Following Good news from 10K concerning debt after 1997 FY:
Subsequent to June 30, 1997 , the Company has received proceeds of $4,616,000 upon the exercise by the holders of 3,001,101 stock options and stock purchase warrants for 3,001,101 shares of common stock. Proceeds have been used for general working capital, including repayment of bank debt and the reduction in accounts payable. Further, subsequent to June 30, 1997, the holders of the Company's 9% convertible debentures have converted $2,685,000 of long term debt into 1,790,032 shares of its common stock.
During the past eighteen months, the Company has assumed debt obligations to three banks in the course of executing its acquisition strategy. According to the terms of these debt agreements, the Company is required to repay one of these obligations by November 30, 1997. This facility is comprised of a revolving line of credit in the amount of $75,000 and a term note in the amount of $404,000. The Company has commenced discussions with the lender regarding a short-term extension of this facility and is reasonably confident that the maturities will be extended. Under the terms of the other two credit facilities, the Company is required to repay the facilities by January 1, 1998. As of June 30, 1997, the Company owed $1,143,000 under these facilities.
The Company has continued the process of securing replacement financing for its short-term debt obligations. The Company plans to consolidate its outstanding debt obligations into one or two larger credit facilities and secure an increase in its revolving credit facility to provide improved capacity to handle the short-term working capital requirements of the larger projects and its anticipated revenue growth. While a firm commitment has not yet been received, the Company has received proposals and is reasonably confident that it will be successful obtaining this financing. If the Company is not successful in refinancing these facilities, its overall liquidity would be negatively impacted and default could result in acceleration of other obligations, including the 9% convertible debentures. (See "Management's discussion of liquidity" below.) |
