CellPoint Inc. Reports Second Quarter and Six Months Results for the Period Ended December 31, 2001; Improved Visibility for Location Market in 2002.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 15, 2002 CellPoint Inc. (Nasdaq: CLPT), a global provider of mobile location software technology and platforms, announced the Company's unaudited results for the second fiscal quarter and six months ended December December: see month. 31, 2001. Results for the Fiscal Quarter The Company reported revenues for the second quarter ending December 31, 2001 of $176,552 compared to $804,417 for the comparable period of 2000. No revenues were recorded during the quarter from the contract announced in December 2001 for the license sale of its Mobile Location Broker (MLB MLB Major League Baseball MLB Minor League Baseball MLB Middle Linebacker (football) MLB Motor Life Boat MLB Matt Leblanc (actor) MLB Mother Love Bone (band) ). Selling, general and administrative expenses were $599,929 for the second quarter compared to $1,869,623 in the comparable quarter. The Company's research and development expenses increased by $298,147 to $1,388,832 during the second quarter from $1,090,685 in the comparable quarter. The increase in research and development expenses in the Company's continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was due to the research and development of the new generation of software platforms for location-based services See mobile positioning. . EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (earnings before investment expenses, taxes, depreciation and amortization) for the current quarter was ($2,312,431) compared to ($2,744,286) in the comparable quarter. The Company incurred a net loss of $2,506,821 in the quarter including depreciation and amortization expenses of $974,912. Net loss in the comparable quarter was $7,919,926 including loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $3,299,030 representing the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of the telematics Originally coined to mean the convergence of telecommunications and information processing, the term later evolved to refer to automation in automobiles. GPS navigation, integrated hands-free cellphones, wireless communications and automatic driving assistance systems all come under the division. The decrease in expenses from continuing operations in the current quarter was mainly a result of the reduction in overall operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. following the Company's restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). work. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , income from discontinued operations of $1,525,670 was recorded in the quarter due to the reversal of the cumulative translation adjustment relative to these discontinued operations. Loss per share was $0.16 based on weighted average shares outstanding of 16,301,713, while the loss per share in the comparable quarter of 2000 was $0.76 based upon a weighted average of 10,485,000 shares outstanding. Results for the First Fiscal Half The Company reported revenues for the first six months ending December 31, 2001 of $591,757 with receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed collected during the period of $2,172,941. The revenue from the comparable period in 2000 was$1,729,970. All of the Company's revenues came from the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. market. For the six-month period, EBITDA was ($5,019,872) compared to ($4,403,142) in the comparable period. Selling, general and administrative expenses were $2,463,746 for the current period compared to $3,224,401 in the comparable period. The Company incurred a net loss of $7,765,059 in the current period including depreciation and amortization expenses of $1,985,131. This compares to a net loss of $13,267,224 for the equivalent period ending December 31, 2000 which included a loss from discontinued operations of $5,927,855 related to the telematics subsidiary. In accordance with US GAAP, income from discontinued operations of $1,525,670 was recorded in the quarter ended December 2001 due to the reversal of the cumulative translation adjustment relative to these discontinued operations. The net loss per share for the six-month period was $0.57 based on weighted average shares outstanding of 13,641,876, while the comparable period loss per share was $1.27 based upon a weighted average of 10,475,000 shares outstanding. