Re: Would someone please explain why PTSC had 7,559,000 in Selling, General and Administrative expenses
posted on
Aug 15, 2007 06:54AM
Selling, general and administrative expenses increased from approximately $4,151,000 for the fiscal year ended May 31, 2006 to approximately $7,559,000 for the fiscal year ended May 31, 2007. Legal and accounting related expenses increased by approximately $847,000 for the fiscal year ended May 31, 2007 compared with the fiscal year ended May 31, 2006 related to legal and accounting matters in connection with the restatement of our financial statements for the fiscal years 2005, 2004, 2003 and 2002 as well as the quarterly reports for the periods ended August 31, 2005 and February 28, 2006 and our required compliance with Sarbanes-Oxley regulations. Legal expenses related to a dispute with a former officer as well as other legal proceedings involving a co-inventor of a portion of our technology and other legal expenses connected with SSDI contributed to the increase in legal expenses for the 2007 fiscal year. Salary costs and related expenses included non-cash expenses associated with the fair value of options granted during the fiscal year ended May 31, 2007 in accordance with SFAS No. 123(R). On June 5, 2006, 1,500,000 options were granted to our former chief executive officer resulting in non-cash compensation expense amounting to approximately $1,527,000. On October 23, 2006, 230,000 options were granted to employees resulting in non-cash compensation expense of approximately $184,000. On February 9, 2007, 1,070,000 options were granted to employees and directors resulting in non-cash compensation expense of $584,000. Additional non-cash compensation for the fiscal year ended May 31, 2007 amounted to $61,000 for vesting of employee stock options in accordance with SFAS No. 123(R). No such compensation expense was incurred for the 2006 fiscal year. Other salary expenses increased by approximately $398,000 for the fiscal year ended May 31, 2007 as compared with the fiscal year ended May 31, 2006 including approximately $223,000 in salaries and related expenses for SSDI during the fourth quarter of the 2007 fiscal year. Salary expenses for the parent company including expenses connected with bonuses and 401(k) employer matching of salaries increased by approximately $175,000 in the 2007 fiscal year as compared with the 2006 fiscal year. Marketing related expenses decreased by approximately $139,000 for the fiscal year ended May 31, 2007 as compared with the fiscal year ended May 31, 2006 as product marketing activities were largely discontinued. Public and investor relations expenses increased by approximately $165,000 for the fiscal year ended May 31, 2007 as compared with the 2006 fiscal year as a result of a change in our public relations firm and one-time contracts with investor relations consultants. Insurance expense increased by approximately $158,000 for the fiscal year ended May 31, 2007 as compared with the 2006 fiscal year primarily as a result of increased costs of directors and officers insurance coverage. Travel and related expenses for the 2007 fiscal year increased by approximately $44,000 as expenses for SSDI were combined with travel expenses for the parent company which increased due to travel to attend various lawsuit mediations.