 |
Search -
Finance Home -
Yahoo! -
Help |  |
|
Search -
Finance Home -
Yahoo! -
Help | |
|
Quotes & Info
|
| DSBO.OB > SEC Filings for DSBO.OB > Form 10-Q on 14-Aug-2009 | All Recent SEC Filings |
14-Aug-2009
Quarterly Report
This Form 10-Q contains forward-looking statements regarding future events and the Company's future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). These statements are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the Company's management. Words such as "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," "continues," "may," variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of the Company's future financial performance, the continuing development of the Company's website, the prospects for selling advertising on the website and new visitors and visitor page views related to advertising agreements, the Company's anticipated growth and potentials in its business, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified under "Risk Factors" in our Form 10-K for the year ended December 31, 2008. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.
The Company is under no duty to update any of these forward-looking statements after the date of this report. You should not place undue reliance on these forward-looking statements.
Plan of Operation
We were incorporated in the State of Colorado on September 5, 2006 with the primary purpose of developing the first interactive online community dedicated to constantly improving the way Americans with disabilities or functional limitations live their lives. Our network of websites (the "Disaboom Network") serves as a comprehensive online resource as well as a social media and publishing platform not only for people living with such conditions, but their immediate families and friends, caregivers, recreation and rehabilitation providers, employers, and other related communities. Our headquarters are located in the metropolitan area of Denver, Colorado.
The Company released the first fully operational version of our main website (www.disaboom.com) on January 24, 2008. On October 9, 2007, the Company acquired an online dating and social networking website with the domain name Lovebyrd.com, and re-branded Lovebyrd.com in the quarter ended March 31, 2008 as a related website of Disaboom.com. On February 1, 2008 the Company launched a website with the domain name DisaboomJobs.com, which is the first website dedicated to providing employment-related resources and services to the disability community and their employers who are actively trying to create a more inclusive workforce. On July 31, 2009, the Company announced the launch of its redesigned DisaboomJobs.com website. The Company's main website and related microsites for employment-related resources and services, as well as dating, are collectively referred to herein as the Disaboom Network.
There are more than 54 million American adults living with disabilities or functional limitations today in the United States alone, and over 650 million worldwide. We believe Disaboom offers a new solution to the difficulties faced by this traditionally underserved market. Persons living with disabilities or functional limitations have unique needs, as do the people in their lives who are directly affected by such disabilities or functional limitations.
We promote the trademarked name of our website, Disaboom.com, and related microsites DisaboomJobs.com and Lovebyrd.com, by primarily implementing a combination of search engine optimization and search engine marketing ("SEO/SEM") advertising campaigns, as well as organic and social marketing campaigns, intended to encourage people to visit our sites. We believe that with the present absence of a comprehensive, community-oriented network of websites specifically for people living with or directly affected by disabilities or functional limitations, this traditionally underserved target audience will visit and participate in our community, and contribute to its growth and success.
The activities of the Company in 2008 generally focused on the initial
operational matters of an early stage internet company, including (i) the
initial launch of the first fully operational version of our main website
(www.disaboom.com) on January 24, 2008, (ii) launching additional resources and
services through related microsites and the Company's marketplace, (iii)
integrating our main website and related microsites into the Disaboom Network,
(iv) driving internet traffic into the Disaboom Network, and (v) beginning to
generate traditional cost per mille ("CPM") related advertising and sponsorship
revenues, as well as directory services revenues.
During the third and fourth calendar quarters of 2008, and through the period ended June 30, 2009, the Company began and continues today to respond aggressively to recessionary economic conditions, the liquidity crisis, capital market volatility, and the general economic outlook (collectively, "general economic conditions"), and their resultant adverse impact on the internet advertising industry. During the period ended June 30, 2009 and through the filing date of this Form 10-Q, the Company continues to aggressively reduce and monitor our overall operating expenditures in response to general economic and internet advertising market conditions. We also continue to monitor and evaluate our business needs and resources on an ongoing basis, and may scale back in certain areas that are not deemed essential to the Company's near term success. Our objective is to balance investment in the Company's sales function and capabilities, as summarized herein, while conserving our financial resources to ensure we have sufficient liquidity to fund our planned business operations.
Business Changes and Business Progress in the Context of General Economic Conditions
Market growth of traditional static banner and display advertising products in several online advertising market sectors has slowed considerably, and some sectors experienced negative growth during the third and fourth calendar quarters of 2008, and through at least through the second quarter of 2009. This was due in particular to the general economic conditions. Online advertising market growth has also generally slowed due to online advertising pricing declines resulting from increased competition among numerous websites for advertisers to choose from. However, market growth related to niche website advertising which is directed at a specific target audience such as Disaboom, as well as new media online advertising, is anticipated to recover more quickly than general website advertising and traditional advertising products as economic conditions begin to improve.
Beginning in September 2008, the Company, with the full support of its Board of Directors, aggressively responded to dramatically changing economic, capital market, and internet advertising conditions. The Company appointed new leadership, restructured its management team and employee base, and dramatically reduced its overall cost structure to reflect these new realities - while at the same time launching a series of initiatives designed to enhance its future growth and drive to profitability. Since the third calendar quarter of 2008, the Company has realized the following financial results and launched the following business initiatives:
• Average monthly cash operating expenditures for the quarter ended June 30, 2008 were $1,546,206; average monthly cash operating expenditures for the most recent quarter ended June 30, 2009 were $244,162, a decrease of 84 percent.