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Commentary and Outlook Peter Henricsson, CellPoint's Chairman and CEO, commented, "During the start of 2002, the visibility for our market has improved significantly. A large number of the European and Asian mobile operators have told us the decision to invest in a location platform has been made and budgets are in place. Many will make their decisions public during the first half of the year and we expect to get our fair share of these orders. Henricsson continued, "The downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the telecoms market coupled with our legal and financial difficulties have delayed new orders. We are currently engaged in several negotiations to close further contracts and the results of the period do not record revenues for the sale of our Mobile Location Broker during the quarter. Over the past few years, we have built strong relationships with cellular providers. We have a proven technology, and have recently lowered server hardware costs to make it more affordable for operators to install our software in their networks. It has been a long wait, but now we believe we have the right products and the operators tell us these products are here at the right time for this emerging market. "We have stated earlier that we expect our first cash flow positive quarter this fiscal year, and we still believe we have a good chance to reach that but will require additional funding in the process to meet our current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. and patience from our creditors in the interim as we rebuild from the extremely difficult financial and legal challenges we have faced. We have reached our stated goal to cut our monthly costs to $750,000 and we are continuing to cut costs that are not essential for our focus on MLS See multilevel security. , MLB and LDZ LDZ Latvijas Dzelzcels (Latvian Railways) LDZ Local Distribution Zone LDZ Lorenzo de Zavala (National Hispanic Institute program) . For the current quarter ending March 31, 2002, we expect our monthly costs to go down to $650,000 per month - that means that we will reach cash flow break even by having sales of $2 million per quarter." Financing On January January: see month. 31, 2002, the Company closed a private placement of Common Stock and warrants pursuant to which it issued an aggregate of 848,982 shares of Common Stock for proceeds of $665,000. In addition, the Company issued warrants to purchase 424,471 shares of Common Stock exercisable at $1.50 per share for two years. On December 20, 2001, the Company negotiated a $500,000 loan in addition to the $4 million loan already outstanding. The Company's focus now is to complete other financing transactions in process which are necessary to carry on business and meet current liabilities. Orders CellPoint announced in December that E-Plus For other uses, see E-Plus (disambiguation). E-Plus is a mobile telecommunications operator in Germany. With 13.6 million subscribers as of 2007, E-Plus is the third largest mobile operator in Germany, after T-Mobile (30.7 million subscribers) and Vodafone (30. ordered CellPoint's Mobile Location Broker (MLB) as its location middleware Software that functions as a conversion or translation layer. It is also a consolidator and integrator. Custom-programmed middleware solutions have been developed for decades to enable one application to communicate with another that either runs on a different platform or comes from a platform. MLB provides for secure communication between content providers' applications and a location determination platform such as CellPoint's MLS. MLB and MLS work in GSM (Global System for Mobile Communications) A digital cellular phone technology based on TDMA that is the predominant system in Europe, but also used worldwide. Developed in the 1980s, GSM was first deployed in seven European countries in 1992. , GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. and UMTS/3G networks including network architectures supplied by mixed vendors. MLB is an Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the protocol-based platform and also works in TDMA (Time Division Multiple Access) A satellite and cellular phone technology that interleaves multiple digital signals onto a single high-speed channel. For cellular, TDMA triples the capacity of the original analog method (FDMA). and CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. networks. Restructuring CellPoint executed an aggressive restructuring program during the fall that has reduced its monthly costs by $1 million per month to less than $750,000 per month. In addition to reducing costs and the ongoing reduction of expenses, operations have been streamlined to focus on bringing the Company's core technology to