Part 3
"Outside the law enforcement field, we are poised to take advantage of a large market opportunity with our DVM-250 event recorder, which is designed to address the safety and liability requirements of commercial vehicle fleet operators. Earlier this year, we announced our first significant DVM-250 order from one of the largest ambulance service providers in the United States. In recent months, we have developed the sales and marketing infrastructure to pursue potential customers that operate vehicle fleets in a number of different industries, including taxicab, bus, limousine, and motor coach operators; utility, telecommunication, package delivery, and distribution companies; government agencies; and even passenger vehicles. Uses of event recorders include driver training, personal protection and monitoring, protection against liability and workman's compensation claims, and personal documentation of events. In the aggregate, we believe the market for event recorders in the transportation industry is larger than the law enforcement market opportunity, and we expect sales of the DVM-250 to increase significantly in the upcoming year."
"Although we recorded a modest operating loss in the third quarter of 2011, I am delighted to report that net cash provided by operating activities totaled $1,009,347 during the first nine months of 2011, compared with $679,014 of net cash used in operating activities in the corresponding period of last year. This represented an improvement of almost $1.7 million in operating cash flows, which benefited significantly from reductions in inventories and accounts receivable. Our balance sheet improved during the first nine months of the year as well, with cash and cash equivalents rising 109% to $1,304,290 as of September 30, 2011 when compared with $623,475 at December 31, 2010. During the nine months ended September 30, 2011, inventory levels were reduced by 34%, accounts receivable declined by 17%, and we reduced our outstanding accounts payable by 60%. Meanwhile, we entered into a new $1.5 million unsecured credit facility with a private third-party lender in June and used the borrowings under it to fully repay our bank line of credit. The new credit facility does not mature until May 30, 2012 and requires us to pay interest-only on a monthly basis until the maturity date. With $9.1 million in working capital available and most of our major product development programs substantially complete, the Company is financially well-positioned to pursue its strategic objectives. We expect additional inventory to be converted to cash as customer orders are received and shipments occur during the balance of 2011 and believe the Company has ample liquidity to support its current operations." |
