BAMMM! $ECDC:
Plan of Operation
2013 operations represented a significant shift in focus and business restructuring for the Company. We completed the development of 2 new divisions, "StudentConnect" and "WetWinds," and began to commercialize both divisions. The Company is continuing to focus its resources on completing the development of its two newest divisions StudentConnect and WetWinds (Vir2o).
To accomplish our commercial objectives we hired key executives to manage development activities for all divisions of the Company.
Marketing and Business Development
We completed the development of Vir2o and launched the site as planned in Brazil, India, US, Nigeria, Canada and UK representing markets where we will offer commercial content.
We hired SocialRadius to engage in public and media relations campaign for Vir2o.
We began the development of the mobile application for Vir2o and will launch the mobile application on September 1 st 2013.
We opened the Amazon aStore to all users on Vir2o on July 22, 2013.
EarthSearch Communications
In March 2013 we reconstituted our sales team for EarthSearch. We hired a a new Director of Sales and a team of outside sales executives. Due to the rebound in the US economy we have refocused our resources on the expansion of commercial activities in the US and North America.
We are currently engaged in numerous pilot projects with several major organizations, including but not limited to the following partners and customers: Proseguer Uraguay, and Oando Oil in Nigeria. Our business with each of the aforementioned organizations consists of the following:
Proseguer Uruguay:
We executed a 2 year licensing agreement with Prosequer in Uruguay and delivered an initial pilot order of 50 TrailerSeals. Proseguer is currently working on a project with the Uruguay Customs Authority for the tracking of Cargo transported between Uruguay and neighboring countries. Our TrailerSeals will be installed on all containers traveling between Uruguay and neighboring countries. We have developed and localized a version of our GATIS software in Uruguay for the intended deployment of a full operation in 2014.
Oando Oil in Nigeria
We completed our pilot project for Oando Oil in Nigeria and delivered 400 units of oil tanker monitoring devices for the project and are implementing several pilot projects for our Regional Master Licensee for West Africa (Halogen Security), these pilot projects include Lagos State Government Waste Management and an oil pipeline monitoring project for the Nigerian National Petroleum commission through our partner Halogen Security.
StudentConnect
The Company has commercially launched StudentConnect, our school transportation and safety division. We executed 5-year contracts with school Districts in South Carolina, Kentucky, Louisiana, and Arkansas. We intend to have all 4 school districts fully installed and implemented for the school year beginning January 2014. In addition, we are continuing pilot testing and discussions with school districts in GA, SC, KY, AR, AL, NC and LA. We anticipate additional agreements executed by year end for further deployment in 2014.
We executed 2 agreements with Verizon Wireless, The Verizon Partner Program and the Verizon Master Services Agreements (MSA). The MSA agreement gives us access to the Verizon network and grants Verizon wireless exclusive right to provide network services to all schools utilizing StudentConnect. Under the Verizon Partner Program, Verizon and StudentConnect shall engage in joint sales and marketing of the StudentConnect product to school districts across the country. Verizon's sales force shall market StudentConnect to school districts nationwide.
We anticipate having access to the Verizon sales force which will allow us to reach greater audience for the continued and accelerated growth of the StudentConnect division of our business. To meet the potential demand we have expanded our technical and customer service operation and plan to increase our warehousing capabilities.
WetWinds dba "Vir2o"
WetWinds is a technology company that provides interactive social media experiences for users across the globe through its online platform Vir2o. We launched the beta version of Vir2o on April 5, 2013. We filed provisional patent application with the US Trade Mark office in April of 2013 and expect to complete a full non provisional application by January 2014.
We launched the full version of Vir2o on July 1, 2013. The platform will offer an online movie service, music service "VMaestro", a ecommerce platform "MarketPlace" , Gaming platform, Web Radio, Live event broadcast, a World Headline news feature and our proprietary "nVite" technology. The social media product was designed to improve social engagement on the internet.
On August 1, 2013, we executed an agreement with Ad Media to provide advertisement content to Vir2o.
We offer commercial content and advertisement platform in 4 additional markets outside the US. We implemented advertisement capability on the platform and currently display advertisement on the platform in 40 countries.
In September 2013 we hired several independent consultants in Nigeria and Brazil to help facilitate the growth of the platform in both markets with the recruitment of users and content providers,
Our user recruitment strategy includes the engagement of a public relations firm to target and introduce our proprietary nVite technology to the public. We are consistently promoting the platform on social media, engaging potential users with games and contest in all markets where we are actively promoting the site, and hope to engage online bloggers and celebrities to endorse the platform.
On October 18, 2013, we launched the mobile app for Vir2o on iOS, Android and Blackberry platforms making it available to all users with smart phones. In addition we launched the app in html for users that do not have smartphones.
On October 20, 2013, we entered into an agreement with AdMob, the mobile ad division of Google, to provide advertisement on the mobile apps. We anticipate that these advertisements will be deployed by the end of 2013.
We intend to accelerate and increase our promotion and marketing efforts to grow the site as we move into 2014. Our goal is to have the site actively growing with users, content and revenue.
