June 10, 2016 09:39 ET
CoroWare Reports First Quarter 2016 Earnings
Consulting Service Revenues Increase Over 100 Percent Year-Over-Year
During the three months ended March 31, 2016 (the "2016 Period"), revenues were $1,646,187 compared to revenues of $798,541 during the three months ended March 31, 2015 (the "2015 Period"), an increase of $847,646 or 106.1%. Gross revenues in the 2016 Period were higher compared to the 2015 Period as the Company intensified its focus on selling R&D support, operations support, and marketing support services in the 2016 Period.
"CoroWare's consulting services revenue rapid growth has been the result of repeat customer engagements, including the delivery of R&D support services, marketing specialist services, and business operations support services," said Lloyd Spencer, president and CEO of CoroWare, Inc.
Gross profits increased to $474,584 during the 2016 Period compared to $226,479 during the 2015 Period, an increase of $248,105 or 109.5%. Gross profits increased during the 2016 Period as a result of the Company reorganizing its Robotics & Automation team in order to improve profitability. The gross profit percentage in the 2016 Period was 28.8% compared to 28.4% in the 2015 Period.
Operating expenses were $776,305 for the 2016 Period compared to $415,171 for the 2015 Period, an increase of $361,134 or 87.0%. General and administrative expenses amounted to $724,667 during the 2016 Period compared to $371,805 for the 2015 period, and represented mostly labor and related compensation costs, legal and professional fees, outside services, travel expenses, rental expense and related office expenses.
Loss from operations was $301,721 for the 2016 Period compared to $188,692 for the 2015 period, an increase of $113,029 or 59.9%. The overall increase in operating expenses was due to the Company increasing its travel expenses in support of its marketing specialist services, and increasing investor relations expenses.
Other expenses was $7,020,186 during the 2016 Period compared to other expense of $1,125,999 in the 2015 Period, an increase of $5,894,187 or 523.5%. Other expenses is comprised primarily of gain/loss on derivative, amortization of debt discount, deferred finance costs, accrued interest on notes payable, and loss on extinguishment of debt. The change in derivative liabilities for the 2016 Period was $3,513,117 compared to $762,039 for the 2015 Period, an increase of $2,751,078 or 361.0%.
Interest expense, net for the 2016 Period was $217,479 compared to $147,354 for the 2015 Period, an increase of $70,125 or 47.6%. The increase in interest expense is principally a result of an increase in accrued interest on debt. The Company also recognized a $3,289,590 loss on extinguishment of debt during the 2016 Period compared to $216,606 in the 2015 Period, an increase of $3,072,984. The increase in loss on extinguishment of debt is primarily a result of the consolidation of debt with YA Global on February 5, 2016.
Net loss for the 2016 Period was $7,321,907 compared to net loss of $1,314,691 for the 2015 Period, an increase of $6,007,216. The increase in net loss is primarily a result of an increase in loss on the change in derivative liabilities and an increase in loss on extinguishment of debt.
"In order to continue growing our business, we are focused on expanding our customer base; improving our gross margins; cutting general and administrative expenses; and refinancing or extinguishing CoroWare's most critical debt obligations," added Mr. Spencer.
The full 10-Q report can be accessed by going to the following link: http://www.otcmarkets.com/stock/COWI/profile
About CoroWare, Inc.
CoroWare, Inc., headquartered in Bellevue, Washington, is a diversified technology and solutions company with expertise in:
- Business Consulting Services: R&D engineering services; business process workflow; software architecture, design and development; content management; console, PC and online game production; marketing coordination and management.
- Robotics and Automation: Custom engineering such as visualization, simulation and software development; and mobile robot platforms for university, government and corporate researchers.
CoroWare's customers are located in North America, Europe, Asia and the Middle East, and span multiple industry sectors -- including universities, software and hardware product development companies, and non-profit organizations. For more information, please visitwww.coroware.com.
This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The ability of the Company to complete and file its Fiscal Year 2016 annual report on Form 10K relies on third parties to complete their activities. Investors are cautioned that such forward-looking statements involve risks and uncertainties, which include among others, the inherent uncertainties associated with smaller reporting companies, including without limitation, other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.