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Karin, what's up for Monday?
I think that the situation with MTNL is unlike anything
OneVoice has been involved with previously, and therefore any
predictions based on the past have little value, IMHO.
I prefer to wait and see how this situation plays out on
its own, as it looks like a "whole new ballgame" to me.
Also, I think it's premature to expect hard numbers this
early, I'll give it some time to either catch on or not.
GLTAEB.
I think stock of BOY would fall under assets,
and salaries might be considered expenses.
:)
you folks are (deliberately) missing the point. Every point
that's brought up for reasonable discussion, where one might look at positives and/or negatives is met with spin, sneers, total negativisn, personal attacks on posters and management,
and the constant personal opinions that OneVoice is a scam,
and that every statement by management is a lie.
From your standpoint, you guys seem to have won control of the board, except for the few who continue to patiently
refute your nonsense.
However the last chapter here has not yet been written.
GLTAL.
Boy looks great, the PIG sucks(EOM).
Boyuan signs new construction project agreements valued at US $26.3 million
Press Release
Source: Boyuan Construction Group, Inc.
On Tuesday September 15, 2009, 1:05 pm EDT
TORONTO, Sept. 15 /CNW/ - Boyuan Construction Group, Inc., (TSX-V: BOY & BOY.DB) a fast-growing construction company in China of commercial, residential and municipal infrastructure projects, announced today that it has signed two new agreements to construct two separate buildings. The combined aggregate value of the contracts is US $26.3 million.
"China's ongoing economic development is fueling considerable demand for our design, engineering and construction services," said Mr. Cai Liang Shou, Chairman of Boyuan Construction Group. "Our core markets in the Yangtze River Delta and Hainan Island provide significant potential for continued growth, new opportunities are also emerging in neighboring regions, enabling us to bid on more projects, grow our customer base and expand our operations."
Under the terms of the agreements, Boyuan will construct a 23-storey hotel in Sanya, one of China's most popular tourist destinations. The project, which is valued at US $11.7 million, is expected to be completed by the end of 2010.
Boyuan will also develop a commercial building in Shandong, one of China's most economically diversified provinces with high concentrations of manufacturing and oil and gas production activities. The project, valued at US $14.6 million, is expected to be completed October 1, 2011. Shandong represents a new market opportunity for Boyuan, particularly for commercial projects.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the business of residential and commercial building construction, municipal infrastructure and engineering projects. In its last three fiscal years ended June 30, 2008, Boyuan completed more than 120 projects for a number of private and public sector clients including Cargill and the Dalian Shide Group, a billion dollar conglomerate whose partners include DuPont, Mitsubishi and GE. Boyuan's current projects include residential, industrial and mixed-use developments, including a five-star hotel and a project at the Qingshan Nuclear Plant, China's first and largest nuclear facility. From its operating bases in Zhejiang Province and on Hainan Island, Boyuan focuses on construction projects in China's fast-growing regions of the Yangtze River Delta and the city of Sanya.
Caution concerning forward-looking statements
Statements in this news release, which are not purely historical, are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future.
It is important to note that actual outcomes and Boyuan's actual results could differ materially from those in such forward-looking statements. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (1) the failure of Boyuan to execute its business plan, (2) the risks arising from Boyuan's operations generally (such as the ability to secure raw materials, arrange for manufactured products on a timely basis, and maintain an adequate workforce), (3) Boyuan's ability to remain competitive as other parties develop and release competitive projects and services, (4) Boyuan's ability to retain the employees necessary to continue research and development of current and new projects and services, (5) the success by Boyuan of the sales of its projects and services, (6) the impact of competitive products on the sales of Boyuan's projects and services, (7) the impact of technology changes on Boyuan's projects and services, (8) Boyuan's reliance on contractual rights such as licenses and leases in the conduct of its business, (9) general economic conditions as they affect Boyuan and its current and prospective customers, (10) the ability of Boyuan to control costs operating, general administrative and other expenses, and (11) insufficient investor interest in the Boyuan's securities which may impact on Boyuan's ability to raise additional financing as required.
Actual future results may differ from the anticipated results expressed in the forward-looking statements contained in this press release and Boyuan does not undertake to update this information. Investors are cautioned against placing undue importance on forward-looking information contained herein and should consult Boyuan's disclosure documents filed from time to time on SEDAR and other public filings which contain a more exhaustive analysis of risks and uncertainties connected to Boyuan's business.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information
Boyuan Construction Group, Inc., Mr. Paul Law, Chief Financial Officer, +(852) 9329 5088, paullaw@zjboyuan.com.cn
The Equicom Group Inc., Joe Racanelli, (416) 815-0700 ext. 243, jracanelli@equicomgroup.com
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ENERGROUP HLDGS NEW (ENHD.OB) On Aug 21: 3.10 0.00 (0.00%)
MORE ON ENHD.OB
View: Annual Data | Quarterly Data All numbers in thousands
PERIOD ENDING 30-Jun-09 31-Mar-09 31-Dec-08 30-Sep-08
Total Revenue 48,138 40,894 36,051 53,726
Cost of Revenue 41,200 35,169 29,465 47,255
Gross Profit 6,938 5,724 6,586 6,471
Operating Expenses
Research Development - - - -
Selling General and Administrative 1,219 1,424 2,478 1,614
Non Recurring - - - -
Others - - - -
Total Operating Expenses - - - -
Operating Income or Loss 5,718 4,300 4,108 4,857
Income from Continuing Operations
Total Other Income/Expenses Net (4,603) (3,391) (11,617) 267
Earnings Before Interest And Taxes 16,615 909 (7,509) 5,124
Interest Expense 85 217 (241) 587
Income Before Tax 16,530 692 (7,268) 4,537
Income Tax Expense 475 280 71 217
Minority Interest - - - -
Net Income From Continuing Ops 555 412 (7,339) 4,320
Non-recurring Events
Discontinued Operations - - - -
Extraordinary Items - - - -
Effect Of Accounting Changes - - - -
Other Items - - - -
Net Income 555 412 (7,339) 4,320
Preferred Stock And Other Adjustments - - - -
Net Income Applicable To Common Shares $555 $412 ($7,339) $4,320
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PROBABLE????
You have been carrying on for weeks about the launch date,
how you and only you had the right date... now you're not so sure....
the rest of your post is just speculative BS.
IMO, lol.
All this gloom and doom from the one who said over and over ad
nauseum that MTNL would never launch.
Too funny!
The article I posted was from IBD via YAhoo finance...it
appears in print on page 1 of today's IBD.
Netbooks are considered the first generation of mobile Internet devices, which fit between smart phones and laptops.
Monday's announcement confirmed what has been expected. In June, Nokia and Intel announced they would team up to create MID devices.
Nokia Will Attack Converging Market With First Netbook
Brian Deagon
On Monday August 24, 2009, 7:09 pm EDT
With computer companies pushing into smart phones, handset leader Nokia counterpunched Monday by announcing its first netbook computer.
The Nokia Booklet 3G will run Microsoft (NasdaqGS:MSFT - News) Windows on Intel's (NasdaqGS:INTC - News) Atom processor and has a 10-inch screen, WiFi, Bluetooth, GPS and 3G wireless access. Nokia claims it has a 12-hour battery life. Pricing and a launch date will be announced next week.
Finland-based Nokia (NYSE:NOK - News) is entering a minilaptop computer field that is growing fast and is hotly competitive.
"Nokia needed to do this," said Jack Gold, principal of research firm J. Gold Associates. "They are getting nipped at their heels from all directions. Nokia needs to protect its core market."
ABI Research forecasts that 139 million netbooks will ship in 2013, up from 35 million this year.
Nokia's move raises the stakes in an escalating battle among computer and cell phone makers. It faces an increasing onslaught in smart phones.
This year, up to 20 new models of smart phones based on Google's (NasdaqGS:GOOG - News) Android operating system alone are expected to hit the market, from makers such as Samsung and Motorola (NYSE:MOT - News).
Android Hikes Competition
Computer companies are moving in as well. Acer plans to introduce an Android phone in the fourth quarter. Dell (NasdaqGS:DELL - News) recently introduced its first cell phone, an Android smart phone, in China, but it's been mum on further plans. Hewlett-Packard (NYSE:HPQ - News) has offered smart phones for years, though it's been a minor player.
Netbooks are considered the first generation of mobile Internet devices, which fit between smart phones and laptops.
Monday's announcement confirmed what has been expected. In June, Nokia and Intel announced they would team up to create MID devices.
The pact gave Intel access to a key leader in the cell phone market, where the No. 1 chipmaker has lagged.
Nokia, meanwhile, gets ammunition to fight off Apple (NasdaqGS:AAPL - News) and others. It's been widely rumored that Apple will enter the MID category with a tablet PC this year.
Analysts say Nokia's relationship with cellular carriers will help in distributing its product. Netbooks are increasingly being sold as mobile alternatives to smart phones.
Carriers such as AT&T (NYSE:T - News)and Verizon Wireless already are selling netbooks, complete with service plans.
"Mobile carriers have been trying to figure out how to get into the netbook space," said Ben Bajarin, an analyst with research firm Creative Strategies. "The (Nokia) device is a perfect solution for them. A strong carrier relationship is an absolute must in the market."
Size Seen As Advantage
Analyst Gold says few of Nokia's traditional smart phone competitors, such as Motorola, seem to have the wherewithal to win against Nokia in the netbook market.
"There is no question this market will get hypercompetitive," Gold said. "But if Nokia can leverage its channel partnership, they will have a real advantage."
Nokia's heft gives it pricing power.
"With no fewer than 25 device competitors and mobile network operators experimenting with netbook subsidies, now is the ideal window of opportunity for Nokia to test the waters," ABI Research analyst Jeff Orr wrote in a research report.
Yet analysts point 15ut that Nokia doesn't have a solid track record in developing new, cutting-edge devices.
"A lot of critics have questioned Nokia's ability to innovate around features that consumers prefer," said Phil Hendrix, an analyst at consulting firm Institute for Mobile Markets. "They have to do something that differentiates this netbook device from what's already out there. So far, what I'm seeing doesn't appear terribly distinctive."
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ONE VOICE TECHNOLOGIES INC
FORM 10-Q
(Quarterly Report)
Filed 08/20/09 for the Period Ending 06/30/09
Address 7660 FAY AVENUE
LA JOLLA, CA 92037
Telephone 858-552-4466
CIK 0001096088
Symbol OVOE
SIC Code 7372 - Prepackaged Software
Industry Software & Programming
Sector Technology
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2009, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
COMMISSION FILE NUMBER 0-27589
ONE VOICE TECHNOLOGIES, INC.
(Name of Small Business Issuer in its Charter)
7825 Fay Ave. Suite 200, La Jolla CA 92037
(Address of principal Executive Offices) (Zip Code)
Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK-$.001 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No
[_]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit and post such files). Yes [X] No [_]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of "large
accelerated filer," "accelerated filed," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [_] Accelerated filer [_] on-accelerated filer [_] (Do not check if a smaller reporting company)
Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]
As of June 30, 2009 the registrant had 67,543,466 shares of common stock, $.02 par value, issued and outstanding.
NEVADA 95-4714338
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
(866) 823-1432 (858) 754-1276
(Issuer's Telephone Number) (Issuer's Facsimile Number)
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) F-1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 1
Item 3. Quantitative and Qualitative Disclosures About Market Risk 9
Item 4T. Controls and Procedures 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 1A. Risk Factors 11
Item 2. Unregistered Sales of Equity Securities 12
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security 13
Item 5. Other Information 13
Item 6. Exhibits 13
SIGNATURES 14
i
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
One Voice Technologies, Inc
Balance Sheet
UNAUDITED
Assets June 30, December 31,
2009 2008
(UNAUDITED) (AUDITED)
Current Assets
Cash and cash equivalents $ 1,522 $ 666
Accounts receivable, net 52,574 95,840
Inventories 20,255 20,479
Prepaid expenses 8,515 41,130
Total Current Assets 82,866 158,115
Fixed and Intangible assets
Property and Equipment, net of accumulated depreciation 42,736 26,455
Intangible assets, net of accumulated amortization 16,237 26,024
Total Fixed and Intangible Assets 58,973 52,479
Other Assets
Deposits 4,732 4,732
Total Other Assets 4,732 4,732
Total Assets $ 146,571 $ 215,326
Liabilities and Stockholders' Deficit
Current Liabilities
Accounts payable $ 558,826 $ 539,562
Accrued expenses 952,867 821,452
Settlement agreement liability 166,715 173,091
License agreement liability 1,336,500 1,267,500
Current notes payable 181,272 133,264
Debt derivative liability 4,020,171 1,805,482
Warrant derivative liability 58,303 31,266
Convertible notes payable, net 546,000 546,000
Revolving line of credit 2,626,683 2,374,621
Total Current Liabilities 10,447,337 7,692,238
Long term notes payable 19,734 67,742
Total Liabilities 10,467,071 7,759,980
Stockholders' Deficit
(Adjusted for impact of 1-for-20 reverse split)
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
no shares issued and outstanding - -
Common stock, $0.0001 par value; 1,290,000,000 shares authorized; 67,543,466
and 60,929,085 issued and outstanding as of June 30, 2009 and 1,324,176 1,218,582
December 31, 2008 respectively
Additional paid-in capital 43,949,311 43,920,439
Escrow Shares (713,087 ) (713,087 )
Accumulated deficit (54,880,900 ) (51,970,588 )
Total Stockholders' Deficit (10,320,500 ) (7,544,654 )
Total Liabilities and Stockholders' Equity (Deficit) $ 146,571 $ 215,326
F-1
One Voice Technologies, Inc.
Statements of Operations
UNAUDITED
THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008 2009 2008
Revenue
Net Revenue $ 85,915 $ 145,373 $ 167,232 $ 334,125
Cost of good sold 53,148 99,286 106,761 194,211
Gross profit 32,767 46,087 60,471 139,914
Operating Expenses
Selling, general and administrative 269,187 1,102,096 619,668 1,851,632
Research and development - - - -
Total Operating Expenses 269,187 1,102,096 619,668 1,851,632
Loss from Operations (236,420 ) (1,056,009 ) (559,197 ) (1,711,718 )
Other Income (Expense)
Interest expense (56,439 ) (239,724 ) (115,765 ) (494,478 )
Gains (loss) from change in derivative liability (2,183,068 ) 601,020 (2,241,726 ) 1,902,774
Other income (expense) (29,315 ) - 6,376 -
Total Other Income (Expense) (2,268,822 ) 361,296 (2,351,115 ) 1,408,296
Net loss before Taxes (2,505,242 ) (694,713 ) (2,910,312 ) (303,422 )
Income Taxes - - - (800 )
NET LOSS $ (2,505,242 ) $ (694,713 ) $ (2,910,312 ) $ (304,222 )
Loss Per Share
Basic $ (0.04 ) $ (0.02 ) $ (0.04 ) $ (0.01 )
Number of shares used in calculation of loss per share
Basic and diluted (Adjusted for impact of
1-for-20 reverse split) 64,401,000 42,815,550 70,347,000 40,235,900
F-2
THE ACCOMPANYING NOTES FORM AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
One Voice Technologies, Inc
Statements of Cash Flows
(UNAUDITED)
SIX MONTH ENDED
JUNE 30,
2009 2008
Cash Flows from Operating Activities:
Net loss $ (2,910,312 ) $ (304,222 )
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 17,151 145,468
Debt issue costs and debt discount amortization - 381,213
(Gain) loss on debt derivative liability 2,214,689 25,781
(Gain) loss on warrant derivative liability 27,037 (1,952,555 )
Common stock issued for services rendered - 552,406
Common stock issued for liquidated damages - 24,000
Stock based compensation 28,872 61,048
Non cash assets placed in service for India Launch (23,645 ) -
Settlement liability (6,376 ) -
License agreement liability 69,000 75,000
Changes in certain assets and liabilities
Accounts receivable 43,266 (25,374 )
Inventory 224 (20,366 )
Prepaid expenses 32,615 (24,864 )
Accounts payable 19,264 56,224
Accrued expenses 143,571 176,157
Deferred rent - 1,217
Net Cash Used in Operating Activities (344,644 ) (828,867 )
Cash Flows from Investing Activities:
Purchase of property and equipment - (3,221 )
Net Cash Provided by (Used in) Financing Activities - (3,221 )
Cash Flows from Financing Activities:
Proceeds from revolving line 345,500 840,000
Net Cash Provided by (Used in) Financing Activities 345,500 840,000
Net Increase (Decrease) in Cash and Cash Equivalents 856 7,912
Cash and Cash Equivalents - Beginning of Year 666 14,879
Cash and Cash Equivalents - End of Year $ 1,522 $ 22,791
Supplemental Disclosure of Cash Flow Information:
Cash Paid during the year for:
Income taxes paid $ - $ 800
Supplemental Disclosure of Non-cash Investing and Financing Activities:
Common stock issued upon conversion of debt $ 105,594 $ 546,313
F-3
ONE VOICE TECHNOLOGIES, INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
One Voice Technologies, Inc. is a voice recognition technology company with over $43 million invested in Research and Development and deployment of products in both the
telecom and PC multi-media markets. To date, our customers include: Telefonos de Mexico, S.A.B. de C.V. (TELMEX), Intel Corporation, Inland Cellular, Nex-Tec Wireless
and several additional telecom service providers throughout the United States. Our telecom solutions allow business and consumer phone users to Voice Dial, Group
Conference Call, Read and Send E-Mail and Instant Message, all by voice. We offer PC Original Equipment Manufacturers (OEM's) the ability to bundle a complete voice
interactive computer assistant which allows PC users to talk to their computers to quickly play digital media (music, videos, DVD) along with reading and sending e-mail
messages, SMS text messaging to mobile phones, PC-to-Phone calling (VoIP) and PC-to-PC audio/video. We feel we are strongly positioned across these markets with our
patented voice technology.
The Company is traded on the NASD OTC Bulletin Board ("OTCBB") under the symbol OVOE. One Voice is incorporated in the State of Nevada and commenced operations
on July 14, 1999.
Effective June 16, 2009, the Company completed a 1-for-20 reverse split of its common stock as approved by a majority vote of the Company's stockholders on May 22,
2009. As of June 16, 2009 the Company’s shares began trading on a split adjusted basis under the new symbol OVOE. See Note 19 to the financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INTERIM FINANCIAL STATEMENTS
The accompanying audited financial statements represent the financial activity of One Voice Technologies, Inc. These financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted accounting principles have been included or omitted pursuant to such rules and regulations. These
financial statements and the accompanying notes are unaudited and should be read in conjunction with the financial statements and the notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2008. In the opinion of management, the financial statements herein include adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the Company's financial position as of June 30, 2009, and results of operations for the three and six months
ended June 30, 2009 and 2008. The results of operations for the three and six months ended June 30, 2009 are not necessarily indicative of the operating results to be expected
for the full fiscal year or any future periods.
