SOURCE: Zolon Corporation

November 18, 2010 09:30 ET

Zolon Corporation Announces Third Quarter 2010 Financial Results

Management to Host Conference Call at 4:15 PM ET Today

ROLLING MEADOWS, IL--(Marketwire - November 18, 2010) -  Zolon Corporation (OTCBB: ZLON) announced its financial results for the third quarter of 2010 and filed its 10-Q on November 15, 2010. The Company will host a conference call today at 4:15 PM EST to discuss the results. The call can be accessed by dialing (480) 629-9664. To listen to the replay, please dial 1-858-384-5517 PIN Number: 4380251.

Financial Highlights:

  • Sales for the three months ended September 30, 2010 were $5,182,887 compared to sales for the three months ended September 30, 2009 of $32,455. 

  • During the second and third quarters, the Company acquired three business entities with established customers in the Financial, Healthcare and Telecom services sectors. The revenue generated for the third quarter increased over the prior year due to the consulting income received from these newly acquired business entities. 

  • Cost of revenue for the three months ended September 30, 2010 was $4,379,485 compared to cost of revenue for the three months ended September 30, 2009 of zero. The increase in cost of revenue is due to the Company's acquisition of three business entities during the second and third quarters of 2010. 

  • Selling, general & administrative expenses for the three months ended September 30, 2010 were $309,963 compared to operating expenses for the three months ended September 30, 2009 of $44,561. The increase in operating expenses is due to the Company's acquisition of three business entities during the second and third quarters of 2010. These represent the SG&A expenses of the acquired entities for the full third quarter of 2010.

  • Financing expenses were $313,615 for the three months ended September 30, 2010 compared to zero for the three months ended September 30, 2009. The increase in financing expenses is a result of interest expense incurred from an accounts receivable factoring agreement and short term debt financing.

  • The Company reported net income of $179,823 or $0.005 per share for the three months ended September 30, 2010 as compared to net income of $(12,106) or zero per share for the three months ended September 30, 2009.

About Zolon Corporation
Zolon Corporation is presently focused in the Information Technology (IT) and Software enabled service areas which it has begun to enter through a series of strategic business combinations. The Company intends to target companies in the Financial Services, Health Care and Telecom sectors to create a diversified portfolio. The Company continues to actively pursue and negotiate for business acquisitions and/or combination opportunities with several targets and intends to consummate transactions in the near future to further execute its business strategy.

   
ZOLON CORPORATION  
CONSOLIDATED BALANCE SHEETS  
   
    September 30, 2010     December 31, 2009  
             
Assets:            
Current assets:            
Cash   $ (13,813 )   $ 1,286  
Accounts receivable Allowance for bad debt     6,009,298 (1,015,145 )        
Other current assets     (3,968 )        
Total current assets     4,976,372       1,286  
                 
Fixed assets:                
Furniture & fixtures, net     -       25,540  
Total fixed assets     -       25,540  
                 
Other assets:                
Goodwill     5,911,643       -  
Unbilled revenue     83,297          
Total other assets     5,994,940       -  
                 
Total assets   $ 10,971,312     $ 26,826  
                 
                 
Liabilities and Stockholders' Equity (Deficit)                
Current liabilities:                
Accounts payable   $ 221,557          
Accrued payroll     378,276          
Payable to seller     620,759          
Other     312,705       10,000  
Accrued interest     27,500          
Current notes payable     3,417,684       22,007  
Accounts receivable factoring     2,899,309          
Total current liabilities     7,877,791       32,007  
                 
Long-term liabilities     500,000       0  
  Total Liabilities     8,377,791       32,007  
                 
                 
Stockholder's equity (deficit)                
Common stock     3,183,211       3,150,211  
Treasury stock     200,000       200,000  
Additional paid in capital     (80,793 )     (2,216,793 )
Accumulated deficit     (708,897 )     (1,138,599 )
Total stockholders' equity(deficit)     2,593,521       (5,181 )
                 
Total liabilities and stockholders' equity (deficit)   $ 10,971,312     $ 26,826  
   
ZOLON CORPORATION  
CONSOLIDATED STATEMENTS OF OPERATIONS  
   
    Three months ended September 30,     Nine months ended September 30,  
    2010   2009     2010   2009  
                     
Revenue   $ 5,182,887   $ 32,455     $ 9,519,426   $ 143,864  
                             
Cost of revenue     4,379,485             8,027,581     58,604  
                             
Gross margin     803,401     32,455       1,491,844     85,260  
                             
Operating expenses                            
                             
Selling, general & administrative     309,963     44,561       528,930     98,163  
                    -        
                             
  Total operating expenses     309,963     44,561       528,930     98,163  
                             
Income from operations   $ 493,439   $ (12,106 )   $ 962,915   $ (12,903 )
                             
Interest expenses     313,615             540,593        
                             
Net income     179,823     (12,601 )     422,322     (12,903 )
                             
Net income (loss) per common share-basic & diluted     .005   nil       0.012   nil  
                             
Weighted common shares outstanding -basic and diluted     36,150,211     2,790,324       35,400,211     3,150,210  

Forward-Looking Statements
This release contains forward-looking statements which are subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipate," "expects," "estimates," and similar expressions) should be considered to be forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Exchange Act of 1934, as each is amended, for which the Private Securities Litigation Reform Act of 1995 provides a safe harbor. Certain factors (including but not limited to those risk factors identified from time to time in our filings with the Securities and Exchange Commission as well as changes in economic conditions; outcome of negotiations; changes in the Company's access to necessary capital; outcome of litigation; volatility of capital markets; variability and timing of business opportunities; changes in accounting policies and practices; the effects of internal organizational changes; adverse state and federal regulation and legislation; and the occurrence of extraordinary or catastrophic events and terrorist acts; or other unforeseen changes in circumstances) could cause actual results and conditions to differ materially from those projected in such forward-looking statements. We do not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this release is based on information currently available and may not be reliable after this date.

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