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Non-Tech : US Global Nanospace (USGA) -- Ignore unavailable to you. Want to Upgrade?

To: scion who wrote (94)	2/24/2004 10:46:18 AM
From: scion	Read Replies (1) \| Respond to of 132

LIQUIDITY AND CAPITAL RESOURCES At December 31, 2003 we had cash on hand of $3,005. Our primary source of cash during the nine months ended December 31, 2003 was loans totaling $395,425 and revenues totaling $127,831. Net cash used in operating activities was $262,959 during the nine months ended December 31, 2003. The primary uses of cash for the quarter ended December 31, 2003 consisted of general operating costs and product research and development expenses. At this time, to conserve cash, we outsource the manufacture of our products and our sales and marketing functions. In addition, our officers and certain employees have deferred their salaries. We have applied for grants from various government agencies that, if approved, will provide funding for the development of new products and for the enhancement of our current products. We are also negotiating with various government agencies and private companies in the areas of defense, homeland security, law enforcement and aerospace for the sale of our products. We cannot be certain, however, that we will be awarded any funds through grants or that sales of our products will ever generate enough cash to fund our business. During the next 12 months, if we cannot generate sufficient funds to operate our business from grants and product sales, we will be required to seek financing from our largest stockholder, who has provided financing and a loan guarantee for us in the past, although he is under no obligation to loan any money to us. We may also consider selling debt or equity securities. We cannot be certain that we will be successful in obtaining financing if we need it. If we cannot obtain financing when we need it, we may be unable to maintain our operations. We had no investing activities that used or generated cash during the nine months ended December 31, 2003 as compared to $2,946 of cash from investing activities that was acquired in conjunction with the share exchange we entered into on May 17, 2002 with USDR Global Aerospace, Ltd., a Delaware corporation, and its stockholders. Cash flows from financing activities for the nine months ended December 31, 2003 included loan proceeds in the amount of $395,425. Cash flows from financing activities for the nine months ended December 31, 2002 consisted of proceeds from lines of credit in the amount of $1,307,879 from a bank, and $1,280,000 from a shareholder and other third parties. During the nine months ended December 31, 2003, in order to conserve cash, we issued our common stock to satisfy accounts payable totaling $376,851 and wages totaling $2,502,743.