What changed in this filing

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Item 2. Management’s Discussion and Analysis

2009-02-20 compared with 2008-11-13 · 374 added, 211 removed, 66 unchanged (90% of the section changed)

7 unchanged sentences

ACCOUNTING POLICIES

described our critical accounting policies in Item 6, "Management's Discussion

and Analysis or Plan of Operation," of our Annual Report on Form 10-KSB for the

year ended March 31, 2008.

critical accounting policies are those that are most important to the portrayal

2 unchanged sentences

fairly depicts our financial condition and results of operations for all periods

the first half of our fiscal year 2009 we have continued to focus on sales of

our HipLink family of software applications and services utilized by businesses

and their employees to wirelessly connect to critical business systems,

information and processes.

These products maintain high gross and operating

margins and form the core of our enterprise software marketing strategy with

wireless and mobile features available in the software.

We also continued to

work towards closing the acquisition of the assets and liabilities of Flint

Telecom, Inc.

(“FTI”), which closed on October 1, 2008.

believes that it has adequate working capital for the next 12

three months ended September 30, 2008, we had a net loss of $68,881 ($0.02 per

share basic and diluted), as compared to net income of $3,328,361 ($1.85 per

share basic and $1.69 per share diluted) in the three months ended September 30,

We had a net loss of $303,446 ($0.13 per share basic and diluted) in the

six months ended September 30, 2008, as compared to net income of $3,471,805

($1.94 per share basic and $1.77 per share diluted) in the six months ended

September 30, 2007.

Our overall cash decreased by $139,222 in the six

months ended September 30, 2008, compared to an increase by $181,007 in the six

months ended September 30, 2007.

OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2008 AND

for the three months ended September 30, 2008 increased 204% to $425,680 as

compared to $139,803 for the three months

September 30, 2007.

Revenues for the six months ended September 30,

2008 increased 45% to $656,415 as compared to $454,134 for the six months ended

September 30, 2007.

This increase is due to a sale to one significant

new customer in the three months ended September 30, 2008

versus the same period in 2007.

Our critical accounting policies are described below.

Revenue Recognition –

Flint recognizes revenues based upon contract terms and completion of the sales

process in accordance with Staff Accounting Bulletin No.

104, a codification of

revenue recognition.

Revenue is generated from the sale of telecom services to

the Company’s partners.

The Company recognizes the revenue when the service is

provided and payment is collected either through credit cards or through

payments by check.

The appropriate partner revenue allocation is deducted from

those accounts that pay Flint directly.

Other accounts that pay the partners

directly, Flint recognizes the portion of the revenue share that relates to it

and invoices the Partner for this.

The invoice becomes a receivable from the

Partner when raised.

Cost of Revenue –

Costs directly related to the production of revenue are categorized as a cost of

These costs are the cost of call generation, including transmission and

termination, network charges including access costs, lease and right-of-way

charges and other third party fulfillment costs, and other telecommunication

fees, such as emergency 911 service fees.

Earnings (loss) per share

- Basic earnings (loss) per share is computed by dividing net income

(loss) available to common stockholders by the weighted average number of common

shares outstanding during the period.

Diluted earnings per share reflects the

potential dilution, using the treasury stock method or the if converted method,

that could occur if securities or other contracts to issue common stock were

exercised or converted into common stock or resulted in the issuance of common

stock that then shared in the earnings of the Company.

Any dilutive security

issued, that would create an anti-dilutive effect, is not included in the

weighted average share calculation for that period.

Stock Compensation Expense –

Flint adopted Statement of Financial Accounting Standards (SFAS) No.

(revised 2004), “Share-Based Payment,” requiring us to recognize expense related

to the fair value of our employee stock option awards.

We recognize the cost of

all share-based awards on a straight line vesting basis over the vesting period

of the award.

Total stock compensation expense recognized by us during the three

and six months ended December 31, 2008 was $3,045,249.

Income taxes - The

Company accounts for income taxes in accordance with SFAS No.

“Accounting for Income Taxes.” Under SFAS No.

109, income taxes are

recognized for the amount of taxes payable or refundable for the current year

and deferred tax liabilities and assets are recognized for the future tax

consequences of transactions that have been recognized in the Company’s

financial statements or tax returns.

