MCET 10Q Ending 08-31-05 The 10K will be more revealing IMO
Total revenue for the three months ended August 31, 2005 was $69,056, as compared to revenue of $176,299 for the same quarter in the prior fiscal year, a decrease of $107,243. In the comparable quarter of the prior year $150,000 was recognized as amortization of the $700,000 royalty prepayment made by XenoTech for the first 16 month royalty period. This prepayment period ended November 30, 2004. Revenues under the XenoTech agreement commencing December 1, 2004 are being recognized based on the agreement's royalty percentage applied to XenoTech's actual sales for the period. On June 15, 2005, the Company announced the launch of a shrink-wrap version of its product. We believe that this action, along with further product enhancements and the launch of new products currently under development, will lead to an improvement in revenue levels in the future.
Operating Expenses. Total operating expenses for the three months ended August 31, 2005 were $1,173,036, representing an increase of $547,066, as compared to the same period in the prior fiscal year. This increase results from the Company increasing selling, general and administrative expenses by $581,144 due to the hiring of additional management personnel, increasing marketing and investor relations costs, as well as increasing costs associated with meeting the requirements of being a public company. Research and development expenditures decreased by $29,872. This decrease is primarily due to the granting of options to the Scientific Advisory Board during the quarter ended August 31, 2004 valued at $235,980, in comparison to direct research and development expenditures of $206,108 incurred during the quarter ended August 31, 2005.
Net Loss. Net loss for the three months ended August 31, 2005 was $1,059,363, as compared to a net loss of $2,180,774 for the same period in the prior fiscal year, representing a decrease in the net loss of $1,121,411. The net loss applicable to common stockholders for the three months ended August 31, 2004 included a one-time non-cash charge of $1,721,144 due to the beneficial conversion feature attributable to the difference between the purchase price and the fair market value of the common stock to which the Series I preferred stock issued in July 2004 is convertible, and an increase in operating expenses of $547,066 due to the Company incurring additional operating expenses relating to the management and marketing of the Company as described above. |
