David,
I love your dear diary slant on this thread. I know it seems lonely, but as this story unfolds(I hope not fold) there is bound to be more activity. I found the latest 10-Q Management Discussion in Edgar. Roy continues to tell it like it is. The Management Discussion that follows is far from "Candy-Coated".
Concerns:
1) Not much capital to work with. They'll need to raise capital immediately to continue operations. As long as they can raise the capital, I'm not too worried about the dilution. It's a much bigger problem if they cannot raise additional capital.
2) Still no sales. I was hoping for a small revenue stream by now.
3) Still no contracts that I'm aware of. Anybody know of any?
Mark S.
STRATFORD ACQUISITION CORP
Filed on Oct 21 1997
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is management's discussion and analysis of certain significant factors which have affected the Company's financial position and operating results during the periods included in the accompanying consolidated financial statements.
The Financial Statements for the period ended August 31, 1997 included in this Form 10-Q are unaudited; however, such information reflects all adjustments (consists solely of normal recurring adjustments), which are, in the opinion of management, necessary to present a fair statement of the results for the interim period.
Results of Operations
Three months ending August 31, 1997 vs. August 31, 1996.
Sales for the three months ended August 31, 1997, were $0. In the same period in 1996, sales were also $0. The Company's inability to generate sales in this period is attributable to the complete management and operational turnaround that the Company undertook in November, 1996. Operating expenses for the three months ended August 31, 1997, increased 25% to $220,871 when compared to the same period in 1996. The increase was attributable to the legal, auditing and
administrative expenses incurred by the Company to complete the turnaround of its operations. The Company also recorded other income of $1,007 which consisted primarily of financial gains from
currency fluctuations. The net result of the Company's operations for the three month period was a loss of $219,831. Thus, the Company's business operations in the three months ended August 31, 1997, were nominal and are not expected to become profitable for the next nine months.
On August 31, 1997, the Company had $214,307 in assets, of which $198,568 were current assets: $143,799 of inventory; $43,257 in cash and cash equivalents and $11,512 was in accounts and advances receivable. In addition, the Company had $3,174 of equipment (net of depreciation), organizational cost of $826 and security deposits of $11,739. Based on the Company's average monthly operating expenses of $73,623 during the three month period ending August 31, 1997, the
Company has less than one month of current assets to operate its business, assuming no revenues are earned and that the Company does not raise capital from third-party sources.
In the three month period, the Company had total liabilities of $119,933 and $94,374 in shareholders' equity. However, the Company had an accumulated deficit of $1,763,653.
Liquidity and Financial Resources at August 31, 1997
On August 31, 1997, the Company, due to the lack of internally generated cash flow from operations had a weak financial position and without generating working capital from third-party sources is not likely to continue as a going concern. The Company, is planning to raise additional working capital through the sale of debt and equity and believes it will raise a sufficient amount of capital to sustain the Company's operations.
The Company's management originally anticipated selling the Company's products in the Spring of 1997, however its reorganization plan was delayed by litigation brought by the Company and the' additional time necessary to complete its year end audit for May 31, 1997. |
