Why isn't WOLV higher than CDSS?
CDSS
At March 31, 2006 the Company had cash and cash equivalents of approximately $3.8 million, a net working capital deficiency of approximately $5.2 million and a stockholders’ equity deficit of approximately $1.4 million. In addition, cash provided by operating activities in the first three months of 2006 totaled approximately $3.6 million; however, the Company incurred a first quarter 2006 net loss of approximately $892 thousand.
The Company reported approximately $3.6 million of cash flows provided by operating activities; and after cash expenditures of approximately $520,000 for capitalized software development costs , and net repayments of approximately $602,000 related to amounts borrowed against accounts receivable and advances from an officer, the result was a total increase in cash of approximately $2.4 million during the first quarter of 2006. As a result of this increase in cash, no debt or equity financings were deemed necessary by the Company, other than short-term borrowings against accounts receivable. Historically the Company has had access to additional capital and has raised money through both equity and debt financings, including borrowings against accounts receivable, preferred stock private placements, and advances from the Company's CEO. The Company believes that it has adequate access to capital and that it will continue to have access to capital to fund the operations however, the Company has no plans as of the filing date of this report to raise additional funds. In addition, the Company's CEO has committed to advance the Company up to three million dollars in funding should it be necessary for short term working capital needs through March 2007. The terms and conditions of any advance to the Company from the CEO will be established by the Company's Board of Directors. The CEO advanced approximately $475,000 to the Company during the first quarter of 2006 of which approximately $322,000 remained outstanding at March 31, 2006 and was repaid in April 2006.
The Company believes that the execution of its business plan including strategies to grow revenue and control costs and expenses, combined with liquidity available from our Factoring Agreement and the commitment from the Company's CEO, is sufficient to fund operations for the next twelve months. If needed, Citadel may also consider raising additional debt or equity capital under the right circumstances. However, there can be no assurance that the Company will be able to raise debt or equity capital at terms it considers reasonable and prudent or that the Company will be able to fully execute its business plan in 2006.
