Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Geos Communications, Inc. (949371) 10-Q published on May 13, 2011 at 5:31 pm
Reporting Period: Mar 30, 2011
The condensed consolidated financial statements included herein have been prepared by Geos Communications, Inc. and are unaudited, except for the condensed consolidated balance sheet at December 31, 2010, which has been derived from audited consolidated financial statements at that date on the basis of GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the unaudited condensed consolidated interim financial statements include all normal recurring adjustments necessary for a fair presentation of the financial position as of March 31, 2011, the results of operations for the three months ended March 31, 2011 and 2010, and the cash flows for the three months ended March 31, 2011 and 2010. In addition, operating results for the three months ended March 31, 2011 are not necessarily indicative of results that may be expected for the year ending December 31, 2011.
Although management believes the unaudited interim related disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2010 Annual Report on Form 10-K.
It is the Company’s intent to obtain a third party valuation of the Series F, H and I Preferred Shares as of the date of the exchange during the year ending December 31, 2011. Based upon internal estimates, we calculated the difference in the fair value of the Old Preferred Stock and the fair value of the New Preferred stock to be greater than 10% and therefore will result in an extinguishment of equity classified as preferred stock. In estimating the fair value of the each series of Preferred Stock, the Company used a discounted cash flow model and assumed each Series was redeemed for the face value at the date stated in the original agreement and using a discount rate of 35%. The value of the new Series I preferred shares is estimated at $4,847,968. The difference in the carrying value of the Old Preferred and the fair value of the New Preferred is $431,581 and the gain on extinguishment has been treated similar to dividends on preferred shares and recorded as non-recurring reduction in the loss attributable to Geos common shareholders as a result of the transaction.
This Quarterly Report on Form 10-Q and the exhibits attached hereto contain certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated herein. The cautionary statements made in this report should be read as being applicable to all related forward-looking statements wherever they appear in this report.
Total cost of sales for the three months ended March 31, 2011 was approximately $14,588 as compared to the three months ended March 31, 2010 of $4,074. Cost of sales for Shoot It! reflect the purchase of paper and postage. Cost of sales for D Mobile represents the purchase of mobile content. For the three months ended March 31, 2011, total cost of sales were $3,021 and $11,567 for Shoot It! and D Mobile, respectively. For the three months ended March 31, 2010, total cost of sales were $2,145 and $1,929 for Shoot It! and D Mobile, respectively. The increase in cost of sales is reflective of the period from the date of acquisition in the first quarter of 2010 through March 31, and as such, the results of 2010 do not include a full period of results. Cost of sales for Shoot-It! exceeded sales during the quarter ended March 31, 2011 due to promotional cards shipped during the quarter.