For the quarter ended August 31, 1997, the Company incurred
net losses of $744,000, compared with net losses of $1,351,000 for the
comparable prior quarter, a decrease of $607,000. An explanation of these losses
is set forth below.
Revenues
--------
For the quarters ended August 31, 1997 and 1996, the Company
had no operating revenue. The Company has abandoned its software licensing and
maintenance business and is now focused on the development of software for use
in providing conversion services, including Year 2000 conversion services, and
the marketing of such services. In September, 1997, the Company signed a revenue
generating contract with Lender's Service, Inc., a Merrill Lynch company,
pursuant to which the Company will provide conversion services with respect to
approximately 3,000,000 lines of code, including year 2000 correction services.
Software Development Expenses
-----------------------------
For the quarter ended August 31, 1997, software development
expenses were $284,000, compared with approximately $211,000 for the quarter
ended August 31, 1996, an increase of approximately $73,000. The increase in
software development expenses is primarily attributable to the Company's hiring
of additional personnel dedicated to the development of software for use in
providing conversion services, including Year 2000 conversion services.
General and Administrative Expenses
-----------------------------------
For the quarter ended August 31, 1997, general and
administrative expenses were approximately $334,000, compared with approximately
$1,011,000 for the three months ended August 31, 1996, a decrease of $677,000.
This decrease in general and administrative expenses was primarily attributable
to a decrease of $889,000 in non-cash compensation expenses (related to stock
issued for services), offset by the following: a $113,000 increase in expenses
associated with the Company's status as a public company, consisting primarily
of professional fees in the amount of $92,000 and other expenses of $21,000; a
$30,000 increase in sales and marketing expense; a $12,000 increase in rent
expense; a $21,000 increase in expenses associated with hiring new personnel;
and a $36,000 increase in salaries and other general expenses.
CSGI is just raking it in! |
