girgish1
عضو نشط
أعلنت عن نتائج مش بطاله
آخر سعر 0.079
للمتابعة
آخر سعر 0.079
للمتابعة
دورة المؤشرنت للتحليل الفني
50 دينار كويتي
أنت تستخدم أحد المتصفحات القديمة. قد لا يتم عرض هذا الموقع أو المواقع الأخرى بشكل صحيح.
يجب عليك ترقية متصفحك أو استخدام أحد المتصفحات البديلة.
يجب عليك ترقية متصفحك أو استخدام أحد المتصفحات البديلة.
flip.ob للمتابعة
- بادئ الموضوع girgish1
- تاريخ البدء
girgish1
عضو نشط
ams545
عضو نشط
- التسجيل
- 24 مايو 2005
- المشاركات
- 421
والله شي يحير !!
من شهر تقريبا نزل خبر عن احتمال تحقيق ارباح وارتفع السهم بشكل ممتاز ..والان مع نزول خبر الارباح السهم انخفض حوالي 11% !!!!! معقول الي حاصل هو انهم كانو متوقعين نزول خبر الارباح الجيد ولذا باعو على الخبر !! وش السواة يا قرقش !! انا داخل فيها ب 066 والان 055
فعلا سهم غريب
من شهر تقريبا نزل خبر عن احتمال تحقيق ارباح وارتفع السهم بشكل ممتاز ..والان مع نزول خبر الارباح السهم انخفض حوالي 11% !!!!! معقول الي حاصل هو انهم كانو متوقعين نزول خبر الارباح الجيد ولذا باعو على الخبر !! وش السواة يا قرقش !! انا داخل فيها ب 066 والان 055
فعلا سهم غريب
ams545
عضو نشط
- التسجيل
- 24 مايو 2005
- المشاركات
- 421
خبر نزل قبل الاغلاق :
Form 10QSB for FTS GROUP, INC.
--------------------------------------------------------------------------------
16-Aug-2006
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis contains a comparison of the results of operations for the three months ended June 30, 2006 and the same period in 2005. This discussion and analysis should be read in conjunction with the un-audited interim consolidated financial statements and the notes thereto included in this report, and the audited financial statements in our Annual Report on Form 10-KSB for the year ended December 31, 2005.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report and in our annual report on Form 10-KSB filed with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.
OVERVIEW
We focus on developing, acquiring and investing in cash-flow positive businesses and viable business projects primarily in the Internet, Wireless and Technology industries. We operate a diversified wireless business through our two wholly-owned subsidiaries See World Satellites, Inc. and FTS Wireless, Inc. See World is a Regional Service Provider, or RSP, and retail distributor for DISH Network Services satellite television systems primarily to business and retail customers in the western Pennsylvania market and nationally through our retail channel. FTS Wireless is an emerging distributor of next generation wireless communications devices and related products and services. FTS Wireless operates a chain of nine retail wireless locations in the Gulf Coast market of Florida. All of the retail locations are leased properties.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Principles of Consolidation
The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries: FTS Wireless, Inc and See World Satellites, Inc. All significant intercompany transactions and balances have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months period ended June 30, 2006 are not indicative of the results that may be expected for the year ending December 31, 2006.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-B, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company's annual financial statements and footnotes thereto. For further information, refer to the Company's audited consolidated financial statements and related footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2005.
Accounts Receivable
Accounts receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.
Inventories
Inventories are valued at the lower-of-cost or market on a first-in, first-out basis.
Investment Securities
We account for our investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such determination at each balance sheet date. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Debt securities for which we do not have the intent or ability to hold to maturity, and equity securities not classified as trading securities, are classified as available-for-sale. The cost of investments sold is determined on the specific identification or the first-in, first-out method. Trading securities are reported at fair value with unrealized gains and losses recognized in earnings, and available-for-sale securities are also reported at fair value but unrealized gains and losses are shown in the caption "unrealized gains (losses) on shares available-for-sale" included in stockholders' equity. We determine fair value of our investments based on quoted market prices at each balance sheet date.
Property, Equipment and Depreciation
Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (5-20 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.
Intangible Assets
SFAS No. 142 eliminates the amortization of goodwill, and requires annual impairment testing of goodwill and introduces the concept of indefinite life intangible assets. We adopted SFAS No. 142 effective January 1, 2002. Goodwill and indefinite-lived intangible asset impairment is always assessed based upon a comparison of carrying value with fair value.
Impairment of Long-Lived Assets
We periodically assess realization of long-lived assets, including goodwill. Accordingly, in the event that facts and circumstances indicate that property and equipment, and intangible or other assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, we compare the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount to determine if a write-down to market value is necessary. We believe that there was no impairment of such assets at December 31, 2005. When we completed our impairment testing for the year ended December 31, 2004, we determined that the value of assets acquired related to certain store locations were impaired in the amount of $107,000.
Revenue Recognition
We recognize revenue from the activation of new wireless customers and the sale of wireless handsets, airtime and accessories at the time of activation or sale.
Net revenues from wireless activations are recognized during the month the activation is performed. Allowances for charge-backs, returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
Although our post-paid activations are subject to possible charge-back of commissions if a customer deactivates service within the allowable 180-day period after signing the contract, we still recognize the activation in the period of the activation. We have set up a reserve for possible activation charge-backs. Based on SFAS No. 48, this is permitted if reliable estimates of the expected refunds can be made on a timely basis, the refunds are being made for a large pool of homogeneous items, there is sufficient company-specific historical basis upon which to estimate the refunds, and the amount of the commission specified in the agreement at the outset of the arrangement is fixed, other than the customer's right to request a refund.
The Company's wholly-owned subsidiary, See World Satellites, Inc. recognizes revenue when it makes a sale within the store, completes a retail satellite receiver installation at the customer's home and the customer signs a contract, or completes a retail service provider satellite receiver installation at the customer's home and signs a contract.
