10-Q Filed on Valentine's Day...not for the weak of heart
As of December 31, 2012, the Company has access to its Credit Facility up to $27,730,356 for borrowing and has borrowed $27,096,637. The Company had available cash and remaining available Credit Facility (see Note 5), collectively, of $633,719. Based on current projections, the Company does not expect its available cash, estimated revenues and remaining Credit Facility to be sufficient to cover liquidity needs for the next twelve months. Without additional funding sources, proceeds from asset sales, or a merger, the Company forecasts that its available capital will be depleted sometime during its second fiscal quarter of 2013. Additionally, the Company will be facing maturity and repayment of its Credit Facility on June 30, 2013.
In order for the Company to continue operations and implement its business plan, it needs to raise additional capital or merge. The Company has been actively pursuing various initiatives aimed at resolving its need for additional capital, namely asset sales and/or a merger. The asset sale negotiations have met with some success with proceeds supplementing cash flow, but negotiations have not yet resulted in large asset sales. On July 9, 2012, the Company executed a merger agreement with Multiband Corporation (“Multiband”), whereby the Company would effectively become an operating subsidiary of Multiband. Although several conditions precedent still exist, the Company is working toward closing the merger in February or March 2013. The Company’s ability to close additional asset sales or to consummate the merger remains uncertain. Unless the Company is able, in the near-term, to raise additional capital, close additional asset sales or enter into a merger, there is substantial doubt about the Company’s ability to continue as a going concern.