TLCR... .035 X .07 News 11/21...10Q filed.....
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Management`s Discussions: 10-Q, TELECOMMUNICATION
PRODUCTS INC
TUESDAY, NOVEMBER 21, 2000 8:08 AM
- Edgar Online
(Edgar Online via COMTEX)
Company Name: TELECOMMUNICATION PRODUCTS INC
- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management provides the following forward looking information to the best of its
information and belief as of the time of signing, with no assurance as to eventual
outcome.
Financial Condition and Changes in Financial Condition
The Company had significant other income this quarter. These monies included
payment of $75,000 made pursuant to a letter of intent agreement entered into with
a merger candidate, which requires shareholder approval by proxy vote prior to
consummation of the transaction, and which transaction also provides for a reverse
split of present shareholders' stock and divestiture of present operations, inter alia.
The merger candidate raised an entity status issue, disclosed prior to siging of the
letter of intent, which the Company has hired outside counsel to resolve. The
Company is moving forward to accomplish its obligations under the agreement, and
intends to hold the merger candidate to its responsibilities thereunder as well.
Although there was a net gain this quarter due to the other income received, overall
there is a significant accumulated deficit which has eroded stockholders' equity,
and as no sales are presently pending, such attrition may continue through fiscal
2001. The Company had significant sales to customers in Malaysia and Korea
during fiscal 1995, and there appears to be continued interest in these countries,
which could, without assurance, result in future sales. In addition, the Company
had talks with EchoStar during the present quarter about a potential sale to that
entity of one Model 9100 system; however, EchoStar's needs changed so that a
sale is not now presently contemplated.
Since its liquidity was enhanced in fiscal 1984 by a limited offering of the
Company's securities in August, 1983 for net proceeds of $218,055, and an initial
public offering of its common stock for net proceeds of $493,394 on March 20,
1984, the Company's liquidity has declined due to the initial expenditures required
for research and development, and the time involved in securing a market for the
Company's products. There are no present or planned commitments for material
capital expenditures, and the Company presently has no material unused sources
of liquid assets.
There are continuing inquiries from potential customers regarding the Company's
products, and management believes that marketing efforts by Mr. Ranniger and by
its outside commissioned sales dealer and/or sales representatives may continue
to increase revenues, thus enabling the Company to sustain operations. Due to the
losses sustained by the Company during its development stage and over the
intervening years, the Company's ability to remain a going concern depends upon
its ability to generate sufficient cash flow to meet its obligations, to obtain
additional financing as may be required, and to continue to increase its product
sales. Even though the Company has previously been unable to obtain outside
conventional financing, it has been able to continue as a going concern due to
loans it has received from officers, in addition to those officers deferring their
respective salaries since January 1987.
Results of Operations
The Company had no sales revenues again this quarter. However, the Company
has seen such highs and lows over the past years that the future is difficult to
project. For instance, although fiscal 1995 revenues were the second highest
annual revenues in the previous five-year period, fiscal 1994 total revenues were
among the lowest in the Company's history. The total revenues for fiscal 1993 were
almost nine times as great as those generated in fiscal 1992, where sales were the
lowest in its preceding five year period, and fiscal 1991 revenues were the highest
in the Company's history. As a result, it is impossible to speculate as to what will
happen in fiscal 2001. Ninety-eight percent of fiscal 1995 revenues, and 100% of
fiscal 1994 and 1993 revenues, were generated via sales of the Company's Model
9100 and related equipment.
The Company has been working to upgrade its Model 9100 system with a new
diode which will increase the transmission power of the system from 1 watt power
input to 1.2 and 2.4 optical power output, thereby increasing the transmission
range to over two miles in normal atmospheric conditions.
In addition, the Company is upgrading the data rate transmission capabilities of the
Model 9100. Presently, the Model 9100-2 is capable of transmitting communication
formats of DS-0 (64 kbps), DS-1 (1.544 mbps), and the European standard CEPT
HDB-3 (2.048 mbps). Upgrades would allow transmission of additional data rates of
OC-1 (51.84 mbps) and OC-2 (155.520 mbps). The present plans to accomplish
these upgrades would utilize the same castings, optics, mounts, and most other
hardware, therefore reducing the cost of the new design while greatly enhancing
system features.
Other than the above, the Company does not expect any material changes in the
mix and relative cost of resources. Raw materials were previously augmented in
the anticipation of potential future demand in Asia. As of year end, there were no
finished goods in inventory. Inflation has had no material effect on the Company's
operations over the last three fiscal years.
The Company's current cash requirement for payroll is down to zero, due to the
fact that the Company's only full time employees, Don and Clara Ranniger, have
elected to defer their salaries since January of 1987 in order to help the Company's
cash flow. The Company's former engineering technician and another
technician/consultant are presently available to work as independent contractors
for the Company on an as'needed basis.
Besides pursuing a merger with a potentially profitable candidate, fiscal 2001
operations will continue to concentrate efforts on increasing sales and production
of the Model 9100. However, due to varying economic conditions in the domestic
and world-wide market for this product, sales projections are difficult to estimate.
(c) 1995-1999 Cybernet Data Systems, Inc. All Rights Reserved.
Received by Edgar Online: Nov. 21, 2000
CIK Code: 0000725929 |