Net revenues from product sales are recognized upon the transfer of title and risk of ownership to customers. Allowances for estimated returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
We recognize revenue from the sale and activation of wireless handsets and related accessories.
Income Taxes
We are a taxable entity and recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. We use a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.
Earnings Per Share
We compute the basic net earnings (loss) per common share by dividing the net earnings (loss) by the weighted average number of shares outstanding during a period. We compute diluted net earnings (loss) per common share by dividing the net earnings, adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the six months ended June 30, 2006 and 2005, we did not include potential dilutive securities that had an anti-dilutive effect in the calculation of diluted net earnings (loss) per common share. These securities include options to purchase shares of common stock.
Advertising Costs
The cost of advertising is expensed as incurred.
Management's Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
Stock-based Compensation
Effective the first quarter of fiscal 2006, we adopted SFAS 123(R) which establishes accounting for stock-based awards exchanged for employee services. Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, over the requisite service period. We previously applied APB 25 and related interpretations, as permitted by SFAS 123.
Fair Value of Financial Instruments
We estimate the fair value of our financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates of fair value are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by us on our notes payable approximate market rates. We believe that the fair value of our financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate our carrying amounts.
THREE MONTH PERIOD ENDED JUNE 30, 2006 AS COMPARED TO THREE MONTHS
ENDED JUNE 30, 2005 RESULTS OF OPERATIONS
SALES REVENUE
For the three months ended June 30, 2006, overall sales increased $1,286,662 or 371.1%, to $1,633,392, as compared to $346,730 for the three months ended June 30, 2005. For the six months ended June 30, 2006 sales increased to $3,267,006 from $650,700 during the same period in 2005. For the six months ended June 30, 2006 our wholly-owned subsidiary See World Satellites, Inc. generated revenue of $2,330,091. See World generated 73.0% of our total sales for the three months ended June 30, 2006 or $1,192,055. We have no comparable figures for the three months ended June 30, 2005. Our sales revenue for See World is primarily generated from the sale, service and installations of DISH satellite television systems. For our wholly-owned subsidiary FTS Wireless, revenue increased $286,215 or 44.0% to $936,915 compared to revenue of $650,700 for the six months ended June 30, 2005. FTS Wireless generated 27.0% of our total sales or $441,337 for the three months ended June 30, 2006, compared to revenue of $346,730 for an increase of 27.3%. Our sales revenue for FTS Wireless is generated from the sale of wireless handsets and related products and services. We believe the increase in sales revenue at FTS Wireless is related to the introduction of Metro PCS products and services into our core market. During the three months ended June 30, 2005 Metro PCS did not operate in the Tampa, Florida market. The overall increase in total sales revenue for the three and six month period was primarily related to the acquisition of See World Satellites, Inc. completed in the first quarter of this year.
COST OF GOODS SOLD
For the three months ended June 30, 2006, cost of goods sold increased by $212,642 to $472,510, as compared to $259,868 for the three months ended June 30, 2005. The increase in cost of goods sold is primarily related to increased product purchases of DISH satellite television systems for See World and an increase in wireless handset purchasing at FTS Wireless.
GROSS PROFITS
For the three months ended June 30, 2006, gross profits increased by $1,074,020 from $86,862 in 2005 to $1,160,882 in 2006. The increase in gross profits is attributed to the increase in service and sales revenue of DISH satellite systems relating to our wholly-owned subsidiary See World not offered during the comparable period. Gross profits as a percentage of sales increased to 71.1% in 2006 compared to 25.1% in 2005. The increase in gross profits as a percentage of sales is related to the introduction of new business related to the sales, service and installation of satellite television systems for DISH networks at our wholly-owned subsidiary See World.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative Expenses for the three months ended June 30, 2006, increased $794,361 or 291.7% to $1,066,642, as compared to $272,281 for the three months ended June 30, 2005. The increase in Selling, General and Administrative expenses was primarily related to increased operating costs related to our newly-acquired operations at See World not included in the three months ended June 30,2005.
OPERATING INCOME
Operating income increased to $94,240 during the three months ended June 30, 2006, compared to an operating loss of ($185,419) for the three months ended June 30, 2005 for a net improvement of $279,659. Operating income increased to $136,186 during the six months ended June 30, 2006, compared to an operating loss of ($772,294) for a net improvement of $908,480.
NET INCOME
Net income increased $247,922 to $56,867 for the three months ended June 30, 2006 compared to a net loss of ($191,055) during the three months ending June 30, 2005. The increase in net income was primarily related to an increase in revenue of $1,192,055 from our new wholly-owned subsidiary See World. Net income for the six month ended June 30, 2006 increased to $62,118 compared to a net loss of ($962,042) for a net improvement of $1,024,160. The increase in net income was primarily related to an increase in revenue of $2,330,091 from our new wholly-owned subsidiary See World.
INTEREST EXPENSE
Interest expense increased $31,737 to $37,373 for the three months ended June 30, 2006, as compared to $5,636 for the three months ended June 30, 2005. The increase in interest expense is related to an increase in interest expenses from a private placement closed on December 29, 2005.
LIQUIDITY AND CAPITAL RESOURCES
Our requirements for capital are to:
o pay down debt,
o fund possible acquisitions, and
o provide working capital and funds to expand our current business.
Our primary source of financing during the three months ended June 30, 2006 includes cash received from the issuance of common stock and cash generated from operations.
As of June 30, 2006, our Current Assets were $1,239,377 consisting of $537,558 in cash, $418,917 in inventories, $128,583 of accounts receivables and $154,319 of prepaid expenses and current assets. Current Liabilities were $3,850,749, consisting of $1,238,321 of convertible debentures, $2,389,586 of notes payable related parties, $212,946 in accounts payable and accrued expenses and $9,896 of long term debt-equipment loans.
At June 30, 2006, we had total assets of $7,196,971 consisting of, in addition to the assets described above, excess of cost over the net assets of business acquired $5,177,696, property and equipment, net of accumulated depreciation of $358,767, Unamortized discount of convertible debt of $315,231, unamortized debt issuance costs $88,718 and deposits of $17,182.
