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CLEARTRONIC, INC. - 10-Q - Management's Discussion and Analysis or Plan of Operation.
(Edgar Glimpses Via Acquire Media NewsEdge) Overview
Cleartronic, Inc. (the "Company," formerly GlobalTel IP, Inc.) was incorporated
in Florida on November 15, 1999. Originally formed as a website developer, we
ceased such operations in 2002. In 2005, we commenced operations as a provider
of Voice Over Internet Protocol (VoIP) services. In 2007, we elected to exit the
international VoIP business and concentrate on providing unified group
communication solutions. The Company, through our wholly owned subsidiary,
VoiceInterop, Inc., now designs, sells and installs unified group communication
solutions for public and private enterprises and is developing an Application
Service Provider solution for voice interoperability.
Results of Operations - Three Months Ended December 31, 2011 and 2010
Revenues
Revenues decreased approximately 45% to $99,129 for the three months ended
December 31, 2011 as compared to $180,442 for the three months ended December
31, 2010. The decrease was due to fewer unified communication projects completed
in the three months ended December 31, 2011 than were completed in the three
months ended December 31, 2010.
Cost of Revenues
Cost of revenues was $64,099 for the three months ended December 31, 2011 as
compared to $86,095 for the three months ended December 31, 2010, a decrease of
approximately 26%. The decrease was due to decreased sales of unified
communications solutions.
Operating Expenses
Operating expenses for the three months ended December 31, 2011 were $312,710
compared to $273,359 for the three months ended December 31, 2010, an increase
of approximately 14%. This increase was primarily due to an increase in research
and development costs which increased 116% to $56,976 in in the three months
ended December 31, 2011 compared to $26,398 primarily because of expenditures in
developing new products not related to group communications.
Loss from Operations
Loss from operations for the three months ended December 31, 2011 was $277,680
compared to a loss of $179,012 for the three months ended December 31, 2010. The
increase in loss from operations in 2011 versus 2010 was primarily due to a
decrease in our sales. Gross profit margins declined to approximately 35% in the
three months ended December 31, 2011 from approximately 52% for the three months
ended December 31, 2010. This decrease was primarily due to purchasing and
manufacturing our communication product in smaller quantities.
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Net Loss Applicable to Common Stock
Net loss applicable to common stock was $309,763 for the three months ended
December 31, 2011 compared to a net loss of $195,099 for the three months ended
December 31, 2010. Net loss per common share was $0.0023 and $0.0015 for the
three months ended December 31, 2011 and 2010, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operating activities was $109,175 for the three months ended
December 31, 2011 compared to $198,184 for the three months ended December 31,
2010.
No cash was provided by or used in investing activities during the three months
ended December 31, 2011 and the three months ended December 31, 2010.
Net cash provided by financing activities was $104,453 for the three months
ended December 31, 2011 compared to $249,314 for the three months ended December
31, 2010. The decrease was primarily due to the sale of $250,000 of the
Company's preferred stock in the three months ended December 31, 2010 as
compared with $104,453 in debt financing for the same period in 2011.
Our obligations are being met on a month-to-month basis as cash becomes
available. There can be no assurance that our present flow of cash will be
sufficient to meet current and future obligations.
We have incurred losses since our inception and continue to require additional
capital to fund operations and development. As such, our ability to pay our
already incurred obligations is mostly dependent on the Company being able to
have substantially increased revenues and raising substantial additional capital
through the sale of its equity or debt securities. There can be no assurance
that we will be successful in accomplishing any of the foregoing.
We believe that in order to fund our business plan, we will need approximately
$1 million in new equity or debt capital. In the past, in addition to revenues
and deferred revenues, we have obtained funds from the private sale of our debt
and equity securities. We intend to continue to seek private financing from
existing stockholders and others.
The costs to operate our current business are approximately $90,000 per month.
In order for us to cover our monthly operating expenses, we would have to
generate revenues of approximately $260,000 per month. Accordingly, in the
absence of revenues, we will need to secure $90,000 in equity or debt capital
each month to cover our overhead expenses. In order to remain in business for
one year without any revenues, we would need to secure $1,080,000 in equity or
debt capital.
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If we are unsuccessful in securing sufficient capital or revenues, we would have
to cease business in approximately 60 days.
FORWARD-LOOKING STATEMENTSThe information set forth in this Management's Discussion and Analysis contains
certain "forward-looking statements," including, among others (i) expected
changes in our revenues and profitability, (ii) prospective business
opportunities, and (iii) our strategy for financing our business.
Forward-looking statements are statements other than historical information or
statements of current condition. Some forward-looking statements may be
identified by use of terms such as "believes," "anticipates," "intends," or
"expects." These forward-looking statements relate to our plans, objectives, and
expectations for future operations. Although we believe that our expectations
with respect to the forward-looking statements are based upon reasonable
assumptions within the bounds of our knowledge of our business and operations,
in light of the risks and uncertainties inherent in all future projections, the
inclusion of forward-looking statements in this prospectus should not be
regarded as a representation that our objectives or plans will be achieved. In
light of the risks and uncertainties, there can be no assurance that actual
results, performance, or achievements will not differ materially from any future
results, performance, or achievements expressed or implied by such
forward-looking statements. The foregoing review of important factors should not
be construed as exhaustive. We undertake no obligation to release publicly the
results of any future revisions we may make to forward-looking statements to
reflect events or circumstances after the date of this prospectus or to reflect
the occurrence of unanticipated events.
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