• There were 63 full-time employees during the month of August 2008, and only 20 full-time employees as of June 30, 2009, a decrease of 68 percent.
• There were a number of outsourced third party vendor services relationships as of August 2008; the Company has aggressively restructured its operations, terminated almost all of its third party vendor services relationships, and performs the necessary core functions in-house as of June 30, 2009.
• Unique visitors to the Disaboom Network during the month of August 2008 were approximately 285,000; there were approximately 1,345,000 unique visitors during the month of June 2009, an increase of 370 percent.
• Beginning in December 2008, the Company launched a new sales initiative, and began to hire, train, and develop online sales executives on a very limited basis; for the quarters ended December 31, 2008, March 31, 2009, and June 30, 2009, sales related to this initiative were approximately $33,000, $141,000, and $230,000, respectively.
• There were three groups of standard products available for sale to advertisers as of August 2008; there are four groups of standard products, as well as 10 additional individual products, available for sale to advertisers as of June 30, 2009.
• Beginning in the quarter ended June 30, 2009, the Company launched a comprehensive initiative involving the entire redesign of its enterprise technology, including its enterprise framework, social media applications, and web assets (i.e., websites); the primary objective of the redesign initiative is to dramatically enhance the user experience by simplifying navigation and substantially increasing site speed.
Our focus through the quarter ending September 30, 2009 and the remainder of 2009 will likely continue to be:
(i) the continued growth of our new customer sales, existing customer renewals, and cash collections, as well as the proactive management of our total cash operating expenditures, with the aim of ultimately achieving the status of cash flow positive in our business operations in late 2009;
(ii) the completion of the comprehensive initiative involving the entire redesign of the Company's enterprise technology, including its enterprise framework, social media applications, and web assets (i.e., websites) summarized above;
(iii) the identification and pursuit of targeted traffic and growth opportunities related to the Disaboom Network, (including the redesign of our website Disaboom.com), our social media and publishing platform, through various search engine, social media, social networking, business development and partnership initiatives, and other activities; and
(iv) the ongoing development and evolution of resources, products and services related to the Disaboom Network, our social media and publishing platform, our user community, and our customers.
Ultimately, the features and products offered through the Disaboom Network that we will focus our time and resources to, may change due to general economic and internet advertising market conditions and as a result of which generates the best revenue and cash flow opportunities for the Company.
We believe that the greater the awareness in the marketplace of the Disaboom Network, our community and brand, and our social media and publishing platform, the greater the amount of market penetration, organic traffic, advertising product opportunities and billable revenue we will experience and capitalize upon.
Results of Operations:
During the three months ended June 30, 2009, our revenues increased 16% to $163,577 from $141,355 during the six months ended June 30, 2008. During the six months ended June 30, 2009 our revenues increased 111% to $404,211 from $191,215 during the six months ended June 30, 2008. While the level of these increases were adversely impacted by general economic conditions and certain limitations with the Company's existing website, revenues for the three and six months ended June 30, 2008 were generated under a dramatically higher cost structure than currently exists at the Company. The revenue increases were driven by the Company's ability to surpass the important customer credibility milestones of receiving one million monthly unique visitors and having a fully operational main website for at least one year, and being able to demonstrate steadily improving or otherwise above industry average advertiser results and customer testimonials as their campaigns have been optimized throughout the terms of their agreements.
During the three months ended June 30, 2009, our net loss decreased 84% to $534,679, from $3,317,819 during the three months ended June 30, 2008. During the six months ended June 30, 2009 our net loss decreased 82% to $1,263,915 from $6,965,901. These decreases were primarily a result of the Company's ongoing initiative to dramatically reduce its cost structure in light of general economic conditions, without impairing its core operating capabilities. This includes significant reductions in headcount as the Company eliminated various positions and initiatives not deemed essential to its 2009 success, the elimination of several Marketplace sales personnel, and transitioning from a variety of third party outsourced vendor services to an in-house environment as summarized above. Average monthly cash operating expenditures for the quarter ended June 30, 2008 were $1,546,206; average monthly cash operating expenditures for the quarter ended June 30, 2009 were $244,162, a decrease of 84%. June 2009 monthly cash operating expenditures were approximately $200,000.
Liquidity and Capital Resources
As of June 30, 2009 we had working capital of $746,706 as compared to working capital $1,540,527 as of December 31, 2008. At June 30, 2009 we had current assets of $1,262,180, including $259,586 in cash and cash equivalents, and $741,031 in short-term investments. Our working capital and current assets decreased from March 31, 2009 as during the six month period ended June 30, 2009 we primarily funded our operations from our resources on-hand. While we earned revenues during the quarter ended June 30, 2009, these revenues were not sufficient to cover our expenditures.
With our projected sales, operations and expenditures we expect that our current financial resources are sufficient to fund our operations into the fourth calendar quarter of 2009. We expect that during fiscal 2009 we will need to raise additional funds through equity or debt financing to continue to fund our current and pla nned business operations. Current conditions in the global and financial markets have currently limited the availability of these resources. We cannot assure you that capital will be available on reasonable terms, if at all. Therefore, the inability to raise additional funds, either through equity or debt financing could materially impair our ability to generate revenues, or continue our current business operations.
|
|