ORGANIZATION AND BASIS OF PRESENTATION
One Voice Technologies, Inc., ("The Company"), is incorporated under the laws of the State of Nevada. The Company develops voice recognition software and it commenced
operations in 1999. The Company's telecom solutions allow business and consumer phone users to Voice Dial, Group Conference Call, Read and Send E-Mail and Instant
Message, all by voice. We offer PC Original Equipment Manufacturers (OEM's) the ability to bundle a complete voice interactive computer assistant which allows PC users to
talk to their computers to quickly play digital media (music, videos, DVD) along with reading and sending e-mail messages, SMS text messaging to mobile phones, PC-to-
Phone calling (VoIP) and PC-to-PC audio/video.
GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has incurred significant losses since inception of $54,880,900 and used cash from operations of
$344,644 during the six months ended June 30, 2009. The Company also has a working capital deficit of $10,364,471 of which $4,078,474 represents non-cash warrant and
debt derivative liabilities.
F-4
ONE VOICE TECHNOLOGIES, INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company also has a stockholders' deficit of $10,320,500 as of June 30, 2009. These factors raise substantial doubt about the Company's ability to continue as a going
concern. Management has instituted a cost reduction program that included a reduction in labor and fringe costs. Historically, management has been able to obtain capital
through either the issuance of equity or debt, and is currently seeking such financing. There can be no assurance as to the availability or terms upon which such financing and
capital might be available. Additionally, management is currently pursuing revenue-bearing contracts utilizing various applications of its technology including wireless
technology. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the
amount of revenue and expense reported during the period. Significant estimates include valuation of derivative and warrant liabilities. Actual results could differ from those
estimates.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing
any corporate obligations.
ACCOUNTS RECEIVABLE
Trade accounts receivable are stated at amounts billed to and due from clients, net of an allowance for doubtful accounts. Credit is extended based on evaluation of a client’s
financial condition, and collateral is not required. In determining the adequacy of the allowance, management identifies specific receivables for which collection is not certain
and estimates the potentially uncollectible amount based on the most recently available information. The Company writes off accounts receivable when they are determined to
be uncollectible, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. As of June 30, 2009 and December 31, 2008, the
Company had a reserve for doubtful accounts of $212,079 and $135,289, respectively.
CONCENTRATION OF CUSTOMER
The Company generated 80% of total revenues from three major customers in the six month period ended June 30, 2009. The accounts receivable balance for these customers
at June 30, 2009 represented 75% of the total net accounts receivable.
REVENUE RECOGNITION
The Company recognizes revenue when persuasive evidence of a sale arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or
determinable, and collectability is reasonably assured in accordance with SEC Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB
104").
In most cases, revenue from hardware and software product sales is recognized when title passes to the customer. Based upon the Company's standard shipping terms, FOB
The Company, title passes upon shipment to the customer. The Company ships a portion of its hardware and software products on consignment. Revenue for these products is
recognized when title passes to the end consumer. These products are included in the Company’s inventory totals for the six months ended June 30, 2009 and year ended
December 31, 2008.
Revenue is recognized on service contracts using the proportional-performance method. The Company uses the proportional-performance method when a service contract
involves an unspecified number of acts over a fixed time period for performance. Revenue is recognized over the period during which the acts will be performed by using the
straight-line method.
F-5
ONE VOICE TECHNOLOGIES, INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
TRADEMARKS AND PATENTS
The Company's trademark costs consist of legal fees paid in connection with trademarks. The Company amortizes trademarks using the straight-line method over the period of
estimated benefit, generally four years. The Company's patent costs consist of legal fees paid in connection with patents pending. The Company amortizes patents using the
straight-line method over the period of estimated benefit, generally five years. Yearly patent renewal fees are expensed in the year incurred.
In accordance with SFAS No. 142, the Company evaluates its operations to ascertain if a triggering event has occurred which would impact the value of finite-lived intangible
assets (e.g., patents). Examples of such triggering events include a significant disposal of a portion of such assets, an adverse change in the market involving the business
employing the related asset, a significant decrease in the benefits realized from an asset
As of June 30, 2009, no such triggering event has occurred. An impairment test involves a comparison of undiscounted cash flows against the carrying value of the asset as an
initial test. If the carrying value of such asset exceeds the undiscounted cash flow, the asset would be deemed to be impaired. Impairment would then be measured as the
difference between the fair value of the fixed or amortizing intangible asset and the carrying value to determine the amount of the impairment. The Company determines fair
value generally by using the discounted cash flow method. To the extent that the carrying value is greater than the asset's fair value, an impairment loss is recognized for the
difference.
CONVERTIBLE NOTES AND FINANCIAL INSTRUMENTS WITH EMBEDDED FEATURES
The Company accounts for conversion options embedded in convertible notes in accordance with Statement of Financial Accounting Standard ("SFAS) No. 133 "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS 133") and EITF 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock" ("EITF 00-19"). SFAS 133 generally requires Companies to bifurcate conversion features embedded in convertible notes from their host instruments
and to account for them as free standing derivative financial instruments in accordance with EITF 00-19. SFAS 133 provides for an exception to this rule when convertible
notes, as host instruments, are deemed to be conventional as that term is described in the implementation guidance under Appendix A to SFAS 133 and further clarified in
EITF 05-2 "The Meaning of "Conventional Convertible Debt Instrument" in Issue No. 00-19.
The Company accounts for convertible notes (if deemed conventional) in accordance with the provisions of Emerging Issues Task Force Issue ("EITF")98-5 "Accounting for
Convertible Securities with Beneficial Conversion Features," ("EITF 98-5"), EITF 00-27 "Application of EITF 98-5 to Certain Convertible Instruments," Accordingly, the
Company records, as a discount to convertible notes, the intrinsic value of such conversion options based upon the differences between the fair value of the underlying
common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized
over the term of the related debt to their earliest date of redemption.
The Company’s convertible notes do host conversion features and other features that are deemed to be embedded derivatives financial instruments or beneficial conversion
features based on the commitment date fair value of the underlying common stock.
COMMON STOCK PURCHASE WARRANTS AND OTHER DERIVATIVE FINANCIAL INSTRUMENTS
The Company accounts for the issuance of common stock purchase warrants issued and other free standing derivative financial instruments in accordance with the provisions
of EITF 00-19. Based on the provisions of EITF 00-19, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives
the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any
contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company)
(ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).
See notes 9 and 10 in the accompanying footnotes to the financial statements for additional details.
F-6
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET LOSS PER COMMON SHARE
Basic earnings per share ("EPS") is calculated using the weighted-average number of outstanding common shares during the period. Diluted earnings per share is calculated
using the weighted-average number of outstanding common shares and dilutive common equivalent shares outstanding during the period, using either the as-converted method
for convertible notes and convertible preferred stock or the treasury stock method for options and warrants.
The net (loss) per common share for the six months ended June 30, 2009 and 2008 is based on the weighted average number of shares of common stock outstanding during the
periods. Potentially dilutive securities include options, warrants and convertible debt.
The following table is a reconciliation of the numerator (net income / (loss)) and the denominator (number of shares) used in the basic and diluted EPS calculations and sets
forth potential shares of common stock that are not included in the diluted net loss per share calculation as the effect is antidilutive:
SIX MONTHS ENDED
JUNE 30,
2009
(Adjusted for impact
of 1-for-20
reverse split)
2008
(Adjusted for impact
of 1-for-20
reverse split)
NUMERATOR - basic net income $ (2,910,312 ) $ (304,222 )
DENOMINATOR- BASIC
Weighted average common shares outstanding 70,347,000 40,235,900
DENOMINATOR-DILUTIVE
Weighted average common shares outstanding -- --
TOTAL BASIC AND DILUTED SHARES 70,347,000 40,235,900
NET INCOME PER SHARE- BASIC $ (0.04 ) $ (0.01 )
NET INCOME PER SHARE- DILUTED $ (0.04 ) $ (0.01 )
F-7
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET LOSS PER COMMON SHARE (CONTINUED)
ACCOUNTING FOR STOCK-BASED COMPENSATION
On January 1, 2006 the Company adopted "SFAS" No.123 (Revised 2004), "Share Based Payment," ("SFAS 123R"), using the modified prospective method. In accordance
with SFAS No. 123R, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the
award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period. The Company
determines the grant-date fair value of employee share options using the Black-Scholes option-pricing model.
During the six months ended June 30, 2009 and 2008, the Company recorded $28,872 and $61,048 respectively, in non-cash charges for stock based compensation.
The fair value of stock options at date of grant was estimated using the Black-Scholes model with the following assumptions: expected volatility of 120.5% and 90.9%,
respectively, expected term of 2.0 years, risk-free interest rate of 4.74% and an expected dividend yield of 0%. Expected volatility is based on the historical volatilities of the
Company's common stock. The expected life of employee stock options is determined using guidance from SAB 107. As such, the expected life of the options and warrants is
the average of the vesting term and the full contractual term of the options and warrants. The risk free interest rate is based on the U.S. Treasury notes for the expected life of
the stock option.
COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," which establishes standards for reporting
comprehensive income and its components in the financial statements. Comprehensive income consists of net income and other gains and losses affecting shareholders' equity
that, under generally accepted accounting principles are excluded from net income. For the six months ended June 30, 2009 and 2008, the Company's comprehensive income
(loss) had equaled its net income (loss). Accordingly, a statement of comprehensive loss is not presented.
SIX MONTHS ENDED
JUNE 30,
2009
(Adjusted for
impact of 1-for-20
reverse split)
2008
(Adjusted for
impact of 1-for-20
reverse split)
POTENTIAL DILUTIVE COMMON SHARES:
Convertible debentures 298,921,712 37,722,175
Options 3,071,700 3,146,700
Warrants 12,346,197 13,795,345
Escrow shares 2,093,945 0
TOTAL POTENTIAL DILUTIVE SHARES 316,433,554 54,664,220
F-8
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS
In April 2009, the FASB issued FSP FAS 157-4, “ Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly .” This FSP provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value
Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that
indicate a transaction is not orderly. This FSP emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and
regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market
conditions. FSP FAS 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and is applied prospectively. Implementation of this standard does
not have a material impact on our financial statements.
In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “ Interim Disclosures about Fair Value of Financial Instruments ”. This FSP amends FASB Statement No.
107, “ Disclosures about Fair Value of Financial Instruments ” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized
financial information at interim reporting periods. FSP FAS 107-1 and APB 28-1 are effective for interim and annual reporting periods ending after June 15, 2009.
Implementation of this standard does not have a material impact on our financial statements.
In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “ Recognition and Presentation of Other-Than-Temporary Impairments ”. This FSP amends the other-thantemporary
impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments
in the financial statements. The most significant change the FSP brings is a revision to the amount of other-than-temporary loss of a debt security recorded in earnings. FSP
FAS 115-2 and FAS 124-2 are effective for interim and annual reporting periods ending after June 15, 2009. Implementation of this standard does not have a material impact
on our financial statements.
The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated
to have a material effect on the financial position or results of operations of the Company.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force ("EITF")), the American Institute of Certified Public Accountants
("AICPA"), and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements,” an Amendment of ARB No. 51, “Consolidated Financial
Statements” (“SFAS 160”). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.
It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial
statements. We adopted SFAS 160 on January 1, 2009. The adoption of these provisions did not have a material effect on our financial statements.
F-9
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB No. 133” (“SFAS 161”). SFAS
161 is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects
on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133. SFAS 161 also applies
to non-derivative hedging instruments and all hedged items designated and qualifying under SFAS 133. The Company adopted SFAS 161 on January 1, 2009. For additional
information regarding derivative instruments and hedging activities, (see Note 9).
In June 2009, the Financial Accounting Standards Board (“FASB”) approved the FASB Accounting Standards Codification (“the Codification”) as the single source of
authoritative nongovernmental GAAP. All existing accounting standard documents, such as FASB, American Institute of Certified Public Accountants, Emerging Issues Task
Force and other related literature, excluding guidance from the Securities and Exchange Commission (“SEC”), will be superseded by the Codification. All other nongrandfathered,
non-SEC accounting literature not included in the Codification will become nonauthoritative. The Codification does not change GAAP, but instead introduces a
new structure that will combine all authoritative standards into a comprehensive, topically organized online database. The Codification will be effective for interim or annual
periods ending after September 15, 2009, and will impact the Company’s financial statement disclosures beginning with the quarter ending September 30, 2009 as all future
references to authoritative accounting literature will be referenced in accordance with the Codification. There will be no changes to the content of the Company’s financial
statements or disclosures as a result of implementing the Codification.
In May 2009, the FASB issued Statement No. 165, “Subsequent Events” (“SFAS 165”), which establishes general standards of accounting for, and requires disclosure of,
events that occur after the balance sheet date but before financial statements are issued or are available to be issued. We adopted the provisions of SFAS 165 for the quarter
ended June 30, 2009. The adoption of these provisions did not have a material effect on our financial statements.
In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets , an amendment to SFAS No. 140 (SFAS 166). SFAS 166 eliminates the concept
of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information
reported to users of financial statements by providing greater transparency about transfers of financial assets, including securitization transactions, and an entity’s continuing
involvement in and exposure to the risks related to transferred financial assets. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company will
adopt SFAS 166 in fiscal 2010 and is evaluating the impact it will have on the results of the Company.
In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS No. 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP FAS 107-1
and APB 28-1”), which amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments , to require disclosures about the fair value of financial instruments for
interim reporting periods, as well as annual reporting periods. FSP FAS 107-1 and APB 28-1 are effective for all interim and annual reporting periods ending after June 15,
2009 and did not impact the Company’s financial statements.
F-10
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. PREPAID EXPENSES
4. PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
Depreciation and amortization expense totaled $17,151 and $145,468 for the six months ended June 30, 2009 and 2008, respectively.
SIX MONTHS
ENDED YEAR ENDED
June 30, 2009 December 31, 2008
Rents 8,515 8,514
Business and health insurance -- 8,971
Assets held for use in 2009 launch -- 23,645
TOTAL $ 8,515 $ 41,130
SIX MONTHS
ENDED YEAR ENDED
June 30, 2009 December 31, 2008
Computer equipment 754,994 731,281
Website development 38,524 38,524
Equipment 1,565 1,565
Furniture and fixtures 9,430 9,430
Telephone equipment 5,365 5,365
Molds and tooling 120,217 120,214
TOTAL 930,095 906,379
Less accumulated depreciation (887,359 ) (879,924 )
NET PROPERTY AND EQUIPMENT $ 42,736 $ 26,455
SIX MONTHS
ENDED YEAR ENDED
June 30, 2009 December 31, 2008
Patents 212,062 $ 212,062
Trademarks 243,259 243,259
Software licensing 1,145,322 1,145,322
Software development costs 1,675,601 1,675,601
TOTAL 3,276,244 3,276,244
Less accumulated amortization (3,260,007 ) (3,250,220 )
NET INTANGIBLE ASSETS $ 16,237 $ 26,024
F-11
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. ACCRUED EXPENSES
6. SETTLEMENT AGREEMENT LIABILITY
On August 23, 2007, One Voice Technologies, Inc. (the "Company") entered into a Settlement Agreement and Mutual Release with La Jolla Cove Investors, Inc. ("LJCI")
pursuant to which the Company agreed with LJCI to forever settle, resolve and dispose of all claims, demands and causes of action asserted, existing or claimed to exist
between the parties because of or in any way related to a legal proceeding in the San Diego County Superior Court (the "Court") entitled La Jolla Cove Investors, Inc. vs. One
Voice Technologies, Inc., Case No. GIC850038 (the "Action"). LJCI received a judgment in its favor against the Company in connection with the Action whereby the
Company owes LJCI an amount equal to $408,594.48 (the "Owed Amount"). Under the Settlement Agreement, the parties reached a final resolution with respect to such Owed
Amount whereby (i) LJCI shall receive $200,000 within 15 days of the date of the Agreement and (ii) the difference between the Owed Amount and $200,000 shall be payable
at a later date (the "Remaining Owed Amount"). The payment of the Remaining amount owed of $208,594 shall be made to LJCI in the following manner:
SIX MONTHS
ENDED YEAR ENDED
June 30, 2009 December 31, 2008
Accrued salaries $ 302,005 $ 260,154
Accrued vacation & 401k 75,244 101,468
Accrued interest 488,739 385,129
Accrued commission 1,026 1,026
Accrued taxes 38,095 25,917
Accrued payables (other) 47,758 47,758
TOTAL $ 952,867 $ 821,452
· Concurrently with the execution of the Agreement, the Company shall transfer to an independent escrow agent, on behalf of LJCI, all right, title and interest to
30,000,000 shares of Common Stock of the Company (the "Escrow Shares"), issued in 30 increments of 1,000,000 shares. On the one year anniversary of the
Agreement, 1,000,000 Escrow Shares shall be released to LJCI whereby LJCI shall be able to sell such shares in open market transactions provided such sales do not
exceed more than 14% of the corresponding daily volume of such shares on the trading market on which the Company's securities are sold. LJCI shall continue to
receive the Escrow Shares, provided they satisfy the volume limitation set forth above and LJCI's ownership of the Company's common stock does not exceed 4.99%
of the Company's then issued and outstanding shares of common stock, until the Remaining Owed Amount is satisfied;
· Upon notice from LJCI that the Remaining Owed Amount has been satisfied by the sale of the Escrow Shares either (i) Alpha Capital Ansalt ("Alpha") shall have the
ability within 15 business days to purchase any remaining Escrow Shares at a 20% discount to the current market price of the shares or (ii) if Alpha does not exercise
its right to purchase the shares, the Company shall have the ability to redeem the remaining Escrow Shares within 5 business days.
· At anytime while the Remaining Owed Amount is outstanding, the Company or Alpha may pay in cash to LJCI an amount equal to the Remaining Owed Amount and
either (i) Alpha shall have the ability within 15 business days to purchase any remaining Escrow Shares at a 20% discount to the current market price of the shares or
(ii) if Alpha does not exercise its right to purchase the shares, the Company shall have the ability to redeem the remaining Escrow Shares within 5 business days.
F-12
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. SETTLEMENT AGREEMENT LIABILITY (CONTINUED)
LJCI has contractually agreed to restrict their ability to exercise the Escrow Shares such that the number of shares of the Company common stock held by it does not exceed
4.99% of the Company's then issued and outstanding shares of common stock.
Upon receipt of the Owed Amount, LJCI will file a Satisfaction of Judgment in the appropriate court and grant the Company a release from any and all actions related to the
Action.
