Summary of EDOORWAYS CORP - Yahoo! Finance

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion and analysis compares our results of operations for the three months ended March 31, 2008 to the same period in 2007. This discussion and analysis should be read in conjunction with our condensed financial statements and related notes included elsewhere in this report, and our Form 10-KSB for the year ended December 31, 2007.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Report on Form 10-Q contains forward-looking statements, including, without limitation, statements concerning possible or assumed future results of operations and those preceded by, followed by or that include the words "believes," "could," "expects," "intends" "anticipates," "will", or similar expressions. Our actual results could differ materially from these anticipated in the forward-looking statements for many reasons including the risks described in our 10-KSB for the period ended December 31, 2007 and elsewhere in this report. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results.

Overview

On March 30, 2007 (the "Issuance Date"), we entered into a Securities Purchase Agreement with AJW Capital Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millennium Capital Partners II, LLC (the "Investors"), whereby the Investors purchased an aggregate of (i) $165,000 in Callable Secured Convertible Notes (the "Notes") and (ii) warrants to purchase 1,500,000 shares of our common stock (the "Warrants").

Under the Securities Purchase Agreement, we are obligated to pay all costs and expenses incurred by us in connection with the negotiation, preparation and delivery of the transaction documents, as well as the costs associated with registering the common shares underlying the Notes being offered in this Prospectus.

eDOORWAYS evaluated the convertible debentures and the warrants under SFAS 133 "Accounting for Derivatives" and EITF 00-19 "Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Company's Own Stock, eDOORWAYS determined the convertible debentures contained an embedded derivative for the conversion option and the warrants qualified as free standing derivatives. The conversion option allows for an indeterminate number of shares to potentially be issued upon conversion. This results in eDOORWAYS being unable to determine with certainty they will have enough shares available to settle any and all outstanding common stock equivalent instruments. eDOORWAYS would be required to obtain shareholder approval to increase the number of authorized shares needed to share settle those contracts. Because increasing the number of shares authorized is outside of eDOORWAYS control, this results in these instruments being classified as liabilities under EITF 00-19 and derivatives under SFAS 133.

Twelve Month Plan of Operations
During the next 12 months, we will direct our resources to the development, branding, and launch of the eDOORWAYS web service offering. This includes both the B to C and B to B versions of eDOORWAYS. We will enter into strategic alliances, form joint ventures and acquire interests in companies whose products and services integrate into the eDOORWAYS portal.

As the transition to the eDOORWAYS business model has proceeded, we have raised $2.415 million in capital, and plan on receiving another $3 million in 2nd quarter 2008. If the plan as outlined is achieved within 12 months, we will have raised approximately $5 million for working capital and $5 million for deployment of the B to C version of the eDOORWAYS Internet service offering.

The corporate relationships between us, subsidiaries, joint ventures and strategic alliances will be collaborative, but decentralized so that shared functions, such as accounting are efficient, but existing, successful operations will continue without significant adjustment. New operations will require significant management and professional resources.

We have raised $2.415 million in capital, and hope to secure another $3 million in July 2008 for working capital. Without this funding, with our current cash balance of $677, we do not have enough working capital to continue operations. If raised, the additional $3 million would be allocated as follows: $1 million will be used for completion of the B to C version of eDOORWAYS, $500,000 for its launch starting in Austin, Texas and the remaining balance will be used for expenses such as general and administrative, marketing, and consulting. The next four months are devoted to the testing and soft launch of the B to C version of the service offering, with the remainder of 2008 dedicated to transitioning into the national launch, initiating development of phases II and III of eDOORWAYS, and pursuing the B to B version.

A goal has been set to raise investment capital of $10 million in 2008 through funding acquisitions, joint ventures and strategic alliances to be used in the business to increase working capital, boost staffing, and purchase fixed assets such as a building and server farm. The increase in staffing is projected to be as follows: production - 6 employees, general and administrative - 3 employees, sales and marketing - 6 employees.

