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Gold/Mining/Energy : Unitec Int. Controls Inc. -- Ignore unavailable to you. Want to Upgrade?

To: dale w ruckle who wrote (366)	4/30/1998 11:48:00 PM
From: Richard Saunders	Respond to of 856

dale/ Thank you for asking. John/ thank you for answering me/ a bit stunned.

To: dale w ruckle who wrote (366)	5/1/1998 12:43:00 AM
From: John B. Smyth	Read Replies (1) \| Respond to of 856

First, Dale, we were unable to complete the $1M equity that had been originally required to meet financing requirements for the $6M in orders that we won last year. We lost a few of those orders as we were unable to deliver. This financing is a bridge to start several projects that we would also lose if we did not begin them. It is a temporary means of initiating the projects until normal bank financing can be arranged. The banks simply will not finance our work in process. They love the receivables, but won't touch the WIP. We came up short on trying to find equity financing, and unless we want to turn down these orders too, we use this (last resort) financing until we have a bankable receivable. This facility is strictly a bridge to allow us to begin production. When we reach a billable milestone, the banks will finance the receivable, which is used to repay the bridge loan and reduces the effective borrowing cost of the project. I expect to use part of this facility only, the bulk of which should be retired in two months. Regards, John