A valuation allowance is provided when it

is more likely than not that some portion or all of the deferred tax asset will

not be realized.

Cash and Cash

Equivalents – The

Company considers all highly liquid investments with original maturities of

three months or less or money market funds from substantial financial

institutions to be cash equivalents.

The Company places substantially all of its

cash and cash equivalents in interest bearing demand deposit accounts with one

financial institution and in amounts that are insured either by the Irish

government for Euro deposits or by the Federal Deposit Insurance Corporation for

U.S deposits.

Concentrations of Credit

Risk - Financial instruments which potentially subject the Company to

concentrations of risk consist principally of trade and other receivables.

Company extends credit to its customers in the ordinary course of business and

periodically reviews the credit levels extended to customers, estimates the

collectability and creates an allowance for doubtful accounts, as needed.

Company does not require cash collateral or other security to support customer

Provision is made for estimated losses on uncollectible

Company estimates its allowance for doubtful accounts by applying estimated loss

percentages against its aging of accounts receivable balances.

The estimated

loss percentages are updated periodically and are based on the Company’s

historical write-off experience, net of recoveries.

Changes to allowances may be

required if the financial condition of the Company’s customers improves or

deteriorates or if the Company adjusts its credit standards for new customers,

thereby resulting in write-off patterns that differ from historical

Estimates - The

preparation of financial statements in conformity with generally accepted

accounting principles requires management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosure of

contingent assets and liabilities at the date of the financial statements and

the reported amounts of revenues and expenses during the reporting period.

Certain significant estimates were made in connection with preparing the

Company’s financial statements.

Actual results could differ from those

Fair value of financial

instruments - The carrying amounts of financial instruments, including

cash and cash equivalents, accounts receivable, accounts payable and short term

notes approximate fair value because of their short maturity as of December 31,

Convertible Notes were recorded at face value as of the issuance date.

Convertible Notes issued in the Euro currency were translated at the Euro – U.S.

Dollar exchange rate as of the transaction date and are adjusted for exchange

rate changes on a quarterly basis.

The Convertible Notes approximate fair value

since they are a long term liability with a fixed interest rate, adjusted for

exchange rates if required and will be held until maturity or until converted

into common stock.

Foreign Currency

Transactions - Exchange adjustments resulting from foreign currency

transactions are generally recognized in operations.

Flint has a bank account

and convertible notes that are in the Euro currency.

Net foreign currency

transaction losses were $269,571 for the six months ended December 31,

Equipment – These assets are stated at cost, net of accumulated

depreciation and amortization.

Depreciation is provided on the straight-line

method over the estimated useful lives of the related assets, generally three to

Amortization on capital leases is over the lesser of the estimated

useful life or term of the lease if shorter, and is included in depreciation and

amortization expense in the statement of operations.

Ordinary course repairs and

maintenance on fixed assets are expensed as incurred.

carrying value of property and equipment is assessed annually or when factors

indicating an impairment are present.

In accordance with SFAS No.

“Accounting for the Impairment or Disposal of Long-Lived Assets”, we review our

property, plant, and equipment for impairment whenever events or circumstances

indicate that their carrying amount may not be recoverable.

Impairment reviews

require a comparison of the estimated future undiscounted cash flows to the

carrying value of the asset.

If the total of the undiscounted cash flows is less

than the carrying value, an impairment charge is recorded for the difference

between the estimated fair value and the carrying value of the

objective for the first half of our fiscal year was to become public, increase

the size of the business through acquisition or other strategic business

combination structures, and to improve overall operations to reduce the need for

external financing in the difficult economic and financial

We closed a reverse merger with Semotus on October 1, 2008,

which brought us public, increased the depth and breadth of operations, enhanced

the management team and identified acquisitions in the telecom, media and

technology (TMT) space.

