On page 15, under the "Liquidity and Capital Resources" section:
"After giving effect to the Bricoleur financing, and assuming the conversion of the Put Notes to our common shares in the third quarter, we had working capital of $1,239,675 as of June 30, 2006, with the ability to draw an additional $2.5 million of funds under the securities put option agreement. We believe that the Bricoleur financing, in addition to our existing cash and cash equivalents together with expected cash generated by operations, will meet our working capital needs, capital expenditures, and commitments through, at least through the end of this year. We will endeavor to raise additional required funds through various financing sources, including the sale of our equity and debt securities and the procurement of commercial debt financing. However, as result of our present level of debt and certain restrictions on our ability to incur additional indebtedness under our agreement, it is unlikely we will be able to obtain additional debt-based capital, unless a significant portion of the proceeds are used to retire existing debt. There can be no guarantees that such funds will be available on commercially reasonable terms, if at all. If such financing is not available on satisfactory terms, we may be unable to expand or continue our business as desired and operating results may be adversely affected."
1) It's "at least through the end of this year," which could mean as long as the next 12 months (the length of the forecast I'm accustomed to seeing in this section of a 10-Q).
2) Laugh this off as oh-it's-just-CYA-legal-boilerplate at your own risk if you own VNX.
RFID Casino Chips sales for the quarter were $1,197,270 (Note 2 on page 5, or page 11, or page 13).
On page 7 appears:
"Note 7 - Significant Transaction
In June 2006, pursuant to the criteria set forth in Staff Accounting Bulletin (SAB) 104, the Company recognized $1,197,270 in revenue from a �bill and hold� transaction. The transaction was with an international customer, and the goods were held, at the request of the customer. The transaction was determined to have met the SAB 104 criteria for revenue recognition in the current quarter, including the following:
� The risk of ownership had passed to the buyer, � The customer made a fixed commitment to purchase the goods, in writing, � The buyer requested that the transaction be on a bill and hold basis, and that the buyer had a substantial business purpose for ordering the goods on a bill and hold basis, � There was a fixed schedule for delivery of the goods, � The Company did not retain any specific performance obligations such that the earnings process is not complete, � The ordered goods were segregated from the Company's inventory and not be subject to being used to fill other orders (because they were manufactured to the customer�s unique specifications), and � The product was complete and ready for shipment to be completed.
The product has been shipped to the customer subsequent to June 30, 2006."