Hi Jane,
"...no assurance that the Company will be able to continue operations..." is normal annual report language for a company that is transitioning from a research and development stage to a marketing stage. In other words, they're not making a profit yet, so they need to raise capital to stay in operation. They can do this by issuing more stock or by taking on debt. Small companies usually can't get a bank to lend them money, so they usually do a private placement or sell convertible debentures or something like that.
Most of the info in the annual report is relating the the fiscal year ended 2/28/97, so it's a bit dated. (The annual report is basically just the 10K, which has been available on EDGAR for months, the only new stuff in it is the letter to shareholders from the president on page 1.) The report is just making you aware that, as of the end of the fiscal year, they didn't have enough cash to continue operations for another year without finding more funding. As you'll see by reading page 1 of the report, the company did a private placement in November '97, so they have the capital to continue for now.
Cyclopss will probably have to seek outside sources of capital again, but if the share price remains high, it shouldn't result in too much dilution. Hopefully the company will soon be operating at a profit (but not for a few more quarters at least, I'd guess), and then they won't need to raise additional capital. I think most people on this thread expect that to be the case, especially since Cyclopss has several diverse products which could each be big revenue generators.
I hope my rambling helped.
regards,
Mike |