After the reverse merger with Semotus, we

continued our focus on our operations and consolidation of the two

We have been actively engaged in seeking other potential

acquisition targets to further enhance the scale, depth and profitability of the

three months ended December 31, 2008, we had a net loss of $8,548,598 ($0.21 per

share basic and diluted), as compared to a net loss of $526,113 ($0.02 per share

basic and diluted) in the three months ended December 31, 2007.

loss of $9,694,544 ($0.28 per share basic and diluted) in the six months ended

December 31, 2008, as compared to net loss of $1,072,860 ($0.04 per share basic

and diluted) in the six months ended December 31, 2007.

cash decreased by $638,392 in the six months ended December 31, 2008, compared

to an increase by $246,001 in the six months ended December 31,

OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2008 AND

for the three months ended December 31, 2008 increased 816% to $2,987,042 as

compared to $326,095 for the three months ended December 31,

Revenues for the six months ended December 31, 2008 increased

1,453% to $6,212,293 as compared to $399,880 for the six months ended December

This increase is primarily due to the growth of our

wholesale call traffic business.

OF REVENUES AND GROSS MARGIN

overall gross profit margin increased to 99.8% in the three months ended

September 30, 2008 from 98.7% in the same period ended September 30,

The overall gross profit margin increased to 99.6% for the six

months ended September 30, 2008 from 95% in the same period ended September 30,

The increase in gross profit margin during the three and six months ended

September 30, 2008 is principally due to a decrease in the cost of

The cost of revenues principally includes costs of engineering

development directed to specifically identified products, and costs of servicing

and hosting customer products.

expenses increased 4% to $552,642 in the three month period ended September 30,

2008 versus $530,613 for the same period in the last fiscal year, and increased

1% to $1,013,861 in the six month period ended September 30, 2008 versus

$1,003,887 for the same period in the last fiscal year.

This increase

is mainly due to a slight increase in sales and marketing and general and

administrative expenses.

We categorize operating expenses into four

overall gross loss margin has improved in both the three and six months ended

December 31, 2008 versus 2007 due to larger traffic volumes being delivered

through the call platform.

The revenue increases now cover the fixed cost

component of cost of sales.

The cost of revenues principally is the cost of call

generation, including transmission and termination, network charges including

access costs, lease and right-of-way charges and other third party fulfillment

costs, and other telecommunication fees, such as emergency 911 service

expenses increased 1,563% to $7,118,899 in the three month period ended December

31, 2008 versus $428,025 for the same period in the last fiscal year, and

increased 928% to $8,182,348 in the six month period ended December 31, 2008

versus $796,082 for the same period in the last fiscal year.

increase is mainly due to costs associated with the reverse merger with Semotus

Solutions, Inc., the growth of the telephony business, the non-cash expense of

stock and options issued to directors, officers and employees, and the

impairment of goodwill.

We categorize operating expenses into three

major categories:

research and development, sales and marketing, general and

administrative, and stock, option and warrant expense.

The table below

summarizes the changes in these five categories of operating expenses

research and development, sales and marketing, and general and

administrative.

The table below summarizes the changes in these three categories

of operating expenses (unaudited):

and development

1 unchanged sentence

and administrative

option and warrant expense

-----------------

6 unchanged sentences

expense as incurred.

These costs increased slightly due to an

increase in product enhancements for current products.

engineering costs are due to production projects for existing products and

these projects also increased slightly in the second quarter ended

September 30, 2008.

These costs are solely related to the Hiplink

product in the Semotus business division.

marketing expenses consist of costs incurred to develop and implement marketing

5 unchanged sentences

These costs also include the expenses of hiring

sales personnel and maintaining a customer support call center.

increased slightly in the three and six months ended September 30, 2008 compared

to the same periods in last year due to an increase in sales and marketing

sales personnel and maintaining a customer support activities.

incurred in 2008 are a result of an increase in sales and marketing personnel

through the Semotus Business, as well as a management fee to Flint,

and administrative expenses include senior management, accounting, legal,

1 unchanged sentence

overhead related costs.

This category also includes the costs associated with

being a publicly traded company, including the costs of SEC filings, investor

relations and public relations efforts.

These costs have increased slightly

during the three and six months ended September 30, 2008 versus 2007 due to a

slight increase in the costs associated with being a publicly traded

non-cash charges for compensation consist mainly of grants of stock, options and

warrants for services provided to us.