GOING CONCERN OPINION
We believe that our continued existence is dependent upon our ability to grow the profits of our satellite television operations and make our retail wireless operations profitable, and our ability to raise additional capital to reduce debt. Accordingly, the notes to our un-audited, interim financial statements express substantial doubt about our ability to continue as a going concern.
FINANCING ACTIVITIES
During the three months ended June 30, 2006, we issued 11,458,338 shares of restricted common stock upon the exercise of warrants priced at $0.0239. The warrants were exercised by four accredited investors for total proceeds of $273,854.28. At June 30, 2006, we had not issued 1,185,350 restricted shares that we owed to one of the investors. On April 5, 2006, we issued 11,458,338 new warrants to accredited investors under substantially the same terms as the warrants that were exercised except that the exercise price on the new warrants was increased to $0.04.
SUBSIDIARIES
As of June 30, 2006, we had two wholly-owned subsidiaries, FTS Wireless, Inc. and See World Satellites, Inc
Form 10QSB for FTS GROUP, INC.
--------------------------------------------------------------------------------
16-Aug-2006
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis contains a comparison of the results of operations for the three months ended June 30, 2006 and the same period in 2005. This discussion and analysis should be read in conjunction with the un-audited interim consolidated financial statements and the notes thereto included in this report, and the audited financial statements in our Annual Report on Form 10-KSB for the year ended December 31, 2005.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report and in our annual report on Form 10-KSB filed with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.
OVERVIEW
We focus on developing, acquiring and investing in cash-flow positive businesses and viable business projects primarily in the Internet, Wireless and Technology industries. We operate a diversified wireless business through our two wholly-owned subsidiaries See World Satellites, Inc. and FTS Wireless, Inc. See World is a Regional Service Provider, or RSP, and retail distributor for DISH Network Services satellite television systems primarily to business and retail customers in the western Pennsylvania market and nationally through our retail channel. FTS Wireless is an emerging distributor of next generation wireless communications devices and related products and services. FTS Wireless operates a chain of nine retail wireless locations in the Gulf Coast market of Florida. All of the retail locations are leased properties.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Principles of Consolidation
The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries: FTS Wireless, Inc and See World Satellites, Inc. All significant intercompany transactions and balances have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months period ended June 30, 2006 are not indicative of the results that may be expected for the year ending December 31, 2006.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-B, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company's annual financial statements and footnotes thereto. For further information, refer to the Company's audited consolidated financial statements and related footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2005.
Accounts Receivable
Accounts receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.
Inventories
Inventories are valued at the lower-of-cost or market on a first-in, first-out basis.
Investment Securities
We account for our investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such determination at each balance sheet date. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Debt securities for which we do not have the intent or ability to hold to maturity, and equity securities not classified as trading securities, are classified as available-for-sale. The cost of investments sold is determined on the specific identification or the first-in, first-out method. Trading securities are reported at fair value with unrealized gains and losses recognized in earnings, and available-for-sale securities are also reported at fair value but unrealized gains and losses are shown in the caption "unrealized gains (losses) on shares available-for-sale" included in stockholders' equity. We determine fair value of our investments based on quoted market prices at each balance sheet date.
Property, Equipment and Depreciation
Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (5-20 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.
Intangible Assets
SFAS No. 142 eliminates the amortization of goodwill, and requires annual impairment testing of goodwill and introduces the concept of indefinite life intangible assets. We adopted SFAS No. 142 effective January 1, 2002. Goodwill and indefinite-lived intangible asset impairment is always assessed based upon a comparison of carrying value with fair value.
Impairment of Long-Lived Assets
We periodically assess realization of long-lived assets, including goodwill. Accordingly, in the event that facts and circumstances indicate that property and equipment, and intangible or other assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, we compare the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount to determine if a write-down to market value is necessary. We believe that there was no impairment of such assets at December 31, 2005. When we completed our impairment testing for the year ended December 31, 2004, we determined that the value of assets acquired related to certain store locations were impaired in the amount of $107,000.
Revenue Recognition
We recognize revenue from the activation of new wireless customers and the sale of wireless handsets, airtime and accessories at the time of activation or sale.
Net revenues from wireless activations are recognized during the month the activation is performed. Allowances for charge-backs, returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
Although our post-paid activations are subject to possible charge-back of commissions if a customer deactivates service within the allowable 180-day period after signing the contract, we still recognize the activation in the period of the activation. We have set up a reserve for possible activation charge-backs. Based on SFAS No. 48, this is permitted if reliable estimates of the expected refunds can be made on a timely basis, the refunds are being made for a large pool of homogeneous items, there is sufficient company-specific historical basis upon which to estimate the refunds, and the amount of the commission specified in the agreement at the outset of the arrangement is fixed, other than the customer's right to request a refund.
The Company's wholly-owned subsidiary, See World Satellites, Inc. recognizes revenue when it makes a sale within the store, completes a retail satellite receiver installation at the customer's home and the customer signs a contract, or completes a retail service provider satellite receiver installation at the customer's home and signs a contract.
Net revenues from product sales are recognized upon the transfer of title and risk of ownership to customers. Allowances for estimated returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
We recognize revenue from the sale and activation of wireless handsets and related accessories.
Income Taxes
We are a taxable entity and recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. We use a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.
Earnings Per Share
We compute the basic net earnings (loss) per common share by dividing the net earnings (loss) by the weighted average number of shares outstanding during a period. We compute diluted net earnings (loss) per common share by dividing the net earnings, adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the six months ended June 30, 2006 and 2005, we did not include potential dilutive securities that had an anti-dilutive effect in the calculation of diluted net earnings (loss) per common share. These securities include options to purchase shares of common stock.
Advertising Costs
The cost of advertising is expensed as incurred.