7. LICENSE AGREEMENT LIABILITY
In March 2000 the Company entered into a Software License Agreement ("License Agreement") with Philips Speech Processing, a division of Philips Electronics North
America ("Philips"). Pursuant to the License Agreement, the Company received a world-wide, limited, nonexclusive license to certain speech recognition software owned by
Philips. The initial term of the License Agreement was three (3) years, and the License Agreement included an extended term provision under which the License Agreement
was automatically renewable for successive one (1) year periods, unless terminated by either party upon a minimum of sixty (60) days written notice prior to the expiration of
the initial term or any extended term.
The License Agreement provides for the Company to pay a specified commission on revenues from products incorporating licensed software, and includes minimum royalty
payment obligations over the initial three (3) year term of the License Agreement in the aggregate amount of $1,100,000.
The License Agreement has been amended as follows:
The first amendment to the License Agreement was entered into during March 2002.
The amendment also included a revised payment schedule of the minimum royalty payment obligation due that provided for semi-annual payments of $250,000 (due on March
31th and December 31st of each year). In lieu of scheduled payments, in May, 2003, based on a verbal agreement with the Company and Philips, the Company began making
monthly payments of $15,000, of which $10,000 is being applied against the remaining minimum royalty payment due and $5,000 is being applied as interest.
The second amendment to the License Agreement was entered into on February 1, 2007.
The following payment terms are as follows:
The 2006 past due amounts owed by the Company of $70,000 were allocated as follows:
As of June 30, 2009 the note payable balance due Philips Speech Processing was $1,336,500.
· The initial term of the License Agreement was extended for two (2) years.
· The aggregate minimum royalty payment was increased from $1,100,000 to $1,500,000.
· The Company paid $20,000 on February 23, 2007 to Philips.
· The remaining balance of $50,000 is to be paid in the form of a non-interest bearing note payable to Philips Speech Processing.
· During the period of January 1, 2007 thru March 31, 2008 the following payments will be allocated as follows: $6,000 is to be paid monthly by the Company
to Philips Speech Processing. The monthly remaining balance of $11,500 due to Philips Speech Processing is to be paid by the Company in the form of
a non-interest bearing note payable to Philips Speech Processing.
F-13
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. SHORT TERM NOTE PAYABLE
On June 8, 2007 the Company entered into agreement with Maguire Properties-Regents Square LLC. ("Landlord"). The agreement relates to past due office rents owed by the
Company to the Landlord. The landlord has agreed to accept payment in the form of a promissory note for $103,605.59. The promissory note has a term of 42 months and
bears an interest rate of 10.0% per annum, due December 1, 2010. Monthly payments of $2,933.78 are to be paid to the Landlord. All rent expenses related to the note have
been fully expensed in the proper periods.
As of June 30, 2009 the short term note payable balance due Maguire Properties-Regents Square LLC was $83,871 with the remaining balance classified as long term notes
payable. The Company has not made any payments towards this note, but has continued to accrue interest at the stated rate of 10% per annum.
On August 8, 2003 the Company entered into a note payable in the amount of $100,000 with an interest rate of 8% per annum. The note matured on August 8, 2008, but
remains outstanding in full at June 30, 2009. As of June 30, 2009, the Company is on default on this note.
9 . DEBT DERIVATIVE LIABILITY
Since inception, the Company has entered into several convertible debt financing agreements with several institutional investors. Embedded within these convertible financing
transactions are derivatives which require special treatment pursuant with SFAS No. 133 and EITF 00-19. The derivatives include but are not limited to the following
characteristics:
· Beneficial conversion features
· Early redemption option
· Registration rights and associated liquidated damage clauses
As a result of the valuation conducted as of June 30, 2009 the Company has incurred a net non-cash loss of $2,214,689 for the six months ended June 30, 2009.
The liability valuation calculated at June 30, 2009 and December 31, 2008, resulted in the fair value of the debt derivative liability being $4,020,171 and $1,805,482
respectively.
10. WARRANT DERIVATIVE LIABILITY
Since inception, the Company has issued warrants in connection with convertible debt financing agreements and private placements that required analysis in accordance with
EITF 00-19. EITF 00-19 specifies the conditions which must be met in order to classify warrants issued in a company's own stock as either equity or as a derivative liability.
Evaluation of these conditions under EITF 00-19 resulted in the determination that these warrants are classified as a derivative liability. In accordance with EITF 00-19,
warrants which are determined to be classified as derivative liabilities are marked-to-market each reporting period, with a corresponding non-cash gain or loss charged to the
current period. The Company valued all warrant derivative liabilities as of June 30, 2009 using a Black-Scholes option pricing model using the following assumptions:
expected dividend yield of 0.0%, expected stock price volatility of 246%, risk free interest rate of 1.76% and a remaining contractual life ranging from 0.1 years to 2.2 years.
As a result of the valuation conducted, the Company incurred net non-cash (loss) of ($27,037) for the six months ended June 30, 2009.
The liability valuation calculated at June 30, 2009 and December 31, 2008, resulted in the fair value of the warrant derivative liability being $58,303 and $31,266, respectively.
F-14
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. REVOLVING CREDIT NOTE PAYABLE
On December 21, 2006, the Company completed a private placement pursuant to a Revolving Credit Note Agreement which the Company entered into with several
institutional Investors, pursuant to which the Investors subscribed to advance up to a maximum amount of $640,000 bearing an interest rate of 7%. The term of the agreement
shall be effective as of December 21, 2008 and shall be in full force and effect until the earliest to occur of (a) 12 months from December 21, 2006 (B) a date not less than
thirty days after Lender gives notice of termination to the Company. In connection with the Revolving Credit Note Agreement, the Company also issued 20,000,000 shares of
its common stock to the related investors. Interest shall be calculated daily on the outstanding principal balance due, and is to be reimbursed to the Investors a monthly basis.
The reimbursement of the interest shall be in the form of the Company's restricted shares of common stock. The stock is to be valued at the month end stock closing price. The
advances to the Company are to be based on an amount of up to 75% of the face value of the current and future invoices "Receivables" submitted for borrowing. All proceeds
paid relating to the previously mentioned invoices are to be deposited into a lockbox [c1] account belonging to Investors. The lockbox proceeds are to be 100% applied
towards any outstanding principal amount owed by the Company. On January 10, 2008 the lockbox was terminated and subsequently all future "Receivables" go directly to the
Company and the Company is no longer obligated to apply any Receivables towards paying outstanding amount owed. In addition, the Company's obligation to repay all
principal and accrued and unpaid interest under the convertible notes is secured by the Company's assets pursuant to a certain Security Agreement dated February 16, 2006,
which also secures the remaining unconverted principal amount of the Company's convertible notes in the aggregate amount of $1,114,220 which the Company issued on
March 18, 2005, July 13, 2005, March 17, 2006 May 5, 2006, July 6, 2006 and August 29, 2006 to certain of the investors participating in this new private placement.
The original Revolving Credit Note agreement has been amended twenty times since inception. On the second amendment the principal and interest payment terms by the
Company to the lender had changed. The original note payment terms were that all outstanding principal and interest were to be paid in cash by the Company upon maturity of
the note.
The amendment provided an option to convert the outstanding balance into shares of the Company's restricted common stock. The following conversion privileges apply:
The lender may elect to convert at a conversion rate of the lower of (i)$0.015 or (ii) 80% of the lowest 3 day trading price of the past 30 trading days.
On June 21, 2009, the Company entered into the Third Modification Agreement to increase the maximum borrowing by the Company to an amount of $3,249,000 and to
modify the conversion price contained in the Second Amendment noted above. In addition, the terms were extended to June 21, 2011. The Second Amendment was modified
as follows:
“The foregoing notwithstanding, Interest and principal shall be payable in restricted shares of Debtor’s Common Stock valued at $0.001.”
Since inception the Company has borrowed $3,013,000 against the revolving note. During the same period the Company paid $386,317 against the outstanding balance for a
total net borrowing of $2,626,683 since inception. All borrowings are used to cover recurring operating expenses by the Company.
As of June 30, 2009 the outstanding principal amount owed to the Investors is $2,626,683. Interest accrued on the outstanding principal is $302,478 as of June 30, 2009.
12. LONG TERM NOTES PAYABLE
On June 8, 2007 the Company entered into agreement with Maguire Properties-Regents Square LLC. ("Landlord"). The agreement relates to past due office rents owed by the
Company to the Landlord. The landlord has agreed to accept payment in the form of a promissory note for $103,605.59. The promissory note has a term of 42 months and
bears an interest rate of 10.0% per annum, due December 1, 2010. Monthly payments of $2,933.78 are to be paid to the Landlord. All rent expenses related to the note have
been fully expensed in the proper periods. As of June 30, 2009 the long term notes payable balance due Maguire Properties-Regents Square LLC. was $19,734 with the
remaining balance of $83,871 being classified as short term notes payable.
At June 30, 2009 and December 31, 2008 the principal balance on the long term portion of notes payable was $19,734 and $67,742, respectively. Accrued interest as of June
30, 2009 is $11,208.
F-15
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. CONVERTIBLE NOTES PAYABLE SUMMARY
On September 7, 2007, the Company entered into a subscription agreement (the "Agreement") with accredited investors and/or qualified institutional investors (the
"Investors") pursuant to which the investors subscribed to purchase an aggregate principal amount of $420,000 in convertible promissory notes for an aggregate purchase price
of $210,000. The Company also issued 10,000,000 Class A common stock purchase warrants to the Investors. The Class A warrants are exercisable until four years from the
closing date at an exercise price of $0.02 per share. The exercise price of the Class A warrants will be adjusted in the event of any stock split or reverse stock split, stock
dividend, reclassification of common stock, recapitalization, merger or consolidation. In addition, the exercise price of the warrants will be adjusted in the event that we spin
off or otherwise divest ourselves of a material part of our business or operations or dispose all or a portion of our assets. The initial discount of $412,410 will be expensed over
the term of the agreement using the straight line method. The fair value of the warrants of $58,303 using the Black Scholes option pricing model is recorded as a derivative
liability. The proceeds of the offering were used to make payment towards a legal settlement agreement.
The secured convertible notes mature 1 year after the date of issuance. Each investor shall have the right to convert the secured convertible notes after the date of issuance and
at any time, until paid in full, at the election of the investor into fully paid and nonassessable shares of our common stock. The conversion price per share shall be the lower of
(i) $0.015 or (ii) 80% of the average of the three lowest closing bid prices for our common stock for the 30 trading days prior to, but not including, the conversion date as
reported by Bloomberg, L.P. on any principal market or exchange where our common stock is listed or traded. The conversion price is adjustable in the event of any stock split
or reverse stock split, stock dividend, reclassification of common stock, recapitalization, merger or consolidation. In addition, the conversion price of the secured convertible
notes will be adjusted in the event that we spin off or otherwise divest ourselves of a material part of our business or operations or dispose all or a portion of our assets.
No convertible debt agreements have been entered into during the six months ended June 30, 2009.
The Company must file a registration statement (Form SB-2) with the SEC for all the above financing transactions. Filing date is typically between 90 and 120 days of the
transaction date.
ISSUANCE SUMMARY
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2009 2008
Principal $ - $ 420,000
Warrants issued A&B - 10,000,000
CONVERSION SUMMARY
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2009
(Adjusted for impact
of 1-for-20 reverse
split)
2008
(Adjusted for impact
of 1-for-20 reverse
split)
Principal and interest Converted $ 105,594 $ 1,304,671
Shares converted 6,614,213 20,312,535
Average share conversion price $ 0.016 $ 0.06
F-16
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
14. COMMON STOCK
The following is a summary of transactions that had an impact on equity:
CONVERTIBLE DEBT CONVERSION BY INVESTOR
During the six months ended June 30, 2009 the Company issued 6,614,213 shares of its restricted common stock, adjusted for impact of 1-for-20 reverse split, having a market
value of $105,594 as settlement of convertible debt.
15. OTHER INCOME (EXPENSE)
Other income / (expense) totaled $(2,351,115) and $1,408,296 for the six months ended June 30, 2009 and 2008, respectively.
Other income (expense) consist of:
OTHER INCOME / (EXPENSE) SUMMARY
SIX MONTH ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2008 2008
SHARES
ISSUED
(Adjusted for impact
of 1-for-20 reverse
split)
AVERAGE
SHARE
PRICE
(Adjusted for impact
of 1-for-20 reverse
split) VALUE
SHARES
ISSUED
(Adjusted for impact
of 1-for-20 reverse
split)
AVERAGE
SHARE
PRICE
(Adjusted for impact
of 1-for-20 reverse
split) VALUE
Debt conversions 6,614,213 0.016 105,594 20,312,535 0.064 1,304,671
Issuance of stock in
exchange for services - - - 2,960,268 0.187 552,407
Stock issued for liquidated
damages - - - 150,000 0.160 24,000
Shares in escrow - - - 593,945 0.190 113,087
Total 6,614,213 0.016 105,594 24,016,748 0.083 1,994,165
SIX MONTH ENDED
JUNE 30,
2009 2008
Interest expense $ (115,765 ) $ (494,478 )
Gain / (Loss) on warrant and debt derivatives ( 2,241,726 ) 1,902,774
Other income 6,376 --
Total other income / (expense) $ (2,351,115 ) $ 1,408,296
F-17
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
15. OTHER INCOME (EXPENSE) (CONTINUED)
INTEREST EXPENSE
INTEREST EXPENSE SUMMARY
For six months ended June 30, 2009 and 2008, interest expense was $115,765 compared to $494,478 respectively. A decrease of $378,713 or 77%.
Interest expense is composed of three very distinct transactions, which vary in their financial treatment. Below is a brief explanation of the nature and treatment of these
expenses.
1. Monthly amortization of debt issue costs related to securing convertible debt Financing (legal fees etc...).
This represents a cash related transaction.
For the three months ended June 30, 2009 and 2008, interest expense related to debt issue costs was $0 compared to $29,077, respectively.
2. Monthly amortization of the embedded discount features within convertible debt financing.
This represents a non-cash transaction.
For the six months ended June 30, 2009, and 2008, interest expense related to the amortization of discount was $0 compared to $352,136 respectively.
3. Monthly accrued interest related to notes payable and convertible notes payable financing.
This represents a future cash transaction if the convertible interest accrued is not converted into common stock. No accrued interest related to convertible notes payable has
been paid in cash during the six months ended June 30, 2009 and 2008.
For the six months ended June 30, 2009 and 2008, interest expense related to notes payable and convertible notes payable was $115,765 compared to $113,265, respectively.
SIX MONTH ENDED
JUNE 30,
2009 2008
Debt issue cost -- 29,077
Discount amortization -- 352,136
Interest 115,765 113,265
TOTAL $ 115,765 $ 494,478
F-18
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
15. OTHER INCOME / (EXPENSE) (CONTINUED)
GAIN ON DEBT DERIVATIVES
For the six months ended June 30, 2009 and 2008, non-cash losses recorded on debt derivatives were ($2,214,689) and ($25,781) respectively.
See Note 9 in the accompanying notes to the financial statements for a full description of the nature of debt derivative transactions.
LOSS ON WARRANT DERIVATIVES
For the six months ended June 30, 2009 and 2008, non-cash (losses) / gains recorded on warrant derivatives were ($27,037) and $1,952,555 respectively.
See Note 10 in the accompanying notes to the financial statements for a brief description of the nature of warrant derivative transactions.
16. COMMITMENTS AND CONTINGENCIES
The Company leases its facilities under a lease that expires in 2009. The Company does not have future minimum rental payments required under operating leases that have
non cancelable lease terms in excess of one year as of June 30, 2009:
Rent expense amounted to $27,291 and $66,259 for the six months ended June 30, 2009 and 2008 respectively. The decrease of $38,968 is attributed to the relocation of the
corporate office in March 2009 to a less expensive facility
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
On July 14, 1999, the Company adopted an Incentive and Nonqualified Stock Option Plan (the "Plan") for its employees and consultants under which a maximum of 3,000,000
options (Amendment to increase the available shares from 1,500,000 to 3,000,000 approved by the shareholders in December 2001) and approved by the shareholders may be
granted to purchase common stock of the Company. On July 29, 2005 the Company adopted the 2005 Stock Incentive Plan and reserved 60,000,000 shares of the Company's
common stock for issuance under the 2005 Plan.
F-19
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN (CONTINUED)
Two types of options may be granted under the 2005 Plan: (1) Incentive Stock Options (also known as Qualified Stock Options) which may only be issued to employees of the
Company and whereby the exercise price of the option is not less than the fair market value of the common stock on the date it was reserved for issuance under the Plan; and
(2) Nonstatutory Stock Options which may be issued to either employees or consultants of the Company and whereby the exercise price of the option is greater than 85% of
the fair market value of the common stock on the date it was reserved for issuance under the plan. Grants of options may be made to employees and consultants without regard
to any performance measures. All options issued pursuant to the Plan vest at a rate of at least 20% per year over a 5-year period from the date of the grant or sooner if
approved by the Board of Directors. All options issued pursuant to the Plan are nontransferable and subject to forfeiture.
Upon termination of employment or service contract, all options vested or non-vested expire unless the options have been exercised in full, or in part within 90 days of such
event. Management reserves the right to extend vested options under certain circumstances, given approval by the Board of Directors.
On September 12, 2007 the Company granted 15,000,000 stock options to its employees and Board of Directors. The stock options issued are pursuant to the 2005 stock
option plan.
The total intrinsic value of vested options relating to employee and director compensation at June 30, 2009 was $0. The intrinsic value of $0 is due to the closing stock price
subsequent to the June 16, 2009 1-for-20 reverse stock split at June 30, 2009 of $0.02 being lower than any vested option grant price.
For the six months ended June 30, 2009 and 2008, there was $28,872 and $61,048 of total compensation expense recorded by the Company related to share-based
compensation.
As of June 30, 2009, there was approximately $14,436 of total unrecognized compensation cost related to share-based compensation arrangements with employees, directors
and contractors.
The Company's adjusted closing stock price subsequent to the June 16, 2009 1-for-20 reverse stock split reported by NASDAQ listed under symbol OVOE at June 30, 2009
was $0.02 per share.
STOCK OPTIONS ACTIVI TY
The following table is a summary for the two stock compensation plans adopted by the Company as of June 30, 2009.
SIX MONTH ENDED
JUNE 30, 2009
NUMBER OF
SHARES
AUTHORIZED
(Adjusted for impact
of 1-for-20
reverse split)
NUMBER OF
SHARES
OUTSTANDING
(Adjusted for impact
of 1-for-20
reverse split)
NUMBER OF
SHARES
AVAILABLE
FOR GRANT
(Adjusted for impact
of 1-for-20
reverse split)
Year 1999 plan 150,000 150,000 -
Year 2005 plan 3,000,000 2,921,700 3,300
Total 3,150,000 3,071,700 3,300
F-20
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN (CONTINUED)
A summary of the Company's stock option activity and related information is as follows for the year ended June 30, 2009 and 2008, respectively.
