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Organization, Consolidation and Presentation of Financial Statements
6 Months Ended
Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements:  
Reclassifications

Reclassification

 

Certain reclassifications to the statement of operations, related to subscription costs, and to the statement of cash flows, related to amortization of deferred financing costs, were made to prior period financial statements to conform to the current presentation.

Additional Financial Information Disclosure

Operating Matters and Liquidity

 

The Company has a history of net losses.  In the first six months of 2016, the Company generated a net loss of $1,745,000 compared to a net loss of $1,066,000 in the same period in 2015.  Further, at June 30, 2016, the Company had a working capital ratio of .57:1, with cash and cash equivalents and investments available for sale of $1,419,000. 

 

The Company expects to continue to incur additional operating expenses for research and development and investment in software development to achieve its projected revenue growth.  We continually evaluate our operating cash flows which can vary subject to the actual timing of new sales closing compared to our projection of those sales closing and are sensitive to many factors, including changes in working capital and our net loss.  However, projections of future cash needs and cash flows are subject to substantial uncertainty.  As of June 30, 2016, the Company owed $1,526,000 against the line of credit from Silicon Valley Bank (“SVB”).   The availability under the SVB line of credit is tied to a borrowing base formula that is based on 80% of the Company’s eligible domestic accounts receivable. As of June 30, 2016, the availability under the line of credit was $188,000.  The Company has projected revenues that management believes will provide sufficient funds along with cash on hand and available borrowings under its line of credit to sustain its continuing operations for at least the next twelve months.

 

The Company does not plan any significant capital expenditures in 2016 other than to replace its existing capital equipment as it becomes obsolete. The Company’s plans for investment in product development and capitalized software development costs are expected to be similar to prior years.