Management's Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
Stock-based Compensation
Effective the first quarter of fiscal 2006, we adopted SFAS 123(R) which establishes accounting for stock-based awards exchanged for employee services. Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, over the requisite service period. We previously applied APB 25 and related interpretations, as permitted by SFAS 123.
Fair Value of Financial Instruments
We estimate the fair value of our financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates of fair value are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by us on our notes payable approximate market rates. We believe that the fair value of our financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate our carrying amounts.
THREE MONTH PERIOD ENDED JUNE 30, 2006 AS COMPARED TO THREE MONTHS
ENDED JUNE 30, 2005 RESULTS OF OPERATIONS
SALES REVENUE
For the three months ended June 30, 2006, overall sales increased $1,286,662 or 371.1%, to $1,633,392, as compared to $346,730 for the three months ended June 30, 2005. For the six months ended June 30, 2006 sales increased to $3,267,006 from $650,700 during the same period in 2005. For the six months ended June 30, 2006 our wholly-owned subsidiary See World Satellites, Inc. generated revenue of $2,330,091. See World generated 73.0% of our total sales for the three months ended June 30, 2006 or $1,192,055. We have no comparable figures for the three months ended June 30, 2005. Our sales revenue for See World is primarily generated from the sale, service and installations of DISH satellite television systems. For our wholly-owned subsidiary FTS Wireless, revenue increased $286,215 or 44.0% to $936,915 compared to revenue of $650,700 for the six months ended June 30, 2005. FTS Wireless generated 27.0% of our total sales or $441,337 for the three months ended June 30, 2006, compared to revenue of $346,730 for an increase of 27.3%. Our sales revenue for FTS Wireless is generated from the sale of wireless handsets and related products and services. We believe the increase in sales revenue at FTS Wireless is related to the introduction of Metro PCS products and services into our core market. During the three months ended June 30, 2005 Metro PCS did not operate in the Tampa, Florida market. The overall increase in total sales revenue for the three and six month period was primarily related to the acquisition of See World Satellites, Inc. completed in the first quarter of this year.
COST OF GOODS SOLD
For the three months ended June 30, 2006, cost of goods sold increased by $212,642 to $472,510, as compared to $259,868 for the three months ended June 30, 2005. The increase in cost of goods sold is primarily related to increased product purchases of DISH satellite television systems for See World and an increase in wireless handset purchasing at FTS Wireless.
GROSS PROFITS
For the three months ended June 30, 2006, gross profits increased by $1,074,020 from $86,862 in 2005 to $1,160,882 in 2006. The increase in gross profits is attributed to the increase in service and sales revenue of DISH satellite systems relating to our wholly-owned subsidiary See World not offered during the comparable period. Gross profits as a percentage of sales increased to 71.1% in 2006 compared to 25.1% in 2005. The increase in gross profits as a percentage of sales is related to the introduction of new business related to the sales, service and installation of satellite television systems for DISH networks at our wholly-owned subsidiary See World.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative Expenses for the three months ended June 30, 2006, increased $794,361 or 291.7% to $1,066,642, as compared to $272,281 for the three months ended June 30, 2005. The increase in Selling, General and Administrative expenses was primarily related to increased operating costs related to our newly-acquired operations at See World not included in the three months ended June 30,2005.
OPERATING INCOME
Operating income increased to $94,240 during the three months ended June 30, 2006, compared to an operating loss of ($185,419) for the three months ended June 30, 2005 for a net improvement of $279,659. Operating income increased to $136,186 during the six months ended June 30, 2006, compared to an operating loss of ($772,294) for a net improvement of $908,480.
NET INCOME
Net income increased $247,922 to $56,867 for the three months ended June 30, 2006 compared to a net loss of ($191,055) during the three months ending June 30, 2005. The increase in net income was primarily related to an increase in revenue of $1,192,055 from our new wholly-owned subsidiary See World. Net income for the six month ended June 30, 2006 increased to $62,118 compared to a net loss of ($962,042) for a net improvement of $1,024,160. The increase in net income was primarily related to an increase in revenue of $2,330,091 from our new wholly-owned subsidiary See World.
INTEREST EXPENSE
Interest expense increased $31,737 to $37,373 for the three months ended June 30, 2006, as compared to $5,636 for the three months ended June 30, 2005. The increase in interest expense is related to an increase in interest expenses from a private placement closed on December 29, 2005.
LIQUIDITY AND CAPITAL RESOURCES
Our requirements for capital are to:
o pay down debt,
o fund possible acquisitions, and
o provide working capital and funds to expand our current business.
Our primary source of financing during the three months ended June 30, 2006 includes cash received from the issuance of common stock and cash generated from operations.
As of June 30, 2006, our Current Assets were $1,239,377 consisting of $537,558 in cash, $418,917 in inventories, $128,583 of accounts receivables and $154,319 of prepaid expenses and current assets. Current Liabilities were $3,850,749, consisting of $1,238,321 of convertible debentures, $2,389,586 of notes payable related parties, $212,946 in accounts payable and accrued expenses and $9,896 of long term debt-equipment loans.
At June 30, 2006, we had total assets of $7,196,971 consisting of, in addition to the assets described above, excess of cost over the net assets of business acquired $5,177,696, property and equipment, net of accumulated depreciation of $358,767, Unamortized discount of convertible debt of $315,231, unamortized debt issuance costs $88,718 and deposits of $17,182.
GOING CONCERN OPINION
We believe that our continued existence is dependent upon our ability to grow the profits of our satellite television operations and make our retail wireless operations profitable, and our ability to raise additional capital to reduce debt. Accordingly, the notes to our un-audited, interim financial statements express substantial doubt about our ability to continue as a going concern.
FINANCING ACTIVITIES
During the three months ended June 30, 2006, we issued 11,458,338 shares of restricted common stock upon the exercise of warrants priced at $0.0239. The warrants were exercised by four accredited investors for total proceeds of $273,854.28. At June 30, 2006, we had not issued 1,185,350 restricted shares that we owed to one of the investors. On April 5, 2006, we issued 11,458,338 new warrants to accredited investors under substantially the same terms as the warrants that were exercised except that the exercise price on the new warrants was increased to $0.04.