The following table summarizes the number of options authorized by the plan and available for distribution as of June 30, 2009 and 2008, respectively.
SIX MONTHS ENDED
JUNE 30,
2009 2008
NUMBER OF
SHARES
OUSTANDING
(Adjusted for
impact of 1-for-20
reverse split)
WEIGHTED
AVERAGE
EXERCISE
PRICE
(Adjusted for
impact of 1-for-20
reverse split)
NUMBER OF
SHARES
OUSTANDING
(Adjusted for
impact of 1-for-20
reverse split)
WEIGHTED
AVERAGE
EXERCISE
PRICE
(Adjusted for
impact of 1-for-20
reverse split)
Outstanding at beginning of year 3,071,700 $1.10 3,146,700 $1.08
Options granted 0 N/A 0 N/A
Options exercised 0 N/A 0 N/A
Options terminated 0 N/A 0 N/A
OPTIONS OUTSTANDING AT END OF 2ND QUARTER 3,071,700 1.10 3,146,700 1.08
OPTIONS EXERCISABLE AT END OF 2ND QUARTER 2,830,033 $1.16 2,646,700 $1.22
SIX MONTHS ENDED
JUNE 30,
2009 2008
NUMBER OF
SHARES
(Adjusted for
impact of 1-for-20
reverse split)
NUMBER OF
SHARES
(Adjusted for
impact of 1-for-20
reverse split)
Beginning options available for grant 78,300 3,300
Add: Additional options authorized -- --
Less: Options granted -- --
Add: Options terminated -- --
ENDING OPTIONS AVAILABLE FOR DISTRIBUTION 78,300 3,300
F-21
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN (CONTINUED)
The following tables summarize the number of option shares, the weighted average exercise price and the weighted average life (by years) by price range for both total
outstanding options and total exercisable options as of June 30, 2009 and 2008, respectively.
SIX MONTHS ENDED JUNE 30, 2009
TOTAL OUSTANDING TOTAL EXERCISABLE
PRICE RANGE
(Adjusted for
impact of 1-for-20
reverse split)
# OF SHARES
(Adjusted for
impact of 1-for-20
reverse split)
WEIGHTED
AVERAGE
EXERCISE
PRICE
(Adjusted for
impact of 1-for-20
reverse split) LIFE
# OF SHARES
(Adjusted for impact
of 1-for-20 reverse
split)
WEIGHTED
AVERAGE
EXERCISE
PRICE
(Adjusted for
impact of 1-for-20
reverse split) LIFE
$136.00 - $256.00 12,000 $ 143.16 1.14 12,000 $ 143.16 1.14
$6.40 - $40.00 34,700 17.34 2.03 34,700 17.34 2.03
$0.32 - $3.80 3,025,000 0.34 5.73 2,783,333 0.34 5.95
TOTAL 3,071,700 $ 1.10 7.17 2,830,033 $ 1.16 7.46
SIX MONTHS ENDED JUNE 30, 2008
TOTAL OUSTANDING TOTAL EXERCISABLE
PRICE RANGE
(Adjusted for
impact of 1-for-20
reverse split)
# OF SHARES
(Adjusted for
impact of 1-for-20
everse split)
WEIGHTED
AVERAGE
EXERCISE
PRICE
(Adjusted for
impact of 1-for-20
reverse split) LIFE
# OF SHARES
(Adjusted for
impact of 1-for-20
reverse split)
WEIGHTED
AVERAGE
EXERCISE
PRICE
(Adjusted for
impact of 1-for-20
reverse split) LIFE
$136.00 - $256.00 12,000 $ 143.16 2.14 12,000 $ 143.16 2.14
$6.40 - $40.00 34,700 17.34 3.03 34,700 17.34 3.03
$0.32 - $3.80 3,100,000 0.34 6.73 2,600,000 0.34 7.22
TOTAL 3,146,700 $ 1.08 6.67 2,646,700 $ 1.22 7.14
F-22
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN (CONTINUED)
A summary of option activity and the average intrinsic value that relate to employee, director and contractor compensation as of June 30, 2009 and 2008, respectively is
presented below:
Note: Assumes only options above water are to be exercised, the closing stock price is under the price of any options granted. Calculation is based on closing stock price of $
0.02 per share, adjusted for impact of 1-for-20 reverse split, dated June 30, 2009 and $ 0.014 per share, adjusted for impact of 1-for-20 reverse split, dated June 30, 2008.
SIX MONTHS ENDED JUNE 30,
2009
WEIGHTED
OPTIONS RELATING TO EMPLOYEE, CONSULTANTS AVERAGE AVERAGE
AND DIRECTOR COMPENSATION GRANT-DATE INTRINSIC
# OF SHARES
(Adjusted for
impact of 1-for-20
reverse split)
FAIR VALUE
(Adjusted for
impact of 1-for-20
reverse split) LIFE
VALUE
(Adjusted for
impact of 1-for-20
reverse split)
Outstanding at beginning of year 3,071,700 $ 1.10 7.17 N/A
Options granted - N/A N/A N/A
Options exercised - N/A N/A N/A
Options terminated - N/A N/A N/A
OPTIONS OUTSTANDING AT END OF 2ND QUARTER 3,071,700 $ 1.10 5.67 N/A
OPTIONS EXERCISABLE AT END OF 2ND QUARTER 2,830,033 $ 1.16 5.89 N/A
SIX MONTHS ENDED JUNE 30,
2008
WEIGHTED
OPTIONS RELATING OT EMPLOYEE, CONSULTANTS AVERAGE AVERAGE
AND DIRECTOR COMPENSATION GRANT-DATE INTRINSIC
# OF SHARES
(Adjusted for
impact of 1-for-20
reverse split)
FAIR VALUE
(Adjusted for
impact of 1-for-20
reverse split) LIFE
VALUE
(Adjusted for
impact of 1-for-20
reverse split)
Outstanding at beginning of year 3,146,700 $ 1.08 0.05 N/A
Options granted - N/A N/A N/A
Options exercised - N/A N/A N/A
Options terminated - N/A N/A N/A
OPTIONS OUTSTANDING AT END OF 2ND QUARTER 3,146,700 $ 1.08 6.67 N/A
OPTIONS EXERCISABLE AT END OF 2ND QUARTER 2,646,700 $ 1.22 7.14 N/A
F-23
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN (CONTINUED)
A summary of the status of the Company's non-vested option shares relating to employee and director compensation as of June 30, 2009 and 2008, and changes during the
periods ended June 30, 2009 and 2008, respectively is presented below:
In addition to the assumptions in the below table, the Company applies a forfeiture-rate assumption in its estimate of fair value that is primarily based on historical annual
forfeiture rates of the Company.
The above options carry vesting date's as follows: 1/3 of the options vest on the grant date, 1/3 of the options vest one year after the grant date, the final 1/3 of the options vest
two years after the grant date.
On July 14, 1999, the Company adopted an Incentive and Nonqualified Stock Option Plan (the "Plan") for its employees and consultants under which a maximum of 3,000,000
options (Amendment to increase the available shares from 1,500,000 to 3,000,000 approved by the shareholders in December 2001) and approved by the shareholders may be
granted to purchase common stock of the Company. On July 29, 2005 the Company adopted the 2005 Stock Incentive Plan and reserved 3,000,000 shares, adjusted for impact
of 1-for-20 reverse split, of the Company's common stock for issuance under the 2005 Plan.
SIX MONTHS ENDED JUNE 30,
2009 2008
WEIGHTED WEIGHTED
NON VESTED OPTIONS RELATING TO EMPLOYEE, AVERAGE AVERAGE
CONSULTANTS AND DIRECTOR COMPENSATION GRANT-DATE GRANT-DATE
# OF SHARES
(Adjusted for
impact of 1-for-20
reverse split)
FAIR VALUE
(Adjusted for
impact of 1-for-20
reverse split)
# OF SHARES
(Adjusted for
impact of 1-for-20
reverse split)
FAIR VALUE
(Adjusted for
impact of 1-for-20
reverse split)
Outstanding at beginning of year 241,667 $ 0.18 3,146,700 $ 0.32
Options granted - N/A - N/A
Options exercised - N/A - N/A
Options vested - N/A (2,646,700 ) 0.017
Options terminated - N/A - N/A
NON VESTED AT END OF 2ND QUARTER 241,667 $ 0.18 500,000 $ 0.38
Expected dividend yield 0.00%
Expected volatility 113.00%
Average risk-free interest rate 4.74%
Expected life (in years) 2.16 to 8.07
F-24
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN (CONTINUED)
Stock options: The Company generally grants stock options to employees at exercise prices equal to the fair market value of the Company's stock at the dates of grant. Stock
options may be granted throughout the year, vest immediately, vest based on years of continuous service, or vest upon completion of specified performance conditions. Stock
options granted prior to September 12, 2007 expire 10 years following the initial grant date. Stock options granted on or after September 12, 2007 expire 5 years following the
initial grant date. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period for each separate vesting portion of
the stock option award, or, for awards with performance conditions, when the performance condition is met.
Warrant options: The Company generally grants warrant options to directors and consultants at exercise prices equal to the fair market value of the Company's stock at the
dates of grant. Stock warrants and options may be granted throughout the year, vest immediately, vest based on years of continuous service, or vest upon completion of
specified performance conditions, and expire 10 years following the initial grant date. The Company recognizes compensation expense for the fair value of the stock options
over the requisite service period for each separate vesting portion of the stock option award, or, for awards with performance conditions, when the performance condition is
met.
The fair value of each option and warrant award is estimated on the date of grant using the Black-Scholes option-pricing model that uses the assumptions noted in the
following table. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options. In addition, option valuation models require
the input of highly subjective assumptions including the expected stock price volatility. Because the Company's stock options and warrants have characteristics significantly
different from those of traded options, and because changes in the subjective assumptions can materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of its stock options and warrants. The expected dividend yield assumption is based on the
Company's expectation of dividend payouts. Expected volatilities are based on historical volatility of the Company's stock. The average risk-free interest rate is based on the
U.S. treasury yield curve in effect as of the grant date. The expected life is primarily determined using guidance from SAB 107. As such, the expected life of the options and
warrants is the average of the vesting term and the full contractual term of the options and warrants.
SFAS 123(R) requires the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options to be
classified as financing cash flows. Due to the Company's loss position, there were no such tax benefits for the six months ended June 30, 2008 and 2007. Prior to the adoption
of SFAS 123(R), those benefits would have been reported as operating cash flows had the Company received any tax benefits related to stock option exercises.
18. WARRANTS
As a normal business practice, the Company grants warrants to Investors who participate in the financing of the Company. Warrants issued are an additional incentive to the
Investors and also provide additional cash flow for the Company upon exercise.
At June 30, 2009, the Company had warrants outstanding that allow the holders to purchase up to 12,346,197 shares of common stock, adjusted for impact of 1-for-20 reverse
split.
At June 30, 2009, the weighted average remaining contractual life of the warrants was approximately 19 months.
F-25
ONE VOICE TECHNOLOGIES INC.
CONDENSED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
18. WARRANTS (CONTINUED)
The number and weighted average exercise prices of the warrants for the six months ended June 30, 2009 and 2008 are as follows:
19. REVERSE STOCK SPLIT
Effective June 16, 2009, the Company completed a 1-for-20 reverse split of its common stock as approved by a majority vote of the Company's stockholders on May 22,
2009. As of June 16, 2009 the Company’s shares began trading on a split adjusted basis under the new symbol OVOE.
As a result of the reverse stock split, stockholders received one new share of common stock for every twenty shares. Registered holders received a letter of transmittal shortly
after the effective date with instructions for the exchange of stock certificates. Stockholders with shares in brokerage accounts were contacted by their brokers with
instructions.
Fractional or partial shares were not be issued and instead were rounded up to the nearest whole number of shares.
20. SUBSEQUENT EVENTS
In October 2007 both the Company and Mantec Consultants ("Mantec") entered into a contract with Mahanagar Telephone Nigam Ltd. ("MTNL") of India to provide
MobileVoice services to MTNL's over 6 million subscribers. Mantec is One Voice's local sales associate in India. MTNL is owned and operated by the Government of
India. On July 31, 2009 MTNL officially launched their marketing campaign to their subscribers in the Delhi region and we are now working on a launch to MTNL
subscribers in the Mumbai region. The revenue generated from this launch with MTNL should have a material impact on the Company in future periods. The Company has
finalized initial system and acceptance testing with a domestic US based carrier with over 10 million subscribers. The Company is currently in the final testing phase with this
carrier and have been working closely with them to customize systems according to their testing feedback. The Company is also negotiating terms and conditions and
anticipate a national launch in 2009.
SIX MONTHS ENDED JUNE 30,
2009 2008
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
# OF SHARES
(Adjusted for impact
of 1-for-20 reverse
split)
PRICE
(Adjusted for impact
of 1-for-20 reverse
split)
# OF SHARES
(Adjusted for impact
of 1-for-20 reverse
split)
PRICE
(Adjusted for impact
of 1-for-20 reverse
split)
Outstanding at beginning of year 13,795,345 $ 0.32 13,802,637 $ 0.28
Warrants granted - N/A - N/A
Warrants exercised - N/A - N/A
Warrants terminated (1,449,149 ) N/A (7,292 ) N/A
WARRANTS OUSTANDING AT END OF 2nd QUARTER 12,346,196 $ 0.32 13,795,345 $ 0.28
WARRANTS EXERCISABLE AT END OF 2nd QUARTER 12,346,196 $ 0.32 13,795,345 $ 0.28
F-26
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular,
the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can
be identified by the use of words such as "believes," "estimates," "could," "possibly," "probably," anticipates," "projects," "expects," "may," "will," or "should" or other
variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements
reflect management's current expectations and are inherently uncertain. Our actual results may differ significantly from management's expectations.
The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the
results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future.
Such discussion represents only the best present assessment of our management.
OVERVIEW OF THE BUSINESS
One Voice Technologies, Inc. is a voice recognition technology company with over $43 million invested in Research and Development and deployment of more than 20
million products worldwide in seven languages. To date, our customers include: Mahanagar Telephone Nigam Ltd. ("MTNL") of India, Telefonos de Mexico, S.A.B. de C.V.
(TELMEX), Intel Corporation, Fry's Electronics, Nex-Tec Wireless, Rural Independent Networks, Mohave Wireless, Inland Cellular and several additional telecom service
providers throughout the United States.
Based on our patented technology, One Voice offers voice solutions for the Telecom and Interactive Multimedia markets. Our telecom solutions allow business and consumer
phone users to voice dial, group conference call, read and send e-mail and instant messages, all by voice. We offer PC Original Equipment Manufacturers (OEM's) the ability
to bundle a complete voice interactive computer assistant which allows PC users to talk to their computers to quickly play digital media (music, videos, DVD) along with read
and send e-mail
messages, SMS text messaging to mobile phones, PC-to-Phone calling (VoIP) and PC-to-PC audio/video. We feel we are strongly positioned across these markets with our
patented voice technology.
The Company believes that the presence of voice technology as an interface in mobile communications and PC computing is of paramount importance. Voice interface
technology makes portable communications more effective and safer to use and it makes communicating with a PC to play digital content, such as music, videos and photos,
easier for consumers. One Voice's development efforts currently are focused on the Telecom and PC multimedia markets and more specifically on mobile communications
from a cell phone, directory assistance and in-home digital media access.
On May 22, 2009, the Company held a special meeting of its shareholders whereby a majority of the shareholders approved a reverse split of the Company’s issued and
outstanding stock on a 1-for-20 basis. The reverse split and symbol change were effective as of June 16, 2009 and the Company’s common stock now trades under the symbol
“OVOE”.
TELECOM SECTOR
In the Telecom sector, we believe that the Mobile Messaging market, which has both business and consumer market applications including: e-mail, instant messages, and SMS
(Short Message Service), is extremely large and is growing at an astonishing rate. One Voice solutions enable users to send, route and receive text messages using voice from
any type of phone (wired or wireless) anywhere in the world.
The Company's strategy, in the telecom sector, is to continue aggressive sales and marketing activities for our voice solutions, which we believe, may result in increased
deployments and revenue stream. The product offerings will encompass both MobileVoice(TM) suite of solutions as well as our Directory Assistance 411 service.
In 2006, the Company signed a deployment contract with the residential group within TELMEX for deployment of One Voice's MobileVoice solutions to the over 19 million
TELMEX subscribers throughout Mexico. The MobileVoice service was launched to TELNOR subscribers, a TELMEX subsidiary, in October, 2007 as a TELNOR branded
service called IRIS. For information on IRIS visit http://www.yosoyiris.com or http://www.telnor.com. The MobileVoice (IRIS) service has tested and performed very well as
anticipated. We are working closely with TELNOR to ensure the IRIS service is very successful and the feedback to date has been very positive. We are currently working
with TELNOR to relaunch IRIS as a standard bundle included with all new and existing TELNOR Package customers and anticipate this happening during 2009. Subsequent
to this relaunch within TELNOR, TELMEX will evaluate the results and make a determination regarding a national launch as a bundle to all TELMEX Package customers.
1
In October 2007 both the Company and Mantec Consultants ("Mantec") entered into a contract with Mahanagar Telephone Nigam Ltd. ("MTNL") of India to provide
MobileVoice services to MTNL's over 6 million subscribers. Mantec is One Voice's local sales associate in India. MTNL is owned and operated by the Government of India.
The Company and Mantec are currently working on deployment of hardware and systems integration with MTNL. According to MTNL, the MobileVoice service will be made
available to MTNL's existing 6.13 million subscribers for MobileVoice email by phone service and the total expected customers for this service is .92 million within the first
two years. MTNL has set the monthly subscription price of $Rs. 50/- (Rupees) monthly per subscriber out of which the Company has a 30% share. We anticipate the MTNL
revenue stream to grow as we launch additional MobileVoice services including voice dialing, group call and voice-to-SMS services. In order to expedite the launch with
MTNL we decided to initially launch email by phone and the revenue projections given by the marketing department of MTNL reflect the email by phone service only. We
anticipate this revenue projection to grow as additional MobileVoice services are launched to MTNL subscribers. We launched our services by MTNL in June, 2009. On July
31, 2009 MTNL officially launched their marketing campaign to their subscribers in the Delhi region and we are now working on a launch to MTNL subscribers in the
Mumbai region. The revenue generated from this launch with MTNL should have a material impact on the Company in future periods.
