From NT...
Estimated Revenues
Year ended December 31, 2007. Gross revenues for the fiscal years ended December 31, 2006 and 2007 were $1,834,245 and $3,354,243, respectively. This represents a $1,519,998 or 83% increase from 2006 to 2007. Gold Fusion had four operating stores during the year of 2007 compared to two during 2006. The Company purchased a new salon during 2007 increasing revenue for that year.
Estimated Expenses
Year ended December 31, 2007. Total expenses for the fiscal years ended December 31, 2006 and 2007 were $5,422,272 and $8,202,224, respectively. This is a $2,779,952 increase, or a 51% increase from 2006 to 2007. The increase was attributable primarily to consulting fees of $784,593, promotional and marketing expenses of $1,259,608, and increased expenses for the expansion of Landis and Gold Fusion operations.
Estimated Operating Losses
Nexia estimates an operating loss of $6,397,956 for the year ended December 31, 2007 compared to a loss of $4,425,135 for the comparable period in the year 2006. The increase in operating loss of $1,972,521 or a 45% increase was the result of the increased operating expenses related to the operation of the Landis Salon, Black Chandelier costs of expansion and investor relations, promotional and marketing related fess paid during the year ended December 31, 2007.
Estimated Net Losses
Nexia estimates a net loss of $6,320,440 for the period ended December 31, 2007, as compared to a net loss of $1,967,208 for the comparable period in 2006. The increase in net loss represents a change of $4,353,232, or 221% increase compared to the same period in 2006, reported above. Increased operations in the salon and retail segments are contributors to the increase in net loss. Other major contributors to the increased loss were increases in payroll, marketing and promotion expenses.
Estimates of Liquidity and Capital Resources
On December 31, 2007, Nexia estimated current assets of $629,179 and total assets of $5,303,445 compared to current assets of $1,022,549 and total assets of $4,734,635 as of December 31, 2006. Nexia estimates its net working capital deficit of $1,847,561 at December 31, 2007, as compared to a net working capital deficit of $990,123 at December 31, 2006. The increase in working capital deficit of $857,438 is due primarily to increased operations without sufficient cash flow to cover the increase.
