General and Administrative Expenses. General and administrative expenses consisted of salary and payroll tax expenses of administrative personnel, rent, professional fees and costs associated with employee benefits, supplies, communications, and travel. Total general and administrative expenses for the year ended December 31, 2010 were $11,584,552 as compared to $5,745,538 for the year ended December 31, 2009. The increase of $5,839,014, or 102%, was primarily due to significant increase in bad debt expense primarily for certain clients in the Euro Zone of approximately $5.2 million, increase in bonus expenses of approximately $0.8 million and professional fees of approximately $0.4 million, offset by decrease in stock-based compensation expense of approximately $0.6 million.
Press Release
Revenues grew 29% to $35,505,273, income from operations was $6,180,981, and net income was $5,495,028, representing a net profit margin of 15%.
Business Highlights
2010 was again a strong year for our gaming business. We achieved a total number of iPhone/iPod Touch/iPad downloads of approximately 15.8 million in the year of 2010, a significant increase of 88%, as compared to approximately 8.4 million in 2009. The total cumulative number of our mobile games and apps downloaded through June 2011 exceeded 60 million worldwide.
Management Comments
Frank Namyslik, Chief Financial Officer of Artificial Life, Inc. said:
"Considering the liquidity crisis in the Euro zone during 2010, our core market, which required us to account for over $7 million in bad debt allowance for some Greek and European clients and the decline of the Euro during 2010 which cost us nearly an additional of $1 million in currency losses, we still performed quite well. Not only did we maintain a solid profit margin of 15%, we also increased revenues by 29% and therefore grew at an even stronger rate than in the already good year 2009".
Eberhard Schoneburg, CEO of Artificial Life, Inc. added:
"2010 was again a strong year for us despite the difficult global economy and the liquidity issues in the Euro zone. We are now looking forward to implementing our new business model. In the coming months and years we are planning several key investments and joint ventures and are aiming to build up a unique and cooperative network of leading edge wireless companies around the globe. We will be very active in analyzing targets within the BRICS nations and in extending our portfolio of investment companies."
Net Earnings Per Share 2010 $0.09 compared to $0.15 in 2009.
This year will be transitional, so I don't have a clue how 2011 will be!
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