The Company has finalized initial system and acceptance testing with a domestic US based carrier with over 10 million subscribers. We are currently in the final testing phase
with this carrier and have been working closely with them to customize our system according to their testing feedback. We are also negotiating terms and conditions and
anticipate a national launch in 2009.
EMBEDDED SECTOR
On August 15, 2007 the Company signed a Memorandum of Understanding ("MOU") with Intel Corporation in which both companies will work together to add One Voice's
voice technology to a Linux based handheld device. The Company sees a potential opportunity with this mass consumer electronics (CE) device and will apply the necessary
resources to co-develop this project. We have been working closely with Intel engineers to add voice control to their Moblin operating system. We have recently demonstrated
this capability in the Intel booth at the 2007 Consumer Electronics Show, Mobile World Congress and the upcoming Intel Developers Forum. We have also ported our
software to RedFlag Linux. Both RedFlag Linux and Moblin are the primary operating systems used on Mobile Internet Devices (MIDs). Both One Voice and Intel have
jointly presented our voice solution to several MID OEM's worldwide. Currently the MID market is very small and has not gained enough traction for One Voice to focus
resources on this market. One Voice is currently focusing all our resources on Telecom launches during 2009 and will wait until the MID market matures and gains industry
acceptance before we readdress this market. We have evaluated launching applications on the iPhone and BlackBerry but the current state for voice control applications for
these devices from competitors offering free software is not in line with our focus on near-term revenue generating opportunities that we currently have in the Telecom sector.
PC SECTOR
In the PC sector, we believe that digital in-home entertainment is rapidly growing with the wide acceptance of digital photography, MP3 music and videos, along with plasma
and LCD TV's. We believe that companies including Apple, Microsoft and Intel are actively creating products and technology, which allow consumers to experience the nextgeneration
of digital entertainment. The Company's Media Center Communicator(TM) product works with Microsoft Windows XP Media Center Edition and Microsoft
Windows Vista to add voice-navigation and a full suite of communication features allowing consumers to talk to their Media Center PC to play music, view photo slideshows,
watch and record TV, place Voice-Over-IP (VoIP) phone calls, read and send e-mail and Instant Message friends and family, all by voice. The company recently launched a
new retail product called VoiceTunes. VoiceTunes allows users to voice control their entire music library including Apple iTunes and Windows Media. This product is similar
to our flagship product Media Center Communicator but is very focused on music. In addition, the Company launched a voice controlled PC gaming software called
Say2Play. Say2Play gives gamers a tremendous advantage by adding voice command for common game macros while allowing the gamer to keep their hands and fingers on
the keyboard and mouse for rapid motion movements. Say2Play has recently received several very positive editorial reviews and is available for purchase online.
The Company has changed our focus from in-store on-shelf retail sales to only offering online downloadable retail versions. The Company’s retail products are now available
for immediate purchase and download on the new Dell Download Store at http://downloadstore.dell.com as the only products in the category of Voice Control.
PATENTS
The Company has retained the services of a patent litigation firm in order to enforce our patented technology rights throughout the industry. The Company feels strongly that
several companies have launched voice solutions that are unlawfully using our patented technology. One Voice will aggressively pursue these companies to enforce our
patents.
2
SUMMARY
The Company has products and services in several sectors discussed above but we are now heavily focused on revenue generation in the telecom sector and patent
enforcement. Management believes the Company's deployment of services in the US, India and Mexico signifies the acceptance of our technology and the value it delivers to
our customers and their subscribers.
The management team remains committed to generating short and long-term revenues significant enough to fund daily operations, expand the intellectual property portfolio
and development of cutting edge solutions and applications for the emerging speech recognition market sector which should build shareholder value.
CRITICAL ACCOUNTING POLICIES
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect
the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates,
including those related to impairment of property, plant and equipment, intangible assets, deferred tax assets, fair value of derivative liabilities and fair value of options or
warrants computation using Black Scholes option pricing model. We base our estimates on historical experience and on various other assumptions, such as the trading value of
our common stock and estimated future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions; however, we believe that our estimates, including those for the above-described items, are reasonable.
The following is a discussion that relates to certain financial transactions and the results of operations for the three months ended June 30, 2009 and 2008.
RESULTS OF OPERATION FOR THE THREE MONTHS ENDED JUNE 30, 2008 AND 2009.
REVENUES
Net revenues totaled $85,915and $145,373 for the three months ended June 30, 2009 and 2008, respectively. The decrease of $59,458 or 41% was due to certain Telecom
contracts expired in 2008 after their initial 3-year term.
COST OF GOODS SOLD
Cost of goods sold for the three months ended June 30, 2009 and 2008 totaled $53,148 and $99,286, respectively. The decrease of $46,138 or 46% was primarily due to the
decrease in revenues during the year and a decreased employee headcount. These expenses specifically relate to licensing agreements and telecommunication expenses that
allow the voice recognition products offered to be functional.
ONE VOICE TECHNOLOGIES INC.
SELECTED STATEMENT OF OPERATIONS INFORMATION
THREE MONTHS ENDED FAV/ (UN FAV) PERCENTAGE
JUNE 30, JUNE 30, CHANGE CHANGE
2008 2009
----------- ----------- ----------- ------
Net Revenue $ 145,373 $ 85,915 $ (59,458) -41%
Cost of goods sold 99,286 53,148 46,138 46%
----------- ----------- ----------- ------
GROSS PROFIT 46,087 32,767 (13,320) -29%
General and administrative expenses 1,102,096 269,187 832,909 -76%
Other income (expense) 361,296 (2,268,822) (2,630,118) -728%
----------- ----------- ----------- ------
NET LOSS BEFORE INCOME TAX (694,713) (2,505,242) (1,810,529) -261%
Income tax expense -- -- -- 0%
----------- ----------- ----------- ------
Net income / (loss) $ (694,713) $(2,505,242) (1,810,529) -261%
=========== =========== =========== ======
3
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expenses totaled $269,187 and $1,102,096 for the three months ended June 30, 2009 and 2008, respectively. The decrease of $832,909 or 76% was
primarily due to decreases in salary and compensation, a decrease in accounting and legal fees, and a decrease in depreciation and amortization for the three months ended
June 30, 2009 as compared to the three months ended June 30, 2008.
SALARY AND COMPENSATION
Salary and wage related expenses totaled $151,795 and $369,016 for the three months ended June 30, 2009 and 2008, respectively. The decrease of $217,221or 59% was
primarily due to voluntary reductions in salaries for current employees, paired with headcount reductions.
ACCOUNTING AND LEGAL
The Company incurred accounting and legal fees of $31,628 and $84,673 for the three months ended June 30, 2009 and 2008, respectively.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense totaled $8,104 and $11,397 for the three months ended June 30, 2009 and 2008, respectively. The decrease of $3,293 or 29% is due to
the full depreciation and amortization of certain assets during 2008 and additions in June 2009 that had no impact on depreciation and amortization for the quarter..
OTHER INCOME
Other income / (expense) totaled $(2,268,822) and $361,296 for the three months ended June 30, 2009 and 2008, respectively. The increase in expense of $2,630,118 can be
directly related to non cash income / (expense) activity, more specifically the revaluation of both debt and warrant derivatives.
(LOSS) ON DEBT DERIVATIVES
For the three months ended June 30, 2009 and 2008, (losses) recorded on debt derivatives were ($2,252,829) and ($425,160), respectively.
See Note 9 in the accompanying notes to the financial statements for a brief description of the nature of the debt derivative transactions.
(LOSS) / GAIN ON WARRANT DERIVATIVES
For the three months ended June 30, 2009 and 2008, we had (loss) / gain of $69,761 and $1,026,180 respectively.
See Note 10 in the accompanying notes to the financial statements for a brief description of the nature of warrant derivative transactions.
LIQUIDITY AND CAPITAL RESOURCES
NON-CASH ITEMS AFFECTING THE COMPANY'S NET LOSS
Non-cash related expense items of $2,345,130 are reflected in the net (loss) for the three months ended June 30, 2009. In this example the non-cash expense items are added
back, and non cash income items are deducted from the Company's net income / (loss).
Non-cash items consisted of the following items:
The above information is intended to illustrate the impact that these specific expenses have on the Company's net income/(loss). There are no cash transactions that related to
these expenses. More specifically, this table is shown to demonstrate the impact that the re-valuation of warrant and debt derivatives have on the income statement. Please note
that this table is not in conformity with auditing standards generally accepted in the United States of America.
THREE MONTHS ENDED
JUNE 30, 2009
Depreciation and amortization 8,104
Stock compensation expense 14,436
Loss on warrant and debt derivatives 2,183,068
-----------
TOTAL NON-CASH RELATED EXPENSE ITEMS 2,205,608
4
The following is a discussion that relates to certain financial transactions and the results of operations for the six months ended June 30, 2009 and 2008.
RESULTS OF OPERATION FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008.
REVENUES
Net revenues totaled $167,232 and $334,125 for the six months ended June 30, 2009 and 2008, respectively. The decrease of $166,893 or 50% was due to certain Telecom
contracts expired in 2008 after their initial 3-year term.
COST OF GOODS SOLD
Cost of goods sold for the six months ended June 30, 2009 and 2008 totaled $106,761 and $194,211 respectively. The decrease of $87,450 or 45% was primarily due to the
decreases in revenues during the year and a decreased employee headcount. These expenses specifically relate to licensing agreements and telecommunication expenses that
allow the voice recognition products offered to be functional.
GENERAL AND ADMINISTRATIVE EXPENSE
General and administrative expenses totaled $619,668 and $1,851,632 for the six months ended June 30, 2009 and 2008, respectively. The decrease of $1,231,964 or 67% was
primarily due to decreases in salary and compensation, a decrease in accounting and legal fees, and a decrease in depreciation and amortization for the six months ended June
30, 2009 as compared to the six months ended June 30, 2008.
SALARY AND COMPENSATION
Salary and wage related expenses totaled $335,420 and $709,184 for the six months ended June 30, 2009 and 2008, respectively. The decrease of $373,764 or 53% was
primarily due to voluntary reductions in salaries for current employees, paired with headcount reductions.
ACCOUNTING AND LEGAL
The Company incurred accounting and legal fees of $40,533 and $159,094 for the six months ended June 30, 2009 and 2008, respectively.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense totaled $17,151 and $145,468 for the six months ended June 30, 2009 and 2008, respectively. The decrease of $128,317 or 88% was
due to the full amortization of capitalized costs associated with the design and development during the six months ended June 30, 2008 of a product for which the completion
and launch time frame could not be accurately estimated by management.
ONE VOICE TECHNOLOGIES INC.
SELECTED STATEMENT OF OPERATIONS INFORMATION
--------------------------------------------
SIX MONTHS ENDED FAV/ (UN FAV) PERCENTAGE
JUNE 30, JUNE 30, CHANGE CHANGE
2008 2009
----------- ----------- ----------- -----------
Net Revenue $ 334,125 $ 167,232 $ (166,893) -50%
Cost of goods sold 194,211 106,761 (87,450) (45%)
----------- ----------- ----------- -----------
GROSS PROFIT 139,914 60,471 (79,443) (57%)
General and administrative expenses 1,851,632 619,668 (1,231,964) (67)%
Other income (expense) 1,408,296 (2,351,115) (3,759,411) -267%
----------- ----------- ----------- -----------
NET LOSS BEFORE INCOME TAX (303,422) (2,910,312) (2,606,890) -859%
Income tax expense 800 - 800 100%
----------- ----------- ----------- -----------
Net loss $ (304,222) (2,910,312) (2,606,090) -857%
=========== =========== =========== ===========
5
OTHER INCOME (EXPENSE)
Other income / (expense) totaled ($2,351,115) and 1,408,296 for the six months ended June 30, 2009 and 2008, respectively. The increase in the expense of $3,759,411 can be
directly related to non cash (expense) activity, more specifically the revaluation of both debt and warrant derivatives.
(LOSS) ON DEBT DERIVATIVES
For the six months ended June 30, 2009 and 2008, non-cash losses recorded on debt derivatives were ($2,214,689) and ($25,781) respectively.
See Note 9 in the accompanying notes to the financial statements for a brief description of the nature of debt derivative transactions.
GAIN / (LOSS) ON WARRANT DERIVATIVES
For the six months ended June 30, 2009 and 2008, non-cash (losses) / gains were ($27,037) and $1,952,555 respectively.
See Note 10 in the accompanying notes to the financial statements for a brief description of the nature of warrant derivative transactions.
OTHER INCOME / (EXPENSE)
For six months ended June 30, 2009 and 2008, the Company incurred ($6,376) compared to other income $0 respectively.
LIQUIDITY AND CAPITAL RESOURCES
NON-CASH ITEMS AFFECTING THE COMPANY'S NET LOSS
Non-cash related (income) / expense items of items of $2,287,749 are reflected in the net (loss) for the six months ended June 30, 2009. In this example non-cash expense
items are added back, and non-cash income items are deducted from the Company's net income / (loss).
Non-cash items consisted of the following items:
The above information is intended to illustrate the impact that these specific expenses have on the Company's net income/(loss). There are no cash transactions that related to
these expenses. More specifically, this table is shown to demonstrate the impact that the re-valuation of warrant and debt derivatives have on the income statement. Please note
that this table is not in conformity with auditing standards generally accepted in the United States of America.
CASH FLOW AND WORKING CAPITAL
At June 30, 2009, the Company had a working capital deficit of $10,364,471 as compared with a working capital deficit of $7,534,123 at December 31, 2008.
Net cash used for operating activities is $344,644 for the six months ended June 30, 2009 compared to $828,867 for the six months ended June 30, 2008.
Net cash used for investing activities is $0 for the six months ended June 30, 2009 compared to $3,221 for the six months ended June 30, 2008.
Net cash provided by financing activities is $345,500 for the six months ended June 30, 2009 compared to $840,000 for the six months ended June 30, 2008.
See financing transaction details below.
SIX MONTHS ENDED
JUNE 30, 2009
Depreciation and amortization 17,151
Stock compensation expense 28,872
(Gain) on warrant and debt derivatives 2,241,726
-----------
TOTAL NON-CASH RELATED (INCOME) / EXPENSE ITEMS 2,287,749
===========
6
FINANCING TRANSACTIONS
The following is a discussion that summarizes the net financing and conversion activities for the six months ended June 30, 2009 and 2008.
NET CASH PROCEEDS RECEIVED DUE TO FINANCING ACTIVITY
CONVERTIBLE NOTES PAYABLE SUMMARY
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008
------------ ------------
Revolving line of credit net of pay down $ 345,500 $ 840,000
------------ ------------
TOTAL FINANCING ACTIVITY $ 345,500 $ 840,000
============ ============
CONVERSION SUMMARY SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2009 2008
(Adjusted for impact of (Adjusted for impact of
1-20 reverse split) 1-20 reverse split)
------------ ------------
Principal and interest Converted $ 105,594 $ 546,313
Shares converted 6,614,213 3,827,647
Average share conversion price $ 0.016 $ 0.143
7
COMMON STOCK
The following is a summary of transactions that had an impact on equity:
REVOLVING CREDIT NOTE PAYABLE
On December 21, 2006, the Company completed a private placement pursuant to a Revolving Credit Note Agreement which the Company entered into with several
institutional investors, pursuant to which the Investors subscribed to advance up to a maximum amount of $640,000 bearing an interest rate of 7%. The term of the agreement
shall be effective as of December 21, 2006 and shall be in full force and effect until the earliest to occur of (a) 12 months from December 21, 2006 (B) a date not less than
thirty days after Lender gives notice of termination to the Company.
The original Revolving Credit Note agreement has been amended twenty times during the term of the agreement including the Third Modification on June 21, 2009 which
increased the maximum borrowing by the Company to an amount of $3,249,000.
Since inception the Company has borrowed $3,013,000 against the revolving note. During the same period the Company paid $368,317 against the outstanding balance for a
total net borrowing of $2,626,683 since inception. All borrowings are used to cover recurring operating expenses by the Company.
As of June 30, 2009 the outstanding principal amount owed to the Investors is $2,626,683. Interest accrued on the outstanding principal is $302,478 as of June 30, 2009.
(Adjusted for impact of 1-for-20 reverse split )
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2009 2008
AVERAGE AVERAGE
SHARES SHARE SHARES SHARE
ISSUED PRICE VALUE ISSUED PRICE VALUE
----------- ------ ----------- ----------- ------ --------
---
Debt conversions 6,614,213 $0.016 $ 105,594 1,015,627 $ 1.28 $
1,304,671
Issuance of stock in exchange for services -- -- --
148,015 3.74 552,407
Stock issued for liquidated damages -- -- --
7,500 3.20 24,000
Shares in escrow -- -- --
29,697 3.80 113,087
----------- ------ ----------- ----------- ------ --------
---
Total 6,614,213 $0.016 $ 105,594 1,200,839 $0.083 $
1,994,165
=========== ====== =========== =========== ======
===========
8
FUTURE CAPITAL OUTLOOK
The Company will continue to rely heavily on our current method of convertible debt and equity funding, proceeds borrowed from the revolving line of credit and the sale of
warrants. The (losses) of ($54,880,900) through the period ended June 30, 2009 are due to minimal revenues and recurring operating expenses, with a majority of expenses in
the areas of: salaries, accounting fees, legal fees, licensing costs along with a majority of expense incurred being non-cash related. The Company faces considerable risk in
completing each of our business plan steps, including, but not limited to: a lack of funding or available credit to continue development and undertake product rollout; potential
cost overruns; a lack of interest in its solutions in the market on the part of wireless carriers or other customers; potential reduction in wireless carriers which could lead to
significant delays in consummating revenue bearing contracts; and/or a shortfall of funding due to an inability to raise capital in the securities market. Since further funding is
required, and if none is received, we would be forced to rely on our existing cash in the bank, collection of monthly accounts receivable or secure short-term loans. This may
hinder our ability to complete our product development until such time as necessary funds could be raised. In such a restricted cash flow scenario, we would delay all cash
intensive activities including certain product development and strategic initiatives described above.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations,
liquidity or capital expenditures.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4T. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that is
designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized
and reported, within the time specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's
management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure.
Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation with the participation of the Company's management, including Dean Weber, the
Company's Chief Executive Officer and Interim Chief Financial Officer ("CEO/CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined
under Rule 13a-15(e) under the Exchange Act) as of the three months ended June 30, 2009. Based upon that evaluation, the Company's CEO /CFO concluded that the
Company's disclosure controls and procedures are ineffective and cannot ensure that information required to be disclosed by the Company in the reports that the Company files
or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information
is accumulated and communicated to the Company's management, including the Company's CEO /CFO, as appropriate, to allow timely decisions regarding required
disclosure.