SUBSIDIARIES
As of June 30, 2006, we had two wholly-owned subsidiaries, FTS Wireless, Inc. and See World Satellites, Inc
ams545
عضو نشط
- التسجيل
- 24 مايو 2005
- المشاركات
- 421
خبر نزل قبل الاغلاق :
Form 10QSB for FTS GROUP, INC.
--------------------------------------------------------------------------------
16-Aug-2006
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis contains a comparison of the results of operations for the three months ended June 30, 2006 and the same period in 2005. This discussion and analysis should be read in conjunction with the un-audited interim consolidated financial statements and the notes thereto included in this report, and the audited financial statements in our Annual Report on Form 10-KSB for the year ended December 31, 2005.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report and in our annual report on Form 10-KSB filed with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.
OVERVIEW
We focus on developing, acquiring and investing in cash-flow positive businesses and viable business projects primarily in the Internet, Wireless and Technology industries. We operate a diversified wireless business through our two wholly-owned subsidiaries See World Satellites, Inc. and FTS Wireless, Inc. See World is a Regional Service Provider, or RSP, and retail distributor for DISH Network Services satellite television systems primarily to business and retail customers in the western Pennsylvania market and nationally through our retail channel. FTS Wireless is an emerging distributor of next generation wireless communications devices and related products and services. FTS Wireless operates a chain of nine retail wireless locations in the Gulf Coast market of Florida. All of the retail locations are leased properties.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Principles of Consolidation
The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries: FTS Wireless, Inc and See World Satellites, Inc. All significant intercompany transactions and balances have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months period ended June 30, 2006 are not indicative of the results that may be expected for the year ending December 31, 2006.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-B, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company's annual financial statements and footnotes thereto. For further information, refer to the Company's audited consolidated financial statements and related footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2005.
Accounts Receivable
Accounts receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.
Inventories
Inventories are valued at the lower-of-cost or market on a first-in, first-out basis.
Investment Securities
We account for our investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such determination at each balance sheet date. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Debt securities for which we do not have the intent or ability to hold to maturity, and equity securities not classified as trading securities, are classified as available-for-sale. The cost of investments sold is determined on the specific identification or the first-in, first-out method. Trading securities are reported at fair value with unrealized gains and losses recognized in earnings, and available-for-sale securities are also reported at fair value but unrealized gains and losses are shown in the caption "unrealized gains (losses) on shares available-for-sale" included in stockholders' equity. We determine fair value of our investments based on quoted market prices at each balance sheet date.
Property, Equipment and Depreciation
Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (5-20 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.
Intangible Assets
SFAS No. 142 eliminates the amortization of goodwill, and requires annual impairment testing of goodwill and introduces the concept of indefinite life intangible assets. We adopted SFAS No. 142 effective January 1, 2002. Goodwill and indefinite-lived intangible asset impairment is always assessed based upon a comparison of carrying value with fair value.
Impairment of Long-Lived Assets
We periodically assess realization of long-lived assets, including goodwill. Accordingly, in the event that facts and circumstances indicate that property and equipment, and intangible or other assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, we compare the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount to determine if a write-down to market value is necessary. We believe that there was no impairment of such assets at December 31, 2005. When we completed our impairment testing for the year ended December 31, 2004, we determined that the value of assets acquired related to certain store locations were impaired in the amount of $107,000.
Revenue Recognition
We recognize revenue from the activation of new wireless customers and the sale of wireless handsets, airtime and accessories at the time of activation or sale.
Net revenues from wireless activations are recognized during the month the activation is performed. Allowances for charge-backs, returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
Although our post-paid activations are subject to possible charge-back of commissions if a customer deactivates service within the allowable 180-day period after signing the contract, we still recognize the activation in the period of the activation. We have set up a reserve for possible activation charge-backs. Based on SFAS No. 48, this is permitted if reliable estimates of the expected refunds can be made on a timely basis, the refunds are being made for a large pool of homogeneous items, there is sufficient company-specific historical basis upon which to estimate the refunds, and the amount of the commission specified in the agreement at the outset of the arrangement is fixed, other than the customer's right to request a refund.
The Company's wholly-owned subsidiary, See World Satellites, Inc. recognizes revenue when it makes a sale within the store, completes a retail satellite receiver installation at the customer's home and the customer signs a contract, or completes a retail service provider satellite receiver installation at the customer's home and signs a contract.
Net revenues from product sales are recognized upon the transfer of title and risk of ownership to customers. Allowances for estimated returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
We recognize revenue from the sale and activation of wireless handsets and related accessories.
Income Taxes
We are a taxable entity and recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. We use a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.
Earnings Per Share
We compute the basic net earnings (loss) per common share by dividing the net earnings (loss) by the weighted average number of shares outstanding during a period. We compute diluted net earnings (loss) per common share by dividing the net earnings, adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the six months ended June 30, 2006 and 2005, we did not include potential dilutive securities that had an anti-dilutive effect in the calculation of diluted net earnings (loss) per common share. These securities include options to purchase shares of common stock.
Advertising Costs
The cost of advertising is expensed as incurred.
Management's Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
Stock-based Compensation
Effective the first quarter of fiscal 2006, we adopted SFAS 123(R) which establishes accounting for stock-based awards exchanged for employee services. Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, over the requisite service period. We previously applied APB 25 and related interpretations, as permitted by SFAS 123.
Fair Value of Financial Instruments
We estimate the fair value of our financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates of fair value are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by us on our notes payable approximate market rates. We believe that the fair value of our financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate our carrying amounts.