The $10 million of capital, if acquired, would be used as follows:

(a) eDOORWAYS B to C Initial Launch in Austin ($1.5 million) General & Administrative Marketing Site Development & Technology Infrastructure Furniture Fixtures & Equipment Facilities & Office Compensation Working Capital Reserve for Contingencies

(b) eDOORWAYS B to C National Launch ($5 million) General & Administrative Marketing Site Development & Technology Infrastructure Furniture Fixtures & Equipment Facilities & Office Compensation Working Capital Reserve for Contingencies

Product Development
Our objective is to complete testing of Phase I of the eDOORWAYS B to C web service offering in the second quarter of 2008 in preparation for a "soft launch" in Austin, Texas by the end of the quarter. It's also our objective initiate development of Phases II and III of the eDOORWAYS B to C service offering during the second quarter, with a goal of completing one or both by the end of the 2008 calendar year. Also, in the second quarter, we hope to complete development of a B to B version of eDOORWAYS.

Pre-launch Organization and Planning
Planning and organizing activities for the establishment of Austin, Texas as the operational headquarters of eDOORWAYS Corporation, as well as for the "soft launch" of the B to C version must be completed in the second quarter of 2008.

Marketing/Deployment of the eDOORWAYS' "B to C" Service Offering Applied Storytelling, our brand development consultant, has established an objective of completing our B to C marketing and deployment strategy in the second quarter of 2008.

Development of the Brand Platform
Applied Storytelling has been engaged to create the eDOORWAYS brand identity, it's positioning strategy, and platform. These activities are scheduled to be completed in the second quarter of 2008 in advance of our "soft launch."

Entertainment Vertical Market Development Ajene Watson, an entertainment marketing consultant in New York City, has established a goal of creating a business plan and an operational division for the entertainment vertical market in the second quarter of 2008.

eDOORWAYS B to C Version National Launch It is our objective to execute a national launch of the B to C version of eDOORWAYS during the third and fourth quarters of 2008.

Recent Events
On January 1, 2008, eDOORWAYS entered into a three year employment agreement with Gary F. Kimmons to continue to serve as CEO of the company. The base salary is $300,000 per annum,with a $60,000 bonus payable in cash, or stock if Mr. Kimmons so chooses. Also, pursuant to this agreement, Mr. Kimmons was issued 30,000,000 shares of common stock.

EDOORWAYS entered into a director agreement with Kathryn Kimmons, effective from January 1, 2008 to January 1, 2009. A monthly director's fee of $2,500 per month was agreed upon. Ms. Kimmons has the option to take the monthly director fee in cash or common stock of the company.

On January 1, 2008, a one year consulting services agreement was entered into with Lance Kimmons to assist with operations and business development of eDOORWAYS. Mr. L. Kimmons will also serve on the board of directors for the year 2008, and will receive the monthly director compensation of $2,500 per month, in addition to a $7,000 per month fee for consulting services in relation to the business development aspect of the contract.

On February 5, 2008, we entered into a consulting agreement with Ajene Watson, an individual consultant in New York, who is charged with establishing an entertainment vertical service offering as a component of eDOORWAYS. The agreement has an initial "trial" period of 90 days and converts to a month-to-month agreement thereafter.

On February21, 2008 , 1,000,000 shares of common stock were issued to an individual to retire a $3,000 promissory note. The share price on the day of conversion is $0.01 and the Company recognized a loss on debt settlement of $7,000.

On March 3, 2008, we issued performance bonuses to consultants in the form of an issuance of common stock totaling 20,453,125 shares with an aggregate value of $163,625.

On March 3, 2008, the company issued 18,687,500 shares of its common stock as compensation in lieu of $149,500 in cash owed to its key affiliates for work performed from the period of January 1, 2007 through February 28, 2008.

On March 3, 2008, we issued 1,250,000 shares of our common stock as compensation in lieu of $10,000 in cash owed as compensation to a consultant, Elaine Leonard, for performance from November 1, 2007 through February 28, 2008 as specified under her contract dated November 1, 2007.

During March and April, 2008, the company issued 63,474,005 common shares to consultants in lieu of compensation for services performed in 2008.

On April 7, 2008, EDOORWAYS entered into a Finder's Fee agreement with SmallCap Consultants, Inc. in relation to potentially securing financing for the company's operations.

On April 11, 2008, the company entered into a consulting agreement with Marty Lobkowicz, MML International, Inc., a Florida Corporation, to advise EDOORWAYS in financial and merger/acquisition matters, and also in matters related to retail business development and brand implementation.

During April 2008, eDOORWAYS received notice of default from the holders of its convertible debentures. The Company is in talks to resolve the outstanding issues surrounding the default with the lenders while seeking financing from other sources.

