NEVADA
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95-4627685
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(State or other Jurisdiction of
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(I.R.S. Employer NO.)
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Incorporation or Organization)
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99.1
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News Release dated May 10, 2011
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NETSOL TECHNOLOGIES, INC.
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Date: May 10, 2011
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/s/ Najeeb Ghauri | |
NAJEEB GHAURI | |||
Chief Executive Officer | |||
Date: May 10, 2011
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/s/ Boo-Ali Siddiqui | |
BOO-ALI SIDDIQUI
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Chief Financial Officer
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![]() |
Investor Relations Contact:
RedChip Companies, Inc.
Dave Gentry
800-733-2447, Ext. 104
407-644-4256, Ext. 104
info@redchip.com
http://www.redchip.com
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·
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Revenues for the third quarter of fiscal year 2011 increased by 21.3% year-over-year to $10.8 million, up from $8.9 million in the third quarter of fiscal 2010.
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o
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License fees totaled $3.6 million or 33.3% of total revenues.
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o
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Maintenance fees totaled $1.9 million or 17.6% of total revenues.
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o
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Service fees totaled $5.3 million or 49.1% of total revenues.
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·
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Net income attributable to NetSol for the third quarter increased to $3.3 million, up from $0.6 million for the third quarter of fiscal 2010.
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Gross margin for the third quarter was 62.6% based on gross profit of $6.8 million, compared with a 61.3% margin and gross profit of $5.5 million in the same period last year.
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Operating income and operating margin for the third quarter were $4.8 million and 44.4%, respectively, compared to $2.6 million and 29.2%, respectively, in the third quarter of fiscal 2010.
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EBITDA totaled $4.6 million or $0.09 per diluted share, versus EBITDA of $1.8 million, or $0.05 per diluted share, in the year-ago period.
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Earnings per diluted share were $0.06 for the quarter, compared with $0.02 per diluted share in the same period a year ago.
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Revenue for the nine months ended March 31, 2011 increased by 13.7% year-over-year to $29.7 million, up from $26.1 million for the nine months ended March 31, 2010.
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Net income attributable to NetSol for the first nine months of fiscal 2011 increased to $6.8 million, compared with a net loss of $0.1 million for the nine months ended March 31, 2010.
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Gross margin for the nine months ended March 31, 2011 was 63.8% based on gross profit of $18.9 million, up from a 59.3% margin and gross profit of $15.5 million in the same period last year.
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Operating income and operating margin for the nine months ended March 31, 2011 were $10.7 million and 36.0%, respectively, compared to operating income of $5.4 million and a 20.7% operating margin for the same period last year.
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EBITDA totaled $10.5 million or $0.22 per diluted share, versus EBITDA of $3.8 million, or $0.11 per diluted share, in the year-ago period.
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Earnings per diluted share were $0.14 for the nine-month period, compared with a loss per diluted share of $0.004 in the same period a year ago.
