VCLD Verecloud Inc (CE)

Verecloud (OTCBB:VCLD), which enables communications service providers (CSPs) to capture market share in the emerging cloud computing services business, today announced financial results for its first fiscal quarter of 2011 ended September 30, 2010 highlighted by revenue of $1,510,542, a 112 percent increase from the previous three months.

Verecloud reported an operating loss of $121,216 during the latest quarter, a $606,505 improvement from the previous three months. The company reduced its net loss by 69 percent to $147,851, from $480,777 in the preceding three months.

During the quarter, Verecloud continued to expand its leadership team with the additions of Dr. Hossein Eslambolchi and Phillip Tonge to its board of directors. Dr. Eslambolchi, a venture capital consultant and renowned technology change visionary, will provide invaluable technological and strategic advice on the company’s business and innovation growth. Tonge, a leader in both the energy and telecommunications industries, will provide strategic and business development guidance as the company continues to expand its customer base.

"The results demonstrate the significant progress that Verecloud made in the quarter," said John McCawley, chief executive officer of Verecloud. "I am very pleased with the growing revenue trend and we remain very focused on expanding our customer base and deploying our Nimbus Xchange solution in the coming months."

Financial Highlights

• Revenue of $1,510,542, up 112 percent from the quarter ended June 30, 2010 and down 57 percent compared to the year ago quarter.
• Net loss of $147,851, down from a net loss of $480,777 in the quarter ended June 30, 2010. Net income for the three months ended September 30, 2009 was $908,031.
• Ended the quarter with a cash balance of $742,857 compared to $197,151 in the quarter ended June 30, 2010 and up from $255,634 at September 30, 2009.
• Closed the quarter with working capital of $692,217, up 87 percent from the quarter ended June 30, 2010 and up 184 percent compared to the year ago quarter.
• Became publicly traded in September 2010 on the Over-the-Counter market.

Additional financial information, including historical SEC filings and the current Quarterly Report on Form 10-Q can be found on Verecloud’s website at www.verecloud.com.

About Verecloud

Based in Englewood, Colorado, Verecloud enables communications service providers (CSPs) to capture market share in the expanding and lucrative cloud computing market. Verecloud’s cloud services broker platform, Nimbus Xchange, addresses the CSPs’ need to integrate their cloud services business with existing back-office systems which enable CSPs to drive new revenue opportunities. By collaborating with Verecloud, CSPs are positioned to capture a significant percentage of this exciting market by leveraging their trusted intermediary status as a cloud services broker. Learn more about Verecloud at: http://www.verecloud.com.

Forward-Looking Statement

This release may contain projections and other forward-looking statements that involve risks and uncertainties. Forward-looking statements are projections reflecting management’s judgment and assumptions based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Future performance cannot be assured. Readers are referred to the documents filed by Verecloud with the Securities and Exchange Commission (SEC), specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Recent documents filed with the SEC can be found in the Investor Relations section of our website (www.verecloud.com). Verecloud believes the forward-looking statements in this release are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. Verecloud is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release.

 

STATEMENT OF OPERATIONS

   

Three Months Ended September 30,

2010

 

2009

  Revenue $ 1,510,542 $ 3,499,022   Cost of goods sold 677,431 1,657,797       Gross profit 833,111 1,841,225   Operating expenses Employee related (1) 415,985 238,018 Marketing expense 250,956 261,099 Legal and accounting 127,421 139,941 Consulting expense 65,092 25,275 Rent 22,435 36,026 Travel and entertainment 23,396 29,213 Information technology 18,090 41,027 Depreciation 10,614 11,921 Other   20,338       262   Total operating expenses 954,327 782,782       Operating income (loss) (121,216 ) 1,058,443   Other income (expense) Interest income 133 73 Interest (expense)   (26,768 )     (52,047 ) Total other income (expense) (26,634 ) (51,974 )       Pretax income (loss) (147,851 ) 1,006,469   Income tax expense (benefit) - 98,438       Net income (loss) $ (147,851 )   $ 908,031       Basic net income (loss) per common share $ (0.00 ) $ 0.02 Fully diluted net income (loss) per common share $ (0.00 ) $ 0.02   Basic weighted average common shares 70,098,000 43,800,000 Fully diluted weighted average common shares 87,068,652 43,800,000   (1) Includes stock-based compensation as follows: Salary and wages $ 51,656 $ -  

BALANCE SHEET

    September 30, June 30,

2010

2010

  ASSETS   Current assets Cash $ 742,857 $ 197,151 Accounts receivable 591,166 632,962 Other current assets   109,888       34,243   Total current assets 1,443,911 864,356   Property and equipment Computer related 87,655 87,655 Equipment and machinery 37,914 36,255 Other property and equipment   36,330       36,330   Subtotal 161,899 160,240 Accumulated depreciation   (109,453 )     (98,839 ) Net property and equipment 52,445 61,401   Other assets Capitalized software, net 40,101 -       Total assets $ 1,536,458     $ 925,757     LIABILITIES AND STOCKHOLDERS' (DEFICIT)   Current liabilities Accounts payable $ 417,115 $ 174,899 Accrued liabilities   334,579       319,899   Total current liabilities 751,694 494,798   Long term debt 1,314,000 864,000       Deferred taxes payable 334,579 319,899       Total liabilities 2,065,694 1,358,798   Commitments and contingencies   Stockholders' (deficit) Preferred stock - $0.001 par value, 5,000,000 shares authorized: - - No shares issued or outstanding Common stock - $0.001 par value, 200,000,000 shares authorized: 70,098 70,098 70,098,000 shares issued and outstanding Additional paid-in capital 849,326 797,670 Accumulated (deficit)   (1,448,661 )     (1,300,809 ) Total stockholders' (deficit) (529,237 ) (433,041 )       Total liabilities and stockholders' (deficit) $ 1,536,458     $ 925,757      

STATEMENT OF CASH FLOWS

    Three Months Ended September 30, Operating Activities

2010

2009

Net income (loss) $ (147,851 ) $ 908,031

Adjustments to reconcile net income to net cash from operations

Depreciation and amortization 10,614 11,921 Stock for services - 98,000 Stock-based compensation 51,656 - Income tax expense (benefit) - 98,438 Change in assets and liabilities Accounts receivable 41,796 (769,353 ) Income taxes receivable Other current assets (75,645 ) 3,918 Accounts payable 242,216 166,108 Other current liabilities   14,679       2,909   Net cash from operating activities 137,466 519,972   Investing Activities Purchase of computer related - (12,727 ) Purchase of equipment and machinery (1,659 ) (2,520 ) Purchase of other property and equipment - (2,946 ) Capitalized software   (40,101 )     -   Net cash (used in) investing activities (41,760 ) (18,193 )   Financing Activities Reduction in note payable (100,000 ) (280,000 ) Increase in long term debt 550,000 - Members distributions   -       (506,623 ) Net cash (used in) financing activities 450,000 (786,623 )   Increase (decrease) in cash for period $ 545,706 $ (284,844 ) Cash at beginning of period   197,151       540,479   Cash at end of period $ 742,857     $ 255,635     Schedule of Noncash Investing and Financing Activities Share exchange agreement $ - $ (579,905 ) Deferred taxes payable $ - $ 214,973 Income taxes payable $ - $ 364,932   Supplemental disclosure: Cash paid for interest during the year $ 26,768 $ 52,047 Cash paid for income taxes during the year $ - $ -