During the first five months of 2008, we have issued promissory notes to various individuals for loans to obtain operating cash. The amounts of these notes total $16,200. In addition, the Company's shareholder has advanced $20,000 to the Company.

Liquidity
During the three months ended March 31, 2008, we used cash of $49,970 in our operations compared to using $279,783 in the comparative quarter of 2007. We had cash on hand of $677 as of March 31, 2008 and $45,647 at March 31, 2007. As reflected in the accompanying financial statements, the Company has a loss from operations of $3,900,529, a negative cash flow from operations of $49,970, a working capital deficiency of $7,948,167 and has a stockholders' deficiency of $7,762,983. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Note 3 of the Notes to Financial Statements describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below. We do not believe that there have been significant changes to our accounting policies during the period ended March 31, 2008, as compared to those policies disclosed in the December 31, 2007 financial statements.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) we are required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our financial statements:

Use of Estimates -These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Specifically, our management has estimated variables used to calculate the Black Scholes and binomial lattice model calculations used to value derivative instruments discussed below under "Valuation of Derivative Instruments". In addition, management has estimated the expected economic life and value of our licensed technology, our net operating loss for tax purposes, share-based payments for compensation to employees, directors, consultants and investment banks, the useful lives of our fixed assets and our allowance for bad debts. Actual results could differ from those estimates.

Deferred financing Costs -Payments, either in cash or share-based payments, made in connection with the sale of debentures are recorded as deferred debt issuance costs and amortized using the effective interest method over the lives of the related debentures. The weighted average amortization period for deferred debt issuance costs is 36 months.

Fair Value of Financial Instruments- For certain of our financial instruments, including accounts receivable, accounts payable, accrued expenses, interest payable, bank overdraft, advances payable and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.

Valuation of Derivative Instruments -FAS 133, "Accounting for Derivative Instruments and Hedging Activities" requires bifurcation of embedded derivative instruments and measurement of fair value for accounting purposes. In addition, FAS 155, "Accounting for Certain Hybrid Financial Instruments" requires measurement of fair values of hybrid financial instruments for accounting purposes. We applied the accounting prescribed in FAS 155 to account for the 2006 Convertible Debentures. In determining the appropriate fair value, the Company uses a variety of valuation techniques including Black Scholes models, Binomial Option Pricing models, Standard Put Option Binomial models and the net present value of certain penalty amounts. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as Adjustments to Fair Value of Derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant derivatives are valued using the Black Scholes model.

Stock Based Compensation- The Company adopted the fair value recognition provisions of FAS 123(R), using the modified prospective transition method. Under this transition method, stock-based compensation expense is recognized in the consolidated financial statements for granted, modified, or settled stock options based on estimated fair values. Results for prior periods have not been restated, as provided for under the modified prospective transition method. In addition, the Company adopted the consensus in EITF No.96-18, "Accounting for Equity Instruments that are issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services."

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2008 AS COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2007.

There were no revenues for the three months ended March 31, 2008 or 2007.

We had operating expenses of $824,555 for the three months ended March 31, 2008 compared to $283,608 for the comparative period of 2007. The primary reason for this increase was due to the increase in equity compensation to various consultants for services and professional fees.

We had interest expense of $273,327 during the three months ended March 31, 2008 as compared to $160,590 for the comparative period of 2007. The interest was accrued on our unpaid accounts payable, accrued expenses and notes payable. The increase in interest expenses was the result of the issuance of the 6% convertible debentures in 2007, and the 8% convertible debentures on March 30, 2008. The interest expense account also include the amortization of deferred financing cost of $36,252

Our net loss was $3,900,529 during the three months ended March 31, 2008 compared to income of $221,421 incurred in the comparable period of 2007. This increase in net loss was due to an increase in professional fees and general and administrative costs in 2008, and also a loss from changes in the derivative liability on the convertible debentures.

Liquidity

During the three months ended March 31, 2008, we used cash of $49,970 in our operations compared to using $279,783 in the comparative quarter of 2007. We had cash on hand of $ 597,110 as of March 31, 2007 and $677 at March 31, 2008. As reflected in the accompanying financial statements, the Company has a loss from operations of $3,900,529, a negative cash flow from operations of $49,970, a working capital deficiency of $7,948,167 and has a stockholders deficiency of $7,762,983. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. The Company currently does not have enough cash to continue operations for the next twelve months.