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News Release |
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News Release |
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·
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Loss on Sale of
Investment. In February 2009 the Company completed the sale of its
investment in a publicly-traded company and recorded a $29,371 loss on the
sale of the investment in the consolidated statement of operations for the
year ended December 31, 2009. In December 2008, the Company sold a portion
of its investment in this publicly-traded company and recorded a $6,500
loss in its consolidated statement of operations. The Company
considers this an investment transaction, and it is not an indication of
operating performance. Therefore the Company does not consider the
inclusion of our sale of this investment helpful in assessing its current
financial performance compared to previous periods as well as prospects
for the future.
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·
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Gain on Derivative Liability.
The Company has historically recorded non-cash gains and losses on
the fair value of its derivative liabilities which arose from the sale of
the Convertible Debentures in May and July 2008. These Debentures have
embedded derivatives and the accounting treatment of derivative financial
instruments requires that the Company record all derivatives and related
warrants, and classify all other non-employee stock options and warrants
as derivative liabilities and mark them to market at each reporting date.
The Company considers this a financing transaction, and it is not an
indication of current or future operating performance. Therefore, the
Company does not consider the inclusion of this transaction helpful in
assessing its current financial performance compared to previous periods
as well as prospects for the
future.
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·
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Impairment write-down in
investment in marketable securities. In the third quarter of 2009
and the fourth quarter of 2008, respectively, the Company recorded a
non-recurring expense of $367,653 and $4,098,514, respectively, based upon
the Company’s determination that its investment in Geeks on Call America
is impaired because the Company believes that its fair market value has
permanently declined. The Company considers this an investment
transaction, and it is not an indication of current or future operating
performance. Therefore, the Company does not consider the inclusion of
this transaction helpful in assessing its current financial performance
compared to previous periods as well as prospects for the
future.
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·
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Impairment write-down in
investment in affiliate. In the fourth quarter of 2009 and 2008,
the Company recorded a non-recurring non-cash expense of $1,000,000 and
$2,000,000, respectively, based upon management’s assessment of the
carrying value of the Company’s intangible assets at December 31, 2009.
The Company considers this an investment transaction, and it is not an
indication of current or future operating performance. Therefore the
Company does not consider the inclusion of this transaction helpful in
assessing its current financial performance compared to previous periods
as well as prospects for the
future.
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·
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Stock-Based
Compensation. The Company believes that because of the variety of
equity awards used by companies, varying methodologies for determining
stock-based compensation and the assumptions and estimates involved in
those determinations, the exclusion of non-cash stock-based compensation
enhances the ability of management and investors to understand the impact
of non-cash stock-based compensation on our operating results. Further,
the Company believes that excluding stock-based compensation expense
allows for a more transparent comparison of its financial results to
previous periods.
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(1)
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GAAP
stands for Generally Accepted Accounting
Principles.
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Three
Months Ended
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Year
Ended
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December
31,
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December
31,
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|||||||||||||||
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2009
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2008
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2009
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2008
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Net
income (loss), as reported
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$ | (3,102,306 | ) | $ | (11,753,910 | ) | $ | 1,059,837 | $ | (23,985,539 | ) | |||||
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Net
(income) loss from discontinued operations
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- | 4,492,646 | 635,735 | 7,905,302 | ||||||||||||
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Net
(gain) from discontinued operations
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- | - | (6,932,586 | ) | - | |||||||||||
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Net
income (loss) from continuing operations
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(3,102,306 | ) | (7,261,264 | ) | (5,237,014 | ) | (16,080,237 | ) | ||||||||
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Financing
expense, net
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674,236 | 623,364 | 1,384,502 | 2,814,795 | ||||||||||||
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Depreciation
and amortization
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81,449 | 72,813 | 348,189 | 391,023 | ||||||||||||
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EBITDA
attributed to Telkonet segment
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(2,346,621 | ) | (6,565,087 | ) | (3,504,323 | ) | (12,874,419 | ) | ||||||||
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Adjustments:
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Loss
on sale of investment
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- | 6,500 | 29,371 | 6,500 | ||||||||||||
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(Gain)
loss on derivative liability
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(11,186 | ) | (420,488 | ) | (777,750 | ) | 1,174,121 | |||||||||
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Impairment
write-down in investment in marketable securities
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- | 4,098,514 | 367,653 | 4,098,514 | ||||||||||||
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Impairment
write-down in investment in affiliate
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1,000,000 | 2,000,000 | 1,000,000 | 2,380,000 | ||||||||||||
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Stock
based compensation
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(8,132 | ) | (4,974 | ) | 235,234 | 699,639 | ||||||||||
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Adjusted
EBITDA
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$ | (1,365,939 | ) | $ | (885,535 | ) | $ | (2,649,815 | ) | $ | (4,515,645 | ) | ||||
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2009
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2008
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Revenues,
net:
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Product
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$
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6,521,906
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$
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13,043,114
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Recurring
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3,996,147
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3,515,887
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Total
Revenue
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10,518,053
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16,559,001
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Cost
of Sales:
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Product
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3,878,988
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8,105,304
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Recurring
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1,313,108
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1,680,832
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Total
Cost of Sales
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5,192,096
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9,786,136
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Gross
Profit
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5,325,957
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6,772,865
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Operating
Expenses:
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Research
and Development
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1,080,148
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2,036,129
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Selling,
General and Administrative
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6,895,624
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9,252,381
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Impairment
of Goodwill and Long Lived Assets
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1,000,000
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2,380,000
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Stock
Based Compensation
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235,234
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699,639
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Depreciation
and Amortization
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348,189
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391,023
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Total
Operating Expenses
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9,559,195
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14,759,172
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Loss
from Operations
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(4,233,238
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)
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(7,986,307
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)
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Other
Income (Expenses):
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Financing
Expense, net
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(1,384,502
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)
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(2,814,795
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)
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Gain
(Loss) on Derivative Liability
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777,750
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(1,174,121
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)
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Gain
(Loss) on Sale of Investments
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(29,371
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)
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(6,500
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)
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Impairment
of Investment in Marketable Securities
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(367,653
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)
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(4,098,514
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)
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Total
Other Income (Expenses)
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(1,003,776
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)
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(8,093,930
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)
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Loss
Before Provision for Income Tax
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(5,237,014
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)
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(16,080,237
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)
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Provision
for Income Tax
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-
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-
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Loss
from Continuing Operations
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$
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(5,237,014
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)
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$
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(16,080,237
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)
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Discontinued
Operations
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Loss
from Discontinued Operations
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(635,735
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)
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(7,905,302
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)
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Gain
on Deconsolidation
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6,932,586
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-
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Net
Income (Loss)
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$
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1,059,837
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$
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(23,985,539
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)
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Net
Income (Loss) per share:
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Loss
per share from continuing operations – basic and
diluted
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$
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(0.06
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)
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$
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(0.20
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)
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Income
(Loss) per share from discontinued operations – basic and
diluted
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$
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0.07
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$
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(0.10
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)
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Net
Income (Loss) per share – basic and diluted
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$
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0.01
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$
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(0.30
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)
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Weighted
average common shares outstanding – basic
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94,486,950
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79,153,788
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Weighted
average common shares outstanding – diluted
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94,486,950
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79,153,788
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Comprehensive
Income (Loss):
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Net
Income (Loss)
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$
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1,059,837
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$
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(23,985,539
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)
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Unrealized
gain (loss) on investment
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32,750
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(32,750
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)
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Comprehensive
Income (Loss)
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$
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1,092,587
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$
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(24,018,289
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)
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