|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
(Edgar Glimpses Via Acquire Media NewsEdge) Results of Operations for the three month periods ended September 30, 2009 and
2008
Net Sales. Net sales for the three month ended September 30, 2009 and 2008 were
$0. We had no sales in the current period as we are gearing up with our new
business plan.
Cost of Sales. The Cost of Sales for the three month period ended September 30,
2009 and 2008 was $0.
Research & Development. R&D expense for the three month period ended September
30, 2009, was $62,863 compared to $0.0 in the prior period. The company
discontinued its food operations and started to devote its attention to
developing technologies in December 2008.
General and Administrative expenses. General and Administrative expenses for the
three month period ended September 30, 2009, were $6,905,979 compared to
$387,782 in the same period in 2008. In order to restructure the new business
it was imperative to increase consultants and professional fees; $5,861,213.
The company hired high level, industry experts to operate the company which
increased officer salaries to $210,932 and office salaries to $105,350.
Investor relations increased to $206,093 in an effort to keep our shareholder
base informed during the transition. Also, legal was a significant expense at
$319,569 in the transformation and to prepare documentation to increase company
capital. Travel and engineering were $43,396 and $50,000 respectfully.
Liquidity and Capital Resources. We have experienced net losses of $6,968,842
and $201,341 for the three months ended September 30, 2009 and 2008,
respectively. At September 30, 2009, we had $52,867 in cash. As a development
stage company in our new field of endeavor, we currently do not have revenue
producing operations, and we must sustain operations through equity and debt
financing.
12
Since our adoption of our new business plan in July of 2008, we have financed
cash flow requirements through the issuance of common stock for cash and
services and through loans. As we expand our operational activities, we will
continue to experience net negative cash flows until we establish revenue
producing operations with sufficient depth to off set our expenses. We hope to
be able to obtain additional financing to fund operations through equity
offerings and borrowings to the extent necessary to provide the necessary
working capital to implement our business plan and achieve positive cash flow.
Financing may not be available, and, if available, it may not be available on
acceptable terms. Such financing it will likely have a negative impact on our
financial condition and our shareholders. The sale of debt would, among other
things, adversely impact our balance sheet, increase our expenses and increase
our cash flow requirements. The sale of equity could, depending on the terms of
its placement, among other things result in dilution to our shareholders. If we
are unable to access sufficient funds when needed, obtain additional external
funding or generate sufficient revenue from the sale of our products and
services, we could be forced to curtail or possibly cease operations.
In the first three months of our current fiscal year, the Company has sold a
total of 219,300,000 shares for cash proceeds of $67,000 and the $2,957,500 of
common stock subscriptions received prior to June 30, 2009, and issued a total
of 495,551,500 shares of its common stock in consideration for services rendered
which were valued in the aggregate at $6,075,368.
Plan of Operations.
Beginning in the December 2008 quarter, the Company decided to discontinue all
operations in the food industry and devote all of its resources and attention to
developing a technology business.
The Company entered into a strategic relationship for various technologies with
the Institute for Information Industry (III) and The Industrial Technology
Research Institute (ITRI) in Taiwan. III and ITRI were established in 1979 as
quasi-governmental organizations, jointly sponsored by the Taiwan government and
prominent private enterprises, for the purpose of strengthening the developments
of information industry in Taiwan. Specifically, this relationship allows our
Company to develop, license and sell technology developed by III and ITRI, and
customized to our customers' specifications into the U.S. and international
markets. The Company has elected to initially work with the III and ITRI in
developing and marketing wireless technologies in RFID, WiMAX, Voice Over
Internet Protocol (VOIP) , digital signage and LED lighting, and security and
surveillance technology markets.
Radio-frequency identification (RFID) is the use of an RFID tag applied to or
incorporated into a product, animal, or person for the purpose of identification
and tracking using radio waves. Most RFID tags contain at least two parts. One
is an integrated circuit for storing and processing information, modulating and
demodulating a radio-frequency (RF) signal, and other specialized functions. The
second is an antenna for receiving and transmitting the signal. There are
generally two types of RFID tags: active RFID tags, which contain a battery and
can transmit signals autonomously, and passive RFID tags, which have no battery
and require an external source to provoke signal transmission. The tags are
read by specialized RFID readers. NDT and III/ITRI's RFID readers and tags are
intended for enterprise supply chain management and asset tracking to improve
the efficiency of inventory tracking and management.
WiMAX, meaning Worldwide Interoperability for Microwave Access, is a
telecommunications technology that provides wireless transmission of data using
a variety of transmission modes, from point-to-multipoint links to portable and
fully mobile internet access. The technology provides broadband speed without
the need for cables. The name "WiMAX" was created by the WiMAX Forum, an
inter-industry and independent group, which was formed in June 2001 to promote
conformity and interoperability of the standard. The forum describes WiMAX as "a
standards-based technology enabling the delivery of last mile wireless broadband
access as an alternative to cable and DSL".
Voice Over Internet Protocol or VOIP, is an IP telephony term for a set of
facilities used to manage the delivery of voice information over the Internet.
VoIP involves sending voice information in digital form in discrete packets
rather than by using the traditional circuit-committed protocols of the public
switched telephone network (PSTN). A major advantage of VoIP and Internet
telephony is that it avoids the tolls charged by ordinary telephone service.