Such services include financial, legal and

business development consulting.

The common stock issued was valued at its fair

market value at the date of issuance.

The substantial decline in this expense is

directly related to the substantial reduction in the number and amount of stock

and option grants in the three and six months ended September 30,

This category also includes stock compensation and

option expense, the costs associated with being a publicly traded company,

including the costs of SEC filings, a management fee payable to Flint, Ltd.,

investor relations and public relations.

These costs have increased during the

three and six months ended December 31, 2008 versus 2007 due to the costs

associated with becoming a publicly traded company and the stock compensation

and option expense from the stock and options issued to directors,

officers and employees.

Also, we determined that the goodwill from the Semotus

acquisition was impaired due to the disposition of the Semotus Business

The goodwill was mainly associated with the Hiplink family of

non-cash charges for compensation consist mainly of the grants of stock as a

result of the reverse merger with Semotus Solutions, Inc., and of warrants

issued as part of financing loans.

The common stock issued was valued at its

fair market value at the date of issuance.

INCOME (EXPENSE)

$58,966 for the three months ended September 30, 2008 and $56,473 for the six

months ended September 30, 2008 in other income is comprised

mainly from the income from our contract with Stockgroup where we are providing

transitional services (See Note 7).

$3,720,924 for the three months ended September 30, 2007 and $4,044,021 for the

six months ended September 30, 2007 in other income is comprised mainly from the

gain on the software license sold to Innofone (See Note 10).

$231,029 for the three months ended December 31, 2008 and $12,655 for the six

months ended December 31, 2008 in other expense is comprised mainly from the

expense related to accrued interest on the convertible and promissory notes, as

well as the amortization of the debt discounts related to those notes.

component is exchange gains and losses from currency transactions in the Euro

There was no other income or expense for the three and six

months ended December 31, 2007.

AND CAPITAL RESOURCES

cash was spent on operating resources during the six months ended September 30,

2008 versus the same period in 2007, but the sale of a convertible

promissory note to Flint Telecom Ltd.

provided $200,000 in cash in the six month

period ended September 30, 2008.

Consequently the overall cash

decreased by $139,222 for the six months ended September 30, 2008 versus a cash

increase of $181,007 for the six months ended September 30, 2007.

cash decreased by $638,392 for the six months ended December 31, 2008 due to a

continued loss from operations, purchases of equipment for the wholesale call

platform, and the reverse merger with Semotus.

We were able to cover some of the

cash loss through proceeds from convertible and promissory note issuances.

increased $246,001 for the six months ended December 31, 2007 due mainly to

financing from Flint Telecom Ltd.

which offset the operating losses.

and uses of cash are summarized as follows (unaudited):

used in operating activities

provided by investing activities

provided by (used in) financing activities

$ (2,228,501)

used in investing activities

provided by financing activities

used in foreign currency activities

--------------------

increase (decrease) in cash and cash equivalents

the six months ended September 30, 2008, cash used in operating activities from

the six months ended December 31, 2008, cash used in operating activities from

continuing operations consisted principally of an operating loss of $9,694,544

resulting from gross profits of $653,942 and operating expenses of $1,013,861.

Also, the transitional services we provide to Stockgroup produced other income

of $56,473, which was slightly offset by interest expense of

Other operating activities contributing to the decrease in

cash were an increase in accounts receivable of $222,429 and in the Stockgroup

receivable of $16, 288, as well as a decrease in deferred revenue of $46,411.

The decline in cash was partially offset by an increase in accrued liabilities

the six months ended September 30, 2007, cash used in operating activities from

resulting from a gross loss of $338,587 and operating expenses of $8,182,348.

The loss included non cash charges for stock and option compensation and

impairment of goodwill of $3,045,249 and $2,538,148, respectively.

non-cash expenses were depreciation and amortization of $947,735 and a loss on

the purchase of notes of $174,956.

operating activities that increased cash were a decline in accounts receivable

of $53,971, an increase in accounts payable of $343,692, of accrued liabilities

of $29,361, of accrued interest of $396,525 and deferred revenue of

the six months ended December 31, 2007, cash used in operating activities from

continuing operations consisted principally of an operating loss of $1,072,860

resulting from gross profits of $431,671 and operating expenses of $1,003,887.