CHANGES IN INTERNAL CONTROLS
Our management, with the participation the Principal Executive Officer and Principal Accounting Officer performed an evaluation as to whether any change in our internal
controls over financial reporting occurred during the Quarter ended June 30, 2009. Based on that evaluation, the Company's CEO/CFO concluded that no change occurred in
the Company's internal controls over financial reporting during the Quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, the
Company's internal controls over financial reporting.
9
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business. Except as disclosed below we are currently not
aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse affect on business, financial condition or operating results.
There has been no bankruptcy, receivership or similar proceedings.
On August 23, 2007, the Company entered into a Settlement Agreement and Mutual Release with La Jolla Cove Investors, Inc. ("LJCI") pursuant to which we agreed with
LJCI to forever settle, resolve and dispose of all claims, demands and causes of action asserted, existing or claimed to exist between the parties because of or in any way
related to a legal proceeding in the San Diego County Superior Court (the "Court") entitled La Jolla Cove Investors, Inc. vs. One Voice Technologies, Inc., Case No.
GIC850038 (the "Action") for a total amount owed of $408,594.48 (the "Owed Amount"). Under the Settlement Agreement dated August 23, 2007, the parties reached a final
resolution with respect to such Owed Amount whereby (i) LJCI shall receive $200,000 within 15 days of the date of the Agreement and (ii) the difference between the Owed
Amount and $200,000 shall be payable at a later date (the "Remaining Owed Amount"). The payment of the Remaining Owed Amount shall be made to LJCI in the following
manner:
· Concurrently with the execution of the Agreement, the Company shall transfer to an independent escrow agent, on behalf of LJCI, all right, title and interest to
30,000,000 shares of Common Stock of the Company (the "Escrow Shares"), issued in 30 increments of 1,000,000 shares. On the one year anniversary of the
Agreement, 1,000,000 Escrow Shares shall be released to LJCI whereby LJCI shall be able to sell such shares in open market transactions provided such sales do not
exceed more than 14% of the corresponding daily volume of such shares on the trading market on which the Company's securities are sold. LJCI shall continue to
receive the Escrow Shares, provided they satisfy the volume limitation set forth above and LJCI's ownership of the Company's common stock does not exceed 4.99%
of the Company's then issued and outstanding shares of common stock, until the Remaining Owed Amount is satisfied;
· Upon notice from LJCI that the Remaining Owed Amount has been satisfied by the sale of the Escrow Shares either (i) Alpha Capital Ansalt ("Alpha") shall have
the ability within 15 business days to purchase any remaining Escrow Shares at a 20% discount to the current market price of the shares or (ii) if Alpha does not
exercise its right to purchase the shares, the Company shall have the ability to redeem the remaining Escrow Shares within 5 business days.
· At anytime while the Remaining Owed Amount is outstanding, the Company or Alpha may pay in cash to LJCI an amount equal to the Remaining Owed Amount
and either (i) Alpha shall have the ability within 15 business days to purchase any remaining Escrow Shares at a 20% discount to the current market price of the
shares or (ii) if Alpha does not exercise its right to purchase the shares, the Company shall have the ability to redeem the remaining Escrow Shares within 5 business
days.
LJCI has contractually agreed to restrict their ability to exercise the Escrow Shares such that the number of shares of the Company common stock held by it does not exceed
4.99% of the Company's then issued and outstanding shares of common stock.
Upon receipt of the Owed Amount, LJCI will file a Satisfaction of Judgment in the appropriate court and grant the Company a release from any and all actions related to the
Action.
On June 15, 2009 our former landlord, The Irvine Company LLC, filed a complaint to collect unpaid rent and future rent in the amount of $249,622. We are currently
disputing this complaint and it is difficult to determine the likelihood or probable outcome at this point.
10
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors previously disclosed in Part I, "Risk Factors," of the Company's Annual Report on Form 10-K for the year ended
December 31, 2008, other than to update certain financial information as of and for the six months ended June 30, 2009 regarding the following risk factors.
WE HAVE A HISTORY OF LOSSES. WE MAY TO CONTINUE TO INCUR LOSSES, AND WE MAY NEVER ACHIEVE AND SUSTAIN PROFITABILITY.
Since inception, we have incurred significant losses and have negative cash flows from operations. For the six months ended June 30, 2009 and 2008, we incurred a net (loss)
of ($2,910,312) compared to a net (loss) of ($304,222), respectively. A large part of the 2009 loss is due to non-cash related expense items.
IF WE DO NOT BECOME PROFITABLE WE MAY NOT BE ABLE TO CONTINUE OUR OPERATIONS.
Our future sales and profitability depend in part on our ability to demonstrate to prospective customers the potential performance advantages of using voice interface software.
To date, commercial sales of our software have been limited.
WE HAVE A LIMITED OPERATING HISTORY WHICH MAKES IT DIFFICULT TO EVALUATE OUR BUSINESS.
Our current corporate entity commenced operations in 1999 and has a limited operating history. We have limited financial results on which you can assess our future success.
Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by growing companies in new and rapidly evolving markets, such as
voice recognition software, media delivery systems and electronic commerce. To address the risks and uncertainties we face, we must:
IF WE ARE UNABLE TO OBTAIN ADDITIONAL FUNDING OUR BUSINESS OPERATIONS WILL BE HARMED.
We do not know if additional financing will be available when needed, or if it is available, if it will be available on acceptable terms. Insufficient funds may prevent us from
implementing our business strategy or may require us to delay, scale back or eliminate certain contracts for the provision of voice interface software.
OUR OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY.
As a result of our limited operating history and the rapidly changing nature of the markets in which we compete, our quarterly and annual revenues and operating results are
likely to fluctuate from period to period. These fluctuations may be caused by a number of factors, many of which are beyond our control.
As a result of the rapidly changing nature of the markets in which we compete, our quarterly and annual revenues and operating results are likely to fluctuate from period to
period. These fluctuations may be caused by a number of factors, many of which are beyond our control.
For these reasons, you should not rely solely on period-to-period comparisons of our financial results, if any, as indications of future results. Our future operating results could
fall below the expectations of public market analysts or investors and significantly reduce the market price of our common stock. Fluctuations in our operating results will
likely increase the volatility of our stock price.
· Establish and maintain broad market acceptance of our products and services and convert that acceptance into direct and indirect sources of revenues.
· Maintain and enhance our brand name.
· Continue to timely and successfully develop new products, product features and services and increase the functionality and features of existing products.
· Successfully respond to competition, including emerging technologies and solutions.
· Develop and maintain strategic relationships to enhance the distribution, features and utility of our products and services.
11
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES
UNREGISTERED SALES OF EQUITY SECURITIES
The securities described below represent our securities sold by us for the period starting January 1, 2008 thru June 30, 2009 that were not registered under the Securities Act of
1933, as amended, all of which were issued by us pursuant to exemptions under the Securities Act.
SALES OF WARRANTS FOR CASH
During the year ended December 31, 2008 and the six months ended June 30, 2009, no warrants were exercised. As a result, the Company received no cash proceeds in
relation to warrants.
ISSUANCE OF WARRANTS ON A CASHLESS BASIS
From time to time warrants can be exercised on a cashless basis if certain conditions exist. If warrants are held for a certain period of time and there is no effective registration
statement for these warrants, the holder of these warrants may exercise them on a cashless basis. The result is the Company issuing restricted shares pursuant to rule 144 or
144K, no cash is received by the Company. The number of shares issued are discounted according the subscription agreement formula. EX: The Company issues 1,000,000
restricted shares and the holder forfeits 1,500,000 of their warrants.
During the year ended December 31, 2008, no warrants were issued on a cashless basis and no warrants were forfeited
No cashless warrants were exercised during the six months ended June 30, 2009 or 2008.
SHARES IN ESCROW
On August 23, 2007, the Company issued 30,000,000 shares of the Company's restricted common stock valued at $600,000. The shares were put into an independent 3rd party
escrow account on behalf of La Jolla Cove Investors Inc. These shares relate to a legal settlement on August 23, 2007 between the Company and La Jolla Cove Investors Inc.
The shares were issued pursuant to an exemption under Section 4(2) of the Securities Act of 1933.
On May 2, 2008, the company issued 11,878,896 shares of the Company’s restricted common stock valued at $113,087. The shares were also put into an independent 3rd party
escrow account on behalf of La Jolla Cove Investors Inc. These shares relate to a legal settlement on August 23, 2007 between the Company and La Jolla Cove Investors Inc.
The shares were issued pursuant to an exemption under Section 4(2) of the Securities Act of 1933.
See Item 1 Legal Proceedings for additional details.
ISSUANCES OF STOCK FOR SERVICES OR IN SATISFACTION OF OBLIGATIONS
During the year ended December 31, 2008, the Company issued a total of 2,960,268 shares of restricted common stock, adjusted for impact of 1-for-20 reverse split, in
exchange for services rendered. Services included financial advisor fees and consulting. The services were valued at approximately $552,000.
During the six months ended June 30, 2009 the Company did not issue any shares of restricted common stock in exchange for services rendered.
The above transactions were granted in lieu of cash payment to satisfy the debt and obligation.
The shares were issued pursuant to an exemption under Section 4(2) of the Securities Act of 1933.
12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
On May 22, 2009, the Company held a special meeting of its shareholders whereby a majority of the shareholders approved a reverse split of the Company’s issued and
outstanding stock on a 1-for-20 basis. The reverse split and symbol change were effective as of June 16, 2009 and the Company’s common stock now trades under the symbol
“OVOE”.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS
31 Certification of the Chief Executive Officer and Interim Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32 Certification Chief Executive Officer and Interim Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.
13
SIGNATURES
In accordance with the requirements of the Exchange Act of 1933, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ONE VOICE TECHNOLOGIES, INC.,
A NEVADA CORPORATION
14
DATE: August 19, 2009 By: /S/ DEAN WEBER
Dean Weber, Chairman, Chief Executive Officer
(Principal Executive Officer) and
Interim Chief Financial Officer
(Principal Accounting a nd Financal Officer)
EXHIBIT 31
CERTIFICATION OF PRINCIPAL EXECUTIVE AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Dean Weber, certify that:
1. I have reviewed this quarterly report on Form 10-Q of One Voice Technologies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15
(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
quarterly report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures and evaluated the effectiveness of our internal control over financial reporting, and presented in this report our conclusions about the effectiveness of
our internal control over financial reporting, as of the end of the period covered by this report based on such evaluation;
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board
of directors (or persons performing the equivalent functions):
(a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and report financial information; and have identified for the registrant's auditors any material weaknesses in internal
controls; and
(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.
Date: August 19, 2009 By: /s/ Dean Weber
Principal Executive Officer and
Principal Financial Officer
EXHIBIT 32
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of One Voice Technologies, Inc. (the "Company") on Form 10-Q for the quarterly period ended June 30, 2009 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Dean Weber, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350
of the Sarbanes-Oxley Act of 2002, that:
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 19, 2009 By: /s/ Dean Weber
Dean Weber
Principal Executive Officer and
Principal Financial Officer
of interest...FROM FORBES........................
Intelligent Investing
Mobile Internet Leading Tech Growth
Darcy Travlos, 08.05.09, 02:00 PM EDT
Mobile Internet is the catalyst--buy Apple.
Mobile Internet is the catalyst for a dramatic secular technology growth cycle, the foundation of which is already set. During the economic downturn while spending stalled, features and functionality have increased substantially, altering the perception of mobile Internet from 'cool entertainment device' to 'must-have productivity tool' particularly in a job-seeker environment.
Lines are blurred between professional and personal uses as everyone needs to be connected to up-to-date information, needs to be able to e-mail/communicate in real time wherever they are and entertainment is an added benefit. Again, features and functionality have driven a shift in how technology is perceived and purchased. Five years ago, technology was a hardware purchase, needing replacement when it wore out. Now, technology is service with a two- to three-year replacement cycle for the appliance. As consumer and enterprise spending becomes much more selective, productivity devices will gain a larger share of a shrinking pie.
BuzzLastly, the total addressable market is larger than the computer market with over 1.2 billion handsets sold per year, vs. 300 million computers, and the beneficiaries of this new technology cycle are similarly more diverse.
Up until two years ago, Research in Motion ( RIMM - news - people ) led mobile technology with one application: e-mail. With that one application, it upset the balance of power in the voice-centric cellular handset world. The implication on wealth creation was significant: today, RIMM has a market capitalization of $45 billion, vs. Nokia's ( NOK - news - people ), the worldwide handset leader, market capitalization of $55 billion, and the core driver was a single new application.
Two years ago, Apple ( AAPL - news - people ) introduced the iPhone, expanding the mobile applications on the handset, and it was an instant success. Apple had already created and proved the playbook for a new consumer technology paradigm. While the iPod was a cool form factor, the catalyst for adoption was the creation of the iTunes store providing consumers with an expansive music selection that could be purchased with a click and delivered right to the iPod.
Apple created similar access to mobile applications on the iPhone, making it much more indispensable than just a cellphone to its users. Apple currently offers over 65,000 free apps for the iPhone. This dramatically changes how people use their "phones" and this is driving adoption with the iPhones accounting for most of the growth in the smart phone market. In Q109, the overall cellphone market declined by 10% but the smart phone market grew by 13% (units). The iPhone accounted for over 70% of that overall smartphone market growth, in a quarter with no new product announcements and in front of a quarter with a known product refresh.
Also in Q109, smart phones accounted for 36.4 million of the 269.1 million cellphones sold, or 14% of the market. Within the smart phone category, Apple and Research in Motion, together, accounted for 31% of the smart phone category, up from 19% a year prior. And their market share can be expected to continue to grow. At the end of this past quarter, for example, Apple introduced a $99 smart phone, driving down prices to bring features and functionality to a larger market. Apple did this successfully, before, with iPods.
Is it too late to invest in Apple and Research in Motion, given their appreciation since March? No, both have short-term and long-term upside.
My price target on Apple is $190 before year end. Apple could get here in two ways: higher earnings or high multiple, or both. First, consensus estimates for Apple are too low, at roughly $5.83 this year and $6.74 next year. Apple has beaten consensus estimates by $0,96 total over the last four quarters and can be expected to continue to deliver better earnings. The adoption of its 3G iPhones, even at the higher $399 price point, is exceeding expectations and was supply-constrained at the end of the past reporting quarter, setting up for even more robust sales next quarter.
Moreover, margins on iPhones are higher than the overall business, driving profitability. Second, Apple has historically traded at multiples in the mid-30s and its growth horizon today is as strong as it has been ever in its corporate history with the success of its iPhones and ever-increasing adoption of Mac computers. Therefore, even if Apple only meets consensus estimates of $6.74, a $190 price target represent a 28x P/E. From today's price at $166, there is opportunity for a 15% stock appreciation by the end of the year.
Research in Motion also provides a great opportunity to participate in the smartphone cycle. Too many investors are focusing on Apple vs Research in Motion, missing the fact that both companies will benefit in the smart phone cycle as the traditional handset makers (i.e., Nokia) will continue to lose market share. Research in Motion continues to provide the essential e-mail functionality, and has relationships with more carriers around the world to distribute its products.
Consensus forward earnings for Research in Motion are $4.12, or roughly 18x its current price vs. an EPS growth rate of 20% on consensus earnings. And earnings could come in higher, as Research in Motion has exceeded estimates by $0.10 for last two quarters. Research in Motion is gaining market share in the smartphone segment, more than doubling the number of smart phones sold from 2007 to 2008, and roughly doubling its revenue and net income annually for its fiscal years 2007, 2008, 2009. My price target on Research in Motion is $90 by the end of the year, representing a 17% stock appreciation.
For investors who agree with the Mobile Internet thesis, the most important takeaway is to look at this new technology cycle differently. It, so far, has left the previous dominant participants, Microsoft ( MSFT - news - people ) and Intel ( INTC - news - people ) struggling to find a position, while new participants are dominating the road map. The first obvious investment opportunities are Apple and Research in Motion, while next week, I will begin to address the building blocks of these smart phones.
See more Intelligent Investing features.
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Here's the complete 8K...................
==================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest reported): June 21, 2009
ONE VOICE TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
Nevada 000-27589 95-4714338
(State or Other Jurisdiction of Incorporation or Organization) (Commission File Number) (IRS Employer Identification No.)
7825 FAY AVENUE
SUITE 200
LA JOLLA, CA 92037
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (866) 823-1432
Copies to:
Darrin M. Ocasio, Esq.
Sichenzia Ross Friedman Ference LLP
61 Broadway
New York, New York 10006
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
--------------------------------------------------------------------------------
Item 1.01 Entry into a Material Definitive Agreement
On June 21, 2009, One Voice Technologies, Inc. (the “Company”) entered into a Third Modification Agreement (the “Agreement”) with Alpha Capital Anstalt (“Alpha”) and Whalehaven Capital Fund Limited (“Whalehaven”) (collectively, the “Investors”). Pursuant to the terms of the Agreement, the Company and the Investors agreed to amend the loan agreement and revolving credit note, dated as of December 21, 2006 in order to (i) increase the aggregate revolving line of credit to $2,997,252, (ii) to modify the conversion price to equal $0.001 per share and (iii) to extend the maturity date to June 21, 2011. Pursuant to the terms of the Agreement, commencing on July 2009 and ending December 2009, the increase to the revolving line of credit will be allocated such that the Investors will loan the Company an aggregate of $42,000 per month, for a total increase of $252,000 to the revolving line of credit.
As further consideration for the above, on June 21, 2009, the Company and the Investors entered into a Partial Release of Collateral Agreement (the “Collateral Agreement”) whereby the Company and the Investors agreed that, in the event the Company successfully enforces its intellectual property rights regarding certain assets, (i) any proceeds received shall be used to satisfied any notes issued by the Company to the Investors, (ii) any remaining proceeds shall be used to pay any accrued past due salaries of the Company’s employees; and (iii) any remaining proceeds after the repayment pursuant to sections (i) and (ii) will be allocated as follows: 50% to the Company, 25% to Alpha and 25% to Whalehaven.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
See Item 1.01
Item 9.01 Financial Statements and Exhibits
10.1 Third Modification Agreement dated June 21, 2009
10.2 Partial Release of Collateral Agreement dated June 21, 2009
--------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ONE VOICE TECHNOLOGIES, INC.
Date: August 5, 2009 By: /s/ Dean Weber
Name: Dean Weber
Title: Chief Executive Officer
Exhibit 10.1
THIRD MODIFICATION AGREEMENT
This Third Modification Agreement (“Agreement”) is made as of June 21, 2009 among ONE VOICE TECHNOLOGIES INC., a Nevada corporation (“One Voice”), ALPHA CAPITAL ANSTALT (“Alpha”) and WHALEHAVEN CAPITAL FUND LIMITED (“Whalehaven”).