We filed a trademark application with the USPTO for our brand and logo Vir2o and the "V" brand as a social plug in and widget.
Rogue Paper
We do not have a management role in Rogue Paper or its operation. During the fourth quarter of 2012, the management of Rogue Paper effectively shut-down operations, denied the Company access to financial records, refused to participate in shareholder or management meetings and all members of Rogue Paper management resigned on January 25, 2013. No legal action has been taken by either Rogue Paper or the Company.
Results of Operations
For the Three Months Ended September 30, 2013 and 2012
Revenues
For the three months ended September 30, 2013, our revenue was $106,949 compared to $66,314 for the same period in 2012, representing an increase of 61%. This decrease is attributed to increase in orders of our EarthSearch products, while we continue our focus on completing development of the StudentConnect and WetWinds divisions.
Revenues are generated from three separate but related offerings, RFID/GPS product sales, consulting services, and user fees for GATIS - our advanced web based asset management platform. We generated revenues from product sales of $101,563 and $52,721 for the three months ended September 30, 2013 and 2012, respectively. Revenues for consulting services were $-0- and $-0- for the three months ended September 30, 2013 and 2012. User fees were $5,386 and $13,593 for the three months ended September 30, 2013 and 2012, respectively.
Operating Expenses
For the three months ended September 30, 2013, operating expenses were $530,632 compared to $1,007,834 for the same period in 2012, a decrease of 47%.
Cost of revenues increased $25,634 and is directly attributable to the increase in revenues for the three months ended September 30, 2013.
For the three months ended September 30, 2013, selling, general and administrative expenses were $453,896 compared to $956,732 for the same period in 2012, a decrease of 53%. This decrease was primarily caused by professional fees related to public company compliance and investor relations decreased by $131,500; bad debt expenses decreased by $125,002; royalties owed on a license agreement decreased by $1,024; and salary expenses of $243,203.
Net Loss
We generated net losses of $384,802 for the three months ended September 30, 2013 compared to $974,993 for the same period in 2012, a decrease of 61%. Included in the net loss for the three months ended September 30, 2013 was interest expense of $125,578 (of which $101,476 represents accretion of embedded beneficial conversion features on notes payable); offset by the change in derivative liability of $160,000 and non-controlling interests' share of the net loss of EarthSearch of $4,459. Included in the net loss for the three months ended September 30, 2012 was interest expense of $134,083 (of which $138,230 represents accretion of embedded beneficial conversion features on notes payable); offset by other income of $57,003, change in derivative liability of $8,518, net loss from disputed subsidiary of $12,047 and non-controlling interests' share of the net loss of EarthSearch of $47,136.
For the Nine Months ended September 30, 2013 and 2012
Revenues
For the nine months ended September 30, 2013, our revenue was $169,168 compared to $710,718 for the same period in 2012, representing a decrease of 76%. This decrease is attributed to our focus on completing development of the StudentConnect and WetWinds divisions.
Revenues are generated from three separate but related offerings, RFID/GPS product sales, consulting services, and user fees for GATIS - our advanced web based asset management platform. We generated revenues from product sales of $155,385 and $514,397 for the nine months ended September 30, 2013 and 2012, respectively. Revenues for consulting services were $-0- for the nine months ended September 30, 2013, compared to $151,920 for the nine months ended September 30, 2012. User fees were $13,783 and $44,401 for the nine months ended September 30, 2013 and 2012, respectively.
Operating Expenses
For the nine months ended September 30, 2013, operating expenses were $1,639,374 compared to $2,911,471 for the same period in 2012, a decrease of 44%.
Cost of revenues decreased $264,905 and is directly attributable to the decrease in revenues for the nine months ended September 30, 2013.
For the nine months ended September 30, 2013, selling, general and administrative expenses were $1,522,806 compared to $2,529,998 for the same period in 2012, a decrease of 40%. This decrease was primarily caused by professional fees related to public company compliance and investor relations decreased by $529,538; bad debt expenses decreased by $309,517, royalties owed on a license agreement decreased by $39,563; travel expense decreased by $8,413; and amortization of intangible assets and prepaid license fees decreased by $9,273; offset by an increase in salary expenses of $37,000 and consulting expenses of $51,470.
Net Loss
We generated net losses of $1,758,516 for the nine months ended September 30, 2013 compared to $3,221,480 for the same period in 2012, a decrease of 45%. Included in the net loss for the nine months ended September 30, 2013 was interest expense of $460,295 (of which $400,424 represents accretion of embedded beneficial conversion features on notes payable); offset by change in derivative liability of $154,277and non-controlling interests' share of the net loss of EarthSearch of $17,708. Included in the net loss for the nine months ended September 30, 2012 was interest expense of $635,280 (of which $604,841 represents accretion of embedded beneficial conversion features on notes payable), a loss on conversion of debt of $575,263, change in derivative liability of $2,291; offset by other income of $58,387, gain on settlement of debt of $141,141, net loss from disputed subsidiary of $41,167 and non-controlling interests' share of the net loss of EarthSearch of $33,746
