new Jag Notes SEC report out, looks bad
However, as shown in the accompanying condensed consolidated financial statements, during the nine months ended April 30, 2002 and 2001, the Company only generated revenues of approximately $468,000 and $785,000, respectively; it incurred net losses of approximately $3,225,000 and $15,368,000, respectively; and it had cash flow deficiencies from operating activities of approximately $1,154,000 and $5,432,000, respectively. As a result, the Company had a working capital deficiency of approximately $768,000 and an accumulated deficit of approximately $37,764,000 as of April 30, 2002. In addition, management believes that the Company will continue to incur net losses and cash flow deficiencies from operating activities through at least April 30, 2003. These matters raise substantial doubt about the Company's ability to continue as a going concern.
Management believes that, in the absence of a substantial increase in subscription revenues, it is probable that the Company will continue to incur losses and negative cash flows from operating activities through at least April 30, 2003 and that the Company will need to obtain additional equity or debt financing to sustain its operations until it can market its services, expand its customer base and achieve profitability.
Cornell Capital received 1,500,000 shares of the Company's common stock (1,363,637 and 136,363 Class A and Series 1 Class B shares, respectively) of as of August 17, 2001 as additional consideration for entering into the Original Equity Line Agreement and certain principals of Cornell Capital agreed to surrender for cancellation outstanding warrants for the purchase of a total of 690,000 shares of the Company's common stock (627,273 and 62,727 Class A and Series 1 Class B shares, respectively). Cornell Capital was also entitled to a cash fee equal to 5% of the gross proceeds received by the Company in connection with each put.
In addition, we did not generate any revenues from our subsidiary JAG Company Voice LLC ("Company Voice") during the nine months ended April 30, 2002
As a result of the above, we had a net loss of approximately $999,000 during the three months ended April 30, 2002
In June 2002, the Company and Reliant Limited, a corporation organized under the laws of the Isle of Man ("Reliant"), agreed to settle, the civil action filed by Reliant against the Company and its transfer agent in Superior Court of the State of New Jersey, County of Monmouth (subsequently removed to U.S. District Court) relating to that certain Offshore Securities Subscription Agreement dated January 18, 2000. No money will be paid under the terms of the settlement, and the parties have agreed to execute a mutual release of claims. |