WHEREAS, the parties entered into a Loan Agreement and Revolving Credit Note dated as of December 21, 2006 (“Loan Agreement”), as amended pursuant to various “Amendments”, relating to a revolving line of credit in an aggregate amount of up to $2,997,000, as amended and as may be further amended, and a Modification Agreement and a Second Modification Agreement dated as of December 21, 2007 and June 21, 2008 (“Modification Agreements”), respectively; and
WHEREAS, it is in the interest of the parties to extend the Term, as defined in Section 13.1 of the Loan Agreement, as amended, to increase the aggregate revolving line of credit to $2,997,252, and to modify the conversion price contained in Section 1.3 of the Second Amendment of Loan Agreement and Revolving Credit Note (“Second Amendment”).
NOW THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, it is agreed that the Term, as defined in Section 13.1 of the Loan Agreement and in the Modification Agreements, be extended to June 21, 2011.
Section 1.3 of the Second Amendment will be deleted and replaced with the following:
“The foregoing notwithstanding, Interest and principal shall be payable in restricted shares of Debtor’s Common Stock valued at $0.001.”
For the next six months commencing July, 2009 through December, 2009, each of Alpha and Whalehaven agree to loan One Voice the sum of $21,000 for an aggregate of $42,000 each month (which aggregate dollar amount of $252,000 has been reflected in the aggregate revolving line of credit amount of $2,997,252).
All other terms and conditions of the Loan Agreement and Revolving Credit Note, as amended and/or modified, shall remain in full force and effect. All the capitalized terms employed herein shall have the meanings attributed to them in the Loan Agreement, Revolving Credit Note, Amendments and Modification Agreements and the documents and agreements delivered therewith.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to any other party, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were an original thereof. This Agreement shall be subject to the same choice of law, venue jurisdiction, and notice provisions as are applicable to the Loan Agreement and Revolving Credit Note.
IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as of the date first written above.
ONE VOICE TECHNOLOGIES, INC.
By:______________________________________
ALPHA CAPITAL ANSTALT WHALEHAVEN CAPITAL FUND LIMITED
By:______________________________________ By:___________________________________
Exhibit 10.2
PARTIAL RELEASE OF COLLATERAL
This Partial Release of Collateral (this “Release”) is made as of June 21, 2009 among Alpha Capital Anstalt (“Alpha”), Whalehaven Capital Fund, Ltd. (“Whalehaven”) (Alpha and Whalehaven collectively referred to as the “Subscribers”) and One Voice Technologies, Inc. (the “Company”). Capitalized terms used herein shall have the meanings assigned to such terms in the Security Agreement (defined below).
1. Reference is hereby made to the Security Agreement dated as of February 16, 2006, (the “Security Agreement”) among the Subscribers and the Company, creating a security interest in certain assets of the Company to secure payment of Company’s obligations under certain notes issued by the Company to the Subscribers. The Subscribers’ security interest under the Security Agreement applies to all of the Company’s assets, including any and all proceeds generated by the assets.
2. The Company desires to enforce its intellectual property rights regarding the assets listed on Schedule 1 hereto (the “IP Assets”). The Company intends to retain counsel (the “Attorney”) to review the IP Assets and, if appropriate, commence litigation against any party infringing on the Company’s intellectual property rights in the IP Assets (the “Enforcement Actions”).
3. The Company and Subscribers hereby agree that if the Enforcement Actions are successful and the Company receives payment in connection therewith such proceeds shall be distributed in the following order:
a. First, any proceeds shall be used to satisfy all obligations under any notes issued by the Company to the Subscribers (the “Notes”);
b. After, all amounts due under the Notes have been indefeasibly paid, any remaining proceeds shall be used to pay any accrued past due salary the Company owes to its employees, as described on Schedule 2 hereto;
c. Thereafter, any remaining proceeds shall be distributed 50% to the Company 25% to Alpha and 25% to Whalehaven.
4. The Subscribers agree that so long as no Event of Default under the Notes related to non-delivery of shares upon the, conversion of notes or exercise of warrants, non-delivery of replacement notes or replacement warrants bankruptcy, judgments, or non-payment of debts occurs and provided no claims are made against the Company that would affect the Subscribers’ rights to the Company’s assets the Subscribers will not accelerate the maturity date of the Notes.
5. Upon the Attorney’s execution of the Acknowledgment and Undertaking, below the Subscribers release and discharge any and all lien, right, title, or interest that they have in or upon the IP Assets for the limited purpose of prosecuting the Enforcement Actions.
6. Entire Agreement; Amendments . The Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
--------------------------------------------------------------------------------
7. Amendments; Waivers . No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Seller and the Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.
8. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Seller may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers.
9. No Third-Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
10. Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery). Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of the documents contemplated herein, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
11. Execution . This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof.
12. Severability . In case any one or more of the provisions of this Agreement shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affecting or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision which shall be a reasonable substitute therefore, and upon so agreeing, shall incorporate such substitute provision in this Agreement.
[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned have caused this Release to be executed by their duly authorized officers as of the date first above written.
ONE VOICE TECHNOLOGIES, INC.
___________________________________
By: Dean Weber
Its: CEO
ALPHA CAPITAL ANSTALT WHALEHAVEN CAPITAL FUND, LTD.
___________________________ ____________________________________
By: Konrad Ackerman By: Brian Mazzella
Its: Director Its: CFO
ACKNOWLEDGEMENT and UNDERTAKING
__________ (the “Attorney”) acknowledges the foregoing Partial Release of Collateral dated June __, 2009 (the “Release”), and acknowledges the Subscribers’ rights to any funds received by the Attorney in connection with the Enforcement Actions. Additionally, Attorney agrees to disburse any funds he receives on behalf of the Company in accordance with Section 3 of the Release.
ATTORNEY
____________________________________
By:
Its:
OKIWIN, don't forget...
Tracphone!
Soon!
:)
MTNL of India Launches One Voice's MobileVoice Remote Email Access Service
India's National Phone Company Now Offering Email Access From Any Landline or Mobile Phone to Access Yahoo!, Gmail, Hotmail, AOL and BolMail
Press Release
Source: One Voice Technologies
On Friday July 31, 2009, 10:00 am EDT
Buzz up! 0 Print.Companies:One Voice Technologies Inc.
LA JOLLA, CA--(Marketwire - 07/31/09) - One Voice Technologies, Inc. (OTC.BB:OVOE - News), developer of 4th Generation voice solutions for the Telecom and Interactive Multimedia markets, announced today the launch and immediate availability of One Voice's MobileVoice Remote Email Access service with Mahangar Telephone Nigam Ltd. (MTNL) servicing over 7 million wireless and landline subscribers throughout Delhi and Mumbai. MobileVoice Remote Email Access is initially available for MTNL Delhi customers and will be available shortly throughout Mumbai. For more information on MTNL or MobileVoice Remote Email Access, visit http://mobilevoice.mtnldelhi.in.
Related Quotes
Symbol Price Change
OVOE.OB 0.0280 +0.0075
{"s" : "ovoe.ob","k" : "c10,l10,p20,t10","o" : "","j" : ""} One Voice's MobileVoice Remote Email Access service allows MTNL subscribers to read and send email from their home, business or mobile phones to any destination worldwide using voice control or touchtone keys on their keypad. MobileVoice Remote Email Access works with 100% of MTNL's existing and new phones and gives subscribers access to the most popular email providers including Yahoo! Mail, Gmail, Hotmail, AOL and BolMail along with POP3 and IMAP corporate email access all for a low fixed price of Rs. 50/- per month plus service tax (as applicable) for unlimited usage, anytime, anywhere.
To signup, MTNL mobile subscribers simply text "SUB EmailAddress EmailPassword" to 51290 for immediate activation. Example: SUB raj@yahoo.com 1234Rj
MTNL landline customers can signup by simply calling MTNL customer service at 1500 or by visiting any MTNL Sanchar Haat location.
"MTNL has tested the MobileVoice Remote Email Access service and found it to be a superior service for our subscribers," said Mr. Rajendra Prasad, General Manager (VAS) at MTNL. "We feel email access from your home or mobile phone gives our subscribers a high quality service all for a low monthly fee."
"It is our great pleasure that MTNL has become the first service provider in India to have this kind of service by which emails can be accessed and sent over fixed and mobile telephone lines through voice. The service will provide a cost-effective solution for managing emails and would be popular and successful among the customers," said Mr. Manoj Kumar, Deputy General Manager (Marketing) at MTNL.
"We are very impressed with One Voice's MobileVoice solution and we see tremendous benefits in offering these services to our subscribers," said Mr. R.B. Sharma, Divisional Engineer (IN) for MTNL. "Email access from our subscribers' phones is a very important feature and MobileVoice works with 100% of our phones in the market and we look forward to a successful service with One Voice."
"This service is for the masses without the need of having expensive mobile phones or internet enabled phones, therefore all the MTNL subscribers would be greatly benefited by this service," said Mr. Arvinder S. Brara, Chairman and Managing Director of Mantec Consultants.
"We are appreciative of the opportunity to launch our service and the strong relationships we have built with MTNL. MTNL is a fine organization with a dedicated management team that is truly interested in leading the industry with value added services for their subscribers. The MobileVoice launch is a major breakthrough opening up email access from any existing or new MTNL landline or mobile phone covering all major email providers including Yahoo!, Gmail, Hotmail, AOL and BolMail. We will begin seeing revenue generated from this launch immediately and we anticipate this revenue stream to quickly grow. In addition, we have begun discussions of launching our service with MTNL's sister company Bharat Sanchar Nigam Ltd. (BSNL) with more than 49 million mobile phone and 35 million landline subscribers. We look forward to a very successful 2009 with MTNL," said Dean Weber, Chairman and CEO at One Voice."
About Mantec Consultants Pvt. Ltd:
Mantec is known to bring new technologies to India and has worked closely with the Ministry of Science & Technology, DRDO etc in such matters Mantec is bringing voice control technology to India for the first time in providing great convenience to MTNL subscribers for accessing their emails anywhere simply through landline and their existing mobile phone in a convenient and low cost manner.
About One Voice Technologies, Inc.
One Voice Technologies, Inc. (OTC.BB:OVOE - News) is the world's first developer of 4th Generation voice solutions for the Telecom and Interactive Multimedia markets. Our Intelligent Voice(TM) solutions employ revolutionary, patented technology that allows people to send messages (E-mail, SMS, Instant Messaging and paging), purchase products, get information and control devices -- all by using their voice. The company is headquartered in La Jolla, California. For more information, please visit http://www.onev.com
FORWARD-LOOKING STATEMENT DISCLAIMER
Some of the statements made in this press release discuss future events and developments, including our future business strategy and our ability to generate revenue, income and cash flow, and should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These "forward-looking" statements can generally be identified by words such as "expect," "anticipate," "believe," "estimate," "intend," "plan," and similar expressions. These statements involve a high degree of risk and uncertainty that exists in the Company's operations and business environment and are subject to change based on various factors that could cause actual Company results, performance, plans, goals and objectives to differ materially from those contemplated or implied in these forward-looking statements. Actual results may be different from anticipated results for a number of reasons, including the Company's new and uncertain business model, uncertainty regarding acceptance of the Company's products and services and the Company's limited operating history.
MobileVoice is a trademark of One Voice Technologies, Inc. All other products and company names herein may be trademarks of their registered owners.
Contact:
INVESTOR RELATIONS:Attn: Investor RelationsPhone: (866) 823-1432Fax: (858) 754-1276Email Contact Buzz up! 0 SendSharePrintShare this pageDeliciousTwitterMyspaceDiggStumble UponFacebookRelated Headlines
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case closed......so...,,,,
you're outta here, right?
Bye!
I picked up a few more today...
:)
of interest...from Seekingalpha.com....
Just as Intel Corp (INTC) (Analyst Report) has a dominant position in the microprocessor market for computers, ARM Holdings (ARMH) (Analyst Report) has the most widely used technology in cell phones and other mobile devices. Intel’s desire to go beyond its home ground may be traced to the maturing state of the enterprise type PC market and the much stronger growth rates in cell phones and mobile internet devices.
The higher demand has been driven by a sea change in technologies driving consumer electronics products that have virtually created demand for a completely new species. Consumers now want greater functionality, connectivity, portability, lower power consumption, smaller sizes and all this at a much lower cost.
What Intel wants to achieve requires a paradigm shift. In the PC market it enjoys a special position at system integrators that have for long kept Advanced Micro Devices (AMD) (Analyst Report) at bay. Being the financially stronger party, it is able to make higher investment in R&D and also see the investment converted to sales.
However, the market is heating up and AMD’s recent alliance should help it generate much needed volumes. What that could mean for the AMD bottom line is a different story. But it should definitely begin to create a larger dent in Intel’s revenues.
The cell phone market is vastly different. Here Intel is in AMD’s shoes, despite its financial strength and ARM processors rule the day. ARM chips are already packaged and sold by the likes of Qualcomm (QCOM) (Analyst Report), Samsung and Texas Instruments (TXN) (Analyst Report) and are the processors of choice for nearly 90% of all cell phones on the market today. Even new operating systems, such as Google’s (GOOG) (Snapshot Report) Android have been specially built to fit in with ARM architecture.
Intel’s problems are not limited to its x86 architecture, which is incompatible with many proprietary cell phones. The company has actually yet to come out with a satisfactory product for the market. The Atom is more of a computing chip, sort of a bridge between the two worlds.
By Intel’s own admission, the company will not be able to make an impression on the cell phone market before the advent of Moorestown. The power savings offered by Moorestown could make the Intel chip more appropriate for the cell phone market. Critics argue that the Cortex A9 from ARM could be shipping by then, which could maintain ARM’s supremacy.
However, Intel’s strategy goes deeper. The company has gone beyond handsets to the growing mobile internet devices (MID) market. According to research firm Forward Concepts, MID shipments will grow from 305,000 units in 2008 to 40 million units in 2012. The research firm expects chip companies serving the market to gain big time, growing from $29 million in 2008 to $2.6 billion in 2012.
Intel is expected to be the biggest winner with its x86 microarchitecture. The non-x86 gainers are likely to be Texas Instruments (TXN) and Qualcomm.
Intel has also been developing the Moblin software platform for Atom based netbooks and nettops using open source technology from Linux. The beta version boasts the latest open source graphics technology; social networking (only Twitter and Last.fm at present); Mozilla browser (for Internet access, video embedding and the latest flash plug-in); zoomable media player, and a user interface for connection management.
Moblin will also be of great strategic importance when Intel is ready to enter the handset market through the recently announced Nokia (NOK) (Snapshot Report) alliance.
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spleef, can you disprove it?
Why does that gladden you?
Valley View: A mobile Intel must be agile
By Chris Nuttall in San Francisco
Published: July 8 2009 16:34 | Last updated: July 8 2009 16:34
Intel held its annual open-house Research Day for the media at the Computer History Museum in Mountain View this year, placing its impressive displays of future technologies among hardware relics of transistors past.
While we admired a demonstration of how electrical power could be transmitted wirelessly in one corner, at the other end of the museum, Difference Engine No. 2 was being cranked up – a computing machine designed by Charles Babbage in 1849.
Never built at the time, it was faithfully reproduced and made functional only this century.
Between these two extremes, the evolution of computing could be seen in a succession of boxed circuitry in all shapes and sizes, including Digital Equipment Corporation’s groundbreaking 1959 PDP-1 (Programmed Data Processor-1) and the Altair 8800 personal computer that inspired Bill Gates to create Microsoft.
The exhibits were a reminder that tomorrow’s advances quickly become yesterday’s technologies and that many of the companies producing them are just as swiftly consigned to history.
Intel’s Research Day emphasised that the world’s biggest chipmaker does not want to be haunted by the ghosts of computers past. It is moving forward at a rate of gigahertz into new markets, as growth in its core PC one slows.
We heard how the Corporate Technology Group had been renamed Intel Labs and was being more closely aligned with the new sectors being eyed by the company, with a special focus on handheld devices.
Among the displays, much was being made of how the compatibility of Intel’s designs would mean different kinds of devices being able to connect and collaborate with one another from server to desktop to laptop to handheld and consumer electronics set-top boxes.
Variations of its low-power Atom microprocessor are being produced for the netbook, Mids (mobile internet devices), embedded and consumer electronics markets.
The biggest prize for Intel would be to win significant share in the mobile phone market from rivals such as Qualcomm, Texas Instruments and Freescale.
At the same time, its rivals are moving into its territory, as the increasing power of their chips, based on the designs of the UK’s ARM, makes them good candidates for computing machines of decreasing sizes, from smartphones to Mids and whatever the future holds.
This convergence of chipmakers, low-powered microprocessors and mobile devices threatens a conflagration of competition and – as with any impending war – Intel has been plotting its strategy, building its arsenal and creating alliances.
It has invested substantially in software – focusing its research, strengthening its in-house teams, funding open-source mobile software and making acquisitions.
It paid $884m in cash for Wind River Systems last month, a software company that should help its push into mobile.
It had earlier acquired OpenedHand, a leading handset user-experience company and in May, it introduced Moblin, a new open-source operating system designed for smaller devices.
This year, it announced an alliance with TSMC, the Taiwanese chip foundry, for Atom, and last month, agreed a strategic partnership with Nokia, which will give it an entry into the smartphone market and access to its 3G wireless technology.
This is crucial. Intel has done well with Wi-Fi [short-range wireless networks] in notebooks, but its WiMax standard for wider areas has made little headway so far and Intel has lacked a partner to combine its wireless chips with 3G ones.
In contrast, analysts expect Qualcomm-based netbooks to appear in the coming months with integrated 3G/Wi-Fi connectivity, instant-on capabilities, 10-hour battery life and lower costs because of better chip-level integration.
With Intel backing open-source Moblin, some also expect Qualcomm to announce a partnership with Microsoft for Windows 7, its new operating system, to run on Qualcomm netbooks. The rupturing of the “Wintel” alliance and creation of Wincomm would indeed be a sign of changing times.
In the meantime, Intel may not be in a good position to challenge as a smartphone chip supplier until 2011, when a smaller version of Atom is ready.
Intel may be able to achieve success and market share with its considerable resources, but I have been surprised at the number of analysts who give it little chance of making a big impact on these unfolding markets.
There is also the size and strength of the opposition.
Intel faces not just big players such as Qualcomm, but scores of smaller ones, particularly in Asia, that are leveraging ARM’s designs and quickly improving on them to bring out new devices.
Intel will have to be more mobile in every sense to keep up with the pace of change.
.Copyright The Financial Times Limited 2009
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Another of the group here.... Are you guys gonna say
we're all aliases? Perhaps all you naysayers are aliases.