Also, a gain on the sale of the software license sold to Innofone, offset by

interest expense of $49,314 produced other income of $4,044,021.

Other operating

activities contributing to the increase in cash were mainly from a decrease in

accounts receivable of $217,023 offset by an increase in the Stockgroup

receivable of $41,463.

There was also an increase in cash resulting from the

capitalization of a $100,000 fee we paid in March 2007 related to the potential

merger with Citytalk, which we wrote off because the merger did not

the six months ended September 30, 2008, cash provided by investing activities

consisted of the collection of the long term receivable from Stockgroup.

the six months ended September 30, 2007, cash provided by investing activities

consisted of proceeds resulting from the asset sale to Stockgroup and the

related interim services agreement with Stockgroup.

provided by financing activities for the six months ended September 30, 2008

consisted of the sale of a convertible promissory note to Flint Telecom Ltd.

which provided $200,000 in cash.

Cash used in financing activities for the six

months ended September 30, 2007 consisted principally of the repayment of $717

on a line of credit from a computer company.

September 30, 2008, we had cash and cash equivalents of $83,162, a decrease of

$139,222 from the balance at March 31, 2008, which was $226,601.

working capital deficit increased as of September 30, 2008 at ($91,884) as

compared to a working capital deficit of ($42,103) at March 31, 2008 .

resulting from gross loss of $276,777 and operating expenses of $796,082.

operating activities contributing to the increase in cash were mainly decline in

accounts receivable of $63,389 and an increase in accounts payable of $212,802,

slightly offset by a decrease in accrued liabilities of $77,565.

the six months ended December 31, 2008, cash used in investing activities

consisted of $329,558 of purchases of telephony equipment and $83,162

for the cash assumed in the acquisition of Semotus Solutions.

During the six

months ended December 31, 2007, no cash was used in or provided by investing

provided by financing activities for the six months ended December 31, 2008

consisted of the sale of short term promissory notes, which provided $2,507,000

in cash and convertible notes payable in the amount of $150,000, which was

offset by the repayment of some short term notes in the amount of $280,000, the

repayment of $166,585 due to Flint, Ltd., and payments of $79,065 on certain

lease obligations.

Cash provided by financing activities for the six months

ended December 31, 2007 consisted principally of proceeds from convertible notes

issued of $150,000 and advances from Flint, Ltd.

of cash was used in foreign currency transactions for the six months ended

December 31, 2008.

There were no foreign currency transactions for the six

months ended December 31, 2007.

December 31, 2008, we had cash and cash equivalents of $848,629, a decrease of

$638,392 from the balance at June 30, 2008, which was $1,487,021.

working capital deficit increased as of December 31, 2008 to ($8,395,627) as

compared to a working capital deficit of ($2,814,281) at June 30, 2008 .

We have not yet

generated sufficient revenues to cover the costs of continued product

development and support, sales and marketing efforts and general and

generated sufficient revenues to cover the costs of continued product and

service development and support, sales and marketing efforts and general and

administrative expenses.

We have an operating lease for our facility in Los

Gatos, California for which the future minimum lease payments are $119,908 in

fiscal 2008, $62,496 in fiscal 2009 and $3,600 in fiscal 2010.

material commitments for capital expenditures at September 30,

believes that it has adequate cash and cash

equivalents to provide working capital for the next 12

still largely dependent on financing in order to generate cash to maintain its

We are currently investigating the capital markets for additional

However, there is no assurance that any additional capital will be

We closely monitor our cash position and our operating costs

in order to maintain an adequate level of cash.

capital lease for our telecom equipment for which future minimum lease payments

are $225,302 in fiscal 2009 and $450,605 in fiscal 2010.

operating lease for our facility in New York, NY for which the future minimum

lease payments are $55,800 in fiscal 2009 and $93,000 in fiscal 2010.

no material commitments for capital expenditures at December 31,

ACCOUNTING PRONOUNCEMENTS

2006, the FASB issued FASB Interpretation No.