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As of March 31,
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As of June 30,
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ASSETS
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2011
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2010
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Current assets:
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Cash and cash equivalents
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$ | 3,374,608 | $ | 4,075,546 | ||||
Restricted Cash
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5,700,000 | 5,700,000 | ||||||
Accounts receivable, net of allowance for doubtful accounts
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18,304,881 | 12,280,331 | ||||||
Revenues in excess of billings
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11,207,618 | 9,477,278 | ||||||
Other current assets
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2,202,641 | 1,821,661 | ||||||
Total current assets
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40,789,748 | 33,354,816 | ||||||
Investment under equity method
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- | 200,506 | ||||||
Property and equipment, net of accumulated depreciation
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14,200,127 | 9,472,917 | ||||||
Intangibles:
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Product licenses, renewals, enhancements, copyrights,
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trademarks, and tradenames, net
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22,659,116 | 19,002,081 | ||||||
Customer lists, net
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290,180 | 666,575 | ||||||
Goodwill
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9,439,285 | 9,439,285 | ||||||
Total intangibles
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32,388,582 | 29,107,941 | ||||||
Total assets
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$ | 87,378,456 | $ | 72,136,180 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$ | 4,567,357 | $ | 4,890,921 | ||||
Due to officers
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- | 10,911 | ||||||
Current portion of loans and obligations under capitalized leases
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6,831,049 | 7,285,773 | ||||||
Other payables - acquisitions
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103,226 | 103,226 | ||||||
Unearned revenues
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4,525,017 | 2,545,314 | ||||||
Deferred liability
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32,066 | 47,066 | ||||||
Convertible notes payable , current portion
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2,692,554 | 3,017,096 | ||||||
Loans payable, bank
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2,335,191 | 2,327,476 | ||||||
Common stock to be issued
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450,825 | 239,525 | ||||||
Total current liabilities
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21,537,285 | 20,467,308 | ||||||
Obligations under capitalized leases, less current maturities
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552,715 | 204,620 | ||||||
Convertible notes payable less current maturities
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- | 4,066,109 | ||||||
Long term loans; less current maturities
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583,798 | 727,336 | ||||||
Lease abandonment liability; long term
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- | 867,583 | ||||||
Total liabilities
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22,673,798 | 26,332,956 | ||||||
Commitments and contingencies
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Stockholders' equity:
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Common stock, $.001 par value; 95,000,000 shares authorized; 53,897,213
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37,103,396 issued and outstanding
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53,897 | 37,104 | ||||||
Additional paid-in-capital
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95,705,495 | 86,002,648 | ||||||
Treasury stock
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(396,008 | ) | (396,008 | ) | ||||
Accumulated deficit
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(33,037,884 | ) | (39,859,030 | ) | ||||
Stock subscription receivable
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(2,075,460 | ) | (2,007,960 | ) | ||||
Other comprehensive loss
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(7,959,341 | ) | (8,396,086 | ) | ||||
Total NetSol shareholders' equity
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52,290,699 | 35,380,668 | ||||||
Non-controlling interest
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12,413,959 | 10,422,557 | ||||||
Total stockholders' equity
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64,704,658 | 45,803,224 | ||||||
Total liabilities and stockholders' equity
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$ | 87,378,456 | $ | 72,136,180 |
For the Three Months
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For the Nine Months
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Ended March 31,
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Ended March 31,
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2011
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2010
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2011
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2010
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Net Revenues:
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License fees
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$ | 3,652,170 | $ | 3,644,809 | $ | 10,259,027 | $ | 9,515,338 | ||||||||
Maintenance fees
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1,896,318 | 1,739,799 | 5,589,746 | 5,327,852 | ||||||||||||
Services
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5,278,960 | 3,548,348 | 13,806,995 | 11,231,648 | ||||||||||||
Total revenues
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10,827,448 | 8,932,956 | 29,655,768 | 26,074,837 | ||||||||||||
Cost of revenues:
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Salaries and consultants
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2,448,517 | 2,154,369 | 6,562,685 | 6,173,967 | ||||||||||||
Travel
