TMCnet News
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. -9- 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. -10- 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. |