| This is significant for two reasons; first, it will demonstrate our ability to manufacture vehicles on a "production basis" (i.e., multiple vehicle sets built to a consistent specification, and according to a predictable schedule) and thus position us for future orders, possibility on a substantially larger scale than we have received to date. Second, as discussed above, in accordance with accepted accounting practice, we have treated progress payments received on our two main contracts as "deferred income", which means that even though we have actually received progress payments totaling $6,354,970, the revenue is not stated on our income statement. As a result, our financial results for the nine month period ending September 30, 2004 show revenues to date of $1,752,158, and a resulting loss from operations of $6,240,716. When we complete and deliver the vehicles, we will be able to move current deferred amounts from the "deferred revenue" category and book it as direct revenue from operations. |