:)
Intel, Nokia to create new family of mobile devices
Companies aiming beyond markets for smartphones, netbooks and laptopsExplore related topics
Computer Hardware Intel Corporation Nokia Corp Nokia Oyj Story Quotes Comments (1) Alert Email Print ShareBy Dan Gallagher, MarketWatch
SAN FRANCISCO (MarketWatch) -- Intel Corp. said Tuesday morning that it has expanded its relationship with cell phone giant Nokia Corp. to design and build a new class of portable computing devices beyond the so-called smartphones and netbooks that are popular today.
In a statement, the two companies said they plan to collaborate on the development of a new "mobile platform beyond today's smartphones, notebooks and netbooks, enabling the development of a variety of innovative hardware, software and mobile Internet services."
No specific devices were outlined.
The two also plan to work together on several open-source, Linux-based software projects for use in the Moblin and Maemo platform projects.
Financial terms of the deal were not disclosed. As part of the agreement, Intel /quotes/comstock/15*!intc/quotes/nls/intc (INTC 15.74, +0.06, +0.40%) will acquire a license for Nokia's /quotes/comstock/13*!nok/quotes/nls/nok (NOK 14.34, +0.26, +1.85%) /quotes/comstock/22u!e4:fi0009000681- (FI:NOK1V 10.29, -0.46, -4.28%) HSPA/3G modem IP technology for use in future products.
Dan Gallagher is MarketWatch's technology editor, based in San Francisco.
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consumerjm 15 minutes ago0 Votes Request sentThis is news? Intel & Nokia say: "We're going to do SOME-thing!!"
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This is news? Intel & Nokia say: "We're going to do SOME-thing!!""
- consumerjm | 15 min ago11:03am 6/23/09
0 Votes
First Take
Beware June bonus projections
Investment banks have thrown off the government reins when it comes to bailouts and pay, business has been good in the first half and bonuses -- especially those at Goldman Sachs Group Inc. -- could reach all-time highs. If you believe that and want to bet on it, David Weidner knows some derivatives traders and floor brokers who'd like to meet you.
2:07pm 6/22/09 | Comments: 29
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/quotes/comstock/15*!intc/quotes/nls/intc Intel Corporation (INTC)
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Of interest.... From Minyanville.com
Intel Corp (INTC) is making another big push into the mobile phone industry. According to Bloomberg, the world’s largest chipmaker will host a conference call today announcing its plans to provide processors to Nokia (NOK) for its production of mobile devices. Details are still unavailable, but some analysts are still excited over the news because Nokia is the world’s largest maker of mobile phones.
Just last February, Intel said it landed a contract with LG Electronics, the third largest phone-maker in the world. CEO Paul Otellini scrapped his predecessor’s $5 billion investment into the field in 2006 after he felt the company was late to the market. Now, he’s attempting to make the push back into phones to lessen Intel’s dependence on computers, which account for approximately 90% of sales.
S3 looking good. We still don't know much about the last China trip. If that next closing comes this month ( as hinted
last PR), I think we'll get our run. JMO.
GLTA.
Can't hurt!(EOM).
Press Release Source: Boyuan Construction Group, Inc.
Boyuan signs new construction project agreements valued at US $33.6 million
On Wednesday June 17, 2009, 7:00 am EDT
Buzz up! Print TORONTO, June 17 /CNW/ - Boyuan Construction Group, Inc., (TSX-V: BOY & BOY.DB) a leading builder of commercial, residential and municipal infrastructure projects in China's fast-growing regions of the Yangtze River Delta and the city of Sanya on Hainan Island, announced today that it has signed three new commercial construction project agreements with a total value of US $33.6 million. The projects are expected to be completed before July 2011.
"Boyuan has developed significant momentum since the start of the 2009 fiscal year," said Mr. Cai Liang Shou, Chairman of Boyuan Construction Group. "We are building a strong reputation for constructing quality projects on time and on budget, growing our project backlog because of our diversified expertise and are on track to exceed our $8.5 million after tax net income target for the year."
Based in the Yangtze River Delta, Boyuan's core market, the projects will include construction of the main production facilities of an eco-farm project in Jiangsu, one of China's fastest growing provinces, development of support facilities for a nuclear plant project in Zhejiang, another fast-growing Chinese province, and construction of a barley production facility also in Zhejiang. The Yangtze River Delta is home to approximately 80 million people and 20% China's gross domestic product, representing US $2 trillion.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the business of residential and commercial building construction, municipal infrastructure and engineering projects. In its last three fiscal years ended June 30, 2008, Boyuan completed more than 120 projects for a number of private and public sector clients including Cargill and the Dalian Shide Group, a billion dollar conglomerate whose partners include DuPont, Mitsubishi and GE. Boyuan's current projects include residential, industrial and mixed-use developments, including a five-star hotel and a project at the Qingshan Nuclear Plant, China's first and largest nuclear facility. From its operating bases in Zhejiang Province and on Hainan Island, Boyuan focuses on construction projects in China's fast-growing regions of the Yangtze River Delta and the city of Sanya.
Caution concerning forward-looking statements
Statements in this news release, which are not purely historical, are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future.
It is important to note that actual outcomes and Boyuan's actual results could differ materially from those in such forward-looking statements. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (1) the failure of Boyuan to execute its business plan, (2) the risks arising from Boyuan's operations generally (such as the ability to secure raw materials, arrange for manufactured products on a timely basis, and maintain an adequate workforce), (3) Boyuan's ability to remain competitive as other parties develop and release competitive projects and services, (4) Boyuan's ability to retain the employees necessary to continue research and development of current and new projects and services, (5) the success by Boyuan of the sales of its projects and services, (6) the impact of competitive products on the sales of Boyuan's projects and services, (7) the impact of technology changes on Boyuan's projects and services, (8) Boyuan's reliance on contractual rights such as licenses and leases in the conduct of its business, (9) general economic conditions as they affect Boyuan and its current and prospective customers, (10) the ability of Boyuan to control costs operating, general administrative and other expenses, and (11) insufficient investor interest in the Boyuan's securities which may impact on Boyuan's ability to raise additional financing as required
Actual future results may differ from the anticipated results expressed in the forward-looking statements contained in this press release and Boyuan does not undertake to update this information. Investors are cautioned against placing undue importance on forward-looking information contained herein and should consult Boyuan's disclosure documents filed from time to time on SEDAR and other public filings which contain a more exhaustive analysis of risks and uncertainties connected to Boyuan's business.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information
Boyuan Construction Group Inc., Mr. Paul Law, Chief Financial Officer, +(852) 9329 5088, paullaw@zjboyuan.com.cn
The Equicom Group Inc., Joe Racanelli, (416) 815 0700 ext. 243, jracanelli@equicomgroup.com
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From PINKSHEETS...ENHD 2.50 high friday.......
BID is 2.00
ASK is 3.25
:)
:)
--------------------------------------------------
ENHD — Energroup Holdings Corp.
Common Stock
Par Value: 0.001
QuoteNewsChartsCompany InfoFilingsResearchShort InterestInsider Trans.Inside Quote Best Bid Best Ask Time of Last Inside Change
2.00 (500 shares) 3.25 (500 shares) 12:43 PM
Trade Data / Last Trade Jun 12, 2009 Last Sale 2.00 Change -0.30
% Change -13.0435 Tick Down
Daily High 2.50 Daily Low 2.00
Opening Price 2.50 Volume 1,243
52 wk. High 260.00 52 wk. Low 0.25
Prev Close 2.30 Dividend 0.00
Yield 0.00 Beta Coefficient 0.00
Earnings/Share 1.37 P/E Ratio 1.4599
Trade data delayed 15 minutes.
Refresh All Data
All information contained herein is provided "as is." Pink OTC Markets Inc. makes no representation or warranty, expressed or implied, as to the accuracy, timeliness, or completeness of the information provided herein. Neither Pink OTC Markets Inc., nor its directors, officers, employees, or third party data suppliers, shall bear any responsibility or liability to verify the information and/or its source or for the use, misuse, or inability to use the information provided. None of the foregoing parties shall be liable to any third-party claims or losses of any nature. Accordingly, investors should not use this information as the basis for making an investment decision. Please see Risk Warning and Terms of Service for more information.
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The lowest price at which someone is willing to sell a security.
ENHD( PIGGY)....
ASK now at 3.25
:)
They'll get their quick profit, but I'll bet we'll stay on their watch lists for the next news.
Karin......
"S3 has clearly made progress since the beginning of 2009 with the closing of the Boyuan Construction RTO transaction and the signing of new Redwood Capital clients. While there certainly are positives in the March 31 financials, we expect the next quarterly filing to more accurately reflect the value of Redwood Capital's holdings, with an improved value for our ENHD stock and potentially the receipt of additional stock from completed client transactions."
==================================================
Sounds like he's hinting at another closing before the end of June. One can hope.
GLTA.
10Q filed today!
SAN FRANCISCO (MarketWatch) -- Intel Corp. said Thursday that it will acquire Wind River Systems Inc. for $884 million, in a move by the chip-making giant to expand into the market for wireless devices.
Under the agreement, Santa Clara, Calif.-based Intel (INTC 16.08, +0.14, +0.88%) plans to pay $11.50 a share for Wind River (WIND 11.72, +3.72, +46.50%) -- a 44% premium above the shares' Wednesday closing price of $8.
Wind River's shares soared more than 40% early Thursday, while Intel was up 0.4%.
Wind River develops software used to make wireless handsets run faster and more efficiently. Its software is also used in other electronic devices in the auto, aerospace and defense markets.
The semiconductor giant, which mainly sells chips for computers and servers, has been seeking to branch out into other markets for several years.
Stifel Nicolaus analyst Cody Acree said the acquisition "is a step in Intel's effort to diversify its offerings into markets beyond its core PC, server, or mobile markets."
"While Intel is working on chips for these diverse sectors, it will also need specialty software," Acree told clients in a note. "Additionally, Wind River is a well-established company with 'thousands' of clients, which Intel will work to sell to and then to expand into other tertiary functionality."
FBR Capital Markets analyst Craig Berger also called Intel's purchase of Wind River a "strategic shift" for the chip giant.
"We think this acquisition of Wind River is, potentially, a first step in Intel diversifying its business model towards that of IBM, a company that sells hardware, chips, software and services worldwide," Berger told clients in a note. "If Intel is beginning to diversify its business away from just semiconductors, we would expect a host of similar software or services related acquisitions in coming years."
BMO Capital Markets analyst Brian Piccioni also said the move "makes sense strategically since they want to penetrate the embedded space and that requires software support."
However, he also noted in an email interview, "History is not full of examples of tech acquisitions which have paid off financially, though, and Intel has sure made a few dubious ones."
Although Wind River has grown steadily over the past few years, the Alameda, Calif.-based company has fallen short of Wall Street estimates in recent quarters. The stock fell to as low as $5.61 in March from a 52-week high of $12.99, before partly recovering.
Wind River is slated to report its first-quarter financial results Thursday after markets close.
In the most recent fiscal year, Wind River generated $359.7 million in revenue, up 9.5% from the year before. Net income totaled $10.7 million.
Benjamin Pimentel is a MarketWatch reporter based in San Francisco.
Jeffry Bartash is a reporter for MarketWatch in Washington.
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PhotonJohn 6 hours agoEven (1 Up / 1 Dn) Request sentThis is a strange move for Intel. Why buy a company that predominantly is focused on embedded processors like the PowerPC? Is this a squeeze play on the PowerPC architecture for Intel?
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kennykeith99 3 hours ago-1 Vote (0 Up / 1 Dn) Request sentwhat an AWESOME move for Intel. Now they can offer even more complete HW+SW platform solutions to their customer base and expand their presence in the embedded market with Intel Architecture !!! Way to go Intel !!
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what an AWESOME move for Intel. Now they can offer even more complete HW+SW platform solutions to their customer base and expand their presence in the embedded market with Intel Architecture !!! Way to go Intel !!"
- kennykeith99 | 4:04pm Today4:04pm 6/4/09
-1 Vote (0 Up / 1 Down)
First Take
At least Rio Tinto didn't compound its mistakes
In backing out of the Chinalco deal, which never received a warm reaction from its top shareholders in any place, Rio Tinto has at the very least not added another mistake to its coal pit-sized collection.
3:57pm Today3:57pm 6/4/09
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/quotes/comstock/15*!intc/quotes/nls/intc Intel Corporation (INTC)
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I'd like to see it break the 2.20 high.
GLTA.
right, load the boat!(EOM).
right, load the boat!(EOM).
Press Release Source: Boyuan Construction Group, Inc.
Boyuan reports third quarter 2009 fiscal results
On Monday June 1, 2009, 1:47 pm EDT
- Year-to-date revenue up 57% and net income up 30% -
TORONTO, June 1 /CNW/ - Boyuan Construction Group, Inc., a leading builder of commercial, residential and municipal infrastructure projects in China's fast-growing regions of the Yangtze River Delta and the city of Sanya on Hainan Island, announced today its financial results for the three and nine-months ended March 31, 2009. All figures are in U.S. dollars unless otherwise stated.
Q3 FY 2009 Financial and Operating Highlights
- Revenue was $15.9 million, down 45% from $28.8 million for Q3 2008
when Boyuan accelerated completion of projects previously delayed
because of licensing issues unrelated to the Company.
- Gross profit was $2.3 million, representing a margin of 14.6% on
revenue.
- Operating income was $1.8 million compared to $5.4 million for Q3-
FY2008.
- After tax net income was $1.2 million, compared to $4.4 million for
Q3-FY2008.
- Completed the acquisition of all issued and outstanding common shares
of SND Energy Ltd. through a reverse-takeover (RTO) transaction.
- Concurrent with the RTO transaction, completed a private placement
financing, which generated gross proceeds of $4.1 million (CDN),
through the issuance of secured convertible debentures and 512,500
common shares to investors.
- As part of the private placement financing, the Company's Chairman,
Mr. Shou Cailiang, deposited 2.05 million common shares into escrow,
which will be transferred to investors in the event that Boyuan does
not achieve after-tax net income of least $8.5 million (U.S.) for
fiscal year 2009 and $11.5 million (U.S.) for fiscal year 2010.
- The Company's common shares began trading on the TSX Venture Exchange
under the symbol BOY and its debentures under the symbol BOY.DB.
Highlight Subsequent to Quarter End
- Appointed Paul Law, CA as Chief Financial Officer effective April 3,
2009.
"Our third-quarter performance was consistent with our expectations and reflects our ongoing progress," said Mr. Shou Cailiang, Chairman of Boyuan Construction Group, Inc. "Despite a general economic slowdown due to Chinese New Year holidays in the period, we expanded our contract backlog and completed several key projects on time and budget. Most importantly, our year to date net income has grown by 30%, keeping us on track to exceed our $8.5 million target for the year."
Operational Results
Revenue for the third quarter of 2009 was $15.9 million compared to $28.8 million for Q3 of 2008. Higher revenue was generated in 2008 because Boyuan accelerated the completion of projects previously delayed due to licensing issues unrelated to the Company. Revenue for the first nine-months of 2009 was $60.6 million, an increase of 57% when compared to $38.7 million for the same period in 2008. The growth is mainly due to an increase in project volume as well as an increase in the number of projects, particularly in the Sanya market, where contract value per construction area is stronger.
Cost of contract revenue for the third quarter of 2009 was $13.6 million, compared to $23.2 million for the third quarter of 2008. For the first nine months of 2009, the cost of contract revenue was $52.1 million, up 60% from $32.5 million for the same period in 2008. The year-to-date increase was primarily due to expanded project contract volume.
Gross profit for the third quarter of 2009 was $2.3 million, down from $5.6 million for the third quarter of 2008. Gross profit for the first nine-months of 2009 increased 39% to $8.5 million from $6.1 million from the same period last fiscal year.
General and administrative expenses for the third quarter of 2009 totalled $0.5 million up 134% from $0.2 million for the same period of 2008. The increase was due primarily to fees relating to the Company's RTO transaction and securing a listing status on the TSX Venture Exchange.
Operating income for the third quarter of 2009 was $1.8 million compared to $5.4 million for the third quarter of 2008. For the first nine months of the year, operating income was $7.8 million compared to $5.4 million for the same period of 2008.
After tax net income for the third quarter of 2009 was $1.2 million compared to $4.4 million for the third quarter of 2008. After tax net income for the first nine months of 2009 was $5.6 million, up from $4.3 million for the same period in 2008. As specified by the Company's make-good provision, Boyuan must obtain after-tax net income of $8.5 million for the fiscal year ending June 30, 2009. If the target is not met, Boyuan's Chairman will transfer more than 1 million common shares currently held in escrow to investors.
Cash and cash equivalents at March 31, 2009 were $1.7 million compared to $6.4 million at year end June 30, 2008.
Outlook
"We remain bullish on our long-term prospects," said Mr. Shou Cailiang. "Demand for our construction services continues to grow in each of our core markets, particularly as the rise of China's middle class and growing urbanization are fueling the need for new, high-quality residential as well as commercial projects for which we are developing a strong reputation."
Boyuan's consolidated statements for the quarter ended March 31, 2009 and related management's discussion and analysis (MD&A) will be filed with securities regulatory authorities and available via SEDAR at www.sedar.com.
About Boyuan Construction Group, Inc.
Based in Jiaxing City, China, Boyuan Construction Group, Inc. is in the business of residential and commercial building construction, municipal infrastructure and engineering projects. In its last three fiscal years ending June 30, 2008, Boyuan completed more than 120 projects for a number of private and public sector clients including Cargill and the Dalian Shide Group, a billion dollar conglomerate whose partners include DuPont, Mitsubishi and GE. Boyuan's current backlog includes residential, industrial and mixed-use developments, including a five-star hotel and a project at the Qingshan Nuclear Plant, China's first and largest nuclear facility. From its operating bases in Zhejiang Province and on Hainan Island, Boyuan focuses on construction projects in China's fast-growing regions of the Yangtze River Delta and the city of Sanya.
Caution concerning forward-looking statements
---------------------------------------------
This press release contains forward-looking statements. Such statements inherently involve numerous risks and uncertainties. Actual future results may differ from the anticipated results expressed in the forward-looking statements contained in this press release, including, but not limited to, those statements contained under "Outlook" and regarding the ability to meet the target for the make-good provision and Boyuan does not undertake to update this information. Investors are cautioned against placing undue importance on forward-looking information contained herein and should consult the Company's reports and other public filings which contain a more exhaustive analysis of risks and uncertainties connected to Boyuan's business.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information
Boyuan Construction Group, Inc., Mr. Paul Law, Chief Financial Officer, + (852) 9329 5088, paullaw@zjboyuan.com.cn
The Equicom Group Inc., Joe Racanelli, (416) 815-0700 ext. 243, jracanelli@equicomgroup.com
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