market. This consolidated the Company's operating headquarters in its office in Kista Kista (Swedish: /'ɕiːsta/) is a district of Stockholm Municipality in Sweden belonging to Rinkeby-Kista borough. , Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. . A branch office has been maintained in the UK to continue servicing existing and future customers, eliminating the need for the Company's UK subsidiary which was liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. during the quarter ended December 31, 2001. Legal Proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. CellPoint has filed a $100 million malpractice malpractice, failure to provide professional services with the skill usually exhibited by responsible and careful members of the profession, resulting in injury, loss, or damage to the party contracting those services. claim against its former legal counsel relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc work performed by them in the Company's agreements with Castle Creek Castle Creek may refer to:
LLC - Logical Link Control . The claim alleges that former counsel breached the duty of care owed to their client by failing to reasonably and competently represent CellPoint in the transactions associated with Castle Creek. The claim further alleges that their actions and omissions fall below the standards for reasonably competent attorneys in the preparation of documents consummating the agreements and the advice related thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. . Castle Creek filed a lawsuit lawsuit: see procedure; tort. against CellPoint in November November: see month. 2001, the primary allegation The assertion, claim, declaration, or statement of a party to an action, setting out what he or she expects to prove. If the allegations in a plaintiff's complaint are insufficient to establish that the person's legal rights have been violated, the defendant can make a of which was that CellPoint had not registered an adequate number of shares in its registration statement filed October 31, 2001, to cover shares issuable under a warrant issued to Castle Creek in July 2001. To settle this suit, the parties agreed in December to amend the existing agreements in several areas. The new agreement includes CellPoint continuing to pay down the outstanding notes. CellPoint will allocate To reserve a resource such as memory or disk. See memory allocation. 25% of the first $3,000,000 of funds raised over the next 10 months to paying down the notes and agreed to pay down a minimum of $200,000 by January 31, 2002 and an additional $550,000 by February 28, 2002. Subject to these payments being made on a timely basis, and CellPoint being otherwise in compliance with its agreements with Castle Creek, the lawsuit will be dismissed. CellPoint met the January payment on time. Technical leadership CellPoint carried out extensive performance testing Performance Testing covers a broad range of engineering or functional evaluations where a material, product, or system is not specified by detailed material or component specifications: Rather, emphasis is on the final measurable performance characteristics. for its network-based location services See mobile positioning. platform, Mobile Location System (MLS). The test aimed to quantify Quantify - A performance analysis tool from Pure Software. and clarify the current confusion in the location platform industry and for its customers regarding issues such as capacity, latency (1) The time between initiating a request in the computer and receiving the answer. Data latency may refer to the time between a query and the results arriving at the screen or the time between initiating a transaction that modifies one or more databases and its completion. , active/idle-mode location, multi-vendor access and commercial availability. The Company is confident that MLS is the best-performing location platform available to GSM network operators. By going public with the tested performance measurements, CellPoint set the standard for the rest of the industry and is ready to accept challenges by any location platform vendor in any GSM environment. Henricsson concluded, "The highlight of this quarter is our technical progress. We have announced the data from comprehensive tests of our MLS. We believe we have the strongest product on the market, and are welcoming competitors to a benchmark test. With the quarter's order to E-Plus, we also have shown the commercial strength of our application platform product, the MLB." Recent Highlights -- MLB Selected and Installed for New Ground-Breaking European Mobile Portal -- Mobile Location