Further Management Discussion on Working Capital, very nice direction:
During July and August 1997, the Company received proceeds in the amount of $4,616,000 through the exercise by the holders of 3,001,101 stock options and stock purchase warrants. These proceeds have been applied to improve working capital, including payment of accounts payable, reduction in debt, payment of normal operating expenses and increasing cash balances. It is management's belief that additional working capital in the near-term will be required to support operations and anticipated revenue growth. As of August 31, 1997, the Company had outstanding exercisable stock purchase warrants and stock options for common shares which, if exercised, would generate approximately $6,205,000in cash proceeds.
It is management's intent to improve liquidity and cash flow from operations through the following activities:
1) Improve the Company's profitability and working capital management.
2) Generate cash proceeds through the exercise of outstanding options and warrants.
3) Prudent use of a credit facility.
4) Issue additional equity, if required.
In an effort to improve the Company's profitability and working capital position, management is:
1) Investing in product development designed to improve gross margins.
2) Improving project performance by centralizing cash management, financial and accounting functions.
3) Improving contract management by standardizing appropriate terms and conditions.
4) Negotiating more favorable payment terms with the Company's customers and suppliers.
5) Continuing to focus on changing the Company's revenue mix to a higher labor content and higher margin product sales.
Management believes the above programs will be sufficient to improve
operating results, improve cash flow from operations and that additional debt and equity financing will be available to support the Company's operations. |
