from sec filing today as posted on yhoo board. also, dj reporting ggbm will delay its 10k filing..
From Today's SEC filing (delay in submission of annual report)
The registrant estimates that its results of operations for the year ended
December 31, 2006 as reflected in its statements of operations to be included in
its Form 10-KSB for the year ended December 31, 2006 will reflect the following:
For the year ended December 31, 2006, sales totaled $4,823,914, primarily from
the sales of the registrant's WiFiber G series GigE products. For the year ended
December 31, 2005, sales totaled $1,196,512, primarily from the sales of the
registrant's WiFiber II Series GigE products. Initial sales were recorded in the
quarter ended June 30, 2005.
Gross margin from sales for the year ended December 31, 2006 was
approximately 20% The overall margin percentage was affected by allocations of
manufacturing overhead over a relatively small number of link products sold
during the year and by adding a provision for obsolescence of $758,554 expensed
to cost of sales related to the carrying value of the registrant's WiFiber II
GigE links, as well as a write down of the carrying value of remaining WiFiber
II parts inventory by $152,784. For the year ended December 31, 2005, the
registrant only had partial (first year) sales, with a negative gross margin,
primarily volume driven, and the level is not comparable to 2006.
General and administrative expenses increased to $6,582,696 for the year
ended December 31, 2006, from $4,115,219 in the comparable 2005 period. The
increase of $2,317,477 was primarily due to increased legal and professional
fees including investment banking fees, higher insurance premiums due to
increased levels of coverage taken, costs associated with compliance with the
requirements of the Sarbanes-Oxley Act, costs of implementation of a integrated
managerial accounting system, and expenses related to employee share-based
compensation required to be recognized in 2006
Selling and marketing expenses increased to $4,985,772 for the year ended
December 31, 2006, from $2,873,918 in 2005. The increase was attributable to
expenses related to employee share-based compensation required to be recognized
in 2006, increased benefit levels for sales and business development personnel
and increased sales activity and related travel expenses, particularly
international travel associated with development of geographically dispersed
reseller agreements and customer development in the Middle East in 2006.
Service, install and link operations expenses increased to $3,191,196 for
the year ended December 31,2006 from $1,234,945 in the comparable 2005 period.
The $1,956,251 increase over 2005 was primarily as a result of expenses
attributable to employee share-based compensation required to be recognized in
2006, increases in salaries and benefits of the personnel that install the
registrant's products, travel to support installed customers' link testing and
operations, the commencement of operation of the registrant's Network Operations
Center ("NOC") as well as supplies and equipment for daily operations. Effective
January 31, 2007, the NOC was closed. In the future, the registrant will provide
such support services as are required by its customer base from its Durham,
North Carolina office.
As a result of the foregoing, the registrant expects to report a net loss
of $20,234,560 for the year ended December 31, 2006, compared to net loss of
$15,306,358 for the year ended December 31, 2005. |
