Taken from the 11/97 SB2...
edgar-online.com
"LIMITED OPERATING HISTORY; LIMITED EXPERIENCE IN YEAR 2000 SOLUTIONS
The Company was founded in September 1996, has a very limited
operating history and is in the development stage. As a result, the Company's operations to date have not produced significant revenues, and there can be no assurance that the Company will generate any future revenues from the sale of its services or products.
The Company has limited experience in providing Year 2000 solutions. Although the Company is in the process of completing its initial assessment projects, the Company has not completed a large scale Year 2000 conversion project. There can be no assurance that the Company will be successful in completing large scale conversions, that the Company will not experience delays or failures in providing its Year 2000 solutions or that the Year 2000 solutions will be effective. The failure of the Company's Year 2000 solutions to function properly or the existence of errors or bugs following completion of a Year 2000 conversion project could necessitate significant expenditures by the Company in order to attempt to remedy the problems. The consequences of failures, errors and bugs could have a material adverse effect on the Company's business, operating results and financial condition.
HISTORY OF OPERATING LOSSES; NEED FOR ADDITIONAL FINANCING
The Company has experienced significant operating losses since its
inception in September 1996. As of June 30, 1997, the Company's accumulated deficit was approximately $1,368,000, which includes a non-recurring charge of approximately $1.2 million, as a result of sales of equity securities to key employees at less than deemed value for financial statement purposes. Such losses have been principally the result of the various costs associated with the Company's selling, general and administrative expenses as the Company commenced operations, acquired its technology rights and began marketing activities. The Company expects that it will incur operating losses over at least the next year."
The Company believes that the net proceeds from this Offering, together with its existing capital resources, will enable it to fund its operations for 12 to 18 months following completion of the Offering. The Company will be required to seek additional capital to continue its operations beyond that time. If available, the additional capital may result in dilution to the purchasers of the Shares and Warrants and underlying securities offered hereby. The Company has no commitments for any future funding, and there can be no assurance that the Company will be able to obtain additional capital in the future. If the Company is unable to obtain the necessary capital, it will be required to significantly curtail its activities or cease operations.
DILUTION
The pro forma net tangible book value of the Company as of June 30,
1997 was $277,688 or $0.12 per share of Common Stock. "Pro forma net tangible book value" per share represents the amount of total tangible assets of the Company reduced by the amount of its total liabilities and divided by the total number of outstanding shares of Common Stock. |
