administrative expenses will continue to increase,” the company warned in its filing.
PC |