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237,694 | 222,136 | 708,082 | 611,343 | ||||||||||||
Repairs and maintenance
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79,068 | 43,364 | 207,585 | 180,086 | ||||||||||||
Insurance
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32,924 | 40,235 | 95,003 | 112,943 | ||||||||||||
Depreciation and amortization
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840,050 | 578,904 | 2,150,274 | 1,650,676 | ||||||||||||
Other
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412,693 | 416,931 | 1,004,690 | 1,884,426 | ||||||||||||
Total cost of revenues
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4,050,946 | 3,455,939 | 10,728,320 | 10,613,442 | ||||||||||||
Gross profit
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6,776,502 | 5,477,017 | 18,927,448 | 15,461,395 | ||||||||||||
Operating expenses:
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Selling and marketing
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560,879 | 651,485 | 2,047,726 | 1,671,866 | ||||||||||||
Depreciation and amortization
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313,865 | 411,563 | 848,168 | 1,341,947 | ||||||||||||
Bad debt expense
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717 | (3,236 | ) | 254,996 | 209,604 | |||||||||||
Salaries and wages
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956,465 | 746,095 | 2,613,627 | 2,214,760 | ||||||||||||
Professional services, including non-cash compensation
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165,010 | 242,177 | 455,371 | 549,078 | ||||||||||||
Lease abandonment charges
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(858,969 | ) | (208,764 | ) | (858,969 | ) | 867,583 | |||||||||
General and administrative
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831,131 | 1,056,718 | 2,837,218 | 3,188,901 | ||||||||||||
Total operating expenses
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1,969,096 | 2,896,038 | 8,198,137 | 10,043,739 | ||||||||||||
Income from operations
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4,807,406 | 2,580,979 | 10,729,311 | 5,417,656 | ||||||||||||
Other income and (expenses)
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Gain (loss) on sale of assets
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2,284 | (125,419 | ) | (13,302 | ) | (214,520 | ) | |||||||||
Interest expense
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(148,661 | ) | (312,671 | ) | (755,781 | ) | (1,153,557 | ) | ||||||||
Interest income
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48,851 | 82,637 | 143,270 | 234,200 | ||||||||||||
Gain (loss) on foreign currency exchange transactions
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224,531 | (190,082 | ) | 897,767 | 190,495 | |||||||||||
Share of net loss from equity investment
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(78,269 | ) | (23,984 | ) | (220,506 | ) | (23,984 | ) | ||||||||
Beneficial conversion feature
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(105,445 | ) | (458,758 | ) | (401,019 | ) | (1,351,972 | ) | ||||||||
Other income (expense)
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(5,105 | ) | 144,609 | (62,406 | ) | 62,634 | ||||||||||
Total other income (expenses)
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(61,815 | ) | (883,667 | ) | (411,977 | ) | (2,256,704 | ) | ||||||||
Net income before income taxes
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4,745,591 | 1,697,312 | 10,317,334 | 3,160,952 | ||||||||||||
Income taxes
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(13,735 | ) | (11,064 | ) | (25,459 | ) | (48,607 | ) | ||||||||
Net income after tax
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4,731,856 | 1,686,248 | 10,291,875 | 3,112,345 | ||||||||||||
Non-controlling interest
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(1,413,427 | ) | (1,097,201 | ) | (3,470,728 | ) | (3,235,093 | ) | ||||||||
Net income (loss) attributable to NetSol
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3,318,429 | 589,047 | 6,821,147 | (122,748 | ) | |||||||||||
Other comprehensive income (loss):
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Translation adjustment
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20,361 | (594,063 | ) | 460,524 | (1,874,242 | ) | ||||||||||
Comprehensive income (loss)
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3,338,790 | (5,016 | ) | 7,281,671 | (1,996,990 | ) | ||||||||||
Comprehensive income (loss) attributable to non controlling interest
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98,756 | (154,375 | ) | 23,780 | (579,849 | ) | ||||||||||
Comprehensive income (loss) attributable to NetSol
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$ | 3,240,034 | $ | 149,359 | $ | 7,257,891 | $ | (1,417,141 | ) | |||||||
Net income (loss) per share:
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Basic
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$ | 0.06 | $ | 0.02 | $ | 0.15 | $ | (0.004 | ) | |||||||
Diluted
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$ | 0.06 | $ | 0.02 | $ | 0.14 | $ | (0.004 | ) | |||||||
Weighted average number of shares outstanding
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Basic
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51,263,639 | 35,636,259 | 46,355,789 | 33,893,968 | ||||||||||||
Diluted
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52,480,900 | 36,988,542 | 47,573,050 | 33,893,968 | ||||||||||||
Amounts attributable to NetSol common shareholders
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Net income (loss)
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$ | 3,318,429 | $ | 589,047 | $ | 6,821,147 | $ | (122,748 | ) |
For the Nine Months
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Ended March 31,
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2011
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2010
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Cash flows from operating activities:
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Net income
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$ | 10,291,875 | $ | 3,112,345 | ||||
Adjustments to reconcile net income
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to net cash provided by operating activities:
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Depreciation and amortization
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2,998,443 | 2,992,624 | ||||||
