Tranzeo Wireless Technologies Inc.
TSX : TZT

Tranzeo Wireless Technologies Inc.

August 15, 2011 17:24 ET

Tranzeo Provides Second Quarter 2011 Results

PITT MEADOWS, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2011) - Tranzeo Wireless Technologies Inc. (TSX:TZT), a leading producer of high-speed wireless broadband communication systems, today announced its financial results for the second quarter 2011.

Financial Results:

  • Revenue was $2.1 million compared with $4.5 million year over year.
  • Gross profit was $0.6 million compared with $0.9 million with % margins at 30% compared to 20% a year ago.
  • EBITDA (excluding stock based compensation) was a loss of $1.4 million compared to a loss of $2.0 million for 2010. The decrease in the loss was primarily due to the reduction of operating expenses in the Aperto subsidiary.

We are planning a company update call with the date still to be determined.

Tranzeo and the Tranzeo logo are registered trademarks of Tranzeo Wireless Technologies Inc.

About Tranzeo Wireless Technologies Inc:

Tranzeo Wireless Technologies Inc. (TSX:TZT) leads the wireless broadband industry as a premier manufacturer of high-performance wireless network equipment that allows communities and businesses to communicate without boundaries. Tranzeo's full spectrum of point-to-point and point-to-multipoint radios, WiMAX equipment, and mesh network solutions are designed for wireless internet service providers, governments, campuses, military, carriers, enterprise customers, and systems integrators around the globe. Headquartered in British Columbia, Canada, Tranzeo also has offices in San Diego, California, San Jose, California, and Indonesia. Visit http://www.tranzeo.com or phone 1.866.872.6936 for more information.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. We use words such as "anticipate", "plan", "expect", "believe", "intend" and similar expressions to identify forward-looking statements that relate to our business, management, operating results and financial condition. These statements are not historical facts, but reflect our current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed under "Risk Factors" in our Annual Information Form and Management's Discussion and Analysis which may be found on SEDAR at www.sedar.com.

Consolidated Balance Sheets

June 30, 2011 December 31,
Assets (Unaudited) 2010
Current assets:
Cash $ 12,559 $ 72,066
Accounts receivable 1,310,827 1,000,754
Prepaid expenses 345,397 388,936
Inventory 4,375,594 4,754,634
6,044,377 6,216,390
Property and equipment 9,262,367 9,812,338
$ 15,306,744 $ 16,028,728
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 8,807,574 $ 7,768,160
Due to related party 1,020,388 1,179,214
Current portion of capital lease obligation 32,439 51,310
Short term debt 660,500 764,500
10,520,901 9,763,184
Capital lease obligation 59,868 84,972
10,580,769 9,848,156
Shareholders' equity:
Share capital 32,002,695 31,779,583
Shares issuable 1,428,364 1,699,787
Reserve 5,219,267 2,937,089
Retained deficit (33,924,351) (30,235,887)
4,725,975 6,180,572
$ 15,306,744 $ 16,028,728

Consolidated Statements of Operations and Deficit
(Unaudited)

Three Months Ended Six Months Ended
June 30 June 30
2011 2010 2011 2010
Sales $ 2,066,960 $ 4,452,385 $ 4,457,569 $ 7,813,954
Cost of goods sold 1,441,358 3,558,069 3,002,942 6,035,747
Gross Profit 625,602 894,316 1,454,627 1,778,207
Expenses:
Sales and marketing 542,297 833,373 1,056,165 1,213,820
Research and development 542,979 895,845 1,152,855 1,398,765
General and administrative 889,520 1,082,279 1,771,562 1,856,423
Share based compensation 139,821 149,304 478,881 866,453
Amortization 270,117 328,309 548,892 648,889
2,384,734 3,289,110 5,008,355 5,984,350
Loss from operations (1,759,132) (2,394,794) (3,553,728) (4,206,143)
Other expenses (income):
Acquisition costs - 514,623 - 514,623
Impairment - 190,501 - 190,501
Interest expense 59,129 52,145 165,603 90,038
Foreign exchange loss (gain) 31,365 83,730 (30,867) 148,929
90,494 840,999 134,736 944,091
Net loss (1,849,626) (3,235,793) (3,688,464) (5,150,234)
Deficit, beginning of period (32,074,725) (16,342,201) (30,235,887) (14,427,760)
Deficit, end of period $ (33,924,351) $ (19,577,994) $ (33,924,351) $ (19,577,994)
Loss per share for the period:
Basic $ (0.04) $ (0.07) $ (0.07) $ (0.02)
Diluted $ (0.04) $ (0.06) $ (0.07) $ (0.02)
Weighted average number of shares – basic 50,047,432 48,656,806 54,826,222 27,454,035

Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended Six Months Ended
June 30 June 30
2011 2010 2011 2010
Cash flows from operating activities:
Net loss for the period $ (1,849,626) $ (3,235,794) $ (3,688,464) $ (5,150,234)
Adjustments to reconcile net earnings to net cash from operating activities:
Amortization 276,776 328,309 548,892 648,889
Impairment - 190,501 - 190,501
Stock based compensation 139,821 149,304 478,881 866,453
(1,433,029) (2,567,680) (2,660,690) (3,444,391)
Changes in working capital assets and liabilities:
Prepaid expenses 8,292 25,769 43,538 (327,169)
Accounts receivable (9,248) 858,312 (310,074) 313,168
Accounts payable and accrued liabilities 1,119,962 1,541,716 1,039,413 1,091,004
Inventories (98,861) (356,806) 379,040 44,979
Net cash flows used in operating activities (412,884) (498,688) (1,508,773) (2,322,409)
Cash flows from investing activities:
Additions to property, plant and equipment (2,049) (462,467) (5,579) (542,739)
Technology rights - (250,063) - (250,063)
Sales of Technology Asset - 606,500 - 606,500
Net cash flows used in investing activities (2,049) (106,030) (5,579) (186,302)
Cash flows from financing activities:
Proceeds from (repayment of) short term note payable 146,000 - (104,000) 164,500
Proceeds from related parties 82,542 - - (150,000)
Repayment of capital leases obligations (16,361) (127,440) (43,976) (326,820)
Repayment of equipment loan - (4,720) - (9,440)
Repayment of related party loan - - (158,825) -
Issuance of common shares - 556,487 1,754,986 1,086,179
Net cash flows from financing activities 212,181 424,327 1,448,185 764,419
Net decrease in cash (202,752) (180,391) (59,508) (1,744,292)
Cash, beginning of period 215,311 273,931 72,067 1,837,832
Cash, end of period $ 12,559 $ 93,540 $ 12,559 $ 93,540

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