Zeev from last 10Q
<< Results of Operations.
For the three and nine months ended June 30, 1998, the Company recorded losses of $392,993 and $1,433,061, compared to net losses of $97,619 and $645,152 for the comparable periods in 1997. The increase for 1998 is primarily due to increases in general and administrative expenses and interest expense, which includes a non-cash interest charge of approximately $45,000 relating to discount on convertible notes payable. These increases are partially offset by profit from the operations of the Company's Okon subsidiary which was acquired in March 1997.
Revenues of $586,451 and$1,381,800 were recognized during the three months and nine months ended June 30, 1998 from net sales of water-based paints, sealers and coatings by the Company's Okon subsidiary. Revenues of $608,432 and 718,249 were recognized by the Company during the three months and nine months ended June 30, 1997. The Company acquired Okon in March 1997.
During the three and nine months ended June 30,1998, cost of sales related to water-based paints, sealers and coatings was $258,456 and $627,290 as compared to $302,715 and 340,526 for the three and nine months ended June 30,1997 because of the contribution of Okon which was acquired in March 1997.
Gross profit increased to $327,995 and $754,510 for the three month and nine month periods ended June 30, 1998 compared to a gross profit of $305,717 and $377,723 for the three month and nine month period ended June 30,1997 because of the contribution of Okon which was acquired in March 1997.
General and administrative expenses increased to $645,947 and
$1,828,127 for the three month and nine month period ended June 30,1998, compared to $328,013 and $822,661 for the comparable periods in 1997. This increase is due to expenses associated with Okon which were not included in the prior periods, increased costs associated with public relations, and increased salary and benefit costs.
Depreciation and amortization increased for the nine month periods ended June 30, 1998 compared to the nine months ended March 31,1997 primarily due to depreciation of Okon's equipment and amortization of goodwill acquired when Okon was purchased in March 1997. The increase of $18,025 in the three month period ended June 30, 1998 compared to prior year reflects the purchase of additional equipment in 1998.
Loss from operations for the three month and nine month periods ended June 30, 1998 increased to $405,098 and $1,340,946 from losses of $91,417 and $640,321 reported for the comparable periods in 1997. The $313,681 increase in loss from operations for the three months ended June 30,1998 compared to the same period in 1997 primarily reflects the increase of $317,934 in general and administrative expenses and the increase of $18,025 in depreciation and amortization, which were partially offset by the increase in gross revenues of $21,981 attributable to Okon. The $700,625 increase in loss from operations for the nine month period ended June 30,1998 compared to
the same period in 1997 primarily reflects the increase of $1,005,466 in general and administrative expenses and the increase of $286,764 in cost of sales and the increase of $71,946 in depreciation and amortization, which were only partially offset by the increase in total revenues of $663,551 of which $668,800 was attributable to Okon which was acquired in March 1997.>>
It appears that OKON IS profitable at least on gross profit level. It is difficult from this information to discern which part of increased G&A is due to expenses from earlier 1/4s associated w/ OKON (1 time or ongoing expenses?) and which part is due to increased salaries.
FWIW,
Eric
PS:
This is an intersting little error:
<<which were only partially offset by the increase in total revenues of $663,551 of which $668,800 was attributable to Okon which was acquired in March 1997.>>
huh????
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