THREE MONTH PERIOD ENDED JUNE 30, 2006 AS COMPARED TO THREE MONTHS
ENDED JUNE 30, 2005 RESULTS OF OPERATIONS
SALES REVENUE
For the three months ended June 30, 2006, overall sales increased $1,286,662 or 371.1%, to $1,633,392, as compared to $346,730 for the three months ended June 30, 2005. For the six months ended June 30, 2006 sales increased to $3,267,006 from $650,700 during the same period in 2005. For the six months ended June 30, 2006 our wholly-owned subsidiary See World Satellites, Inc. generated revenue of $2,330,091. See World generated 73.0% of our total sales for the three months ended June 30, 2006 or $1,192,055. We have no comparable figures for the three months ended June 30, 2005. Our sales revenue for See World is primarily generated from the sale, service and installations of DISH satellite television systems. For our wholly-owned subsidiary FTS Wireless, revenue increased $286,215 or 44.0% to $936,915 compared to revenue of $650,700 for the six months ended June 30, 2005. FTS Wireless generated 27.0% of our total sales or $441,337 for the three months ended June 30, 2006, compared to revenue of $346,730 for an increase of 27.3%. Our sales revenue for FTS Wireless is generated from the sale of wireless handsets and related products and services. We believe the increase in sales revenue at FTS Wireless is related to the introduction of Metro PCS products and services into our core market. During the three months ended June 30, 2005 Metro PCS did not operate in the Tampa, Florida market. The overall increase in total sales revenue for the three and six month period was primarily related to the acquisition of See World Satellites, Inc. completed in the first quarter of this year.
COST OF GOODS SOLD
For the three months ended June 30, 2006, cost of goods sold increased by $212,642 to $472,510, as compared to $259,868 for the three months ended June 30, 2005. The increase in cost of goods sold is primarily related to increased product purchases of DISH satellite television systems for See World and an increase in wireless handset purchasing at FTS Wireless.
GROSS PROFITS
For the three months ended June 30, 2006, gross profits increased by $1,074,020 from $86,862 in 2005 to $1,160,882 in 2006. The increase in gross profits is attributed to the increase in service and sales revenue of DISH satellite systems relating to our wholly-owned subsidiary See World not offered during the comparable period. Gross profits as a percentage of sales increased to 71.1% in 2006 compared to 25.1% in 2005. The increase in gross profits as a percentage of sales is related to the introduction of new business related to the sales, service and installation of satellite television systems for DISH networks at our wholly-owned subsidiary See World.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative Expenses for the three months ended June 30, 2006, increased $794,361 or 291.7% to $1,066,642, as compared to $272,281 for the three months ended June 30, 2005. The increase in Selling, General and Administrative expenses was primarily related to increased operating costs related to our newly-acquired operations at See World not included in the three months ended June 30,2005.
OPERATING INCOME
Operating income increased to $94,240 during the three months ended June 30, 2006, compared to an operating loss of ($185,419) for the three months ended June 30, 2005 for a net improvement of $279,659. Operating income increased to $136,186 during the six months ended June 30, 2006, compared to an operating loss of ($772,294) for a net improvement of $908,480.
NET INCOME
Net income increased $247,922 to $56,867 for the three months ended June 30, 2006 compared to a net loss of ($191,055) during the three months ending June 30, 2005. The increase in net income was primarily related to an increase in revenue of $1,192,055 from our new wholly-owned subsidiary See World. Net income for the six month ended June 30, 2006 increased to $62,118 compared to a net loss of ($962,042) for a net improvement of $1,024,160. The increase in net income was primarily related to an increase in revenue of $2,330,091 from our new wholly-owned subsidiary See World.
INTEREST EXPENSE
Interest expense increased $31,737 to $37,373 for the three months ended June 30, 2006, as compared to $5,636 for the three months ended June 30, 2005. The increase in interest expense is related to an increase in interest expenses from a private placement closed on December 29, 2005.
LIQUIDITY AND CAPITAL RESOURCES
Our requirements for capital are to:
o pay down debt,
o fund possible acquisitions, and
o provide working capital and funds to expand our current business.
Our primary source of financing during the three months ended June 30, 2006 includes cash received from the issuance of common stock and cash generated from operations.
As of June 30, 2006, our Current Assets were $1,239,377 consisting of $537,558 in cash, $418,917 in inventories, $128,583 of accounts receivables and $154,319 of prepaid expenses and current assets. Current Liabilities were $3,850,749, consisting of $1,238,321 of convertible debentures, $2,389,586 of notes payable related parties, $212,946 in accounts payable and accrued expenses and $9,896 of long term debt-equipment loans.
At June 30, 2006, we had total assets of $7,196,971 consisting of, in addition to the assets described above, excess of cost over the net assets of business acquired $5,177,696, property and equipment, net of accumulated depreciation of $358,767, Unamortized discount of convertible debt of $315,231, unamortized debt issuance costs $88,718 and deposits of $17,182.
GOING CONCERN OPINION
We believe that our continued existence is dependent upon our ability to grow the profits of our satellite television operations and make our retail wireless operations profitable, and our ability to raise additional capital to reduce debt. Accordingly, the notes to our un-audited, interim financial statements express substantial doubt about our ability to continue as a going concern.
FINANCING ACTIVITIES
During the three months ended June 30, 2006, we issued 11,458,338 shares of restricted common stock upon the exercise of warrants priced at $0.0239. The warrants were exercised by four accredited investors for total proceeds of $273,854.28. At June 30, 2006, we had not issued 1,185,350 restricted shares that we owed to one of the investors. On April 5, 2006, we issued 11,458,338 new warrants to accredited investors under substantially the same terms as the warrants that were exercised except that the exercise price on the new warrants was increased to $0.04.
SUBSIDIARIES
As of June 30, 2006, we had two wholly-owned subsidiaries, FTS Wireless, Inc. and See World Satellites, Inc
Form 10QSB for FTS GROUP, INC.
