To All: 10Q out today. Lost more money again. I'm really getting sick of Schiller and his antics. I especially like this line:
CEO's Compensation:
Effective September 1996, the CEO's annual salary is $500,000 and shall increase annually by the greater of 5% or the increase in cost of living index. A bonus for each year is payable in an amount equal to 10% of the amount by which the greater of (A) the Company's consolidated net income before taxes, or, (B) the Company's consolidated net cash flow calculated as the Company's net income plus depreciation, amortization and other non-cash items of expense, minus payments of all principal amounts of outstanding debt, exceeds $600,000..
And then there's this one:
Going Concern
For the three and six months ended June 30, 1997, (the "1997 three and six month periods"), the Company incurred net losses of $312,000 and $4.1 million, respectively, has an accumulated deficit at June 30, 1997, ("June 1997"), of $54.3 million, and approximately $6.4 million of debt that is in default. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Furthermore, as of August 15, 1997, the Company has been delisted from Trading on the NASDAQ because it failed to meet the minimum bid requirements of $1 and the minimum net tangible worth requirement of $1 million.
In order to address the minimum bid requirements, the Company's Board of Directors has approved a 1 for 30 reverse split which will be voted on at a stockholders meeting. In order to address the financial difficulties that the Company is experiencing, management has disposed of the unprofitable Audio Products Manufacturing segment, has developed a plan to discontinue the unprofitable operations of the Three Dimensional Products and Services segment and is attempting to sell the Medical Diagnostics segment in anticipation that such a sale would provide the Company with adequate income and working capital
to rectify the NASDAQ net tangible worth deficiency as well as enable the Company to properly fund the remaining subsidiaries. Additionally, management plans to continue efforts to raise capital through initial and secondary public offerings of the remaining subsidiary's equity and to manage them to profitable levels once adequate funding is in place. There can be no assurances that management's plans to raise additional capital and to manage the subsidiaries to profitable levels will be successful. Additionally, no assurances can be given that the Company will be able to sell the Medical Diagnostics segment or that
any potential sale would result in a significant gain. The failure of the Company to sell the Medical Diagnostics segment and the failure of the subsidiaries to raise capital by equity offerings of their stock may force the Company to reduce operations via the closure of additional unprofitable segments and could ultimately force the Company as a whole to cease operations.
Wanna buy some shares of COTG cheap?
-Ken(getting out of COTG)Low- |