Digital Signage and LED Lighting. Through its relationship with III, The Company
has entered into a strategic worldwide distribution agreement with FormoLight
Technologies, Inc., a Taiwan-based professional manufacturer specializing in LED
signage and LED lighting systems. The Company's intent is to work with
FormoLight in customizing LED digital signage solutions that the Company will
then market and sell through strategic sales channel partners in the United
States and international markets. The Company has secured non-exclusive
worldwide marketing and distribution rights to Formolight's products and
solutions. Additionally, for any technology or solution that The Company and
FormoLight "jointly develop", the Company will have exclusive global marketing
and distribution rights.
Security and Surveillance Technologies developed by III/ITRI and intended to be
marketed by NDT have abroad application to provide advanced security solutions
to national border, port, home, business and public environments.
13
Since June of 2008, the Company has been developing business strategies to
market these technologies through sales channel partners that have large,
established client bases. Milestones to date have included signing a
distribution agreement with Ingram Micro, one of the world's largest technology
distribution and logistics companies. Ingram Micro services a large network of
systems integrators (SI's) that are potential customers for the Company's
products and solutions. The Company has actively engaged with Ingram Micro to
develop sales of its products and solutions to Ingram Micro's customer base.
During the quarter ended September 30, 2009, the company continued to further
develop its technology business model. The company is in the process of
renegotiating its agreement with Gil Technologies in order further clarify as
well as to broaden the scope of the relationship. The company anticipates that
it can conclude this renegotiation within the next 90 days.
The company has also continued development of its eLearning pilot program with
the Orange County School district and anticipates that provided sufficient
funding is obtained, the pilot will begin deployment in summer of 2009.
The company also continued to make advancements in developing RFID solutions
and has opened an office in Bentonville, Arkanasas and has hired two RFID
experts who previously work for the RFID Research Center at Sam Walton Business
College at the University of Arkansas. The Company is actively engaged in
developing an end-to-end solution through its collaboration with ITRI and the
RFID Research lab in order to effectively enter the RFID market. The Company is
also working closely with III, ITRI and a major retailer in an effort to
establish EPC Global standards to further the adoption of RFID technology in the
retail inventory management market.
On April 30, 2009, the company announced that it had entered into an agreement
with III and ITRI to distribute what III and ITRI call the world's smallest EPC
Gen 2 Class 1 Passive Reader Module, which is the first of its kind in the
industry. The miniaturized RFID reader module is a cost performance leading
front-end device specially designed for a portable RFID reader. The reader
module incorporates an R1000 chip set and is the world's smallest RFID reader
and the only one currently passing the EPC Gen 2 UHF Protocol V.1.0.9
Certification which includes Conformance Test and Interoperability Test. Its
operating frequency range is 902MHZ -- 928MHZ on 50 channels with one or two
antenna options.
Integration into this reader module is very unique security protocol that is
capable of reading under the EPC Global Gen 2 layer define term on specific RFID
chips. This RFID reader module will not only read the EPC Global Gen 2 layer
RFID define tags but will also provide access to five password protected secure
layers, one layer for each section of a supply chain (Manufacturing,
Transportation, Distribution, Warehouse and Retail), or for such other data
gathering and tracking purposes as the user may designate Both the RFID reader
and the RFID tag will be manufactured in Taiwan and NDT plans to distribute
both through the sales channel partnerships that we are currently developing.
The company, III and ITRI believe that having the smallest footprint of an RFID
reader module will be imperative for the various RFID applications that are
being developed by III and ITRI for medical, agriculture, asset management,
asset tracking, POS and security applications.
Critical Accounting Policies
The preparation of financial statements and related disclosure in conformity
with accounting principles generally accepted in the United States requires us
to make judgments, assumptions, and estimates that affect the amounts reported
in the financial statements and accompanying notes. Results of operations could
be impacted significantly by judgments, assumptions, and estimates used in the
preparation of the financial statements and actual results could differ
materially from the amounts reported based on these policies.
Management is of the opinion that our cash on hand and revenues from operations
are insufficient to meet our operational needs for the next twelve months.
Accordingly, management will rely upon proceeds from debt and/or equity
financing from related and unrelated parties.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-Q report contains certain forward-looking statements with respect
to NDT and its business. Statements that are not historical facts are
identified as "forward-looking statements". The words "estimate," "project,"
"intend," "expect," "believe," "plan," "may", and similar expressions,
particularly when used in the "future tense", are intended to identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. These forward-looking statements are necessarily estimates, reflecting
the best judgment of senior management that rely on a number of assumptions
concerning future events, many of which are outside of NDT's control, and
involve a number of risks and uncertainties that could cause actual results to
differ in a negative manner, and materially so, from those suggested by the
forward-looking statements. These uncertainties, among others, include the
ability of NDT to obtain sufficient equity and/or debt capital on commercially
reasonable terms to carry out its business plan, whether advantageous contracts
can be negotiated on specific products with NDT's strategic partners, whether
new products will find acceptance in the market place and generate significant
sales and profits, the status of US and World economies, and various other
factors and risks. Further information on potential risk factors that could
affect the Company's business plans and financial results can be found in the
Company's reports filed with the Securities and Exchange Commission.
14
[ Back To TMCnet.com's Homepage ]
|
TMCnet LOGIN
Webinars