--------------------------------------------------------------------------------
16-Aug-2006
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion and analysis contains a comparison of the results of operations for the three months ended June 30, 2006 and the same period in 2005. This discussion and analysis should be read in conjunction with the un-audited interim consolidated financial statements and the notes thereto included in this report, and the audited financial statements in our Annual Report on Form 10-KSB for the year ended December 31, 2005.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This report on Form 10-QSB contains forward-looking statements that involve risks and uncertainties. We generally use words such as "believe," "may," "could," "will," "intend," "expect," "anticipate," "plan," and similar expressions to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report and in our annual report on Form 10-KSB filed with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.
OVERVIEW
We focus on developing, acquiring and investing in cash-flow positive businesses and viable business projects primarily in the Internet, Wireless and Technology industries. We operate a diversified wireless business through our two wholly-owned subsidiaries See World Satellites, Inc. and FTS Wireless, Inc. See World is a Regional Service Provider, or RSP, and retail distributor for DISH Network Services satellite television systems primarily to business and retail customers in the western Pennsylvania market and nationally through our retail channel. FTS Wireless is an emerging distributor of next generation wireless communications devices and related products and services. FTS Wireless operates a chain of nine retail wireless locations in the Gulf Coast market of Florida. All of the retail locations are leased properties.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Principles of Consolidation
The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries: FTS Wireless, Inc and See World Satellites, Inc. All significant intercompany transactions and balances have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-QSB. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months period ended June 30, 2006 are not indicative of the results that may be expected for the year ending December 31, 2006.
As contemplated by the Securities and Exchange Commission (SEC) under Rules of Regulation S-B, the accompanying financial statements and related footnotes have been condensed and do not contain certain information that will be included in the Company's annual financial statements and footnotes thereto. For further information, refer to the Company's audited consolidated financial statements and related footnotes thereto included in the Company's annual report on Form 10-KSB for the year ended December 31, 2005.
Accounts Receivable
Accounts receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.
Inventories
Inventories are valued at the lower-of-cost or market on a first-in, first-out basis.
Investment Securities
We account for our investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." We determine the appropriate classification of our investments in marketable securities at the time of purchase and reevaluate such determination at each balance sheet date. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Debt securities for which we do not have the intent or ability to hold to maturity, and equity securities not classified as trading securities, are classified as available-for-sale. The cost of investments sold is determined on the specific identification or the first-in, first-out method. Trading securities are reported at fair value with unrealized gains and losses recognized in earnings, and available-for-sale securities are also reported at fair value but unrealized gains and losses are shown in the caption "unrealized gains (losses) on shares available-for-sale" included in stockholders' equity. We determine fair value of our investments based on quoted market prices at each balance sheet date.
Property, Equipment and Depreciation
Property and equipment are recorded at cost less accumulated depreciation. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense. Depreciation is computed over the estimated useful lives of the assets (5-20 years) using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Maintenance and repairs are charged to operations as incurred.
Intangible Assets
SFAS No. 142 eliminates the amortization of goodwill, and requires annual impairment testing of goodwill and introduces the concept of indefinite life intangible assets. We adopted SFAS No. 142 effective January 1, 2002. Goodwill and indefinite-lived intangible asset impairment is always assessed based upon a comparison of carrying value with fair value.
Impairment of Long-Lived Assets
We periodically assess realization of long-lived assets, including goodwill. Accordingly, in the event that facts and circumstances indicate that property and equipment, and intangible or other assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, we compare the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount to determine if a write-down to market value is necessary. We believe that there was no impairment of such assets at December 31, 2005. When we completed our impairment testing for the year ended December 31, 2004, we determined that the value of assets acquired related to certain store locations were impaired in the amount of $107,000.
Revenue Recognition
We recognize revenue from the activation of new wireless customers and the sale of wireless handsets, airtime and accessories at the time of activation or sale.
Net revenues from wireless activations are recognized during the month the activation is performed. Allowances for charge-backs, returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
Although our post-paid activations are subject to possible charge-back of commissions if a customer deactivates service within the allowable 180-day period after signing the contract, we still recognize the activation in the period of the activation. We have set up a reserve for possible activation charge-backs. Based on SFAS No. 48, this is permitted if reliable estimates of the expected refunds can be made on a timely basis, the refunds are being made for a large pool of homogeneous items, there is sufficient company-specific historical basis upon which to estimate the refunds, and the amount of the commission specified in the agreement at the outset of the arrangement is fixed, other than the customer's right to request a refund.
The Company's wholly-owned subsidiary, See World Satellites, Inc. recognizes revenue when it makes a sale within the store, completes a retail satellite receiver installation at the customer's home and the customer signs a contract, or completes a retail service provider satellite receiver installation at the customer's home and signs a contract.
Net revenues from product sales are recognized upon the transfer of title and risk of ownership to customers. Allowances for estimated returns, discounts and doubtful accounts are provided when sales are recorded. Shipping and handling costs are included in cost of sales.
We recognize revenue from the sale and activation of wireless handsets and related accessories.
Income Taxes
We are a taxable entity and recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. We use a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.
Earnings Per Share
We compute the basic net earnings (loss) per common share by dividing the net earnings (loss) by the weighted average number of shares outstanding during a period. We compute diluted net earnings (loss) per common share by dividing the net earnings, adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the six months ended June 30, 2006 and 2005, we did not include potential dilutive securities that had an anti-dilutive effect in the calculation of diluted net earnings (loss) per common share. These securities include options to purchase shares of common stock.
Advertising Costs
The cost of advertising is expensed as incurred.
Management's Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.
Stock-based Compensation
Effective the first quarter of fiscal 2006, we adopted SFAS 123(R) which establishes accounting for stock-based awards exchanged for employee services. Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, over the requisite service period. We previously applied APB 25 and related interpretations, as permitted by SFAS 123.
Fair Value of Financial Instruments
We estimate the fair value of our financial instruments using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, our estimates of fair value are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumption and/or estimation methodologies may have a material effect on the estimated fair value amounts. The interest rates payable by us on our notes payable approximate market rates. We believe that the fair value of our financial instruments comprising accounts receivable, notes receivable, accounts payable, and notes payable approximate our carrying amounts.