Broker Ordered by E-Plus -- CellPoint Establishes Corporate Facility in the United States -- Mobile Location System (MLS) Handles Over Half a Million Location Requests per Hour in Tests -- CellPoint Completes Restructuring and Executes Further Cost Savings Program, reduces monthly costs from $1.7 million to less than $750,000 per month -- Location Developers' Zone Enhanced, Applications Catalog Introduced The Company's full report on Form 10QSB QSB Fading QSB Qualified Small Business (IRS category) QSB Queen Street Backpackers (Auckland, New Zealand) QSB Quality System Basics QSB Qualified Supplemental Benefit QSB Quantum Singleton Bound has been filed with the SEC and is available at www.cellpoint.com or www.freeedgar.com CellPoint Inc. (Nasdaq and Stockholmsborsen: CLPT) is a leading global provider of location determination technology, carrier-class middleware and applications enabling mobile network operators rapid deployment of revenue generating location-based services for consumer and business users and to address mobile E911/E112 security requirements. CellPoint's two core products, Mobile Location System (MLS) and Mobile Location Broker (MLB), provide an open standard platform adapted for multi-vendor networks with secure integration of third-party applications and content. CellPoint's entry-level location platform handles over 500,000 location requests per hour and has a seamless migration path to GPRS and 3G. CellPoint's early entry and experience with European mobile operators has allowed the development of products and features that address key requirements such as active and idle mode positioning, international roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. , multiple location determination technologies and consumer privacy. CellPoint is a global company headquartered in Kista, Sweden. For more information, please visit www.cellpoint.com. CellPoint(TM) and CellPoint Systems(TM) are trademarks of CellPoint Inc. Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995. Actual results may differ materially from those projected in any forward-looking statement. Investors are cautioned that such forward-looking statements involve risk and uncertainties which may cause actual results to differ from those described. Copyright(c)CellPoint Inc. 2002
CELLPOINT INC. AND SUBSIDIARIES
Consolidated balance sheets
(amounts in USD)
December 31 June 30,
2001 2001
ASSETS (unaudited) (audited)
Current assets
Cash and cash equivalents $ 179,729 $ 687,151
Accounts receivable 729,498 1,366,641
Unbilled receivables -- 792,443
Prepaid expenses and
other current assets 158,037 383,578
Other receivables 233,122 402,132
Current assets of
discontinued operations -- 1,361,148
------------- -------------
Total current assets 1,300,386 4,993,093
Long-term assets
Restricted cash 387,403 184,216
Acquired technology, net of
accumulated amortization of
$6,941,953 and $5,411,604,
respectively 14,040,652 15,571,001
Other intangible assets, net
of accumulated amortization
of $1,541,005 and $1,311,830,
respectively 878,026 1,107,201
Property and equipment, net
of accumulated depreciation of
$1,045,102 and $480,345,
respectively 672,522 885,780
Non-current assets of
discontinued operations -- 521,401
------------- -------------
Total long-term assets 15,978,603 18,269,599
------------- -------------
TOTAL ASSETS $ 17,278,989 $ 23,262,692
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued expenses and
other current liabilities $ 2,667,869 $ 2,337,066
Accounts payable 2,805,511 2,082,257
Current maturities of long-term debt
(net of debt discount of
$1,528,409 and nil, respectively) 9,076,691 --
Current liabilities of
discontinued operations -- 2,982,549
------------- -------------
Total current liabilities 14,550,071 7,401,872
Due to related party 725,750 --
Long-term debt
(net of debt discount
of nil and $1,914,490) -- 11,785,510
------------- -------------
Total liabilities 15,275,821 19,187,382
------------- -------------
Minority interest -- 48,464
Commitments and Contingencies
Stockholders' equity
Preferred shares ($0.001 par
value authorized 3,000,000 shares,
nil issued and outstanding) -- --
Common shares ($0.001 par value
authorized 50,000,000 shares,
16,355,543 shares and 10,824,503
shares issued and outstanding,
respectively) 16,356 10,824
Common shares to be issued 859,292 --
Additional paid in capital 105,694,212 98,692,254
Cumulative foreign currency
translation adjustment (668,631) 597,478
Stock subscription receivable (859,292) --
Accumulated deficit (103,038,769) (95,273,710)
------------- -------------
Total stockholders' equity 2,003,168 4,026,846
