MKRS - added @ .18 today.
Just waiting on news and more details on 2.5 million grant.
Expect full scale production to be next step
Note 1 Basis of Presentation:
The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2003.
In the opinion of the Company's management, the accompanying unaudited financial statements contain all adjustments, consisting solely of those which are of a normal recurring nature, necessary to present fairly its financial position as of September 30, 2004 and the results of its operations and its cash flows for the nine months ended September 30, 2004.
Interim results are not necessarily indicative of results for the full fiscal year.
The Company's financial statements have been prepared assuming that the Company will be able to continue as a going concern. The Company has sustained substantial operating losses in recent years. In addition, the Company has used substantial amounts of working capital in its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans and intentions on the going concern issue are discussed below. These financial statements do not include any adjustments that would be required if the Company were unable to continue as a going concern.
The Company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flows to meet its obligations as they come due. Management has pursued Small Business Innovative Research (SBIR) contracts in order to generate cash flow, while also allowing development of new potential products. For example the Phase II Multiple Function Distributed Analysis Tool (MFDAT0 SBIR) contract with the Naval Surface Warfare Center in Dahlgren, Virginia is expected to continue through the first quarter of 2005. This contract is a cost plus fixed fee contract and the Company is billing its actual costs on a bi-weekly basis, providing crucial cash flow. The Company was awarded an
additional SBIR Phase I firm-fixed price contract from the Office of Naval Research (ONR) for approximately $100,000. In September 2004, the Company was awarded a
Small Business Innovation Research (SBIR) Phase III contract from the Naval Surface
Weapons Center Dahlgren, VA valued at approximately $2,400,000, the contract is to
complete the development and to begin initial production of an intelligent test tool for
Navy radars. The Multi-Function Distributed Analysis Tool ( MFDAT) has been designed by
the Company under a $1,000,000 SBIR Phase II contract, which began in August 2003.
If cash flows are insufficient, there would be a material adverse effect on the Company's financial position and operations and its ability to continue as a going concern. This would force the Company to further reduce its expenditures, reduce its workforce, sell certain assets or possibly explore additional alternatives including seeking bankruptcy protection.
In view of these matters, realization of a major portion of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent on the Company being able to sustain sufficient cash flow to support further development for its new potential products and continuing operations. Management believes that actions presently being taken to sustain the Company's operating and financial requirements will allow it to continue as a going concern. |
