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Empower Technologies™ Second Quarter Report Ended June 30, 2006
Richmond, British Columbia - August 22, 2006 - Empower Technologies Corporation (“The Company” or “Empower”) has filed financial statements for the second quarter ended June 30, 2006.
Empower is a Linux operating software developer for Linux-based embedded system technologies and solutions for the consumer electronics industry. The Company was incorporated under the Company Act ( British Columbia) on February 21, 2003. The Company operates through its wholly-owned Washington State subsidiary, Empower Technologies, Inc. (“Empower US”), and indirectly; Empower Technologies ( Canada) Inc. (“Empower Canada”) and Empower Technologies ( Shanghai) Inc. (“Empower Shanghai”). The Company trades on the TSX Venture Exchange under the symbol EPT.
Highlights of the second quarter ended June 30, 2006:
- The Company has begun a joint international sales effort with Texas Instruments (TI) to promote its LDK591x family of LEOs (LinuxDA Embedded Operating Systems) for TI’s OMAP591x dual embedded software development kits to over 2,000 of the top universities and technical colleges worldwide.
- The Company launched LDK5912 at the Embedded Systems Conference (ESC) in San Jose , California , April 3 rd to April 7th 2006 in the Texas Instruments Third Party Pavilion at the San Jose McEnery Conference Center. The LDK5912 Development Kit completed the LEOs for TI’s OMAP591x dual-core embedded processor family.
- Also, the Company has signed the first LEOs operating software licensing agreement, a supply agreement and a software development agreement with an undisclosed customer on the US west coast. Due to the extremely competitive nature of their fast growing industry, the Customer has requested that Empower to keep their identity and business in strict confidence.
Significant projects
LEOs II (LinuxDA Embedded O/S II)
Empower US has commenced work on the next version of LEOs. Once the new LEOs II is tested and released then it will be optimized for the Texas Instruments (“TI”) OMAP processors.
LDK5912 Development Kit
Empower US has completed work on LEOs for TI OMAP5912 Development Kit (LDK5912). This kit has the same features as the LDK5910. This product completes the LEOs for TI OMAP591x (LDK591x) Development Platform offering.
Osaka Lite Project
The Osaka Lite Project is a light version of Osaka Project. It is a compact, all-digital audio system with an Apple’s iPod dock. Empower has joined the Apple “Made For iPod” licensing and accessories program. Supporting a wide range of sound functions, it integrates all the elements of personal and home audio, in addition to a PDA with QVGA display. Powered by LEOs for the TI OMAP5910 dual core processor, the Osaka Lite Project uses Empower’s Totally Digital Audio Platform (“T-DAP”) technology. The Osaka Lite Project fulfils the needs and demands of the Apple iPod accessory consumer.
Osaka Project
With CD, DVD, MP3 and clock radio capabilities, the Osaka Project is a compact, all-digital audio system. Supporting a wide range of sound functions, it integrates all the elements of personal and home audio, in addition to a PDA with QVGA display. Powered by LEOs for the TI OMAP5910 dual core processor, the Osaka Project uses Empower’s Totally Digital Audio Platform (“T-DAP”) technology. The Osaka Project fulfils the needs and demands of the cutting edge consumer.
PowerPlay 1x
This new mobile data terminal model is still under development. Besides the regular PDA functions, this new model will have wireless communication capability.
Results of Operations
Revenues presently the Company's activities continue to be primarily the development of the Company's LEOs operating software for Texas Instruments embedded processor families, engineering consumer electronics using LEOs and LDK5910 Development Kit, and filing patents for embedded systems and technologies. Revenues generated for the three months ended June 30, 2006 were $22,697 compared with $468 for the three months ended June 30, 2005. This increase is attributed to the Company’s sales ($5,877) and R&D engineering service revenue ($16,820). The negative impact by the Company’s decision to clear out and drop all distributed products and end of life product is near its end and the Company is starting to realize revenue from its principal products and services as stated in the Prospectus from the last financing. They are: (1) the licensing of the Company's core embedded operating software technology LEOs (LinuxDA Embedded O/S), (2) new product solutions/reference designs developed in-house using LEOs and LDK591x, and (3) fee based professional engineering and system development services.
The Company anticipates revenue to continue to improve through its plans to: introduce new reference designs products using LEOs; move aggressively to set up a strong marketing and sales base in North America and in China for LEOs, the new LDK591x Development Kits, and the consumer reference design products such as the Osaka Project and PowerPlay 1x using LEOs and LDK591x technology.
General and administrative expenses without stock-based compensation and R&D costs for the three months ended June 30, 2006 increased to $714,570 (2005 - $487,778). Advertising and promotion increased to $110,507 (2005 - $58,365). Travel increased to 55,667 (2005 - $35,885). Both of the increase was due to the Company’s effort to commercialize its technologies by attending tradeshows and expanding investor relations. Consulting fees increased to $207,508 (2005 - $51,000) due to the Company’s effort for expansion . Rent increased to $13,141 (2005 - $5,450) for our new move to a larger premise. Stock-based compensation increased to 98,821 (2005 - $32,131) due to the Company’s offer of more employee stock options to officers and employees.
Research and Development costs (“R&D costs”) relating to the development of LEOs, the LDK591x Development Kit, and new products using LEOs are expensed as incurred. R&D costs for the three months ended June 30, 2006 were $370,026 compared to $327,056 for the three months ended June 30, 2005.
The R&D cost increase is due to the Company accelerating its efforts to develop its core technology, LEOs operating software, expand the TI embedded processor platform coverage and to apply it to new products to showcase the core technology.
About Empower Technologies™
Founded in 2000, Empower Technologies (TSX.V: EPT) is an innovative company that brings the power and flexibility of the LEOs® (LinuxDAT Embedded Operating System) to the dynamic embedded computing Industry and the emerging Intelligent Appliance Market, through their development of Linux-based operating software, embedded system technologies and solutions.
The products and services that form the base of its business activities include an embedded system development platform for LEOs®, based on Texas InstrumentsT embedded CPU platform, that fulfill the needs and demands of developers and the embedded computing Industry. Empower is continuing to develop LEOs® and newer versions of embedded CPUs in line with Texas InstrumentsT.
By uniting top professionals from within the computer industry and developing quality partnerships and strategic alliances, Empower is committed to being the leading developer of Linux-based operating software and embedded system technologies and solutions for electronics manufacturers and developers.
Empower's brands are "LEOs®", "LinuxDAT", Linux-based embedded operating systems and "PowerPlayT", smart consumer electronics.
Contact Information:
Media Enquiries:
Paul Leung - Chairman, President and CEO: pcleung@empowertechnologies.com or via Tel @ (604) 278-3100
Investor Relations: investorline@empowertechnologies.com
More Information on Empower Technologies: www.empowertechnologies.com
Sales Enquiries: sales@empowertechnologies.com or via Tel @ (604) 278-3100
Paul Leung
Chairman, President and CEO
Empower Technologies Corporation
# 405-5600 Parkwood Way
Crestwood Commerce Centre
Richmond , BC , Canada V6V 2M2
The statements contained in this news release that are not historical facts are forward looking statements. Such statements are based on management's estimates, assumptions and projections using available information. The company cautions that actual financial results could differ materially from the current expectations due to a number of factors.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transactions and has neither approved nor disapproved the contents of this press release.
Empower Technologies, LEOs, PowerPlay and LinuxDA are the trademarks of Empower Technologies, Inc. All other brands are trademarks of their respective owners.
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