BOB,
I am going to look into the recent 10Q report. I would like to know what exactly was done , and what came of it, when ZKID offered a free trial to Google,Yahoo,and Earthlink. I think the best shot they have is for a big company like one of those listed to take an interest in them. But I have one question about that angle, why has one of these large ISP's not already offered something like this? If it were a promising idea, one of those outfits have people in house that could produce something along the same lines. I will email the three companies listed to see if they did in fact receive some kind of offering from ZKID, and also, what their take on the concept in general is.
Another thing to take careful note of in the 10Q is the wording about how cash strapped they are and the ways in which they may seek to raise money. They talk about possibly issuing equity and debt instruments, as well as private placement of stock. Of the three, I would be most concerned about private placements, especially if it is with common stock. The 10Q plainly states the dilutional nature of these possible activities.
Here is an excerpt from the 10Q:
There were additional marketing opportunities created to increase corporate visibility, as well as efforts to raise our subscriber base during this quarter. We entered into marketing and sales agreements with IVI Communications, Air Rover Wi-Fi and Deca. We also offered a free trial of our products to Google, Yahoo and Earthlink.
Our short-term cash requirements are approximately $12,000 per month. Our long-term cash requirements will include our continuing fixed operational expenses and marketing expenses associated with responding to subscriber inquiries. The marketing costs will be in direct proportion to the subscriber response generated from co-marketing. The money needed to finance our operational overhead expenses will come from new investors. We may offer common stock on a private stock offering basis.
We are in need of additional cash. We may seek additional capital in order finance our proposed operations. We have not identified any specific future financing sources. Our efforts to finance Zkid and its operations may result in the issuance of equity and debt instruments. This and other future financing activity may result in the dilution of shareholder equity. We expect to incur financial losses for the foreseeable future.
jc