48, “Accounting for

Uncertainty in Income Taxes — an interpretation of FASB Statement

109” (FIN 48).

FIN 48 prescribes a recognition threshold and

measurement attribute for financial statement recognition and measurement of a

tax position taken or expected to be taken in a tax return, and also provides

guidance on derecognition, classification, interest and penalties, accounting in

interim periods, disclosure, and transition.

FIN 48 is effective for fiscal

years beginning after December 15, 2006.

We do not believe that the

adoption of FIN 48 currently has a material impact on our financial

September 2006, the FASB issued FASB Statement No.

157, Fair Value

Measurements (SFAS 157).

The standard provides guidance for using fair

value to measure assets and liabilities.

The standard also responds to

investors’ requests for expanded information about the extent to which companies

measure assets and liabilities at fair value, the information used to measure

fair value, and the effect of fair value measurements on earnings.

applies whenever other standards require or permit assets or liabilities to be

measured at fair value.

The standard does not expand the use of fair value in

any new circumstances.

SFAS 157 must be adopted prospectively as of the

beginning of the year it is initially applied.

SFAS 157 is effective for

financial statements issued for fiscal years beginning after November 15,

2007, and interim periods within those fiscal years.

We do not believe that the

adoption of SFAS 157 currently has a material impact on our financial

September 2006, the Financial Accounting Standards Board (the “FASB”) issued

Statement No.

157, “Fair Value Measurements” (“SFAS 157”);

SFAS 157 establishes

a formal framework for measuring fair value under GAAP.

and codifies the many definitions of fair value included among various other

authoritative literature, clarifies and, in some instances, expands on the

guidance for implementing fair value measurements, and increases the level of

disclosure required for fair value measurements.

Although SFAS 157

applies to and amends the provisions of existing FASB and AICPA pronouncements,

it does not, of itself, require any new fair value measurements, nor does it

establish valuation standards.

SFAS 157 applies to all other

accounting pronouncements requiring or permitting fair value measurements,

SFAS 123R, share-based payment and related pronouncements, the

practicability exceptions to fair value determinations allowed by various other

authoritative pronouncements, and AICPA Statements of Position 97-2 and 98-9

that deal with software revenue recognition.

This statement is

effective for financial statements issued for fiscal years beginning after

November 15, 2007, and interim periods within those fiscal years.

believe that the adoption of SFAS 157 will have a material affect on our

financial statements.

February 2007, the FASB issued Statement No.

159, “The Fair Value Option for

Financial Assets and Liabilities”.

This Statement permits entities to choose to

measure many financial instruments and certain other items at fair value.

objective is to improve financial reporting by providing entities with the

opportunity to mitigate volatility in reported earnings caused by measuring

related assets and liabilities differently without having to apply complex hedge

accounting provisions.

The fair value option established by this

Statement permits all entities to choose to measure eligible items at fair value

at specified election dates.

A business entity shall report unrealized gains and

losses on items for which the fair value option has been elected in earnings (or

another performance indicator if the business entity does not report earnings)

at each subsequent reporting date.

This Statement is effective as of the

beginning of an entity’s first fiscal year that begins after November 15, 2007.

We do not believe that the adoption of SFAS 159 will have a material affect on

our financial statements.

December 2007, the FASB issued SFAS No.

141(revised 2007), “Business

Combinations” (SFAS 141R) which replaces SFAS No.

SFAS 141R retains the

purchase method of accounting for acquisitions, but requires a number of

changes, including changes in the way assets and liabilities are recognized in

the purchase accounting.

It also changes the recognition of assets acquired and

liabilities assumed arising from contingencies, requires the capitalization of

in-process research and development at fair value, and requires the expensing of

acquisition-related costs as incurred.

SFAS 141R is effective for us beginning

January 1, 2009 and will apply prospectively to business combinations completed

on or after that date.

We do not expect the adoption of SFAS 141R to have a

material impact on our consolidated financial statements.

Combinations” (“SFAS No.

which revises current purchase accounting guidance in SFAS No.

“Business Combination s ”.

requires most assets acquired and liabilities assumed in a business combination

to be measured at their fair values as of the date of acquisition.

