BELLEVUE, WA--(NewMediaWire - Jun 13, 2016) - CoroWare,
Inc. (OTC
PINK: COWI) today issued the following shareholder update
letter from Lloyd Spencer, CEO and Chairman.
To our valued shareholders:
As President and CEO of CoroWare, I want to thank you for your
continued patience and support. This shareholder update will
address questions about our plans for 2016 and 2017 to achieve
operational profitability, steadily extinguish convertible debt,
and further grow our business in the coming 18 months.
The Net Effect of Non-Cash Derivative Liabilities
We recently received a number of questions about CoroWare's Net
Loss as opposed to its Loss from Operations during the three months
ended March 31, 2016 ("Q1-2016").
CoroWare's Q1-2016 Net Loss was overwhelmingly due to a change
in non-cash derivative liabilities -- ($3,113,117) -- and the
extinguishment of convertible debt -- ($3,689,590) -- that resulted
from consolidating all of the outstanding principal and interest
due to YA Global -- $2,829,690 -- from various notes that were
outstanding from early 2006 through January 7, 2016.
These non-cash derivative liabilities are not relevant to the
company's operational income, expenses and profitability, and
therefore distort the company's operating performance and its
efforts to improve operational profitability.
Improving Operational Profitability
Achieving operational profitability has been the focus of
CoroWare's management team. Although the Loss from Operations
during the 2016 Period ($301,721) was significant, this operational
loss included non-recurring accounting, legal, research and
development, and marketing expenses.
More specifically, CoroWare has reorganized its robotics &
automation team in order to improve operational
profitability. In addition, CoroWare's management team focused
its attention on delivering its consulting services more cost
effectively.
As a result, we anticipate that these changes will help improve
CoroWare's gross margins and operational profitability.
Attracting Long Term Investment
During Q1-2016, CoroWare entered into discussions with
individual investors and institutional investors who expressed an
interest in making longer-term investments that could help
CoroWare:
- reduce financing costs and improve profitability
fund R&D initiatives in mobile robotics, Internet of Things,
and augmented reality that can accelerate new revenues
finance strategic joint venture and acquisition opportunities
At the conclusion of our discussions with potential investors,
experienced investment advisors and I concluded that CoroWare must
first extinguish its legacy convertible debt by:
- employing forbearance agreements in combination with affordable
cash payment plans
replacing legacy convertible debt with convertible debt or
preferred equity whose terms benefit the Company and its
shareholders
employing debt-to-equity conversions in a manner that protects the
interests of current shareholders as best possible
While CoroWare's Board of Directors cannot make any guarantees
-- nor say with any certainty -- that these steps will be
successful, we believe that they are necessary for achieving
sustainable profitability and steady revenue growth in fiscal years
2016 and 2017.
In Closing
Speaking on behalf of CoroWare's employees and management team,
we believe that we have the talent, expertise and approach
necessary to grow our business successfully. In that vein, we would
like to thank our Shareholders again for their continued support,
and we look forward to reporting our progress to our Shareholders
as we continue to execute on our plans.
Lloyd Spencer
President and CEO
About CoroWare, Inc.
CoroWare, Inc., headquartered in Bellevue, Washington, is a
diversified technology and solutions company with expertise in:
- Business Consulting Services: R&D engineering services;
business process workflow; software architecture, design and
development; content management; console, PC and online game
production; marketing coordination and management.
Robotics and Automation: Custom engineering such as visualization,
simulation and software development; and mobile robot platforms for
university, government and corporate researchers
CoroWare's customers are located in North America, Europe, Asia
and the Middle East, and span multiple industry sectors --
including universities, software and hardware product development
companies, and non-profit organizations. For more information,
please visit www.coroware.com.
Forward-Looking Statement
This press release may contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. The ability of the Company to complete
and file its Fiscal Year 2015 annual report on Form 10K relies on
third parties to complete their activities. Investors are
cautioned that such forward-looking statements involve risks and
uncertainties, which include among others, the inherent
uncertainties associated with smaller reporting companies,
including without limitation, other risks detailed from time to
time in the Company's periodic reports filed with the Securities
and Exchange Commission.