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 17,278,989 $ 23,262,692
------------- -------------
CELLPOINT INC. AND SUBSIDIARIES
Consolidated statements of operations
(amounts in USD)
Three months ended Six months ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited)(unaudited)
Revenues $ 176,552 $804,417 $ 591,757 $1,729,970
Cost of revenues (14,637) (127,566) (35,683) (356,399)
---------- --------- --------- ---------
Gross profit 161,915 676,851 556,074 1,373,571
Selling, general
and administrative
expenses (599,929) (1,869,623) (2,463,746) (3,224,401)
Research and
development
expenses (1,388,832) (1,090,685) (2,460,939) (1,869,985)
Professional fees (485,585) (460,829) (651,261) (682,327)
Depreciation and
amortization (974,912) (935,288) (1,985,131) (1,845,262)
---------- ---------- ---------- ----------
Total operating
expenses (3,449,258) (4,356,425) (7,561,077) (7,621,975)
---------- ---------- ---------- -----------
Loss from operations (3,287,343) (3,679,574) (7,005,003) (6,248,404)
Loss on sales
on investments -- (342,285) -- (342,285)
Financial items, net (745,148) (599,037) (2,285,726) (748,680)
---------- ---------- ---------- ------------
Loss from continuing
operations (4,032,491) (4,620,896) (9,290,729) (7,339,369)
----------- ---------- ---------- ------------
Income/(Loss) from
discontinued
operations 1,525,670 (3,299,030) 1,525,670 (5,927,855)
----------- ----------- ----------- ------------
Net loss $(2,506,821) $(7,919,926) $(7,765,059)$(13,267,224)
------------ ----------- ----------- ------------
Weighted average
number of shares
outstanding,
basic and diluted 16,301,713 10,485,000 13,641,876 10,475,000
------------- ----------- ------------ -----------
Net loss per common
share basic
and diluted:
Continuing
operations (0.25) (0.44) (0.68) (0.70)
Discontinued
operations 0.09 (0.31) 0.11 (0.57)
Net loss per share (0.16) (0.76) (0.57) (1.27)
CELLPOINT INC. AND SUBSIDIARIES
Consolidated statements of cash flows(amounts in USD)
Six months ended Six months ended
Dec. 31, 2001 Dec. 31, 2000
(unaudited) (unaudited)
Cash flows from operating
activities
Net loss $(7,765,059) $(13,267,224)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
(Income)/Loss from
discontinued operations (1,525,670) 5,927,855
Depreciation and
amortization 1,985,131 1,845,262
Provision for allowance
on accounts receivables -- (36,732)
Non-cash financing costs 1,604,249 127,636
Reversal of cumulative
translation adjustment
related to liquidated
subsidiaries (127,506) --
Loss on disposal of
investment in
affiliated company -- 342,285
Changes in operating
assets and
liabilities:
Increase in restricted
cash (203,187) --
Decrease/(increase) in
accounts receivable 637,143 (492,771)
Decrease/(increase) in
unbilled receivables 792,443 --
Decrease/(increase) in
prepaid expenses 225,541 (654)
Decrease/(increase) in
other receivables 169,010 (412,944)
Increase/(decrease) in
accrued expenses and
other current
liabilities 330,803 129,522
Increase/(decrease) in
accounts payable 674,790 12,328
Decrease in due to
affiliate -- (55,517)
----------- ----------
Net cash used in
operating activities
from continuing
operations: (3,202,312) (5,880,954)
Net cash used in
operating activities
from discontinued
operations: (1,094,378) (1,883,132)
---------- -----------
Net cash used in
operating activities: (4,296,690) (7,764,086)
Cash flows from investing
activities
Capital expenditures (259,395) (242,864)
Proceeds from disposal of
investment in
affiliated company -- 157,715
---------- ----------
Net cash used in
investing activities
from continued
operations: (259,395) (85,149)
Net cash used in
investing activities
from discontinued
operations: (3,429) (95,217)
---------- ----------
Net cash used in
investing activities: (262,824) (180,366)
Cash flows from financing
activities:
Repayment of note payable (3,144,900) --
Proceeds from notes
payable -- 10,000,00
Net proceeds from private
placements 5,339,321 --
Proceeds from issuance of
shares -- 149,800
Due to related party 725,750 --
Advances of bank loans 500,000 --
---------- --------
Net cash provided by
financing activities
from continuing
operations: 3,420,171 10,149,800
---------- ----------
Effects of exchange rate
changes on cash 634,113 (22,584)
Effects of exchange rate
changes on cash from
discontinued operations (2,192) (11,241)
---------- ----------
Increase/(decrease) in
cash and cash
equivalents (507,422) 2,171,523
Cash and cash equivalents
at beginning of period 687,151 6,624,392
---------- ----------
Cash and cash equivalents
at end of period 179,729 8,795,915
---------- ----------
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