Results of Operations For The Year Ended September 30, 2008 Compared to the Year Ended September 30, 2007
Our revenue decreased $51,047, or 6%, to $837,089 for fiscal 2008, as compared to $888,136 for fiscal 2007. During fiscal 2008, two (2) of our clients became fully reporting, publicly traded companies; whereas, during fiscal 2007, three (3) of our clients became fully reporting, publicly traded companies. The decrease in revenue was primarily attributable to the decrease in the number of clients that made it through the process of becoming a fully reporting, publicly traded company during fiscal 2007.
General and administrative expense decreased $742,807, or 37%, to $1,248,426 for fiscal 2008, as compared to $1,991,233 for fiscal 2007. The decrease in general and administrative expense was primarily due to a decrease in officer expenses resulting from executive officer resignations and the discontinuance of our equity compensation plan.
Bad debt expense decreased $43,295, or 40%, to $64,232 for fiscal 2008, as compared to $107,527 for fiscal 2007. The decrease in bad debt expense was due to a decrease in write-offs during fiscal 2008 as compared to fiscal 2007 when we evaluated our client base with a focus on their ability to make it through the process of becoming fully reporting, publicly traded companies, and, as a result, in fiscal 2007 we determined that certain cash and stock receivables from several clients were uncollectible and wrote them off.
Depreciation and amortization expenses decreased $12,526, or 42%, to $17,639 for fiscal 2008, as compared to $30,165 for fiscal 2007. The decrease in depreciation and amortization was primarily a result of having certain capitalized website costs becoming fully depreciated.
Total operating expenses decreased $798,628, or 38%, to $1,330,297 for fiscal 2008, as compared to $2,128,925 for fiscal 2007. The decrease in total operating expenses was primarily attributable to the decrease in general and administrative expense and bad debt expense.
Impairment of non marketable securities increased $182,030, or 60%, to $487,300 for fiscal 2008, as compared to $305,270 for fiscal 2007. During fiscal 2008, the common stock of one of our clients became publicly traded with low volume and, as of September 30, 2008, had a market price per share that was lower than the price per share that we recorded for our shares in March 2005. In addition, there were no identifiable facts or circumstances to suggest that we would recognize more than the prevailing market price per share when we are able to sell our shares. As a result of these factors, we impaired them.
Interest expense decreased $54,665, or 83%, to $11,222 for fiscal 2008, as compared to $65,887 for fiscal 2007. In September 2007, just prior to the beginning of fiscal 2008, Stephen Brock, our President, CEO and a director, converted $1,019,657 of debt into 1,019,657 restricted shares of our common stock. The decrease in interest expense was due to lower levels of debt which resulted after Mr. Brock’s conversion.
Interest income increased to $2,235 for fiscal 2008, as compared to interest income of $1,827 for fiscal 2007. The increase in interest income was due to higher levels of cash on hand.
We had realized gain on sale of marketable securities of $83,271 for fiscal 2008, as compared to realized loss on sale of marketable securities of $103,723 for fiscal 2007. The change from realized loss to realized gain on sale of marketable securities was due to the net increases in the market values of marketable securities that we sold.
Unrealized loss on marketable securities was $66,382 for fiscal 2008, as compared to unrealized loss on marketable securities of $635,656 for fiscal 2007. The decrease in unrealized loss on marketable securities was primarily due to changes in the values of marketable securities.
We had a net loss of $972,606 (and basic and diluted net loss per share of $0.03) for fiscal 2008, as compared to net loss of $2,349,498 (and basic and diluted net loss per share of $0.09) for fiscal 2007. The decrease in the net loss was primarily attributable the decrease in total operating expenses, interest expense, realized loss on sale of marketable securities and unrealized loss on marketable securities.
We had an accumulated deficit of $4,773,217 as of September 30, 2008.
