Our business is subject to various risks and uncertainties, including those set forth
below. The risks and uncertainties described below are not the only ones facing us.
Additional risks and uncertainties not presently known to us or that we currently deem to
be immaterial may also materially and adversely affect our business operations. If any of
the risks set out or referred to below actually occur, our business, financial condition
or results of our operations could be materially adversely affected.
RISKS RELATED TO EXISTING AND PROPOSED
We have a history of losses and accumulated
deficit and could incur losses in the future.
We have a history of net
losses. For the years ended December 31, 2010, 2009, and 2008, our net losses have been
$5.57 million, $2.53 million and $2.15 million, respectively. As of December 31, 2010, we
had accumulated deficits of $13.87 million. If we do achieve profitability in the future,
we may not be able to sustain or increase our profitability in the future.
If we are unable to obtain
additional funds from other financings we may have to curtail the scope of our operations
significantly and alter our business model.
We must achieve
profitability for our business model to succeed. Prior to accomplishing this goal, we may
need to raise additional funds, from equity or debt sources. Our cash requirements are
substantial and our current financial position are insufficient to meet our cash needs in
the future If additional financing is not available when required or is not available on
acceptable terms, we may be unable to continue our operations at current or planned
levels. In addition, any failure to raise additional funds in the future may result in our
inability to successfully secure our advertising platform, take advantage of business
opportunities or respond to competitive pressures, any of which circumstances could have a
material adverse effect on our financial condition and results of operations.
We have incurred losses
since our inception and we may not achieve or maintain profitability.
We have not been
profitable in any fiscal period since our inception and may not be profitable in future
periods. At December 31, 2010, we had accumulated deficits of approximately $13.87
million. We expect that our expenses relating to sales and marketing, technology
development, general and administrative functions, as well as the development of our
advertising platform and infrastructure, will increase in the future. We will need to
build and increase our revenues to be able to achieve and then maintain profitability in
the future. We may not be able in a timely manner to obtain necessary financing or to
reduce our expenses in response to any decrease or shortfall in our revenues, and our
failure to do so would adversely affect our operating results and our efforts to achieve
or maintain profitability. We cannot predict when, or if, we will become profitable in the
future. Even if we achieve profitability, we may not be able to sustain it.
We have a significant
working capital deficit and will need additional funding to support our operations and
capital expenditures; sufficient funding may not be available to us, and the
unavailability of funding could adversely affect our business.
As of December 31, 2010,
we had a working capital deficit of approximately $2.24 million. We have no committed
sources of additional capital to finance the current operation and the expansion of our
business. Due to our recurring losses, negative cash flows, working capital deficits, and
accumulated deficits, the report of our independent registered public accounting firm on
our consolidated financial statements for the year ended December 31, 2010 expressed
substantial doubt about our ability to continue as a going concern. For capital
expenditures, we will need additional funds to continue our operations, expand our
staffing, develop our advertising and mobile devise businesses, pursue business
opportunities (such as licensing or acquisition of complementary technologies or
businesses), react to unforeseen difficulties and respond to competitive pressures. We
cannot assure that any financing will be available to us at any time in the future, in
amounts or on terms acceptable to us, or at all. Furthermore, the sale of additional
equity or convertible debt securities may result in additional dilution to our existing
stockholders. If adequate additional funds are not available, we may be required to delay,
reduce the scope of or eliminate implementation of material parts of our business
strategy, potentially including the development or acquisition of additional advertising
and mobile device businesses and capabilities.