COWIE (.015): CoroWare, Inc. Reports 2009 Annual Earnings
Revenues and Gross Profits Rebound in 4th Quarter Despite Setbacks and Losses
NOTE: "As of March 31, 2010 there were 9,245,454 shares of the issuer's $.001 par value common stock issued and outstanding."
REDMOND, Wash., May 12, 2010: Coroware today announced its financial results for the year ended on Dec. 31, 2009 ("the 2009 Period").
For the 2009 Period, CoroWare reported revenues of $1,988,710 compared to revenues of $2,392,681 during the year ended December 31, 2008 (the "2008 Period").
Gross Profits increased to $599,669 during the 2009 Period compared to $485,976 during the 2008 Period.
Although revenues in the 2009 period were lower than 2008 as the global economy experienced setbacks prompting customers to reduced spending, sales recovered in the last 5 months of 2009 as a result of new and renewed customer contracts for lab management, IT consulting and software development, as well as steady sales of mobile robots. Gross profits improved during the 2009 Period as CoroWare improved its consulting resource utilization and increased its use of near-shore consulting resources in Latin America.
Total Operating Expenses were further reduced to $1,116,127 for the 2009 period from $1,831,025 in the 2008 period as the Company continued to streamline corporate overhead expenses in 2009.
Loss from Continuing Operations before Other Income decreased to $516,458 for the 2009 period from $1,345,049 in the 2008 period as the Company increased Gross Profits and reduced Total Operating Expenses.
Net loss for the 2009 Period was $5,199,134 compared to net loss of $1,805,852 for the 2008 period. The loss during the 2009 Period includes $2,023,108 of derivative expense and $2,753,840 of interest expense.
The derivative expense is associated with CoroWare's convertible debentures. The derivative liability increases with the increase in CoroWare's stock price, because the underlying embedded conversion feature is indexed to CoroWare's stock. As the derivative liability increases, the derivative expense increases. The interest expense is primarily associated with the amortization of the discount also associated with our convertible debentures. We used the effective interest method to amortize the associated discounts. As such, the interest expense increases exponentially each year as the carrying value of the debenture increases. The loss during 2008 consisted of $1,773,207 from continuing operations and $32,645 from discontinued operations. The 2008 loss includes derivative income of $959,970 and interest expense of $870,791. The derivative income in 2008 was the result of a decrease in our stock price. To record a reduction in the derivative liability, we recorded derivative income. Interest expense associated with the debt discount amortization was lower in 2008 as would be expected using the effective interest method where the amount amortized increases exponentially each year.
"CoroWare's business recovered in 2009 as customers increased purchases in IT consulting, software development services, and CoroCall HiDef video conferencing subscription services," said Lloyd Spencer, CEO of CoroWare, Inc. "In the coming year, CoroWare is focused on growing its revenues, addressing the derivative liabilities that are a result of legacy convertible debenture obligations, and evaluating potential acquisitions related to CoroWare's telepresence initiative."
The full 10K report and all previous reports can be accessed by going to www.coroware.com/investors.aspx.
Headquartered in Redmond, Washington, CoroWare is a solutions integrator with expertise in mobile robotics, personal telepresence, IT consulting and software development. For more information on CoroWare's products and services, please visit www.CoroWare.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results, performance and achievement in the future to differ materially from forecasted results, performance, and achievement. These risks and uncertainties are described in the Company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events or changes in the Company's plans or expectations.
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SOURCE: CoroWare, Inc.
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