141R also modifies the initial measurement and subsequent remeasurement

of contingent consideration and acquired contingencies, and requires that

acquisition related costs be recognized as expense as incurred rather than

capitalized as part of the cost of the acquisition.

effective for fiscal years beginning after December 15, 2008 and is to be

applied prospectively to business combinations occurring after adoption.

impact of SFAS No.

141R on the Company’s consolidated financial statements

will depend on the nature and extent of the Company’s future acquisition

December 2007, the FASB issued SFAS No.

160, “Noncontrolling Interests in

Consolidated Financial Statements, an amendment of ARB 51” (SFAS 160) which

changes the accounting and reporting for minority interests.

Minority interests

will be recharacterized as noncontrolling interests and will be reported as a

component of equity separate from the parent’s equity, and purchases or sales of

equity interests that do not result in a change in control will be accounted for

as equity transactions.

In addition, net income attributable to the

noncontrolling interest will be included in consolidated net income on the face

of the income statement and, upon a loss of control, the interest sold, as well

as any interest retained, will be recorded at fair value with any gain or loss

recognized in earnings.

160 is effective for us beginning January

1, 2009 and will apply prospectively, except for the presentation and disclosure

requirements, which will apply retrospectively.

We do not expect the adoption of

SFAS 160 to have a material impact on our consolidated financial

Consolidated Financial Statements – an Amendment of ARB No.

This Statement

amends ARB 51 to establish accounting and reporting standards for the

noncontrolling interest in a subsidiary and for the deconsolidation of a

It clarifies that a noncontrolling interest in a subsidiary is an

ownership interest in the consolidated entity that should be reported as equity

in the consolidated financial statements.

Statement changes the way the consolidated income statement is presented.

requires consolidated net income to be reported at amounts that include the

amounts attributable to both the parent and the noncontrolling interest.

requires disclosure, on the face of

consolidated statement of income, of the amounts of consolidated net income

attributable to the parent and to the noncontrolling interest.

This statement is

effective for financial statements issued for fiscal years beginning after

December 15, 2008, and interim periods within those fiscal years.

believe that the adoption of SFAS 160 will have a material affect on our

financial statements.

Interpretation

Accounting Standards Board Interpretation No 48, “Accounting for Uncertainty in

Income Taxes — an interpretation of FASB Statement No 109, “Accounting for

Income Taxes (“FIN 48”)” is effective for fiscal years beginning after December

FIN 48 addresses the determination of whether tax benefits claimed or

expected to be claimed on a tax return should be recorded in the financial

Under FIN 48, the Company may recognize the tax benefit from an

uncertain tax position only if it is more likely than not that the tax position

will be sustained on examination by the taxing authorities, based on the

technical merits of the position.

The tax benefits recognized in the financial

statements from such a position should be measured based on the largest benefit

that has a greater than 50% likelihood of being realized upon ultimate

FIN 48 also provides guidance on de-recognition,

classification, interest and penalties on income taxes, accounting in interim

periods and requires increased disclosures.

The Company is evaluating the

effects of FIN 48 for the 2008 fiscal year, but it does not believe that it has

a liability for unrecognized tax benefits.

does not believe that there are any other recently-issued accounting

pronouncements, but not yet effective accounting standards, which could have a

material effect on the accompanying financial statements.

LOOKING STATEMENTS AND RISK FACTORS

13 unchanged sentences

risks, uncertainties and assumptions include, but are not limited to, our

limited operating history, our historical losses, the infancy of the wireless

data industry where there is no established market for our products and

services, our ability to adapt to rapid technological changes, our dependence on

wireless networks owned and controlled by others, and the other factors that we

describe in the section entitled "Risk Factors" in the Form 10KSB for the year

ended March 31, 2008.

We claim the protection of the safe harbor for

forward-looking statements contained in the Private Securities Litigation Reform

limited operating history, our historical losses, our ability to secure

additional sources of finance, our ability to adapt to rapid technological

changes and the other factors that we describe in the section entitled "Risk

Factors" in the Form 10KSB for the year ended March 31, 2008.

protection of the safe harbor for forward-looking statements contained in the

Private Securities Litigation Reform Act of 1995.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis