LETS BREAK DOWN THE SNDY FINANCIAL REPORT...
In 2011, Solos Endoscopy began its efforts debt reduction efforts and consummated agreements, which resulted in the forgiveness of $457,471 in debt for the Company. The signed settlement agreement and new consulting agreement resulted in a reduction of ongoing expenses by approximately $40,000 per quarter carried over into 2012. As a result, I’m pleased to report that Solos Endoscopy’s Total Liabilities for period ending June 30, 2012 are just $214,827 compared to Total Assets of $2,426,883.
This is a major accomplishment in less then a year!!
Throughout the year, Solos has focused its R & D efforts into the design and development of new modifications to its endoscopic instrument lines to accommodate the continual advances in Laparoscopic surgical procedures.
Once again the company is doing what they said they would do from the presidents letter. R&D and new products!!
Through the date hereof, we generated revenues during the six months ended June 30, 2012 in the amount of $178,417 versus $172,359 for the six months ended June 30, 2011. This was an increase of $6,058 for the six months then ended. The Company purchases most of its products from European vendors and the value of the dollar was substantially higher against the Euro for the first part of 2012.
This tells me the company is still showing a slight increase in sales from last year. Just wait till they partner with someone to actually push their products with a focus by the company on SALES! That is not happening as of now, but in the months that are ahead it will.
In the second quarter of 2012, the Company executed a pledge agreement to secure the services of the President to be performed under the employment agreement. The Company has a minimum salary commitment to its President at a rate of $100,000 per year going forward for the next four (4) years. As a result, the Board of Directors issued 450,000 shares of Series B Preferred stock as additional security. As long as there is no Event of Default (as defined in the Agreement(s)) respecting to the payments under the Employment Agreement, and no default shall have occurred under the Amended Agreement, the Company shall be entitled to exercise any and all of the President’s voting and other consensual rights pertaining to the Pledged Collateral pursuant to the directions of Board of Directors of Solos Endoscopy. The Company has elected to book the security issued pursuant to the employment contract as an additional $450,000 expense based upon 450,000 shares issued at a rate of $1.00 per share. If the Company satisfies its obligations under the employment agreement and corresponding pledge agreement, the Company will then make the appropriate adjustments to the accounts.
Otherwise, due to forgiveness of debt to the Company the Company would have been a near break even for the six months ended June 30, 2012.
Thanks SNDY for letting me know this great news!!
And we also see here once again the president believes in the future of the company by taking even more preferred b stock options, that to me is enormous!!! And this is the only thing that kept them from being debt free.
Gross profits up from $85,000 to $113,000 for second q 2011 to 2012. Cash on hand $146,000 up from $6,600 last year. Inventory on hand $236,000.
These numbers are in line with what I expected for the second quarter. Third and forth quarter is when we will start to see better increase in numbers.
At June 30, 2012 the Company has been generating revenues and is still seeking capital through the offering of its preferred stock or the obtaining of additional debt in order to continue operations. The Company does not know if the revenues from its current client base will provide sufficient earnings to cover the cost of its operations. The Company had expected this gross margin from operations would increase in 2012, but it expected the gross revenues will not be sufficient to cover all of its current operations. Due to the lack of substantial increases in gross revenues and the maintenance of its gross for the six months ended June 30, 2012, the Company expects the total loss from operations to increase unless the future revenues increase and any related profits from such an increase. The Company will have to obtain additional customers and related sales to
become profitable. At June 30, 2012 and through the date of this filing, the Company has yet to obtain any other commitments for additional funding. For the Company’s first six months of 2012, the Company has received a total of $395,800 from sales of its preferred stock and another $76,500 for subscriptions to its preferred shares that it converted to in July and August. It expects to raise an enough capital under the current contract to sustain the losses being incurred in its operations. The Company expects that the gross proceeds from its offering will provide enough working capital to continue its operations during the next twelve months and to execute its business plan.
Additionally, in the first six months of 2012, the Company has reduced its debt by over $640,000 and $76,500 of the debt was converted to equity in July and August of 2012. This restructuring has created a positive working capital at March 31, 2012 in the amount of $180,066 versus a negative working capital at December 31, 2011 in the amount of $349,569. The Company expects with the existing sales of its Series B Preferred Stock that it will obtain the capital to expand its revenues to cover its operating expenses and gain profitability.
Solos Management believes its long term success is contingent upon its efforts to strengthen its balance sheet, its ability to obtain proper certifications of its product line, and the development of distribution channels for its endoscopic instruments. Management is confident that its products have been FDA approved and are accepted in Hospitals nationwide. The Company will continue product development and marketing as it attempts to sell its endoscopic instruments Internationally.
The company is taking care of their shareholders as well. They have sold 229 million shares since February. But they have not been sold into the market. The ask size on the share price since this run up has been very thin. About the same or even a little less then the first run up in mid February-March. There is no way you could of dumped 229 million shares into the market and it not effect the amount of shares on the ask side of the price.
Also one point of major interest to me as running a business is profit margins. Look how much higher SNDY profit margins are this year compared to last year.
2Q June 2011 Revenue $91,865 cost of goods $50,526 profit 45%
2Q June 2012 Revenue $81,752 cost of goods $28,538 profit 65%
A 20% increase in profit margins is incrediable!! This will add major value to the company and shareholders as revenue increase in the months to come.
This report is exactly what I was expecting. Revenue is still slow because their focus is on new product development, CE mark being finalized and distribution thru partnerships internationally. Once we get this into place then the companies main focus will be increasing SALES! You have to have the products first before you can launch a major sales campagin. They would fall flat on their face if they only came out half cocked with their product line. They are going to have enough equipment that the sales reps will plenty of product to showcase. It will make for a much better sales presentation when you show SNDY's full line of equipment. Let me explain it this way. When I started my candle company we started with just candles. The sales reps had a very hard time placing just candles into retail stores. Now we have candles, room sprays, linen sprays, wax melts, car fresheners, and diffusers. It makes it so much easier for the sales reps to now make sale because our line is complete and diverse. And sales have went up 300%.
The same will hold true for SNDY. I would rather them take their time to get everything in line, CE mark, new products, financing, and inventory build up so when they do partner with someone to distribute their products it will make it very easy for SNDY sales group to make the sale. It just going to require a little more time and patience as the insiders keep moving all the pieces in the right directions to take this company to the next level. Time is on the longs side. If it takes till April 2013 then most of the long will only have to pay long term capital gains taxes and that will just be more money in our pockets if we decide to sell at that time. Of course by then the company may have such a tremendous increase in sales that we might want to wait it out and let the share price move up as sales increase. The next 6 months should be exciting for the longs in SNDY. The future still looks very bright!
