Add
EPRT.PK to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| EPRT.PK > SEC Filings for EPRT.PK > Form 10-Q on 19-Feb-2008 | All Recent SEC Filings |
19-Feb-2008
Quarterly Report
• $44,000 for the design of our customers' applications, including a major US carrier. We expect continued engineering revenues if and when these customers successfully deploy their product and/or service offerings.
For the three months ended December 31, 2007 our total operating expenses were
$4,736,623 (compared to $2,285,449 in the same period last year). Product
development and consulting expenses amounted to $595,754 (compared to $84,600 in
last year or an increase of 250%).This substantial increase is primarily
attributable to an increase in outsource engineering costs incurred in the
development of ESPRE Live, the design of Blideo's application and the provision
of engineering services to third parties. For the three months ended
December 31, 2007 our general, administrative and selling expenses were
$2,037,159 (compared to $2,093,428 last year). In August 2007 we increased our
sales and marketing staff by eight (8) persons in response to sales efforts and
the planned launch of our ESPRE Live version 3.0 in January 2008 and we
anticipate this higher expense level to continue into through 2008. We also
incurred increased salary expenses related to our sales and marketing program
and legal and accounting expenses relating to our becoming a fully reporting
company.
Stock based compensation amounted to $1,996,741 (compared to $1,084,074 last
year).
Liquidity and Capital Resources
The accompanying consolidated financial statements have been prepared assuming
we will continue as a going concern. We sustained substantial and recurring
losses for the period December 22, 2003 (inception) to December 31, 2007. As at
December 31, 2007, we had $1,758,364 in cash (excluding Blideo's cash of
$1,538,725, over which we exercise no control) compared with $3,352,414 at
September 30, 2007. Working capital at December 31, 2007, was $2,304,864
(compared with $2,291,883 at September 30, 2007) and we are not in default of
any debt. However, our continued existence is dependent upon our ability to
achieve profitability and to generate cash either from operations or financing.
Management's financial plan is as follows
• Market our principal product, ESPRE Live, to customers wishing to build
applications using video and provide custom engineering services to those
customers as requested. In August 2007 we expanded our sales and marketing
staff to achieve this objective.
• Engage in partnerships with firms in key vertical markets. These partners will be market experts and have well-defined application strategies that require ESPRE Live to build them. Potential customers have been identified and we are in active negotiations with them. No assurance can be given however that we will be successful in entering into satisfactory commercial arrangements with these or other customers.
• Establish independent sales agreements with representatives to sell our products and services. We will actively pursue the engagement of additional independent sales representatives that can distribute the Company's existing video products and services both domestically and internationally. Potential partners have been identified and we are in active negotiations with them. No assurance can be given however that we will be successful in entering into satisfactory commercial arrangements with these or other partners.
• Obtain additional debt and equity financing.
For the three months ended December 31, 2007 we used net cash of $2,731,068
($153,930 in the same period last year) for operations and realized net cash of
$2,241,008 from financing activities, primarily from the sale of our Common
Stock and receipts of stock subscription receivables. The achievement of
profitability and the ability to generate cash flows from operations will depend
on, among other things, the acceptance of our products and services,
competition, and the deployment of video applications by our customers. These
matters by their nature contain uncertainties and our financial statements do
not include any adjustments that might occur from future efforts. There is
therefore substantial doubt about our ability to continue as a going concern.
Our current cash requirements are approximately $850,000 per month, principally
for salaries, professional services and office expenses. Included in these
expenditures is approximately $450,000 of development expense for the design and
deployment of Blideo and other customers. Our capital expenditures (depending on
our hiring program) which principally consist of computer equipment, test
equipment and office requirements are approximately $15,000 per month. Based on
our cash flow projections, we expect that while our cash requirements will
continue at their current rate for the foreseeable future, we will be able to
meet a portion of our cash requirements from the proceeds of agreements for our
services and the sale of our products. However, we were cash flow negative for
the balance of calendar 2007, expect to remain cash flow negative for calendar
year 2008, and will therefore be dependent on the proceeds of the private sale
of our equity securities.
As with any company engaged in the development of new technology, we have
constantly been challenged by the need to find continuing and new sources of
capital to meet our operating expenses. There can be no assurance that we will
continue to be successful in obtaining financing, or that we will, as we now
anticipate, be able to generate significant revenues from operations in calendar
2008, in which event we may be unable to proceed with our business operations.
Substantial doubt exists about our ability to continue as going concern if we do
not generate significant revenues from operations.
Critical Accounting Policies and Recent Accounting Pronouncements
The company's significant accounting policies are set forth in Note 1 of Notes
to Consolidated Financial Statements in the company's report on Form 10/A dated
February 4, 2008. A discussion of those policies that require management
judgment and estimates and are most important in determining the company's
operating results and financial condition are discussed in Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the company's report on Form 10/A dated February 4, 2008. The
Financial Accounting Standards Board issues, from time to time, new financial
accounting standards, staff positions and emerging issues task force consensus.
See Note 2 of Notes to Condensed Consolidated Financial Statements for a
discussion of these matters.
Forward-Looking Statements
All statements other than statements of historical fact included in this report,
including without limitation statements regarding the company's financial
position, business strategy, and the plans and objectives of the company's
management for future operations, are forward-looking statements. When used in
this report, words such as "anticipate", "believe", "estimate", "expect",
"intend" and similar expressions, as they relate to the company or its
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of the company's management, as well as assumptions
made by and information currently available to the company's management. Actual
results could differ materially from those contemplated by the forward-looking
statements as a result of certain factors, including, but not limited to,
business and economic conditions, including, but not limited to, the housing
market, results of integrating acquired businesses into existing operations,
competitive factors and pricing pressures for resin and steel, and capacity and
supply constraints. Such statements reflect the views of the company with
respect to future events and
are subject to these and other risks, uncertainties and assumptions relating to
the operations, results of operations, growth strategy and liquidity of the
company as previously disclosed in the company's report on Form 10/A dated
February 4, 2008. Readers are cautioned not to place undue reliance on these
forward-looking statements. The company does not undertake any obligation to
release publicly any revisions to these forward-looking statements to reflect
future events or circumstances or to reflect the occurrence of unanticipated
events.
ITEM 3. Quantitative and Qualitative Disclosure About Market Risk
Management does not believe that there is any material market risk exposure
with respect to derivative or other financial instruments that is required to be
disclosed
ITEM 4. Controls and Procedures
Under the supervision and with the participation of our President and Chief
Financial Officer ("CFO"), the Company's disclosure controls and procedures were
evaluated as of the end of the period covered by this report. Based on that
evaluation, the Company's President and CFO concluded that the company's
disclosure controls and procedures were effective.
During the period covered by this report, there were no changes in the
company's internal control over financial reporting which materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.
Limitations on the Effectiveness of Controls
The Company believes that a control system, no matter how well designed and
operated, cannot provide absolute assurance that the objectives of the control
system are met, and no evaluation of controls can provide absolute assurance
that all controls issues and instances of fraud, if any, within a company have
been detected. The Company's disclosure controls and procedures are designed to
provide reasonable assurance of achieving their objectives and the company's
President and CFO have concluded that such controls and procedures are effective
at the "reasonable assurance" level.
|
|