one of your points:
OTOH, I like some of the things they are doing (converting preferred, calling warrants). Hopefully (for longs) this is not a harbinger of more dilutive financing in the future. Additionally, there is a lot of opportunity for improvement in the core business area ... especially with the poor (but improving) gross margins. In the short term, management needs to turn operating cash flow positive, IMO, this is key.
TAVA's Doug Kelsall addresses your concern
(from the Conference Call):
Randall Bollinger: ÿMorning. In regard to your $4.6 million in new financing, I was wondering if you could answer as to what would be the net new money after cost in refinancing. And does this mean that you expect to be able to generate internally all the funds needed for the next 24 months?
Doug Kelsall: ÿI can address that. The $100,000 lease line is all new financing. Out of the $4 million in senior debt, we will be paying off approximately $1 million in bank debt so the net increase would be $3 million.
And with that- again, our additional cash on hand is currently $3.7 million. We believe that that should give us adequate financing with the working capital required with Y2K ramp up.
One thing that's nice about the year 2000 business, particularly on the product sales, is our turnover of our accounts receivable is quicker than it is in our core business. So because of that, there's not as much working capital required to support receivables. |