Provision for bad debts
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254,996 | 209,604 | ||||||
Loss on foreign currency exchange transaction
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- | 25,900 | ||||||
Share of net loss from investment under equity method
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220,506 | 23,984 | ||||||
Loss on sale of assets
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13,302 | 214,520 | ||||||
Stock issued for interest on notes payable
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155,808 | 30,207 | ||||||
Stock issued for services
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698,843 | 572,184 | ||||||
Fair market value of warrants and stock options granted
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335,918 | 791,530 | ||||||
Beneficial conversion feature
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401,019 | 1,351,972 | ||||||
Changes in operating assets and liabilities:
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Increase/ decrease in accounts receivable
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(5,350,512 | ) | (2,658,139 | ) | ||||
Increase/ decrease in other current assets
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(2,099,813 | ) | (2,703,402 | ) | ||||
Increase/ decrease in accounts payable and accrued expenses
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(581,418 | ) | (52,914 | ) | ||||
Net cash provided by operating activities
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7,338,966 | 3,910,415 | ||||||
Cash flows from investing activities:
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Purchases of property and equipment
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(6,242,399 | ) | (1,458,050 | ) | ||||
Sales of property and equipment
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18,358 | 232,783 | ||||||
Purchase of non-controlling interest in subsidiary
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(671,460 | ) | - | |||||
Short-term investments held for sale
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(258,271 | ) | - | |||||
Investment in associate
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- | (268,000 | ) | |||||
Increase in intangible assets
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(4,752,261 | ) | (4,562,044 | ) | ||||
Net cash used in investing activities
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(11,906,032 | ) | (6,055,311 | ) | ||||
Cash flows from financing activities:
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Proceeds from sale of common stock
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2,899,250 | 754,509 | ||||||
Proceeds from the exercise of stock options and warrants
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1,116,175 | 33,750 | ||||||
Proceeds from convertible notes payable
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- | 3,500,000 | ||||||
Redemption of preferred stock
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- | (1,920,000 | ) | |||||
Dividend Paid
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- | (43,988 | ) | |||||
Bank overdraft
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(78,447 | ) | (176,377 | ) | ||||
Proceeds from bank loans
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2,969,146 | 4,320,534 | ||||||
Payments on bank loans
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(46,073 | ) | (484,507 | ) | ||||
Payments on capital lease obligations & loans - net
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(2,823,969 | ) | (3,664,176 | ) | ||||
Net cash provided by financing activities
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4,036,081 | 2,319,746 | ||||||
Effect of exchange rate changes in cash
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(169,951 | ) | (303,170 | ) | ||||
Net increase in cash and cash equivalents
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(700,937 | ) | (128,319 | ) | ||||
Cash and cash equivalents, beginning of year
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4,075,546 | 4,403,762 | ||||||
Cash and cash equivalents, end of year
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$ | 3,374,608 | $ | 4,275,443 |
Three Months
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Three Months
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Year
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Year
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Ended
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Ended
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To date
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To date
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March 31, 2011
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March 31, 2010
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March 31, 2011
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March 31, 2010
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Net Income (loss) before preferred dividend, per GAAP
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$ | 3,318,429 | $ | 589,047 | $ | 6,821,147 | $ | (122,748 | ) | |||||||
Income Taxes
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13,735 | 11,064 | 25,459 | 48,607 | ||||||||||||
Depreciation and amortization
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1,153,915 | 990,467 | 2,998,443 | 2,992,623 | ||||||||||||
Interest expense
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148,661 | 312,671 | 755,781 | 1,153,557 | ||||||||||||
Interest (income)
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(48,851 | ) | (82,637 | ) | (143,270 | ) | (234,200 | ) | ||||||||
EBITDA
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$ | 4,585,889 | $ | 1,820,610 | $ | 10,457,559 | $ | 3,837,839 | ||||||||
Weighted Average number of shares outstanding
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Basic
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51,263,639 | 35,636,259 | 46,355,789 | 33,893,968 | ||||||||||||
Diluted
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52,480,900 | 36,988,542 | 47,573,050 | 34,427,969 | ||||||||||||
Basic EBITDA
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$ | 0.09 | $ | 0.05 | $ | 0.23 | $ | 0.11 | ||||||||
Diluted EBITDA
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$ | 0.09 | $ | 0.05 | $ | 0.22 | $ | 0.11 |
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