The Company leases approximately 4,100 square feet of office space at 610 South Industrial Boulevard, Euless, Texas at an annual rental of approximately $51,144. The lease expires on July 31, 2002.
No decision has been made about the future of the warranty and service contract business. It is anticipated that the Board of Directors will consider the contraction, sale or termination of the warranty and service contract business after the consummation of the StrandTek Transaction. There can be no assurance that the Company will be able to complete the sale of such business, if a decision to sell is made, on terms favorable to the Company or at all.
On April 30, 2001 the Company sold Stamford. The disposition was completed in the third quarter of 2001, effective as of May 1, 2001. The consolidated financial data relating to Stamford is classified as discontinued operations in the financial statements of the Company for all periods presented.
The sale of extended warranties and service contracts via the Internet generated gross revenues of $225,000 in fiscal 2001 as compared to $124,000 in fiscal 2000 of which $107,000 were recognized as earned revenues in the year ended December 31, 2001 as compared to $27,000 in fiscal 2000. The balance of these revenues is being deferred over the life of the contracts. Similarly, direct costs associated with the sale of service contracts are being recognized pro rata over the life of the contracts.
Interest income decreased by $29,000 for the fiscal year 2001 as compared to fiscal 2000. The decrease is primarily due to lower cash and cash investments balances in 2001 as a result of cash being applied to funding operating losses. Interest expense decreased from $10,000 in the twelve months ended December 31, 2000 to $6,000 in fiscal 2001.
The Company commenced the sale of its extended warranty/service contract products over the Internet in the last quarter of 1999, initially for new and used automobiles. The Company's Internet business recorded gross revenues in fiscal 1999 of $11,000 resulting in earned revenues of $400 with the balance deferred over the life of the related contracts.
Interest income totaled $136,000 in fiscal 2000 as compared to $4,400 in the twelve months ended December 31, 1999. The increase in interest income is due to higher cash, cash equivalents and investments in fiscal 2000. Interest expense decreased from $65,000 in the twelve months ended December 31, 1999 to $10,000 in fiscal 2000.
The Company incurred a net loss attributable to common stockholders of $2,080,714 in fiscal 2001. This loss adjusted for the loss on sale of Stamford and discontinued operations totaled $1,839,368. Such loss adjusted for non-cash items such as capitalized software impairment charge $305,333, depreciation charges $155,436, deferred revenues (net
To meet its cash requirement during the twelve months ended December 31, 2001 the Company relied on the sale of marketable securities ($872,840) and the proceeds from the sale of Stamford ($372,000) to fund the Company's operations. Additionally, the Company generated cash from its Internet business, both earned and unearned, of approximately $160,000.
As of December 31, 2001 the Company had cash totaling $51,268. Additionally, it had Treasury Bills and Federal Home Loan Mortgage notes totaling $1,503,374. The Company will continue to rely on its cash reserves and its investments to fund its operations.
The Company does not believe that its operations have been materially influenced by inflation in the fiscal year ended December 31, 2001, a situation which is expected to continue for the foreseeable future.