I am encouraged that Net Sales have increased significantly. With some operating expense control and additional increases in sales, this company could move to profitability very soon. Nice to see an OTC report earnings on a consistent basis. GLTA!
RESULTS OF OPERATIONS
Year ended December 31, 2017 as compared to December 31, 2016
Net Sales. Net sales for the year ended December 31, 2017 were $8,256,918 an increase of $3,871,988 or 88.3%, compared to $4,384,930 for the year ended December 31, 2016. The increase is attributable to the acquisition of ABC 1 and ABC 2 and the increase in equipment and software sales.
Cost of Sales. For the year ended December 31, 2017, cost of sales was $4,910,331 an increase of $1,806,317 from $3,104,014 for the year ended December 31, 2016. The increase in cost of sales is a result of an increase in infrastructure services The Company’s gross margin is 40% for the year ended December 31, 2017 as compared to 29% for the year ended December 31, 2016.
Operating Expenses. For the year ended December 31, 2017, operating expenses were $3,431,344 an increase of $1,517,533 as compared to $1,913,811 for the year ended December 31, 2016. The net increase is a result an increase in staffing salaries and consulting expenses. Technical/Management salaries increased to $365,076 to $438,826 the year ended December 31, 2017 as compared to $73,750 for the year ended December 31, 2016. Officer’s Salaries increased $278,248 to $535,150 for the year ended December 31, 2017 as compared to $256,901 for the year ended December 31, 2016 as a result of the prior year’s acquisition of ABC 1 and ABC 2 and the remaining 50% of Secure Infrastructure and Services. Consulting fees increased $178,370 to $211,122 for the year ended December 31, 2017 as compared to $32,752 for the year ended December 31, 2016. This was a result of adding IBM hosting and investor relations consulting.
Other Income (Expense) Interest income for year ended December 31, 2017 and 2016 was $34 and $2 an increase of $32. Interest expense for the year ended December 31, 2017 decreased $121,371 to $106,906 from $228,277 as compared to the year ended December 31, 2016.
Net Profit (Loss). Net Loss for the year ended December 31, 2017 was ($188,493) a decrease of $737,230 as compared to net loss of $(925,723) for the year ended December 31, 2016. DSC’s profit was primarily a result of an increase in sales.