THREE MONTH PERIOD ENDED JUNE 30, 2006 AS COMPARED TO THREE MONTHS
ENDED JUNE 30, 2005 RESULTS OF OPERATIONS
SALES REVENUE
For the three months ended June 30, 2006, overall sales increased $1,286,662 or 371.1%, to $1,633,392, as compared to $346,730 for the three months ended June 30, 2005. For the six months ended June 30, 2006 sales increased to $3,267,006 from $650,700 during the same period in 2005. For the six months ended June 30, 2006 our wholly-owned subsidiary See World Satellites, Inc. generated revenue of $2,330,091. See World generated 73.0% of our total sales for the three months ended June 30, 2006 or $1,192,055. We have no comparable figures for the three months ended June 30, 2005. Our sales revenue for See World is primarily generated from the sale, service and installations of DISH satellite television systems. For our wholly-owned subsidiary FTS Wireless, revenue increased $286,215 or 44.0% to $936,915 compared to revenue of $650,700 for the six months ended June 30, 2005. FTS Wireless generated 27.0% of our total sales or $441,337 for the three months ended June 30, 2006, compared to revenue of $346,730 for an increase of 27.3%. Our sales revenue for FTS Wireless is generated from the sale of wireless handsets and related products and services. We believe the increase in sales revenue at FTS Wireless is related to the introduction of Metro PCS products and services into our core market. During the three months ended June 30, 2005 Metro PCS did not operate in the Tampa, Florida market. The overall increase in total sales revenue for the three and six month period was primarily related to the acquisition of See World Satellites, Inc. completed in the first quarter of this year.
COST OF GOODS SOLD
For the three months ended June 30, 2006, cost of goods sold increased by $212,642 to $472,510, as compared to $259,868 for the three months ended June 30, 2005. The increase in cost of goods sold is primarily related to increased product purchases of DISH satellite television systems for See World and an increase in wireless handset purchasing at FTS Wireless.
GROSS PROFITS
For the three months ended June 30, 2006, gross profits increased by $1,074,020 from $86,862 in 2005 to $1,160,882 in 2006. The increase in gross profits is attributed to the increase in service and sales revenue of DISH satellite systems relating to our wholly-owned subsidiary See World not offered during the comparable period. Gross profits as a percentage of sales increased to 71.1% in 2006 compared to 25.1% in 2005. The increase in gross profits as a percentage of sales is related to the introduction of new business related to the sales, service and installation of satellite television systems for DISH networks at our wholly-owned subsidiary See World.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, General and Administrative Expenses for the three months ended June 30, 2006, increased $794,361 or 291.7% to $1,066,642, as compared to $272,281 for the three months ended June 30, 2005. The increase in Selling, General and Administrative expenses was primarily related to increased operating costs related to our newly-acquired operations at See World not included in the three months ended June 30,2005.
OPERATING INCOME
Operating income increased to $94,240 during the three months ended June 30, 2006, compared to an operating loss of ($185,419) for the three months ended June 30, 2005 for a net improvement of $279,659. Operating income increased to $136,186 during the six months ended June 30, 2006, compared to an operating loss of ($772,294) for a net improvement of $908,480.
NET INCOME
Net income increased $247,922 to $56,867 for the three months ended June 30, 2006 compared to a net loss of ($191,055) during the three months ending June 30, 2005. The increase in net income was primarily related to an increase in revenue of $1,192,055 from our new wholly-owned subsidiary See World. Net income for the six month ended June 30, 2006 increased to $62,118 compared to a net loss of ($962,042) for a net improvement of $1,024,160. The increase in net income was primarily related to an increase in revenue of $2,330,091 from our new wholly-owned subsidiary See World.
INTEREST EXPENSE
Interest expense increased $31,737 to $37,373 for the three months ended June 30, 2006, as compared to $5,636 for the three months ended June 30, 2005. The increase in interest expense is related to an increase in interest expenses from a private placement closed on December 29, 2005.
LIQUIDITY AND CAPITAL RESOURCES
Our requirements for capital are to:
o pay down debt,
o fund possible acquisitions, and
o provide working capital and funds to expand our current business.
Our primary source of financing during the three months ended June 30, 2006 includes cash received from the issuance of common stock and cash generated from operations.
As of June 30, 2006, our Current Assets were $1,239,377 consisting of $537,558 in cash, $418,917 in inventories, $128,583 of accounts receivables and $154,319 of prepaid expenses and current assets. Current Liabilities were $3,850,749, consisting of $1,238,321 of convertible debentures, $2,389,586 of notes payable related parties, $212,946 in accounts payable and accrued expenses and $9,896 of long term debt-equipment loans.
At June 30, 2006, we had total assets of $7,196,971 consisting of, in addition to the assets described above, excess of cost over the net assets of business acquired $5,177,696, property and equipment, net of accumulated depreciation of $358,767, Unamortized discount of convertible debt of $315,231, unamortized debt issuance costs $88,718 and deposits of $17,182.
GOING CONCERN OPINION
We believe that our continued existence is dependent upon our ability to grow the profits of our satellite television operations and make our retail wireless operations profitable, and our ability to raise additional capital to reduce debt. Accordingly, the notes to our un-audited, interim financial statements express substantial doubt about our ability to continue as a going concern.
FINANCING ACTIVITIES
During the three months ended June 30, 2006, we issued 11,458,338 shares of restricted common stock upon the exercise of warrants priced at $0.0239. The warrants were exercised by four accredited investors for total proceeds of $273,854.28. At June 30, 2006, we had not issued 1,185,350 restricted shares that we owed to one of the investors. On April 5, 2006, we issued 11,458,338 new warrants to accredited investors under substantially the same terms as the warrants that were exercised except that the exercise price on the new warrants was increased to $0.04.
SUBSIDIARIES
As of June 30, 2006, we had two wholly-owned subsidiaries, FTS Wireless, Inc. and See World Satellites, Inc
girgish1
عضو نشط
دورة المؤشرنت للتحليل الفني
50 دينار كويتي